• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • Login
  • Subscribe
  • Logout
  • My Profile

  • CORONAVIRUS
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • REGIONS
    • Asia Pacific
    • Canada
    • China
    • Europe
    • Latin America
    • Middle East/Africa
    • North America
  • THINK TANK
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Transportation Management Is an Imperative for Return to Growth

Transportation Management Is an Imperative for Return to Growth

February 16, 2011
SupplyChainBrain

Analyst Insight: Although transportation costs were depressed and capacity plentiful during the global economic downturn, freight costs and capacity are already showing signs of looming stress, even with a weak recovery. Companies must take immediate action to minimize the impact of increasing freight costs.

-C. Dwight Klappich, research vice president at Gartner

Freight capacity currently remains favorable for shippers, but market indicators suggest capacity is becoming constrained and current transportation market conditions threaten to propel logistics costs higher. These conditions, which include fuel price volatility, a looming freight-capacity supply and demand imbalance and more stringent operating rules, will permit an increase in transportation costs that will remain high for several years.

Because these market conditions will cause freight costs to increase and add complexity to planning and managing transportation, Gartner recommends that shippers consider the following capabilities to help minimize the impact of freight cost increases:

• Freight Sourcing and Procurement (Bid Optimization)
The first place to target cost-containment initiatives is during the annual freight-sourcing exercise.  Shippers of all sizes will benefit from automated freight-sourcing solutions, which include sophisticated bid optimization.

• Strategic Network Design
Redesigning a logistics network can positively affect all costs. Furthermore, the need for organizational agility is leading organizations to tactically use network design tools to more frequently evaluate fundamental or seasonal and cyclical changes in their business.

• Transportation Governance
Enforcing compliance with carrier-selection rules can have a significant impact on freight costs. It can also ensure compliance with other obligations, such as meeting carrier load commitments.

• Transportation Planning and Optimization
Transportation planning applications can help constrain costs by allowing companies to make better mode selections, consolidating orders for shipment by lower costs modes, such as moving from less-than-truckload to truckload, and selecting carriers with the lowest total cost structure, considering all rules and costs.

• Transportation Analytics and Performance Management
Transportation-focused analytics applications with the appropriate level of data and cost granularity are critical to identifying problems and opportunities to reduce costs. Shippers must monitor carrier, logistics service provider, customer and supplier performance to ensure their trading partners perform effectively.

• Evolving Transportation to a Global Shared Service
Innovative companies are beginning to structure transportation as a global shared service that manages the 'multis'- that is, the multiple modes, businesses, carriers, geographies and inbound, outbound and intra-company freight - on a common TMS platform. These companies believe coordinating transportation activities across multiple dimensions will allow them to further reduce costs and provide better overall service to their business and trading partners.

The Outlook

The bottom line is that freight cost increases will threaten company profitability if companies fail to take immediate action to minimize their impact. Organizations must evaluate their supply chain application portfolios and look to enhance or add supply chain solutions that target transportation costs. Those with annual freight spend of more than $25m are candidates for, and can justify, specialized transportation management solutions.

RELATED CONTENT

RELATED VIDEOS

Air Cargo Logistics Global Logistics Logistics Outsourcing LTL/Truckload Services Ocean Transportation Rail & Intermodal Transportation & Distribution Technology Sourcing/Procurement/SRM Transportation Management Global Supply Chain Management Quality & Metrics
KEYWORDS Air Cargo Global Logistics Global Supply Chain Management Logistics Logistics Outsourcing LTL/Truckload Services Ocean Transportation Quality & Metrics Rail & Intermodal Sourcing/Procurement/SCM Supply Chain Analysis & Consulting Technology Transportation & Distribution Transportation Management
  • Related Articles

    No Company Is an Island: Why Collaboration Is Imperative

    Calculating Savings and Return for an Enterprise Transportation Optimization and Automation Solution

    Calculating Savings and Return for an Enterprise Transportation Optimization and Automation Solution

  • Related Events

    The Big Picture: What It Takes to Make Last-Mile Delivery Work

  • Related Directories

    Kuebix

SupplyChainBrain

100 Great Supply Chain Partners Issue 2009

More from this author

Wake up to Coronavirus Updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • Coronavirus-watch-Armada

    Virus Update: J&J Shot Cleared for U.S. Distribution; Microsoft Vows to Fix Vaccination Software

    Coronavirus
  • West Coast Port Congestion

    Shippers Need Alternatives to West Coast Port Congestion

    Logistics
  • Mexico

    The Near-Shoring Trend: Will China’s Loss Be Mexico’s Gain?

    Logistics
  • Robotic automation

    Autonomous Supply Chains Are on the Horizon

    Coronavirus
  • Drugmakers

    Research Lays Groundwork for More U.S.-Made Drugs

    Coronavirus

Digital Edition

Scb feb 2021 lg

2021 Supply Chain Management Resource Guide

VIEW THE LATEST ISSUE

Case Studies

  • Remote Implementation: A Dose of the Right Medicine for B2B Pharmacy

  • LSP Saves Customer $1.5 Million a Year With MPO Global Inbound Management

  • Auto Supplier Wows Key Client Using riskmethods Supply Chain Savvy

  • Integrating Shipping and Compliance Saves Conglomerate Millions

  • How a Consumer Goods Giant Upped Its On-Time Delivery Performance

Visit Our Sponsors

6 River Systems ArcBest Armada
aThingz BluJay Burris Logistics
DSC Logistics DCSA (Digital Container Shipping Association) DHL Resilience360
Genpact Geodis GEP
Honeywell Intelligrated Infor Logility
Magnitude Software MPO Old Dominion
Oliver Wight OpenSky Ports America
Purolator QAD Precision Red Classic
Riskmethods Snapfulfil TGW Systems
Transportation Insights Watson Land Company Westfalia Technologies
Workjam Yang Ming  
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2021 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing