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Logistics Outlook 2006: Control what you can control

By Michael A. Levans, Chief Editor -- Logistics Management, 1/1/2006

You thought 2005 was a tough year? Well, hold onto your hat. With the exception of ocean shipping, transportation rates will rise across the board in 2006—and from what we report in our 2006 Logistics Outlook, there's little relief in sight from the capacity, infrastructure, and fuel-price woes that have confounded shippers for the past two years.

Still perplexed? You're not alone. It's tough for even the most rational logistics pros to comprehend that many of the variables that influence freight rates have slipped out of their control. Before establishing a logistics strategy these days, shippers must first come to terms with a few realities: There's little they can do to bring fuel costs down; it's impossible to prevent natural disasters; and it's not feasible to snap your fingers and magically fill the seats of the nation's truck cabs or unclog the nation's ports.

To hammer this point home in her 2006 Logistics Outlook (Page 26), intrepid economist Elizabeth Baatz writes, "If you're a shipper and you're asking if your rates are going up, you're asking the wrong question." In today's environment, she says, shippers need to ask, "How am I going to manage through this maelstrom?"

I couldn't agree more. Clearly, it's time for logistics managers to take control of the things they can control. It's time to listen to suggestions from aligned departments, for tightening up carrier relationships, and for implementing those best practices ideas you've been clipping from our pages. Simply put: It's time to assess how "fit" your logistics operation is—because if you're flabby around the middle in 2006, you may be forced to get your resumé in shape in 2007.

I'm going to make a few suggestions to help you begin your 2006 "tuneup." First, read our 2006 Logistics Outlook. Second, read "Imagination pays off" (Page 34), which tells how two "change agents" have brought impressive savings and efficiencies to their companies by applying some old-fashioned common sense. And third, on Tuesday, January 31, be sure to attend our Logistics Outlook webcast, an interactive event designed to bring the print version of our annual report to life.

While the Logistics Outlook webcast will focus on rate forecasts, we'll also offer some practical advice to help shippers come to grips with today's realities. As you'll learn in "Imagination pays off," great cost savings and efficiency solutions are often right in front of your eyes—you just need to keep them open.

Michael A. Levans, Chief Editor

Comments? E-mail me at michael.levans@reedbusiness.com

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