Logistics: Huge Gains on Express Lanes

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Stock Keeper
Reducing Transportation Costs in the Supply Chain
JADEN   11/17/2011 3:44:24 PM

There is this option "Developing Core Carrier Programs"; it is one of the ways to reduce transportation operating costs whereby the companies that leverage their relationships well with their carriers typically experience lower rates and better service.  Core carrier programs focus on shipping volumes on approved carriers that meet an established set of requirements.  Performance metrics are monitored and reviewed with those cariers periodically, and collaborative relationship is developed to improve service and reduce costs.

Barbara Jorgensen
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Fast lanes
Barbara Jorgensen   11/2/2011 9:24:37 AM

Gerry--as always, you bring something new to my understanding of the supply chain. When you think about "the shortest distance between two points" it makes sense to take advantage of routes that are heavily used. The airline industry has to some extent used the same philosophy in its hubs. Unfortunately, even if you are slightly outside of those hubs you end up making a connection no matter what. On the flip side, those flights always are the cheapest.

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Supply Network Guru
Jay_Bond   11/2/2011 7:13:11 AM

You have brought up some good points, in certain situations it might be a better to choice to go with a regional carrier or vary carriers based on destinations. By doing some research you might find out that using your large company for every delivery might be costing you more than sending items through different routes.

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Supply Network Guru
Re: Partnering
Jacob   11/2/2011 3:03:56 AM
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“Reducing the number of shipments made and consolidating suppliers”

Gerry, you are right. If there is a bulk transportation option or segregating all the orders from different vendors to a particular company can also help them to reduce the logistics cost. I think some of the logistics companies are adding additional fuel surcharges, in additional to the logistical cost.

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Supply Network Guru
DennisQ   11/1/2011 5:57:33 PM

I think everyone reading this would agree that, "regularly re-evaluating all options of your transportation spend is a task which should not be overlooked" is indeed true, it's one of those tasks which is often pushed off until later or buried under more pressing issues and tasks.

The RFQ process is time-consuming, for one thing... anyhow, long story short, I think partnering with someone can make a whole lot of sense in certain situations. Not only may you be able to take advantage to your partner's scale -- as you mention -- but there are certain things that you won't need to worry about as much. Enabling you to turn your focus back to those more pressing concerns.

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