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The advantage of Collaboration
The capacity crisis
With more than 1,900 airline bankruptcies in the first half of 2008, over 90,000 trucks have withdrawn from operation. To put this shocking statistic in perspective, consider this, there were only 1,200 airline bankruptcies in all of 2007!
After some months of modest growth in 2008, for the American Trucking associations hire truck tonnage index decreased 1.6 percent in August, the biggest drop from month to month since March. Many analysts believe that the fall in tonnage available has led to at least a 4% reduction in the capacity of the truck. In addition, because The combination of these bankruptcies and a weaker U.S. dollar, thousands of used trucks are being exported to other countries.
What all this for the carriers?
Taking into account all the forces affecting the transportation industry today – record fuel prices, the driver current shortages, bankruptcies, global competition for capacity, aging infrastructure and congested – it is clear that this essential component of the chain infrastructure supply is nearing its elastic limit. Unfortunately, the most significant effect of this saturation capacity need not be made by shippers until the economy rights itself and the load changes from month to month tonnage increases.
According to a target = "_blank"> recent survey of the best in class companies in all major sectors conducted by the Aberdeen Group, 99% of shippers have experienced interruptions in the supply chain over the past year, and 58% suffered financial losses as a result of these exceptions. Among the most frequent interruptions supply chain identified in the Aberdeen study were:
- 56% of capacity providers not meet demand
- 49% raw materials price increase / shortage
- 45% unexpected changes in customer demand
- 39% of the shipment delayed / damaged / misdirected
When economic conditions begin to improve, the demand for truckload capacity will increase. The problem is that there will be sufficient capacity in the market to meet him. Supply chain disruptions in all sectors will be expanded, and most likely stay, as many carriers dare immediately to ramp capacity. For example, a recent report by BB & T Capital Markets stated as follows, "Werner and JB both state game management that the effort to reduce the fleet is permanent and will not be early retirement of fleet growth when volumes increase. "
What can Chargers do now to prepare?
For now, many of you have heard suggestions to weather the storm, as the company making it increasingly easy that its load is more attractive, providing carriers with forward visibility to capacity needs, showing flexibility in scheduling appointments, and the guarantee of the payment cycle times on freight invoices. While all these strategies to improve customer value as transportation providers, they lack depth improved business processes between companies and enable continuous improvement.
Collaboration has often been over-used but misunderstood the phrase in the discussions supply chain. In our world, effective collaboration means creating a network of trading partners that allows shippers to operate more efficiently and cost lower as a group. Enabling collaborative processes between shippers transport is one of the hidden values of the M33 Transportation Management System.
Through selective partnerships, both companies and customers are analyzed to ensure optimal benefits in the collaborative network. The result is an integration distribution channels and transport providers to plan and implement "best practice" solutions.
What does collaboration are related to capacity problems the team?
The "typical new customer", adds two immediate values to an intermediary; enterprise collaboration network:
- Its surface similar distribution channels that overlap existing customer shipping lane.
- A select group of quality transport providers.
Like finding the missing pieces of a puzzle, many new distribution channels offer immediate opportunities for cooperation between the network partners. As an example, a recent addition to the collaborative network client M33 presented a consistent delivery of Sioux Falls, SD Winston Salem, North Carolina. Consequently, an existing ship regular customers from High Point, North Carolina Mitchell, SD. The results of the return opportunity available again eliminates the search for two separate transportation providers based in two separate areas of the country, not to mention the reduction lower cost and time value.
How does the group of transportation providers a new client for the benefit of the group?
Recently Carriers in the network often find immediate synergies with existing customers, often increasing their availability in all essential ways to the original client. In addition, over 80% of trucks on the road carrying less than full trailer loads, enables cost-sharing collaboration for shippers, increased company revenues, reducing the demand for capacity in the market, and often faster transit times.
Collaboration Network M33 opens doors to resources and routing engineering ideas that are not available for single carrier. Members of the network share best practices solutions while solidifying relationships with reliable suppliers who normally do not file an association of independently.
If you have not introduced allows us the opportunity to further examine the protected environment of the M33 Collaborative Network for customers, and benefits of the logistics of co-management.
About the Author
Andy Williams is a Partner of M33 Integrated Solutions, a leading logistics solutions provider. Andy oversees all sales activity, including new business development and strategic account management. He can be reached by phone at (866)672-2862.
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