Distribution is one of the important industries in Indonesia with activities related to wholesale, import, export and retail. Distribution is defined as an essential industry, ensuring product availability to buyers by allocating it through the market. Steps for distribution include shipping, packaging, and delivery.

To assist managers in the evaluation process, we would like to introduce a guide to evaluating transporters according to several objective criteria. Depending on your company’s business needs, identify the most important criteria and choose the right supplier based on that.

1. Types of transportation partners

Transporters are companies that provide air, sea or road transport services. There are two main types of transporters: private and for-hire. A private transporter will provide services to companies and industries wishing to own or lease vehicles, and will not charge additional fees beyond the service fee. On the other hand, a for-hire carrier will provide services to the public for a fee, while complying with State regulations on rates, routes and markets served.

• Private carrier: A group that provides exclusive transportation within an organization. Private fleets will be used to transport goods from suppliers, helping to reduce overall operating costs. Most personal vehicles such as cars and pickup trucks can act as a method of advertising, in the form of “mobile billboards”.
• Common carrier: The means of transportation are public and the carrier does not provide special service packages to any one organization. Regulations of these companies are often based on fees, liability and services provided.
• Contract carrier: This type of company does not serve the general public, but leases transportation to a limited number of drivers and under a specific contract. They have no obligation to provide services to the public but only to contracted customers.
• Tax-free transport: A transport company for hire that is not subject to economic regulation, such as a taxi or cargo truck. They are not limited in terms of routes, service areas or prices. Their exemption eligibility is determined by the type of product being shipped and the nature of the organization.
• NVOCC (Non Vessel Owning Common Carrier): a company doing business in the field of ocean freight, considered a carrier but different from shipping lines, meaning they do not own Which ship do you own? NVOCC operations include sales, loading and transportation of containers to shipping ports. Bill of lading and overseas distribution issues will be managed by NVOCC agents.

2. Factors to consider when evaluating transporters

a. Cost and quality

Price is a deciding factor in the carrier selection process and is often one of the information that the service provider must satisfy. In addition to service fees, companies will check the quality of services provided by the potential partner. Along with the time factor, the above factors will help managers reduce risks when choosing a suitable partner for the company.

b. Shipping times and reliability

A carrier should be selected based on speed and reliability. The success of a business depends on goods being transported promptly to the right location. A trustworthy partner will build a positive image for your company and help grow your business by meeting customer needs. Choosing a partner who is transparent in communication is also important. The carrier will be more responsible for the shipment, and you will not have to worry about the condition of the goods.

c. Service and capacity

The carrier considered must have sufficient capacity to serve the company’s transportation needs. Ask yourself questions like: What services does the carrier provide? Do these services serve your company’s requirements? That carrier must have the necessary equipment and resources, as well as the ability to ensure the quality of the shipment to be transported.

d. Geographical scope

Choosing a carrier that can provide service on your freight route at the required frequency is also an important factor. If the company intends to establish a long-term relationship that is beneficial to all parties, it should consider both current and projected goals.

e. Product protection

Safety means a lot to a company as well as its customers. A carrier with a low accident rate and higher service fees is still more optimal than a supplier with lower service fees but an alarming accident rate. In the event of an accident, the carrier’s communication and handling processes must comply with the organization’s standards. A carrier that prioritizes safety helps the company build a stable reputation, which in turn leads to increased sales.

f. Stability and sustainability

A stable carrier in the market will ensure service productivity for your company’s transportation needs. In the long term, the company will enjoy many benefits when dealing with a partner with a stable position in the market and sustainable growth.

Responding to 21st century trends, carriers should follow sustainability goals and be environmentally conscious. Between two reputable companies, customers today tend to choose the more environmentally friendly company.