Truckload Strategies to Improve Efficiency and Cost Control
Zara ran a pre-launch campaign for its new Winter-Fall collection, and now it needs to fill its stores with the new collection for launch day. In the store, each design has to have a minimum of 50 units, and there are many categories, from shoes to bags to clothing.
Zara outsources to a logistics company and asks for one-day delivery on all products from the new collection. How does the logistics company fulfill this demand? It sends full-loads of trucks, carrying only products from Zara.
Truckload shippers have to assess their approach before fulfilling demands like these. They have to check if their load volume is at par, how wide their corridors are, or if their geographical reach is competitive. All of these questions pose a challenge in the procurement process.
If they cannot fulfill the demands, they will have more challenges than top-performing truckload shippers. With load issues, fluctuating rates, and the demand curve tightening, the ability of shippers to deliver orders lessens.
Fortunately, they can still work on truckload strategies that can help them improve and bring benefits, both in the truckload procurement process and efficiency.
The Challenges of Transportation Procurement
Transportation decisions differ from shipper to shipper based on economic conditions. Any decision that a shipper takes can either lead to increasing costs or saving costs. These depend on how they complete the process and fulfill their truckload requirements.
In the market today, truckload shippers have to keep their focus on improving their own supply chain process.
Truckload Strategies for Delays in Transit Time
Take an example of a clothing factory. It needs a bulk amount of raw materials transported each day. If a truckload shipper fails to transport the raw materials in a timely fashion, the manufacturing process will be affected.
Truckload shippers can sometimes face delays in transit time and longer transit hours can cause difficulties both at the shipping and destination points. Delays can result in late raw material procurement, slowed-down production, and delayed distribution shipments, impacting the bottom line of businesses.
Truckload shippers must plan a system that helps them size up or down depending on the attributes of the supply chain. They can tackle the challenges by checking the changes in supply and demand, economic and governmental regulations.
High-Cost, Low-Volume Destination
Full truckload shippers can face changing costs in an unstable market. In a market with high-demand supply, such as transportation of fast-moving consumer goods, the costs are comparatively lower. In markets with low-volume destinations, the costs are higher because of route availability.
Setting a Balanced Strategy
Because truckload shippers have to face instability in the market, they have to focus on improving their plans by simplifying the transportation procurement process with data and technology.
Here are some optimization truckload strategies to simplify and develop an efficient process of transportation:
- Align the requirements of the businesses with the important elements of your transportation portfolio. This is key to operating a stable transportation environment.
- Find the right mix of strategies, suppliers, and providers who can improve both lead time, corridor demands, regional sensitivity, and transit time.
- For cost control and efficiency, set key performance indicators in order to determine which option requires more attention. Knowing what you are aiming to achieve will help you measure progress, clearly showing you the fulfillment of your services.
- Ensure procurement and operations are aligned with the key performance indicators. Finding the balance of cost-control and service efficiency is important to keep both factors on the same page.
- Find the balance between too few truckloads and too many truckloads. It’s important to set a spending limit for each and understand how they fit your goals.
- Match shipping lane strengths. It’s essential to focus on these to help you transport efficiently and cheaply.
- Work on removing unnecessary lanes and empty miles to keep expenses as low as possible.