Flexibility

If your company has capacity agreements, volume surges, and O/D pairs that clash with core operational competencies, satisfy commitments by exploiting an accumulated capital network. In other words, develop the strengths of other companies to your advantage. Flex “their” muscle to build your own.

If your company has capacity agreements, volume surges, and O/D pairs that clash with core operational competencies, satisfy commitments by exploiting an accumulated capital network.  In other words, develop the strengths of other companies to your advantage.  Flex “their” muscle to build your own.     

Let me explain.  

Three networking methods

No matter how hard you try, you cannot do it all yourself.   You see many promising opportunities but pursuing them jeopardizes current operations.  Seek collaborators – other firms that can expand your reach and contribute to your bottom line.  Construct a cooperative capital network and build your business by helping to build a community of like businesses.               

Here are three proven networking methods that will help you build that community.  

  • Broker – use legal and allowable relationships with other companies that fit the needs profile of your clients tendered shipments.[1]  
  • Co-Broker – combine with other brokers.  This multiplies potential opportunities and significantly expands your network.  Pay attention to co-brokering agreements and insurances coverages.  Without proper agreements and coverages, chain of custody and responsibilities become murky and increase the chances for negative outcomes.  Build your networks on transparency. 
  • Referral Selling – This is the ability to meet you customer’s need through direct referral of your network vendors.  These vendors would communicate and operate some portion of your awarded business in direct communication with your customer.  This option can be a useful tool for a company looking to extend their reach to trusted collaborative vendors, gain commissionable margins and manage a smaller cash flow profile.  Smaller companies find this an attractive method of covering additional shipments for their clients.

However, reference selling comes with some risk.   Loss of invoice and revenue control, gaining customer buy-in and installing vendors within client system processes, leaves you with little leverage.  Yet, it can be the most powerful network option if you are able to connect the various parts and place your company as the sales entity for the carrier as well as an extension of your client’s logistic team.  A client becomes significantly more reliant on both your company’s operational abilities and guidance toward alternative vendors. 

In sum, a cooperative network allows you to meet emerging opportunities while still focusing on core competencies.  This network brings added muscle.  Now all you need to do is flex it.      

[1]  Consider this carefully.  Being both carrier and broker presents specific legal and regulatory hurdles.  These must be managed with the Federal Motor Carrier Safety Administration.                     

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