By now, you get that more goes into choosing a freight and logistics vendor than who offers the lowest price for its services. Every business has its own set of unique needs, many of which will change with time. So you often go with someone you feel can adapt and scale as you grow.

How to Know if It’s Time to Switch Vendors

The question is: How do you know when you’ve outgrown your partnership? No one wants to admit they have selected a vendor that isn’t living up to their current expectations and needs. Worse yet – most businesses are too lazy to do anything about it. If you’re not sure, the following are three telltale signs that it’s time to switch vendors:

Price

Annual price hikes aren’t out of the ordinary. But significant increases without improving or expanding services can be a warning sign. Your vendor is either gouging existing customers or struggling to gain new ones, which could mean they won’t be around much longer. If neither of these cases proves to be right, it could be a classic occurrence of unethical business practices. More and more vendors are realizing just how many service and pricing alterations they are able to get away with. What does this mean? Although you want to avoid hasty conclusions, it’s important to understand that vendors often use the trust their clients place on them as a means of generating more revenue.

Before jumping ship, however, consider the value you’re getting out of its services. Is the increase justifiable? Is it competitive in this rapidly changing market? Does it line up with any surcharges hitting the industry?  If not, it may be time to switch vendors.

Service

Every vendor is bound to make a mistake or two. Just consider all the variables that can impact service: weather, customs, strikes, power outages, etc. Not a single one is under its control. But repeated service failures can often indicate systemic problems in the vendor’s processes. Have you had any recent conversations with your vendor about these issues? Beware of any lousy answers or attempts at covering up the service problems they have created. A vendor that is worth your time should be honest, upfront, and quick to make changes in their practices to ensure these issues are fixed. If you do not feel they are respecting or valuing your responses, it may be an indication it’s time to switch vendors.

To further aid the decision-making process of how to move forward, it would prove helpful to investigate the sources of these problems. Is it unavoidable variables as mentioned before? Is the company downsizing or going through an acquisition? Were there changes in management structures and practices? A simple conversation with your vendor could further inform you of whether or not the culture of the company has changed. If you’ve worked with your vendor for any reasonable amount of time, it’s easy to tell when something smells fishy.

Even if a vendor does correct its repeated errors, you’re still experiencing operational disruptions. This forces you to spend additional time and resources that could be used to improve business. When a vendor costs you more money than it saves, it’s time to look into other service providers.

Trust

Whenever working with an outside company, you can only base its performance on a couple factors: service and behavior. There’s also something to be said for your gut, but that’s another story. If a vendor changes the terms of agreement, argues over the terms, or squabbles over minor details, it’s hard to put your trust in them.

You can also run into some trust issues when your values don’t align. After all, values often determine the way a vendor works with its customers. You want to work with a company that’s compatible with your own. Though it should go without saying, walk away from any vendor you can’t trust.

Deciding to switch vendors can be challenging for many businesses. Comfort comes with a longstanding relationship, so you’re more than willing to overlook the occasional oversight or bump in fees. But exploitative pricing, incompetence, and dishonesty should never be tolerated. Any one of these can do significant damage to your bottom line.

Deciding if and when the right time to switch vendors is can be stressful. If you’re questioning whether to switch providers, Interlog USA’s Vendor Scorecard is a simple way to tally and track a vendor’s relative strengths before resigning a contract. If you feel that it’s time to switch vendors, or you want to explore what this would entail, give us a call and we’d be happy to help!