Jarrod Marinello, Executive Vice President/Owner:
First, decide how many providers to use, then reward business to each one of the providers. You may want to use some more than others, but use each at least five percent.
Don’t award the lanes based on the provider being the lowest cost. Instead, mix it up. This strategy allows the particular provider to average out on its margin, keeps the provider committed on lanes losing margin, counteracts any changes in market, and sustains from provider needing price increases. In return, shippers hold more leverage over their transportation providers, and build up loyalty and sustain locked in pricing year round.
Finally, stick to the plan!