By Mary C. Holcomb, Ph.D., and Karl Manrodt, Ph.D., Contributing Editors
September 01, 2013
Business climate: Changing, uncontrollable
Over the past few years, various facets of the business environment have altered how shippers and carriers manage their operations. Participants reported that foremost among these is changing customer requirements, followed by cost to serve and demand uncertainty.
Regardless of size of company or position in the supply chain (e.g. retailer, wholesaler, manufacturer, or supplier), trying to meet the performance expectations and needs of customers is increasingly difficult.
The environment is even challenging for carriers. According to Derek Leathers, president and COO of TL giant Werner Enterprises: “Many trucking companies are dealing with a very high debt load and limited access to credit, equipment is much more expensive, and the residual value of old trucks is low. Added to that, drivers are simply not available.”
What this means for shippers and carriers alike is that flexibility is becoming more critical. The question for shippers is how can they increase their flexibility, especially from transportation providers.
One option would be to use a wide range of carriers. If transportation is all the same, it really doesn’t matter who moves the goods. This is the commodity perspective. Or, you could view transportation as a value-added service and work to develop relationships with a set of carriers who will work with you and provide the needed flexibility. Either option provides a response to changing customer requirements. However, the big question is whether or not it’s the right one in a few years if capacity continues to tighten and transportation costs keep on rising.
About the Author
Mary C. Holcomb, Ph.D., and Karl Manrodt, Ph.D.
Mary Collins Holcomb, Ph.D., is Associate Professor of Logistics and Transportation at The University of Tennessee. Dr. Holcomb was also a member of the faculty in Transportation and Logistics at Iowa State University, Ames. She holds B.S., MBA, and Ph.D. degrees from The University of Tennessee. Her professional career involved some eighteen years at the Oak Ridge National Laboratory in transportation research and policy issues for the U.S. Departments of Energy, Transportation, and Defense. Dr. Holcomb’s background also consists of various industry experience with the former Burlington Northern Railroad, General Motors, Milliken & Company, and two years of collaborative research with Procter & Gamble. She is a principal researcher in one of the longest running annual studies – Logistics and Supply Chain Trends and Issues – that has been conducted for more than 14 years. Dr. Holcomb is the former editor of the Transportation Energy Data Book, author and co-author of numerous reports and articles in the area of transportation policy and logistics systems design.
Karl Manrodt, Ph.D., serves an Associate Professor in the Department of Management, Marketing and Logistics and Georgia Southern University, located in Statesboro, Georgia. Prior to joining Georgia Southern, he served as the Executive Director for the Office of Corporate Partnerships and the Supply Chain Strategy Management Forum in the Department of Marketing, Logistics and Transportation at the University of Tennessee. Degrees include a B.A. in Philosophy and Psychology, Wartburg College, M.S. in Logistics, Wright State University, and his Ph.D. at the University of Tennessee. He is the recipient of the Chancellor’s Citation for Professional Promise, the Walter Melville Bonham Dissertation Scholarship, both at the University of Tennessee, and the E. Grosvenor Plowman Award awarded by the Council of Logistics Management.