The ultimate perishable

By Peter Bradley, Editor in Chief -- Logistics Management, 5/1/2000

From time to time, we run stories in this magazine about shipping perishables and the logistics challenges they present. But it occurred to me recently that those in the transportation business are involved with the ultimate perishable: space. Meat and vegetables have a shelf life of at least a few days. But the instant a truck pulls away from a shipping dock, an aircraft taxis from a gate, a ship departs from a pier, or a train moves out of a terminal, the unused capacity for that trip is lost forever. Success in managing space has much to do with a transportation company's success in business.

That thought is not new, of course: The yield management practiced by the airlines was designed to assure maximum space utilization. Continuous move programs developed by truckload carriers and their customers have the same end. Carriers and their technology providers have invested heavily in decision-support software aimed at maximizing capacity utilization. Private-fleet managers look for backhauls so that their expensive assets are not moving empty.

Yet shippers and carriers-and regulators-can do more to improve the transportation system's efficiency. The proliferation of Internet-based companies in this business over the last few years and especially in the last 12 months is testimony to the belief that better information can make transportation far more efficient than it is at present. The concept-making capacity and freight visible and accessible to both shippers and carriers-takes the well-established idea of freight brokerage and adds the enormous power of the Internet. Whether online brokerage is enough to assure business success is debatable, and most of the dot-coms at least claim to offer more. The point here is that these businesses take direct aim at improving the use of that perishable space.

Good information, properly used, is central to any effort to improve transportation network efficiency. There is also a great deal that carriers and shippers can do in their current operations to improve capacity. Carriers can continue their efforts to provide good equipment where and when promised. If shippers are confident they can get the equipment they need, they can work with carriers to make sure that they order only what they need. Many shippers, too, need to address the inefficiencies they build into the system by, for instance, failure to load or unload a truck in a timely manner. Turning trucks around quickly essentially creates new capacity out of nothing-a win for both carriers and shippers.

Freight capacity appears as solid as a boxcar or a trailer, but in reality it's as ephemeral as a breeze. Only through joint and persistent effort will carriers and shippers capture more of it.