Routing guides are essential tools for any shipper to establish standardized procedures for selecting carriers, routes, and transportation methods. This consistency ensures that all shipments follow the same protocols, reducing variability and enhancing predictability in the supply chain. Additionally, they help meet contractual requirements and stay within the budgeted transportation expenses.
Whether shipping via truck, barge, ocean container, or LTL, a routing guide keeps the shipper on track with the correct carrier and protocols, matching contractual or other agreements. Without a routing guide, freight spend can quickly spiral out of control, leading to freight variance or contractual gaps that can damage long-term relationships. Routing guides streamline the decision-making process for transportation, reducing the time and effort needed to plan and execute shipments. This efficiency translates into faster delivery times and improved customer satisfaction.
I assisted a shipper whose freight spend was spiraling out of control. After a quick investigation, I discovered that shipments were made with almost any available carrier, regardless of cost. While a routing guide existed, it was outdated, unused, and unenforced. As someone once told me, “What gets measured gets done.” It’s crucial to set up a monthly or similar cadence to compare executed shipments with the routing guide and review discrepancies. If the shipper has an ERP or TMS system, a report can be generated. If not, Accounting should catch the discrepancies when making payments, using the routing guide as a backdrop to approved freight rates and terms. Involving more departments in the process enhances checks and balances, keeping the process working effectively. There are justified reasons for using other carriers, but without visibility, a shipper may face additional freight spend or contractual issues. For instance, the preferred carrier might not accept the shipment or meet the specific parameters needed at that moment. The responsible employee must know this to follow up and take corrective actions with the carrier. This will then dovetail into Carrier Performance and Metrics, which I will cover in another blog post.
While most routing guides are set up with preferred carriers based on cost, the same logic can apply to selecting carriers based on quality, transit time, regulatory compliance, or other factors.
From an administrative perspective, a routing guide in Excel or hosted in a TMS or ERP system can reduce emails and communication trying to determine the preferred carrier. Employees can check the routing guide for each shipment, and it can be updated in real-time for any necessary changes.
What have your experiences been with routing guides? Are you currently using one, and is it reviewed regularly? What have you done as a company to make the process more efficient?
USXports can help set up or review an existing routing guide process to ensure your company, customers, and vendors achieve the best results.
Transportation Management and Consulting
Extremely interesting!!
This is wonderful! Wishing you much success.
If you wouldn’t drive to a new destination without a map, don’t get behind the wheel of your supply chain without a routing guide! Our routing guides cover all touch points (ocean, drayage, 3PL warehouses, forwarders, domestic outbound, etc.) and are directly integrated with our SOPs. Looking forward to seeing others’ best practices!