Transportation Management: Weathering the Perfect Storm

With powerful market factors converging to negatively impact transportation costs, capacity-and the bottom line-shippers can apply effective strategies to weather the storm and begin to build a world-class, integrated transportation system.


Table of Contents

Part I: The Changing Landscape of Transportation Management

- Elements of Transportation's "Perfect Storm"

- The Impact of Carrier Challenges on Shippers

Part II: Strategies for Weathering the Storm

- New Strategies for Transportation Procurement

- Leveraging Technology to Drive Transportation Execution

- The Importance of Yard Management

- Improving Relationships with Carrier Partners

Part III: Conclusion

- Taking a New Perspective on Transportation Management

- On the Road to Supply Chain Execution Success

Executive Summary
In today's competitive business environment, shippers in the manufacturing, distribution and retail sectors face enormous challenges, including increased outsourcing, globalization, and growing consumer demand for rapid order fulfillment - all of which lead to supply chain complexity. As a result, efficient supply chain execution and transportation management have become more important than ever for sustained profitability and customer retention.

For North American shippers, one of the most challenging areas of supply chain execution to manage and control is that of inbound and outbound transportation and logistics. In addition to unrelenting competitive pressures, several external factors have recently converged to create a "perfect storm" of adverse market conditions. Taken together, these factors can wreak havoc on the best-conceived transportation strategies and ultimately negatively impact the timely arrival of goods at their destination.

According to a report entitled Freight Shipments in America, released this year by the U.S. Department of Transportation's Bureau of Transportation (USDOT) Statistics, commercial freight shipped in the U.S. in 2002 totaled nearly 16 billion tons by weight, a rise of 18 percent since 1993, and almost $11 trillion in value, up 45 percent since 1993. That amounts to a staggering $29 billion in freight moved every single day.

This phenomenal growth has brought new challenges because the capacity of the transportation network has not increased at a rate commensurate with growth. The USDOT estimates that by 2020, annual freight value will soar to about $30 trillion, including both domestic and international. The American Trucking Association (ATA) reports that the trucking industry alone hauled more than nine billion tons of freight in 2003, or 68.9 percent of all freight tonnage transported in the U.S. The ATA estimates that trucking revenues will likely surpass the $1 trillion mark by 2015 and account for 87.3 of all freight transportation revenue.

Given these statistics, it becomes clear that the importance of profitably managing transportation cannot be overstated. Yet with today's fluctuating fuel prices, driver shortages, ongoing security concerns and changing industry regulations, the transportation industry has a host of tough issues to contend with. In this paper, we will take a closer look at these issues and potential solutions that can benefit shippers and carriers alike.

How can shippers position themselves to deal with the new realities in transportation and still control costs and maintain their competitive edge? The key is to carefully measure and analyze the impact of each of these external market factors on their own transportation planning, procurement and execution processes, and to implement strategies that will help mitigate the pain points. By intelligently applying information technology and adopting a culture of collaboration and continuous improvement, shippers can improve their relationships with suppliers and carriers, automate many of their processes, and fully optimize their transportation and logistics execution

Part I: The Changing Landscape of Transportation Management

Elements of Transportation's "Perfect Storm"
For the past year or more, industry analysts and media alike have been charting the dramatic changes taking place in the transportation industry. Following is a summary of the supplier and carrier issues currently driving up prices and reducing capacity for North America shippers and making it more difficult to ensure high customer fulfillment service levels and profitability.

This content continues onto the next page...

Already have an account? Click here to Log in.

Enhance Your Experience.

When you register for FoodLogistics.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

OR

Complete the registration form.

Required
Required
Required
Required
Required
Required
Required
Required
Required
Required
Required