How Black & Decker Saved $100k with Reliable Contracts
Routing guides built on network RFPs work well when shippers have consistent demand, but fall apart when there's inconsistent volume. Through the Reliable Contracts program, Black & Decker has been able to get 100% PTA, drive cost savings in a soft market, and book efficiently without manual effort.
What Reliable Contracts allows me to do is take our known, tough to contract lanes and have guaranteed capacity. We haven’t had any noise since we started the program. Loadsmart is doing what we signed up for, which is — accept every load and pick it up on time.”
Manager of North American Truckload
Bringing Lanes with Inconsistent Volume Under Contract
Headquartered in the USA, Stanley Black & Decker provides the tools and innovative solutions you can trust to get the job done – and have since 1843. But like many other shippers, current market conditions have made it more difficult than ever to move product efficiently.
For Black & Decker the challenge was finding reliable coverage for lanes with inconsistent volume -- PTA was a constant concern.
With low volume lanes “it’s very tough to get consistency from a contract rate perspective. We’ll lock in a rate and as long as they’re seeing freight, we might get 3 months at the agreed upon price. But the arrangement will typically fall apart” says Matt Jolles, Manager of North American Truckload.
The transportation team runs operationally lean making booking efficiency critical. While planners have a set routing guide, there’s limited bandwidth to spend waiting for carrier responses or finding coverage on the spot market. Re-pricing bids also places a strain on resources.
Black & Decker started with Reliable Contracts on their most troublesome outbound CA lanes. Instead of having a static rate, they used a dynamic rate that included a 100% PTA Guarantee, incentivized margins, and rate transparency.
Using Reliable Contracts, "we can ride the market down, whereas if we had a contracted rate, we’re not actively capturing the benefit of riding that wave down. Given the arrangement, there’s plenty of motivation for Loadsmart to buy well, because they can get better margins for the performance.”
As the market softened throughout 2022, they’ve taken advantage of the floating rate to drive over $100K in cost savings, all without having to re-bid. Since the start of the program, Black & Decker has expanded to 5 new locations and tripled the load volume moved through a Reliable Contract.
3 Strategies to Stay Ahead in an Ever Changing Market
This eBook will help you build three freight strategies to add to your transportation tool box and tips to build your next freight plan.