Accrediting transport providers: discussion

Pushed by modifications to the penal code on the responsibility of companies and legal entities, we find ourselves with a growing awareness amongst companies on exercising greater control over their providers. A scenario which, translated to the transport sector, is complicated by the difficulty entailed by accrediting a high number of partners, and the lack of standardization of requirements by the industry.

Hence, in collaboration with cadenadesuministro.es, we wanted to sit around a debate table with loaders and logistics operators. The idea was that they would share their own experiences and tell us about how they carry out transportation contracting and select of providers, as well as the difficulties they face day to day in order to meet their own quality standards, as well as their clients’ requirements.

Trust in transportation partnerships

Often, the relationship between logistics operators, loaders and transport professionals hinders the swiftness of processes, when they come up against strict safety protocols, multiplicity of platforms and documentation with short expiry periods.

Hector Cordero, ex-CEO of the transport company Carburos Metálicos, CVA Logistics, opens the debate: “For us, accreditation is key”. Given that they operate in a special market, halfway between the chemical and pharmaceutical industries, they are subject to very strict regulations. Thus, he categorically states: “I don’t want the cheapest, I want the best and I am ready to pay more for it”.

On the other hand, he knows what is involved in the relationship between all the supply chain agents, as the company recently integrated transportation into its structure. He laughs when recognizing that they themselves suffer the inconveniences of implementing a restrictive safety policy. This is where the term trust appears. It’s key in partnerships within the transport sector: “Being on the other side of the fence, you become aware of the inefficiencies that occur due to loaders and their procedures. The more layers there are, the more inefficient you become. In traditional structures, double checks lead you to a situation of over-information, that in the end you can only remedy with total, absolute trust in the logistics operator”.

I already have a platform to accredit my providers. Now what?

Everyone present here, the heavyweights of Spanish transportation, are already implementing accreditation and document management procedures for their regular providers. In recent years, major logistics companies have invested millions of euros in constructing customized platforms for this purpose, making the excellency of their systems a weapon to differentiate themselves when faced with the competition.

Juan Ramón Serrano, director of Methods and Sales at Gefco, demonstrates that the volume of documentation that loaders request is a problem for multinationals that work with a database of more than 3,500 providers. For this, they have a platform that encourages partners to keep their documentation up to date, in order to be assigned more loads: “When providers give a lot, they receive a lot: they cease to be providers and instead become partners”.

But once immersed in this process, we find ourselves faced with a problem that is familiar to everyone: the lack of time and resources to keep accreditation up to date. Moreover, each client requests different documentation and doesn’t help to keep it up to date, even more so when many documents have very short expiry dates.

In this sense, José Gabriel Aznar, Manager of Transport Providers for the Carreras Group, comments that the difficulty arrives when each client requests different documents for the same driver. “Working with 100 providers, 15 different drivers and with an average of 20 documents for each one, we have some 30,000 documents to manage monthly, an extra cost that loaders are not willing to cover”.

It must be remembered that, for all the gears to function, at the other end of the chain there has to be a proactive transport professional willing to send the documents and keep them updated. A rare breed, one which we are not always lucky enough to come across.

On this matter, César Romera, traffic manager at Hellmann Worldwide Logistics, recognizes that it is necessary to carry out a process of “reeducating transport professionals” with the objective of raising awareness, so that they themselves send the documentation with each load order.

What happens with accreditation in the spot market?

As we were saying, all logistics operators carry out internal procedures to accredit their regular providers. Nevertheless, everyone recognizes that when dealing with spot contracting, the requirements become more lax due to the load being sent out immediately. Jaume Esteve, CEO of Wtransnet, confirms this feedback received by users of the Freight Exchange:

“We find ourselves with an indispensable spot market, to give clients flexibility. There are companies that have accredited their own fleet and those of their regular providers but which, nevertheless, turn a blind eye when it comes to sporadic partnerships. All this is nothing more than a consequence of a lack of standardization”.

 

Multiplicity of documents, multiplicity of platforms

Whether we look at things from the perspective of logistics operators, with their own systems (ERP, TMS, CRM), or from transport professionals’ point of view, who also have to use each client’s own platform to upload documentation, we find ourselves faced with a range of multiple platforms that make procedures even more inefficient.

Accordingly, Jordi Obach, Director of Medium and Full Load Overland Transport in Spain for DB Schenker, points out: “There are more than 20 different platforms. Now we are in the first phase, in which everyone goes of their own accord, until there is just one platform to unify everything. In fact, I encourage Wtransnet to lead it”.

Jaume Esteve, CEO of Wtransnet, takes over but is conclusive when he says that “it’s difficult to make” a single platform that meets all needs. He then adds that, in the short term, the optimal solution involves “integrating validation in ERP through interconnecting platforms”.

The government should take part

We’ve reached the end of the round table and Ricardo Ochoa, director of cadenadesumunistro.com and moderator of the debate, throws out a question: What is the future of accreditation? How can we organize it?

Jordi Obach (DB Schenker) has clear ideas: “The requirements of other countries have nothing to do with the documentation that we request in Spain, and as such online access to this would help to remedy part of the problem”.

All those present agree that it must be the government that protects the sector by implementing basic legislation that standardizes the documents required for accreditation.

Jaume Martínez, Regional Transport Manager at DHL Supply Chain Spain, comments that “there are some basic things that public bodies should give us – until there’s a single platform that harmonizes everything – so that the part covered by logistics operators is minimal”.

Juan Ramón Serrano (Gefco) goes a step further and adds that it’s necessary to “break down barriers, and that when obtaining the Transport Operator License, having the obligatory, valid documentation should be implicit”.

With these reflections, the round table comes to an end. Clear conclusions have been drawn with respect to the future of accrediting providers in the road goods transport sector: government support is necessary, as is standardizing processes and the interconnecting platforms to put an end to inefficiency stemming from the duplication of information and the multiplicity of platforms.