January 2016 | Sponsored | Knowledge Base

Transportation 2016 (And Beyond): The Old Rules Don’t Apply

Tags: Transportation, Logistics, Technology , Supply Chain

Cindi Hane is Vice President Logistics Product Management, Elemica, 678-514-3700

 

Transportation is ever-evolving with current shipper concerns of growing truck driver shortages, severe capacity crunches, supply chain talent shortfalls, and tenuous customer service levels. Traditionally, shippers would pick up the phone to call a favorite carrier who would carry the load for an acceptable rate at the day and time requested. These manual transactions were inefficient and reactionary and only successful because the carrier would always accept the load. Gone are the days when a shipper could contract with a carrier and name their own freight price. Capacity is constricted with little to no room for increased demand.

In today's global, highly competitive market, the old rules of transportation no longer apply if you want to remain profitable and competitive. Today, shippers use digital technology like a Supply Chain Operating Network to create bi-directional communications with carriers—increasing efficiency and collaboration and enabling end-to-end visibility. Used effectively throughout the ecosystem, technology improves the entire process, adding value to the carriers and supporting "shipper of choice" initiatives.

How can you use a Supply Chain Operating Network to improve your logistics ecosystem? Consider these initiatives:

  • Automate the tendering/booking processes to streamline the search for capacity
  • Connect to multiple data sources to increase visibility to shipments in-transit
  • Lower dwell times with scheduled appointments and ensure resources are available to help with loading and unloading
  • Collaborate on freight assessorial costs to automate dispute resolution
  • Become a preferred shipper by paying carriers correctly and on time
  • Develop a management-by-exception model to improve efficiency of your own logistics operations team
  • Share shipping schedules, load information and requirements so carriers know exactly what's needed

Leveraging the power of a network with one-to-many connections lowers implementation costs across the ecosystem, allowing you to implement these initiatives in record time. And of course, treating carriers and drivers as respected, valued partners earns and retains their loyalty.

Necessity is the mother of invention—with the increased pressure from these constraints comes innovation. In the next few decades, the supply chain will be completely revolutionized. Imagine what the Uber model will do to the economies of our transportation networks. Or driverless trucks. Or the Internet of Things. Even increased regulations will offer new sources of data as e-logging devices are implemented. With new transport technology growing exponentially, digital tools will revolutionize cost, capacity, and supply chain design. Today it costs $2.20/mile to run a truck; in 20 years the cost will be halved.

In previous years, transportation companies didn't want to be bothered with new technology, but succeeding in today's market requires technology savvy transport enterprises that replace manual and complex approaches with responsive and reliable ones. Joining a Supply Chain Operating Network can provide these organizations access to their customers without the usual investments.

One thing that is certain throughout the coming years is the proliferation of data. It will become more reliable, abundant and less latent. A Supply Chain Operating Network offers up this data in a usable way, enabling real-time collaboration, increased visibility, streamlined operations and improved customer satisfaction for a true competitive advantage.






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