If you’re a transportation manager today then you’re faced with a shortage of drivers, stringent regulations, capacity constraints and the need to keep costs down. So how do you meet these challenges head on and still maintain a high-performing transportation network?
One strategy that is gaining in popularity is known as an “integrated solution.” Specifically, this combines the use of a dedicated fleet with third party for-hire carriers to maximize the utilization of your transportation network. Executed effectively, this integrated solution allows transportation managers to achieve significant network stability, guarantee capacity, and reduce costs.
An integrated solution requires a lot of planning and control throughout the process to manage the different modes being used – you’re not just coordinating multiple vendors but also the drivers and maintenance associated with the dedicated fleet.
Any integrated plan is only as promising as the operations team chosen to implement it.
A solution begins with the implementation team conducting a detailed analysis of the transportation network. The goal is to identify the ideal strategy to deliver a more efficient and cost-effective operation, without jeopardizing operational constraints or service levels. Consider such variables as travel distance, number of stops, equipment type, backhauls and or vendor pick-ups, and stop constraints.
Then, review each lane with an open mind to the need for flexibility. For example, it might make sense for a one-way lane to be run with a common carrier one week, and the same lane to be run with the dedicated fleet the following week for product return.
Here are five ways an integrated solution can deliver for your transportation network:
1. Flexibility. An integrated solution provides a foundation for core capacity and allows customers, through their provider, to better match transportation resources with procurement capabilities during fluctuations in demand.
2. Cost savings. By making as-needed adjustments to lanes and other variables, fleet, and common carrier optimization can rise from 5% to 10%.
3. Transparency. Providers that rely on innovative technology gain more in-depth understanding, resulting in increased visibility and anticipation of disruptions. The realization that no one-size-fits-all supply chain remedy exists means centralized route planning and engineering can simplify decision-making and yield efficiencies in pursuit of the best possible solution.
4. Waste reduction. With route optimization comes reduction in miles driven, carbon emissions footprint, lower fuel consumption, and improved utilization of resources.
5. Collaboration. As with any change to “the way things have always been,” success in an integrated solution requires a commitment to collaboration across all groups involved – from purchasing to the shipping dock. An embrace of this collaboration can transcend carrier network operations and private fleet management concerns.
An integrated design between a dedicated fleet and a common carrier is attainable. It requires continually analyzing the transportation network to achieving balance best suited to the individual situation.
By embracing a dynamic transportation strategy, as opposed to a static or fixed plan, organizations can maximize the benefits of significant operational efficiencies and resulting savings. An integrated solution can improve operational efficiencies, reduce empty miles, right-size fleets, minimize costs and ensure a steady workload for dedicated drivers. In the end, the objectives of shipper and provider alike are achieved.
Authored by Mark Swenson
Mark Swenson is vice president of business development at Ryder and serves on Ryder’s Roundtable Board. Prior to joining Ryder, Mark was a Principle at TMSI, a supply chain organization with over 1,100 associates worldwide. Throughout Mark’s career, he has held various operations positions managing transportation and distribution networks.