Supply Chain Expertise and Technology Blog by TMC, a division of C.H. Robinson

When Should You Fine Carriers for Ignoring Shipment Status Reports?

Transportation Management System

The “Where is my shipment?” query is probably as old as the trucking business, but being able to answer it is more important than ever.

Carriers that persistently fail to update the status of the loads they are moving make it almost impossible for shippers and third-party logistics providers (3PLs) to answer this question accurately.

What do you do in such a situation?

Deploy the last resort: a financial penalty for not providing these updates.

But it’s important to be thoughtful about how you fine carriers in this way. The aim is to change their behavior – not punish them.

There are a number of reasons why certain trucking companies – and we should emphasize that they are in the minority – habitually fail to keep customers informed about the progress of their shipments.

Some don’t see the point of the exercise. It’s the classic “why bother as long as the loads get there on time” attitude.

Others may have the best of intentions, but don’t pay enough attention to timely reports. This is especially true for some low-tech players that communicate shipment details via phone calls. When dealing with day-to-day operational pressures, their drivers can overlook the update calls they intended to make.

It may be that shippers simply fail to enforce their reporting requirements, so the information gap is never or seldom addressed.

Persuading recalcitrant carriers to be more diligent is important on a number of fronts.

The most obvious is that shippers and 3PLs need to know which milestones their shipments have reached in the logistics cycle. This is particularly the case when corrective action such as the re-routing of a shipment needs to be taken, and during peak periods when the likelihood of a disruption is greater.

In addition, modern-day transportation management systems use powerful analytical tools to monitor and improve freight network performance. But these tools are only as good as the quality of data inputs such as the status of loads.

Another reason is that solving the problem of negligent reporting has become more urgent. The Great Recession forced many carriers to reduce staff head count, and now there are fewer people to manage track and trace activities in some companies. At the same time, the commercial environment has become more competitive, leaving less room for error and inefficient operations.

Offering these arguments to convince carriers that they must abide by your load reporting requirements is a first step in improving compliance rates. Making the reporting process as systematic as possible also helps. This has become much easier now that cell phones and other mobile devices are ubiquitous. There are apps for reporting load status, and responsive web sites that prompt drivers to provide the relevant details.

It is also worth stressing that not knowing about a delay is, in many instances, worse than the delay itself. Snafus happen; vehicles break down, weather conditions deteriorate, people get sick. The greater sin is not reporting these issues, thus preventing the shipper or 3PL from managing the disruption.

If all of this fails, a system of fines may be your only option. But this should be carefully planned and executed.

Give offenders the opportunity to assess the situation and remedy it prior to imposing a fine. For example, issue a report first thing in the morning that lists all the loads that have not been updated. If by, say, noon, the information has not been forthcoming, then the fines kick in.

The price of being kept in the dark about the shipments you entrust to carriers has never been higher.

It’s in both your interests to fix the problem, even if that involves financial penalties.