22nd Annual Study of Logistics and Transportation Trends: Masters co-create value

The Masters of Logistics have developed strategic partnerships with carriers that enable them to keep costs low while providing innovative service to their customers—and our data show that this value-added perspective is leading to performance that is significantly better than their competitors.

By Mary Collins Holcomb and Karl Manrodt · September 1, 2013

Some have said transportation is a street leading to unlimited destinations. On this street, some are headed to a place where transportation is viewed as a commodity. Others have made a dramatic U-turn and are headed towards an end point of long-term commitment where transportation providers are viewed as critical partners to the success of the firm. Meanwhile, the majority remain in the middle, parked in the off-ramps, wondering why everyone is in a hurry. For those headed to commitment or commodity, the reasons for urgency are apparent and inescapable.

This allegory reflects a trend continued by a group of carriers and shippers towards the co-creation of value, and this group has moved further along the road to positioning transportation as a strategic value-add function. In fact, the results of the 22nd Annual Trends and Issues in Transportation and Logistics (Masters of Logistics) findings indicate that this “value-added” view of transportation directly relates to better company performance in areas such as profitability, return on assets, competitive position/market share, and customer service.

This year’s findings reveal that the value-added approach to transportation goes beyond the core carrier program: It’s an active two-way street where both parties are committed to the long-term success of the other; a strategic relationship where both parties keep their focus on forging a new way of managing transportation.

In addition to the annual global survey which is the primary source of data presented in this article, the authors, along with survey sponsor Con-way Inc., conducted in-depth interviews with vice presidents and directors of transportation, logistics, and supply chain at Fortune 100 companies as well as discussions with CEOs of the top ranking truckload (TL) and less-than-truckload (LTL) carriers. The interviews provided a wealth of perspective concerning the commoditization of transportation.

The findings from the survey in tandem with the interviews point to a pivotal change in the way transportation is being viewed and managed by companies. A critical mass is emerging at both ends of the “commodity/value add spectrum,” with both sides cite compelling, data-driven reasons for their positioning of transportation. Four of the most frequently mentioned factors that emerged from the study regarding forces that are changing the way transportation and logistics is managed are: business climate; cost to serve; customer service; and functional alignment.

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About the Author

Mary Collins Holcomb and Karl Manrodt
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.

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