4 Dimensions When Evaluating a 3PL Fuel Carrier
Fuel wholesalers rely heavily on 3PL carriers to make fuel deliveries to their retail customers. This trend is increasing due to the rising costs of transportation assets, technologies, tax, and insurance. 3PLs create value by helping customers reduce costs through continuous improvement, both tactical and strategic. As such, it is important to define metrics to evaluate existing and prospective 3PL carriers and to consistently monitor and refine these metrics over time. Our Managed Services team is no different. They manage books of business for wholesalers and take care of the delivery of fuel by managing our network of 3PL fuel carriers. This post will discuss a few of the key dimensions they evaluate on their carrier scorecards and could be useful to any fuel wholesaler in reviewing their carriers.
1. Invoice speed and accuracy
This dimension is important for our team to track because it is part of our Service Level Agreement (SLA) with our wholesale customers. We are looking for an accurate, electronic invoice within 24 hours of delivery. In addition, we monitor re-bill activity closely as excessive re-bills reduces the experience for our wholesalers. When evaluating new carriers we look at pricing and accessorials as a percent of total freight because we want to offer competitive rates to our wholesale customers.
2. Delivery Excellence
Under the delivery excellence dimension we are evaluating driver execution and attention to details. We keep track of late deliveries, cross-drops, spills, or misloads. We also regularly check on the safety record of the carrier using information from the U.S. Department of Transportation.
3. Technology Adoption
Since we are an electronic platform technology adoption by the carrier company and their drivers is very important. We require use of a mobile app to capture delivery documents electronically. So, we are tracking usage by the drivers, the timeliness of the images received (BOL should be received at the lift and delivery ticket images should be received at the drop) as well as the quality of the images received. For wholesalers evaluating carriers you could also use information such as the use of API’s or other technology solutions to eliminate paper documentation and whether they offer shipment visibility and traceability.
The final dimension to evaluate is communication. We do not evaluate this as part of our scorecard because of the use of a unified platform with our carrier partners. But, for a wholesaler working with multiple 3PL carriers you would want to assess this dimension. Here you are reviewing how quickly they respond, how reachable are they, do they provide clear status (through a dashboard or other means), and the quality of customer service if you have a problem. This dimension is hard to check prior to beginning the contractual relationship, but should be assessed regularly over time.
Reviewing your carriers on these four dimensions on a regular basis will help you determine whether you are achieving the value you need given the shrinking margins. It will help you determine which carriers are better partners with you. If you have any questions about how our Managed Services team calculates these values or evaluates our 3PL carrier partners, please contact us.
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