10 Tips for Leveraging Routing Guides
By: Steve Barber, Vice President of Operations, Transplace
A routing guide plays an important role in setting the strategy for carrier selection across a variety of shipments within an organization. And while there are various routing guide forms, many in the industry have switched from paper to online portals and beyond to enhanced transportation management system (TMS) technology that enables truly dynamic routing guides for maximum cost savings and service improvement.
The following are 10 tips to get the most out of your routing guide:
- Base your guide on your overall logistics strategy: Factor into your carrier selection the importance you place on using asset-based carriers versus 3PLs, your customer service standards (which may differ across multiple customers) and your cost savings goals.
- Select your mode first, then your carrier: Before you make a specific carrier decision, make a cost-based mode decision (as opposed to more general weight or cube guidelines). Then use your routing guide to select the right truck, intermodal, LTL or parcel carrier based on your logistics strategy.
- Data is your friend: Keeping careful track of historical lane, performance and cost information data for your carrier base is critical to your ongoing routing guide strategy.
- Leveraging technology is key: Paper routing guides, and even static routing guides available via a portal, are simply no longer adequate in the modern transportation industry. Advanced TMS are available to shippers of all sizes and supply chain complexities and can truly give your organization a boost in cost savings and efficiency.
- Balance your routing guide approach: Determine which lanes you want in your routing guide versus how much goes into a backup matrix or spot market. You can realize savings or protect important capacity by tweaking your routing guide to correspond with spot market rates in a particular area.
- Keep it simple: Keep your strategy and your routing guide as simple as your network will allow. Minor savings certainly may not be worth a multi-tiered, multi-load routing guide. And just because technology makes a certain level of complexity available, that doesn’t mean that it is the right solution for your organization.
- Be aware of your routing guide depth: How many routing guide carriers do you need for a specific lane? For example, if you have a high-volume route, you may need access to more carriers to ensure that you have everything covered. If you have a lane with low volume, you might not need as large of a carrier selection.
- Communicate clearly: Ensure that you carefully communicate carrier awards, expectations and routing guide compliance with anyone using your routing guide as well as with your carriers. This includes key info such as ship-to and ship-from locations, drop-trailer and labeling requirements.
- Create stakeholder scorecards: Publish stakeholder scorecards weekly to keep track of KPIs and data. You’ll want to have scorecards for your ship-points (suppliers, DCs and others) as well as your carriers. That way, if something in your routing guide isn’t effective, you can utilize these weekly scorecards to get to the root of the problem and fix it.
- Stay the course: Set a strategy that works for your organization, and stick with it. You can revise your routing guide to make any necessary changes for enhanced efficiency as needed, but a best practice is to completely reconstruct your guide no more than once per year, typically based on the output of a network bid.
*Note: A version of this article originally appeared in Inbound Logistics.