November 17, 2009 (Dallas, TX) – Transplace, a leading provider of transportation management services and logistics technology, provides solutions to transportation professionals for how to prepare a transportation program for an economic rebound. Many transportation careers have recently ascended on the ability to deliver much needed funds to cash-strapped CFOs through large-scale transportation procurement efforts. However, the leverage shippers have enjoyed during this period is not sustainable.
“In the near future, we will either see an economic rebound or trucking capacity will find equilibrium regardless of the strength of the economy, said Matthew Harding, vice president of consulting for Transplace. “In either case, market dynamics will drive currently reduced prices back to more traditional levels. We developed a list of tips for transportation professionals that, we hope, will be useful to face the challenge of a rapidly changing marketplace head on.”
Transplace identifies a number of targeted programs that will benefit shippers in the current market environment in anticipation of an economic rebound:
-- Assess Current IT Infrastructure to Ensure Flexibility
Transportation sourcing should be finely tuned to eliminate delays in identifying and utilizing carriers. Many shippers find IT inflexible to change. Shippers need to have solid procurement processes integrated with IT and IT must be supportive. New suppliers or customer ship points introduced into the supply chain require an IT infrastructure that is capable of adapting to a changing network to capture the benefits from carrier management.
-- Assess Business Processes to Ensure Flexibility
Shippers must ensure that processes are flexible enough to handle increased levels of rework during periods of limited capacity. Business processes coupled with a flexible IT platform work together to handle changes in market environments efficiently, quickly and cost effectively. It is important to know how these changes in activities impact processes ahead of time to lower the risk of unintended outcomes.
-- Obtain Thorough Market/Industry Intelligence
Shippers must have a clear view of the broader transportation market and should invest the time in understanding which providers have specific strengths in various markets in anticipation of balanced capacity. It is important for shippers to understand the carriers and other shippers. One way is to create a carrier advisory board comprised of key carriers and their executive team to ensure the organization is in tune with the carrier base’s strategic direction and the business issues that drive the market. Cross-industry benchmarking leads to insights that can help shippers optimize their carrier relationships.
-- Evaluate Experience Against Adaptable Sourcing Strategies
Due to the infrequency of large scale procurement events, management must ensure that professionals who are new to carrier procurement and have been cultivated in a recessionary environment have the appropriate perspective in the future. When capacity is tight, management must be sure that sourcing strategies focus on carrier utilization. If a carrier management team has not experienced both up and down cycles, carriers will not be responsive to aggressive price-focused negotiations when they have more leverage with their capacity. This can result in missed opportunities to cover freight and increase the potential for higher churn among carriers.
-- Evaluate Dedicated Options and Understand All Options on the Market
Dedicated fleets ensure that shippers have the capacity they need when they need it – they are much more resilient to price variability than the one-way market. In addition, shippers should consider co-company backhaul opportunities for significant savings within their dedicated/private fleets. Finally, shippers must review their sourcing strategies for contract carriers to understand where brokers could add value within specific segments of their networks.
“There are several factors to consider when selecting a TMS provider. Organizations should choose one that can provide a wealth of functionality to support various business processes,” adds Harding. “And beyond having cutting-edge technological knowledge to support their products, TMS providers should – even more importantly – serve as subject matter experts in transportation.”
Click here to read the full list of solutions for how to prepare a transportation program for an economic rebound, or for more information on Transplace, please visit http://www.transplace.com
Transplace is a non-asset based third-party logistics (3PL) provider offering manufacturers and retailers the optimal blend of logistics technology and transportation management services. From complete logistics management outsourcing to intelligent transportation management systems (TMS) to supply chain network planning and design to high-quality brokerage services, Transplace has proven the ability to deliver both rapid return on investment and consistent value to customers. The company is recognized among the elite 3PLs in North America by a customer base that includes many of the largest shippers in the world.
In 2008, Transplace was awarded with the Global Logistics and Supply Chain Strategies “100 Great Supply Chain Partners” distinction for the fifth consecutive year and by Supply & Demand Chain Executive as a “Top 100” provider in supply chain transformation for the fourth consecutive year. In addition, Transplace was recognized by Inbound Logistics as a Top 10 3PL for the sixth consecutive year, and was awarded Logistics Management’s Quest for Quality award for the 3PL category. To learn more about Transplace, please visit www.transplace.com.