Responding effectively to the challenge of perpetually pricy petrol, shippers may need to revisit and potentially revamp their transportation strategies.
Transportation in the NewsFood logistics enters new transformational stage project44 and 3GTMS partner up for real-time LTL integration Port of Oakland forecasts record container throughput in coming years Rising Peak Season volumes and rates are intact, says Flexport Newly public Schneider, Werner bright spots in dull Q2 TL earnings picture More Transportation News
Transportation ResourceQuarterly Air Cargo Update: Confidence on a Steady Climb While the continued growth of air cargo demand is consistent with an improvement in world trade, analysts now contend that the pressure is on the market to improve its value proposition by accelerating process modernization and enhancing customer service.
Responding effectively to the challenge of perpetually pricy petrol, shippers may need to revisit and potentially revamp their transportation strategies. Virtually every aspect—from asset ownership to carrier relationships to customer service—belongs on the table, with priorities that most likely include:
Lower-cost modes: To one extent or another, shippers may need to move from fuel-intensive modes (e.g., road and air) to slower but more economical choices, such as rail and water. Better planning, timing, inter-company collaboration, and even philosophical changes may be needed to accommodate slower modes of transportation.
A tighter focus on utilization: Most companies should consider re-examining their operating models and transportation paradigms. Some may conclude that realigning customer/store-service contracts is needed—pushing, for example, for more factory-direct shipments, larger inventory minimums, or wider delivery windows that let the shipper hold freight until a truck is full. Two or more organizations might also work together to consolidate shipments to low-density areas.
Smarter ways to buy: Companies could determine that maximizing volume with one carrier is not the best policy in an era of runaway fuel prices. Instead, an entity might use an elite carrier when on-time delivery is key, and a low-cost carrier when delivery timing or accuracy are less important.
Thinking differently about transportation assets: Oil price cataclysms could make many private fleets less justifiable—replaced by commodity transportation providers or third-party logistics services providers that can
Subscribe to Logistics Management Magazine!Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!
BMW Takes the Inland Road to Efficiency Global Logistics: No Shortcuts to Security View More From this Issue