What is a Routing Guide?

You may have heard the term “routing guide” tossed around the office a time or two in relation to supply chain management. For some roles it’s no more than a vague concept, for others it’s practically the air they breathe.

No matter your role or industry of choice, rest assured every major supply chain is affected by routing guides on a daily basis. Let’s take a closer look at the what, why and how of routing guides in the supply chain.

What Does a Routing Guide Do?

Growing beyond direct-to-consumer sales channels and expanding into the realm of retail is an exciting milestone for a brand. However, rapid growth demands its own set of challenges — like figuring out how to transport larger volumes of products to a retailer’s receivers.

Big box retailers like Costco, Walmart and Target receive and process products from hundreds of different vendors every day. For these retail giants to manage all of those incoming shipments efficiently, each vendor has to conform to consistent labeling and scheduling systems to book deliveries or risk massive delays and general chaos. That’s where a routing guide comes in.

A routing guide is a living digital document detailing standard shipping rules and requirements for incoming and/or outgoing freight. Think of it like a user’s manual for achieving the smoothest, most cost-effective experience with a specific retailer.

The contents of the routing guide will vary per retailer, but you can typically expect it to include information like:

• Preferred carriers for tendering freight along with rates and service requirements.
• Specific packaging, labeling, and transportation requirements.
• Resources and instructions for scheduling deliveries and pick-ups.
• Instructions for what to do in case of delays or unexpected changes.
• A description of fees and penalty charges for not adhering to the regulations set forth in the routing guide.

Though routing guides are most commonly published by retailers, they’re not the only ones who use them. Any shipper regularly moving freight to multiple facilities or with more than one carrier servicing their facility can benefit from a routing guide to oversee contract rates and other vital shipping details.

Why Use a Routing Guide?

A routing guide is an invaluable tool for streamlining freight tendering and delivery processes. It allows retailers to have more control over inbound shipments and promotes uniformity among vendors, reducing transportation time for goods and the costs associated with processing each load upon delivery.

Additionally, a successful routing guide can enable the following:

• Point vendors in the right direction to find the best transportation rates based on the retailer’s current contracts with specific carriers.
• Provide clear rules for inbound shipments so everyone is on the same page come delivery time. For example, instructions for scheduling dock times, driver certification requirements, expected digital documentation, etc.
• Lay out a plan for handling delays and unexpected changes. This mitigates the negative effects of delays and enables workers to preemptively address problems.
• Offer a central location with the most up-to-date information that can easily be updated digitally by the retailer in order to adjust to modern situations.
• Set a performance standard for carriers to ensure they’re held accountable for their work and are motivated to operate at a certain level in order to continue being a preferred carrier in the future.
• Reduce the amount of time wasted on trying to track down missing documentation and other shipment information
• Enables shippers to spot inefficiencies and prompts a higher level of accuracy among vendors and carriers, which improves the overall efficiency of the supply chain.
• Creates a foundation of open communication between vendors and the recipient and reduces the amount of time that must be spent onboarding new vendors.

How to Build the Perfect Routing Guide

The secret to creating a successful routing guide is simplicity. Successful routing guides use clear language and instructions, making them easy to understand and apply.

Start by identifying your carrier selection criteria. Do your preferred carriers change based on the shipment’s point of origin? Which carriers are preferred for each mode of transportation? If you have a robust shipping network, it may be helpful to create additional routing guides based on each shipping mode or region. It’s also useful for determining primary and backup carriers when possible.

Next, consider mode optimization and shipment consolidation. It may be helpful to review your current processes to identify what is working well and would improve efficiency even more if it were applied to all carriers and channels.

Finally, don’t forget to establish performance tracking and chargeback policies to promote compliance. Setting performance metrics ahead of time will help you more easily identify improvement areas moving forward — this is where investing in a reliable transportation management system comes in handy.

Review your routing guide on at least an annual basis. Remember, a routing guide is a dynamic, living document, which means it should be updated regularly to reflect changes in your company, global trends and conditions.

If you’ve just reached the retail milestone and are working with a retailer’s routing guide for the first time, don’t hesitate to reach out to a reliable 3PL provider for assistance. 3PLs like First Call work with a variety of retail companies on a daily basis. Our team has a lot of practice following routing guides for multiple retailers, and we’d love to help ensure your shipments meet their shipping requirements every time. Contact us here today to get started!