Viewpoint: New culture of collaboration

By Michael Levans, Group Editorial Director
March 01, 2014 - LM Editorial

We’ve certainly been reading and hearing more about the benefits of improved communication and collaboration in logistics management—be it with our carriers, third party-logistics (3PL) providers, suppliers, and even competitors.

You’ve heard the basic collaboration axioms by now: Through more real-time contact with carriers we can cut driver detention time. By sharing long-term plans with our 3PLs, we can expand existing relationships, put more of their services to work, and create a strategy that benefits both parties. We can improve freight visibility and inventory management through collaborative planning with our suppliers. And we may even be able to cut rates and help our TL and LTL carriers improve service if we’re willing to fill more trailers with the help of our competitors down the street.

And that list is just scratching the surface. Collaboration can come in many shapes and sizes and now needs to happen at every level of supply chain management. The very foundation of e-commerce, for example, is built on the backbone of improved collaborative planning between distribution center operations and transportation. The most sophisticated order fulfillment operation in the world is useless unless the trucks are at the dock to move the goods.

Logistics Management has covered the growing culture of collaboration extensively through case studies and columns—and based on some of the results we’re hearing, we are not about to stop.

This month’s cover story is an inspiring example of the power of collaboration between a shipper and an existing 3PL partner. Starting on page 26, Executive Editor Patrick Burnson explains how international home and leisure goods giant Hermes-OTTO set out to re-launch the Bombay Company brand and expand in North America with the help of the 3PL partner that was with them at the start.

“In these situations, shippers are often faced with the difficult decision of either spreading the risk of network expansion among multiple 3PL players or sticking with the provider that got them there in the first place,” says Burnson. “It was refreshing to report that, even though Bombay considered other capable players, they decided to collaborate and build on the existing trust.”

By setting up new pricing arrangements and customizing the existing contract to meet Bombay’s needs in the region, the expanded 3PL partnership yielded a multi-channel supply chain built from the ground up. “They now openly share volume forecasts and are able to maintain a fully optimized fulfillment network with deliveries direct to stores, direct to customers, or back through the reverse loop.”

Beginning on page 32, Contributing Editor and Columnist Peter Moore offers his unique insight into the power of collaborative LTL contracting. According to Moore, LTL plays a critical role in our national supply chain network, yet all too often shippers look at these carriers as little more than a commodity—a perception that Moore contends is causing harm to the budgets of both parties.

“It’s time to toss out the traditional LTL contract and impersonal RFP,” says Moore. “Both the shipper and the carrier need to envision themselves sitting across the table from their mutual challenges.” The objective, adds Moore, is for both parties to share the benefit of optimized costs and improved service. What’s not to like about that?



About the Author

image
Michael Levans
Group Editorial Director

Michael Levans is Group Editorial Director of Peerless Media’s Supply Chain Group of publications and websites including Logistics Management, Supply Chain Management Review, Modern Materials Handling, and Material Handling Product News. He’s a 23-year publishing veteran who started out at the Pittsburgh Press as a business reporter and has spent the last 17 years in the business-to-business press. He’s been covering the logistics and supply chain markets for the past seven years. You can reach him at .(JavaScript must be enabled to view this email address)


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!

Recent Entries

The Department of Commerce reported that January retail sales were up 0.2 percent compared to December and up 3.7 percent annually at $449.9 billion, and the NRF reported that January retail sales, which exclude automobiles, gas stations, and restaurants, rose 0.6 percent over December and 1.4 percent compared to January 2015.

On the freight shipments side, Cass reported that January shipments––at 1.025––trailed December by 1.3 percent and January 2016 by 0.2 percent. These declines were less than the 4.9 percent drop from November to December, though, and January shipments still topped the 1.0 mark for the 65th straight month in December.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that its Freight Transportation Services Index (TSI) saw a 0.4 percent decline from November to December, its second straight decline on the heels of a 1.0 percent decrease from October to November.

Carloads saw a 11.7 percent annual decline at 241,680, and intermodal containers and trailers rose 10.5 percent to 262,830

An amendment to the International Maritime Organization’s Safety of Life at Sea convention will go into effect requiring all shippers (importers and exporters) to certify and submit the Verified Gross Mass – the combined weight of the cargo and the container – to the steamship line and terminal operator in advance of loading the container aboard a vessel.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA