3PLs Should Focus On Their Specialties

Many third-party logistics providers (3PLs) will tell you freight takes serious hustle.

Balancing the unique needs of each customer can be challenging for brokers as their network of carriers, suppliers and partners grows. Chasing after a wide variety of transactional freight — although lucrative at times — may risk spreading your services too thin. 

Excelling in only a handful of services is better than doing everything just so-so; simply meeting expectations won't turn any heads, which means the key to long-lasting relationships in this industry is to provide value that goes above and beyond what's expected of a logistics provider.

The market is saturated with brokers, and few can excel at all of their services. That is the opinion of Karl Bratnober, vice president of Trademark Transportation.

Bratnober believes that it's hard to do anything well when you're trying your hand at everything. It limits the quality of service provided to any one customer, he adds, and also limits the partnerships with carriers, which are as important as relationships between brokers and customers.

"By focusing on specific segments, brokers can offer a higher quality service that allows them to focus on specific customer needs," Bratnober said.

Specialization is Trademark Transportation's specialty, specifically in temperature-controlled food logistics. The St. Paul, Minnesota-based 3PL strives to improve time- and temperature-sensitive shipping, relying on its nearly 40 years of cold chain less-than-truckload (LTL) experience.

Trademark helps food manufacturers, food service companies and other 3PLs manage and grow capacity through freight consolidation, pool distribution and its exclusive cold chain LTL technology suite.

More freight means more business, but it can also be time consuming and eat away at your bottom line. 

"Many 3PLs lean on us as a partner and often strike up co-broker agreements with us strictly because of our specialty," Bratnober said. "Customers look to us as a collaborator as opposed to just a vendor, which is ultimately where we want to be with all of our customers — collaborating to help them grow."

Bratnober said Trademark prefers contracted freight to chasing the spot market, describing the company's dedication to designing, building and managing robust cold chain logistics programs. Trademark is also very selective when choosing carriers to partner with, as Bratnober explained that partners must have aligning values, performance expectations and growth goals before joining the network.

"Everybody has to do the transactional thing, but we've always leaned upon contracted rates and programs as opposed to spot quotes," Bratnober said. "We work hard to focus on a customer's entire freight spend. Rather than shopping rates to save $25-$50 on one shipment, we want to look at programs that save, say, 5% on their LTL spend." 

His father, Justin Bratnober, is the owner of Trademark. He shares his son's views on specialization and the importance of relationship building, alluding to his four decades' worth of experience building a successful cold chain network.

"Looking across the 3PL landscape, I have found that these service providers are a little hard to distinguish one from another," Justin Bratnober said. "You have to be able to distinguish yourself in the marketplace; it's just a fact."

He urged brokers and 3PLs to find their niche, stay true to their mission statement and develop a strategy to stand out from the competition.

"We've found that relationships can be rather short-lived if you aren't providing real value," Justin Bratnober said.

The elder Bratnober entered the industry right out of college in the late 1970s while cutting his teeth at his family's business. It was a Minneapolis-area public warehousing business that handled dry, refrigerated and frozen goods for its clients, which was unique for its time, he said. 

After six years, Bratnober decided to go off on his own. He considered building a consortium company of sorts, similar to that of his family, that linked refrigerated service providers, but he quickly found out just how fragmented the cold chain landscape was.

Bratnober ultimately decided to start brokering truckloads for the sector in 1983, describing Trademark as an early entrant in the brokerage space. The company soon focused on refrigerated and frozen LTL transportation after identifying a need in the market for such services. Over time, Trademark's carrier network quickly grew through the Midwest, where it thrives today. 

Trademark's latest frontier has been on the tech front. The 3PL's technology suite automates freight processing and eliminates inaccuracies, utilizes route optimization and offers access to its database of highly vetted carriers to ensure that each shipment is loaded with the carrier best suited to the job.   

"Because of our specialization, we've discovered that there were considerable process improvements that could be made," Bratnober said. "We're starting to have much deeper conversations with our customers about how things work within their business."

Bratnober explained, for example, that a food company might have 100 truckloads a week, along with 50 LTL shipments. The 100 truckloads make up 95% of sales and total volume, whereas LTL shipments may only be about 5% of that. Despite not packing a punch in sales, the LTL shipments may account for 80% of the issues, headaches and challenges that are plaguing the company.

"By deciding to be hyperfocused on a niche of the industry, we are able to support shippers and other 3PLs with solutions to a need and differentiate ourselves in the marketplace," Bratnober said.

Click for more FreightWaves content by Jack Glenn.

Image Sourced from Pixabay