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TRUST- the foundation of strong personal and Logistics relationships

Updated: Aug 7, 2021

Trust... we all understand how important it is in building successful personal relationships, but its importance is often missed in building successful internal and external Supply Chain and Logistics partner relationships... some believing that it’s success is solely dependent on lowering costs and maximizing profits for their shareholders... these are certainly key indicators, but building Trust with the company’s key Supply Chain & Logistics stakeholders as a means to that end doesn't often factor into a business plan. And, like the scrabble pieces in the picture above, there are many pieces to the puzzle of building a “Trusted“ reationship.

Over the course of my career, I've had the privilege of leading several global 3rd Party Transportation & Logistics businesses. When building the business plans of these companies I always kept a survey of senior executives conducted by the Conference Board of NY top of mind. Several years ago the board asked their members to rank the things they valued most in their relationships with their suppliers... areas like, product and service performance, price, knowledge and insights provided by their sales people, the brand image of the companies they did business with, etc.. Surprisingly, less than a third ranked product/service performance and price as what they valued most. Their highest value rating was in the knowledge and insights of their suppliers' people, and their brand image.

Well, at first, I thought “this can’t be”, but after delving into the survey I learned that the senior executives responding did not "value" a supplier's product or service performance, but "expected" it. Either the company delivered on what they promised, or they quickly found another supplier to fill that need. What’s more, two thirds of the senior executives surveyed valued suppliers with people who provided insights and knowledge they trusted to improve their business performance; and those with a strong and trusted brand image, which reflected well on them by association and enhanced their own company's brand image with their customers and prospects.

This point resonated with me and together with my senior management teams over the years I’ve always focused on building a culture of TRUST... not just with our shareholders, but with all our key stakeholders, in the following order...

  • Our Employees and their Families (or significant others)... without the trust of your people and their families (or whomever was important in their lives) our ability to provide excellent Transportation & Logistics services simply could not be achieved or sustained.

  • Our Business Partners (suppliers)... as a 3PL Transportation & Logistics company we relied on partners that could not only deliver excellent service at competitive (not necessarily the lowest) cost but could help us to provide innovative and creative Logistics solutions to use in building the trust of our customers.

  • Our Customers... I would frequently remind our people that every night, after we processed our last shipment and operations shutdown, we were out of business. Unless, that is, our customers trusted us with their shipments the following day.

  • Our Communities... the towns, cities, states and provinces that support a business. Showing our appreciation for the support of our business by giving back to the community through local organizations like local food banks, veterans associations, childcare agencies, not for profit agencies supporting those needing help in the communities we operated in. To foster this, we formed ”Give Back" committees led by our employees.

  • Finally, Our Shareholders... who are entitled to a strong return on their investment in our business and trust us to deliver against our plans.

And how did we ensure our key stakeholders trusted us? By acting in accordance with our Core Values (more on these another time) when providing them our services. This guided the decisions and actions we took, which wasn't always easy, and sometimes costly. In the end, however, it was worth the investment as our people became energized and aligned with this operating principle, which strengthened the trust of all our stakeholders in our company. Ultimately, our Net Promoter Scores (NPS) soared into the mid to high 60's over the years, and our business and profits grew tenfold.

So, when thinking about your business plans, I would encourage you to know who are the key stakeholders you’re serving through your Supply Chain & Logistics infrastructure, and add the means to build their TRUST into your plans. And, to achieve this deal with suppliers you can trust... price and product performance, cost and profits remain quite important business performance indicators, as without these you'll have no business; but like the senior execs in the Conference Board’s survey you should expect your Supply Chain & Logistics partners prices to be market competitive, and their services to perform as expected. If you also deal with companies whose people can add value and insights into your Supply Chain, that you can then use to build your business and the trust of your all key stakeholders, your company's customer loyalty, revenue and profits will thrive.

John T. Costanzo

Founder & CEO

LDK Global Logistics

Phone: 516-588-9165


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