Signing a Trucking Contract
Before signing a Less Than Truckload (LTL) / Truckload (TL) contract with your chosen carrier, you must consider the following.
Check the terms and conditions (boilerplate) of the contract with your lawyer or a Transportation Consultant or both.
If the carrier has a Transportation Management System (TMS), it is imperative to include a clause that says you, the customer, will share the benefits of TMS Optimization of routes, loads and modes of the goods the carrier hauls for you. There will be cost savings after the carrier has experience hauling your cargo from city to city and finds the optimum routes, loads and modes of transportation. Either put this statement in the contract itself, or add a QBR: Quartely Business Review of the carriers TMS Optimization Cost Savings.
Include a statement about the fuel surcharge in the contract. Either receive a fuel surcharge cap from the carrier based on the contract or request certain carrier points (five to ten) for a fuel surcharge cap and or reduction in fees.
Both you, the customer, and the chosen carrier have to sign the contract and the QBR to make them official. Follow-up has to be put in place for the Quarterly Business Review and fuel surcharge negotiations.
About The Author
Chuck Intrieri is the owner of Charles M. Intrieri Consulting in Orange County, CA. Chuck specializes in Supply Chain Optimization, Third Party Logistics (3PL) and International Purchasing and Importing Consulting. He also writes for THE GOOD WORD, LinkedIn and other Supply Chain Blogs. He is a guest speaker at the Purchasing Management Association and the University of Wisconsin-Madison. He is certified as a C.P.M.,CPIM, and Value Engineer.