We recently had the opportunity to sit down and have a discussion with Curtis Garrett. Curtis is the Senior Vice President, LTL at FreightPlus and also one of the premier experts on the world of LTL. We were able to speak about the future of logistics, some current trends and how 3PLs can achieve growth and create a competitive advantage.
Q1. The logistics industry has had a lot of ups and downs over the last number of years. What does the future hold for the industry as a whole?
CG: Oddly enough, I take what’s possibly the counterintuitive approach on this, which is that all of this extreme volatility and high friction are going to make us much better, extremely quicker versus if we’d hummed along without these major challenges.
While it’s been very tough on the ground, from almost all angles including labor, retention, equipment purchase, facility expansion, and more; I am confident that the recent dust storms have only accelerated trends that were already moving. The way that we all get better in logistics is being more proactive, having better visibility to all parts of our businesses, and more closed loops via metrics and reporting. A big part of achieving these items will be through a combination of better technology and processes that work hand in hand together.
Q2. We talk to 3PLs and freight brokers every day who are looking for ways to grow and be competitive. What is your advice for organizations seeking the same?
CG: That’s obviously a huge focus for all third parties in the logistics industry and often throws a strong signal to the market that they are doing something right. No matter what the industry you play in, growth – profitable growth at that – is vital to staying in the upper tier of your market.
I think in order to grow and stay competitive more of the focus has to be on the frontend and backend of the company’s processes.
Front end – with effective sales, relevant marketing, and strategic architecture of customer solutions. Backend with efficient AR/AP processes, closed loop reporting, and healthy cash flow. All things flow downstream to the accounting bucket, and naturally, that’s where the company outputs either look really healthy or really unhealthy! Set up those programs correctly and make sure things flow into a top tier accounting framework that includes AR/AP and audit, when applicable.
Q3. What are some of the biggest trends you are seeing today in LTL?
CG: The biggest trends are these:
- More technology integration across market partners. More specialization with company’s digging into specific categories and niches in order to be the absolute best in their vertical. The best product becomes the standard in the space, and with API’s the way they are, connecting into the best is cheaper and lower friction than it used to be.
- Sharing of LTL data between carriers, shippers, 3PL’s. There are a lot of silo’s in our industry – partly due to the makeup of it being an oligopoly, but also due to how a single company is segmented internally. There are really interesting new ways to share relevant data that raises all boats while keeping it anonymous using data unions.
Q4. In your work with LTL Carriers, what are some best practices that you recommend for them to improve their business?
CG: LTL carriers should ideally lean in to more of their quality, tech enabled partnerships. They often operate on an island – with pertinent information available but not easily accessible. Carriers integrating with more of their customer and technology partners is the only way this industry will scale and become more efficient in the near future. It helps everyone to do this. Provide plenty of notification around service interruptions and also make service and pricing details easy to find and translate back. Give and receive is very relevant heuristic in LTL.
Q5. Days sales outstanding is a key metric for any broker or 3PL given its impact on cash flow. What are some ways organizations can lower their DSO?
In the LTL broker space – it is extremely vital to find and resolve any carrier invoice discrepancies as quickly and early in the process as possible. Preferably while the carrier is still dealing with the live shipment.
The longer it’s been since delivery and final paperwork, the harder it is to dig things back up and get them disputed or correct. Having the right technology and processes in place to ensure that these exceptions are caught and resolved quickly is key to staying ahead of your competitors on the AR/AP side of things. This really impacts both your partnerships with the LTL carriers, who enjoy being paid quickly, as well as your customers who enjoy being billed accurately. Having direct integration with both your ERP/TMS as well as the carriers you’re working with will make things a lot easier when speed and accuracy are two of the biggest variables when it comes to keeping clean AR/AP and reducing your DSO.
If you would like to learn more how we can help you grow your business, improve your operational efficiency, lower DSO and boost cash flow, contact us and we will find a time to connect.