Transportation Management: Stop Leaving Cash on the Table
Posted by Seraj A. Farooqui on Wed, Sep 21, 2011 @ 04:02 PM
Manufacturers and distributors can agree that improving transportation efficiency, while reducing overall transportation spend, is the “bread and butter” to any logistics strategy. After-all, optimizing transportation correlates directly to higher margins, greater sales, and quarterly success.
However, as concluded by the Cleveland Research Company’s Transportation Industry Monthly: Trend Analysis, demands for LTL/Truck load shipments continue to increase year-over-year. In fact, during July 2011 demand for LTL services was 5% higher than in July 2010. This excess demand creates a “carrier-friendly” pricing environment, and inevitably increases your annual transportation spend.
So how can one counter-act the basic economic principles of supply and demand, and fight increasing shipping costs?
The answer is quite simple. Proactively seek a partnership with a third party logistics provider (3PL) that provide you the tools and resources to manage your spend efficiently. Here are 3 reasons why:
1. A good 3PL analyzes current rates and freight requirements, and uses its market presence to leverage relationships with carriers to provide a least-cost routing model to its customers. In other words, they bid out your shipment to a multitude of qualified freight carriers within their network, and pass their negotiated savings on to you.
2. Looking beyond the price of an individual shipment, a 3PL can also dilute the indirect cost and time associated with quoting a shopping list of carriers, sorting through bids, and following up on shipments. By means of a web-based Transportation Management System (TMS), one can not only rate-shop multiple carriers within 30 seconds, but also manage shipping documents, receive up-to-the-minute tracking, and print transportation audit reports.
3. Working with a 3PL to manage transportation can also reduce the frequency and cost of chargebacks. 3PLs have extensive experience in transporting on-time, 100% retail-complaint shipments to some of the world’s largest and most demanding retailers. They can also provide a host of other Supply Chain and Logistics solutions, which enable them to customize their capabilities and provide value-added logistics solutions such as kitting, assembly, and reverse logistics to name a few.
So whether shipping spare parts to immediately return an aircraft on ground (AOG) to service, coordinating on-site “white glove” deliveries to our nation's hospitals, or fulfilling orders to a retailer - consider a 3PL partnership and fight the increasing transportation costs.
What are some other solutions to combat increasing transportation spend?