Report Says Companies Forced to Adopt New Strategies for Transportation Management

Tightening freight capacity, rising freight costs, and increasing service level pressures are forcing enterprises to rethink their transportation strategies, says a report recently released by the Aberdeen Group.

“The New Strategies for Transportation Management Report” quantifies the business benefits achieved from improved transportation management, benchmarks existing transportation management processes, and recommends specific actions and enabling technologies for maximizing transportation management performance, says Aberdeen Group.

Some 45% of respondents had freight capacity concerns and said increasing accessorial costs have become top-of-mind worries. Major transportation carriers reported that they have been raising their customers’ rates or accessorial charges by as low as 2% and as high as 19%. The highest rates are going to shippers whose own facilities or trading partners cause excessive delays, said the report. While two hours has historically been the industry accepted time for moving a truck in and out of a facility, this standard is now moving quickly toward one hour.

“No longer do shippers have the upper hand with carriers,” said Beth Enslow, Aberdeen’s vice president of enterprise research and author of the report. “It is vital for all companies to undertake improvement activity, or they will find their hard-won freight cost reductions and service level improvements eroding away. Capacity will go to the customers who help trucking companies do their job most efficiently.”

According to the report, the Best-in-Class companies are choosing to respond with programs that make it easier for carriers to do business with them, including capacity forecast sharing, incentive-based contracts, and self-service dock scheduling.

To obtain a copy of this report, consult http://www.aberdeen.com/ summary/report/other/transportation_092904.asp

By Canadian Transportation and Logistics staff