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ShipComm Collaborative Transportation Consortium via Caravan Featured in December 2008 DC Velocity Magazine
While no one should ignore the volatility in the energy markets, there's scant evidence that riding shotgun over month-to-month fluctuations in fuel prices is an effective way to manage transportation costs. But that's not to imply that shippers are without options. There is a better approach, some companies say: Instead of allowing fuel costs to become a distraction, simply manage the supply chain as if oil were not a factor.
So how are shippers coping with energy market volatility? Rather than worrying about costs they can't control, they're focusing on those expenses they can manage. They're taking a careful look at what, how, and where they are shipping. They're examining their operations for opportunities to consolidate freight, optimize loads, and cut unnecessary miles. They're collaborating with vendors and applying technology tools. By controlling your total transportation and logistics costs, they reason, you'll automatically save on fuel expenses as well.
For shippers that move their goods by truck, load optimization technology is a useful tool for driving out deadhead truck miles and, hence, holding down fuel costs. Erv Bluemner, vice president of product marketing and transportation solutions for the software firm RedPrairie Corp., says many companies are shifting from a "set it and forget it" load-building strategy to a tactical analysis based on individual loads. The aim, he says, is to achieve the lowest transportation costs by taking advantage of current business conditions and daily pricing changes.
Bluemner calls its "continuous move" software, touted as a dynamic application that matches bi-directional routings to reduce empty miles. Shippers Commonwealth, which specializes in on-demand transportation management systems, has developed an application called "Caravan" that is integrated with RedPrairie's software. Caravan identifies companies in non-competing industries seeking capacity in both directions. This enables the trucker to build roundtrip loads with more than one shipper— saving money for both carrier and customer, Bluemner says.
Mark Solomon has spent 25 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. Mr. Solomon graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
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