Maximizing assets. When matching available supply with customer demand, companies must increase collaboration with shippers. This includes working to fill extra truck capacity in peak demand times; looking for a backhaul, whether inside or outside of one’s network; and analyzing lead times and delivery times more closely. In essence, companies must get the most out of what they are using given increased cost pressures.
Driver recruitment. Attracting and retaining drivers has become more complicated by new government regulations regarding hours of service and certification requirements. The available market for driving talent has traditionally been constrained as it is, and companies must strike the optimum balance in offering the right benefits, improved equipment, competitive wages and flexible scheduling options.
Defining shipping as a core competency. The dedicated fleet shipping industry has often been ahead of the curve when it comes to state-of-the-art use of technology in tracking customer orders, fleet optimization and focusing on customer service. When developing a strategy around fleet management and asset deployment, companies must determine whether fleet operations is a core competency that they want to invest in or whether it makes more sense to use an outsourced provider. The increasing array of new rules and regulations might also encourage a company to use fleets outside of their immediate control.
Control vs. costs. Companies can operate more flexibly and with more control with their own private fleets, which tend to have much lower driver turnover than the industry average. But if a company’s strengths lie in other areas of the supply chain, such as manufacturing or customer service, it might make sense financially to outsource the function. Outsourcing also allows companies to avoid unnecessary leasing costs and capital expenditures. However, the outsourced fleet must align with a company’s mission; performance metrics; benchmarks; and cultural, environmental and sustainability agendas.
Financial considerations. In addition to the customer service reasons for fleet network design, companies need to balance service with cost reduction and operating efficiency, and be certain of why they are choosing a particular strategy. Whichever direction a company eventually goes, key considerations on this front include analysis of fleet size, leasing vs. buying trucks, fuel costs, use of alternative fuels, and a metric for accountability on spending and return on investment.
Industry trends and best practices. As focused as companies must be on their own operations, they cannot ignore greater industry trends, regulations and evolving best practices. In addition, they must pay close attention to macroeconomic, procurement and specific business cycles. A holistic assessment of fleet operations within the greater supply chain will not only yield more efficient outcomes, but also a better understanding of customer needs and overall risk factors.
As companies continue to be pressured by costs, safety regulations, driver-time restrictions and a more demanding consumer, expect more companies to take a closer look at their fleet operations as a part of their overall supply chain in 2014. As companies are tasked with doing more with less, they will seek to find every opportunity to squeeze out costs and utilize all resources available to them, both internally and through providers.
Enjoy curated articles directly to your inbox.