Tips for Improving Shipping Performance

Mar 21, 2007 7:50 PM  By

This article originally appeared in the March issue of “WERCSheet,” a monthly publication of the Warehousing and Education Research Council (www.werc.org).

With rising fuel prices, carrier capacity problems, and pressure from customers for on-time deliveries, shippers have been feeling the squeeze. To make matters worse, when they didn’t meet carrier expectations, many shippers found they were left out in the cold with carriers refusing to do business with them.

From the cost standpoint alone, transportation has risen to one of the top five expenses for many companies. According to some industry analysts, costs have risen by as much as 30%.

As a result, senior management has taken greater interest in transportation performance than ever before and is looking for ways to improve. “I recently spent a day with the senior management team of a big corporation discussing what’s going on with their transportation,” says consultant Cliff Lynch, principal of Memphis-based C.F. Lynch & Associates.

With senior management’s attention, many companies are now in a position to assess their transportation performance. A good hard look at your transportation system can lead to better control of your transportation performance, improved transportation efficiencies and better control of overall transportation costs.

Areas of opportunity
The turmoil of the past several years in the transportation industry has leveled off some, according to Lynch. “What happened is that some carriers were turning down business because it wasn’t attractive to them,” he says. “They could afford to turn it down, and shippers have had to make some changes as a result.”

Having learned a lesson the hard way, smart shippers are taking a close look at their carrier relationships, identifying areas where they can improve. “There are many ways to become more carrier friendly,” says Lynch. “If you don’t make these efforts, you’re failing to get all that you can out of your transportation.” Among his recommendations:

* Provide good access to your docks.
* Load and unload waiting trucks promptly.
* Give your carrier partners timely estimates of volume.
* Improve communication with your carriers.

That last suggestion—to improve communication with your carriers—provides perhaps the best starting point. “List your goals and tell the carriers that you need their help,” says Lynch. “Ask what you can do to make their jobs easier.”

Internally, once you have established your goals for transportation performance improvement, ask managers throughout the company how operations stack up against those goals. Identify gaps in each area or location of the business, and then map out a plan for making improvements.

Along the way to making improvements, a system for continual assessment needs to be put into place. Whether this means establishing key performance indicators (KPIs) or a less formal evaluation process is up to the individual company, but some sort of evaluation process must be established.

Lynch also suggests investing in a robust transportation management system (TMS) if you don’t have one already. “If you don’t have a TMS in place, it can reduce your freight bill by as much as 15%-20%,” he says. “When you combine TMS with [warehouse management software], you have a more efficient DC, which leads to more-efficient transportation performance.”

The dialogue with your carriers needs to be carried on continuously. “It’s important not only to see where you have been but where you are going with your carriers,” says Lynch. “Ongoing communication with your carriers can help you get your transportation performance where it needs to be.”


 

Tips for Improving Shipping Performance

Mar 21, 2007 7:39 PM  By

This article originally appeared in the March issue of “WERCSheet,” a monthly publication of the Warehousing and Education Research Council (www.werc.org).

With rising fuel prices, carrier capacity problems, and pressure from customers for on-time deliveries, shippers have been feeling the squeeze. To make matters worse, when they didn’t meet carrier expectations, many shippers found they were left out in the cold with carriers refusing to do business with them.

From the cost standpoint alone, transportation has risen to one of the top five expenses for many companies. According to some industry analysts, costs have risen by as much as 30%.

As a result, senior management has taken greater interest in transportation performance than ever before and is looking for ways to improve. “I recently spent a day with the senior management team of a big corporation discussing what’s going on with their transportation,” says consultant Cliff Lynch, principal of Memphis-based C.F. Lynch & Associates.

With senior management’s attention, many companies are now in a position to assess their transportation performance. A good hard look at your transportation system can lead to better control of your transportation performance, improved transportation efficiencies and better control of overall transportation costs.

Areas of opportunity
The turmoil of the past several years in the transportation industry has leveled off some, according to Lynch. “What happened is that some carriers were turning down business because it wasn’t attractive to them,” he says. “They could afford to turn it down, and shippers have had to make some changes as a result.”

Having learned a lesson the hard way, smart shippers are taking a close look at their carrier relationships, identifying areas where they can improve. “There are many ways to become more carrier friendly,” says Lynch. “If you don’t make these efforts, you’re failing to get all that you can out of your transportation.” Among his recommendations:

  • Provide good access to your docks.
  • Load and unload waiting trucks promptly.
  • Give your carrier partners timely estimates of volume.
  • Improve communication with your carriers.

That last suggestion—to improve communication with your carriers—provides perhaps the best starting point. “List your goals and tell the carriers that you need their help,” says Lynch. “Ask what you can do to make their jobs easier.”

Internally, once you have established your goals for transportation performance improvement, ask managers throughout the company how operations stack up against those goals. Identify gaps in each area or location of the business, and then map out a plan for making improvements.

Along the way to making improvements, a system for continual assessment needs to be put into place. Whether this means establishing key performance indicators (KPIs) or a less formal evaluation process is up to the individual company, but some sort of evaluation process must be established.

Lynch also suggests investing in a robust transportation management system (TMS) if you don’t have one already. “If you don’t have a TMS in place, it can reduce your freight bill by as much as 15%-20%,” he says. “When you combine TMS with [warehouse management software], you have a more efficient DC, which leads to more-efficient transportation performance.”

The dialogue with your carriers needs to be carried on continuously. “It’s important not only to see where you have been but where you are going with your carriers,” says Lynch. “Ongoing communication with your carriers can help you get your transportation performance where it needs to be.”