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Four key factors that require management attention

There are four key factors that affect businesses large and small, and in many cases these are real challenges that, if not successfully addressed, can lead to poor business performance. If it hasn’t already, management needs to determine how it measures up to these challenges and how to quickly move forward with meaningful action.

The four factors or challenges are (1) transport continuity planning, (2) energy efficiency and shift to alternative fuels, (3) driver shortages & training and (4) transport management.

Transportation Continuity Planning: recent natural disasters such as tornadoes, earthquakes, fires, floods and severe storms have disrupted the ability of many businesses to deliver their goods on time, if at all. Shippers need to plan for these events now more than ever in the past. If you don’t have a plan, you need one. You may very well have very good freight management in your business, but without a solid transportation plan, you could be caught off guard in the face of a disaster. The suggestions are as follows:

  • Meet internally with your business leaders to discuss requirements and develop an approach. Create a clear but concise and realistic transportation continuity plan. If you have a private fleet, a leased fleet, or a dedicated contracted transportation service, work with their managers to learn about their continuity plans and how they fit your needs. For example, are backup carriers identified and ready to assist in an emergency…how do you prioritize return deliveries to customers…can your private or dedicated fleet be expanded, can the cost be justified ? Find out what contingency plans exist and this also applies to your LTL carriers. Do not wait for a disaster to do so.
  • Then, work with your company’s operations and sales teams to develop a process to improve distribution planning levels by reviewing your inbound movements of goods and raw materials, supplier lead times, transportation and inventory policies.
  • Understand your private fleet’s capacity and your organization’s ability to redeploy that capacity to your most vital lanes. This is your insurance policy!

Energetic efficiency : how to deal with the volatility of diesel fuel prices? From an operations perspective, developing the right approach is key to mitigating ever-increasing fuel and equipment costs. Suggest the following:

  • If you haven’t already, join the EPA’s SmartWay program, make sure your transportation providers have a program in place.
  • Discuss an alternative fuels pilot program with your fleet provider with the potential to convert some or all of your fleet to alternative fuel trucks and tractors. Also check to see if your major carriers have a program in place.
  • If you are a fleet owner, develop a realistic total cost of ownership model for alternative fuel vehicles, consider the implications of high acquisition costs, fueling infrastructure limitations, maintenance, repairs and overhaul. Do you want to take the risk of owning and using an alternative fuel truck that may malfunction or become an unsustainable alternative vehicle model?
  • Speak with a fuel supply expert, your fleet supplier should have one or know of one, about how best to track diesel prices and possibly incorporate hedging strategies into long-term plans.
  • Contact your fleet provider to use a route optimization modeling software tool to plan more efficient routes or update your current route plan. Reducing miles traveled and improving cargo build to increase trailer capacity can result in significant savings.
  • Make sure your trucks and/or tractors are equipped with engine monitoring systems to optimize fuel consumption and identify maintenance items that may affect fuel efficiency.
  • Consider using GPS vehicle tracking systems to monitor your drivers’ behavior, such as excessive idling, speeding, and other driving characteristics that, when modified, can improve fuel economy .

Shortage of drivers: trucking industry experts estimate there is a shortage of more than 40 drivers at current demand. It is obvious that driver shortages will increase and will be a long-term problem, especially when it comes to quality. Shippers should provide their drivers with safety and driver skills training and implement recognition programs to increase the importance and visibility of drivers in the business. Shippers should work with their transportation providers to avoid the impact of driver shortages on their operations, recalibrate the use of private fleet versus purchased transportation, and examine opportunities to improve value through creative outsourcing.

Transport management: many companies have developed