Activity-based costing (ABC) enables motor carriers to analyze different segments of their business for profitability, says Ken Manning, president of Transportation Costing Group. But pinning profitability down precisely can be very difficult in an industry where daily changes in the weather or road conditions or traffic congestion can push a shipment into the red.
Truckload motor carriers see demand picking up and are optimistic that 2010 will mark a strong recovery for the sector, says Kevin Burch, chairman of the Truckload Carriers Association and president of Jet Express.
Activity-based costing (ABC) is an important financial tool for trucking companies, says Paul Dugent, vice president of pricing and traffic at Estes Express Lines. The cost elements allocated to customers through ABC are used to help determine the price of services, though pricing "is more art than science."
Soliciting, analyzing and awarding transportation contracts through a bid process is a complex process. To get the best outcome, transportation buyers need to conduct a thorough opportunity assessment and make sure they have the infrastructure and framework in place to effectively manage the bidding process, says Art Nourot, senior director of carrier procurement at Unyson Logistics.
Mileage-based rates within the trucking industry typically are not calculated using actual miles driven. Instead, they generally are based on historical zone-to-zone mileage or on the standard shortest possible route between two points. That's known as "practical routing," explains Craig Fiander, vice president of marketing at ALK Technologies, which provides mileage mapping software.
The operations of less-than-truckload carries have changed so dramatically in the last two decades that they bear little resemblance to the traditional LTL model that was prevalent for decades, says Brad Morris, vice president of marketing at AAA Cooper, a regional LTL carrier operating in the Southeast.
The economic crisis has provided shippers a great opportunity to step back and rethink their logistics and supply chain operations to see where they can pull costs out of the system and become more efficient, says consultant Dan Goodwill. "Everyone knows that beating up on carriers to bring costs down can't go on forever."
The latest news, analysis, services and systems regarding truckload and less-than-truckload (LTL) services and their impact on supply chains. Today’s companies are transporting and delivering perishables and manufactured goods in a more timely and efficient manner than ever before through truckload and LTL solutions. New technologies that provide information during ground shipments are transforming the way companies do business - and allowing them to stay ahead of the competition in their industries. As these services continue to evolve, businesses are discovering new ways to increase efficiency and cut costs. Learn how companies are using truckload and LTL solutions to power their supply chains.
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