OCEAN, TRUCKING AND RAIL CARRIERS are beginning to look at shippers in a different way. Before deregulation changed the rules of the game, shippers were considered to be simply purchasers of transportation. Now, they increasingly are looked at as partners" in commerce.
This development was much in evidence at the recently concluded Council of Logistics Management conference in Anaheim, Calif. That annual event, which brings together distribution managers and the transportation companies with whom they interact, was not marked by carrier representatives offering excuses for rate increases, or by shippers complaining about poor service. Rather, the conference was marked by a remarkable degree of resolve on the part of shippers and carriers to work together in making both enterprises more profitable.For carriers, such cooperation from shippers could be just what the doctor ordered. Faced with overcapacity and low rates, shipping, rail and motor carriers are finding it difficult to generate the capital they need for new equipment. Since deregulation, shippers have been demanding more service at lower prices, and, by and large, they have been getting it.
But gone are the days when, in the maritime industry, for example, the maxim was: Longshoremen demand, shipping companies give in and the shipper pays." A closer relationshipbetween shippers and carriers may help transportation companies achieve a measure of loyalty and consistent business that will enable them to invest in the costly equipment that will be needed in the years ahead.
Shippers also may find such a partnership rewarding. As the Just-in-Time method of manufacturing spreads throughout U.S. industry, dependable transportation service will become crucial, especially when parts are being sourced from around the world. Botched delivery schedules can shut down an assembly line operating on the JIT system.
Under a shipper-carrier partnership, the U.S. importer rather than the foreign vendor dictates the delivery of parts and materials. By relying upon a full-service carrier who controls the cargo from origin to destination on a single bill of lading, the consignee achieves a degree of predictability in delivery time that is not possible when foreign exporters arrange for transportation.
The competitiveness of U.S. industry is determined by the final landed cost of a product. When the manufacturer and the carrier work together to keep that cost as low as possible, the ability of U.S. industry to compete in the world marketplace is greatly enhanced.