The Benefits of an Integrated Transportation Solution
Q: What market trends are compelling shippers to reconsider their transportation management strategy?
A: For one, a capacity shortage is happening. Shippers are also pressed by equipment investment and maintenance, transportation regulations, and the costs incurred trying to recruit and retain qualified drivers. As a result, some private-fleet owners are questioning that model. Should transportation be a core business?
Coming out of the recession, shippers and carriers "right-sized" their fleets to match demand. Now, as freight volumes are picking up, the industry is jockeying for coverage. Private-fleet shippers need to make a decision about how to ramp up capacity.
Some are hesitant about sinking capital into new equipment or expanding their fleets. Moreover, relying entirely on common carriers or the spot market may not meet requisite requirements. Instead, some are considering an integrated transportation approach.
Q: How does an integrated transportation solution work?
A: The idea is to look across the network, at all the different transportation options available, and find an optimal blend that best serves a shipper’s unique needs. For example, a company can leverage a base dedicated fleet operation to manage lanes or customers that require a higher level of service, then use core carriers or brokers to fill gaps and accommodate seasonal spikes or exceptions.
A dedicated solution adds a layer to existing transportation solutions, providing shippers with greater coverage and flexibility to scale assets to need. A dedicated solution provides shippers with the reliability, customer service, and control they’d expect from a private fleet.
Capacity is rarely static, however. Companies need to account for changes in demand across their network to achieve greater productivity and economy. With an integrated solution, they can look at how to better optimize LTL to TL moves, or TL to intermodal—identifying gaps and directing transportation solutions to address those needs.
Q: What benefits do shippers stand to gain by using an integrated transportation solution?
A: Given the challenges that shippers face, flexibility is important. An integrated transportation solution forces companies to look at their network in a more holistic and creative way. It also creates a model for continuous improvement by providing all the order data, which can be turned into information that will guide decision-making on optimizing activity across an integrated transportation solution.
Perhaps a shipper is having issues with driver retention or empty miles. Maybe there’s an opportunity to work with consignees more collaboratively to consolidate LTL moves to full truckload. Asking these types of questions empowers shippers to optimize in countless ways.
What it comes down to is matching capacity and service requirements to need as efficiently as possible. When you have options, as an integrated transportation model delivers, that task is more easily realized.