Tennis and golf are on the minds of many at this time of year. One of the secrets of success in both is to consistently hit the ball with the sweet spot of your racket or club. The resulting increase in distance and power can be astounding — and can make the difference between winning and losing.
Freight transportation management also has a sweet spot, and hitting it may help you outperform the competition. This sweet spot is the optimal combination of common carrier, private, and third-party dedicated carriage used to deliver transportation services. Finding the right combination, rather than opting for one mode over the others, can mean significant savings.
Urban areas with a high density of customer deliveries often justify a fleet operation — either one you own directly or a third party hired to operate it for you on a dedicated basis. This option also has the benefit of enabling you to put your logo and/or marketing message on your vehicles, enhancing brand recognition in heavily populated areas.
How do you find the sweet spot? A number of factors must be taken into account, including company size, budget and technical capabilities. But the first thing you have to do is collect detailed information about the location, size and frequency of current shipments.
If spreadsheets make your eyes glaze over, start instead by sorting your outbound shipment information into rural and urban deliveries. But if you're comfortable with spreadsheets, use them. They'll provide more accurate information, as well as make data sorts easier and more effective.
If you use common carriers only, select up to three reputable dedicated fleet operators in your area and ask for quotes based on your urban-delivery statistics. If you use only private fleets, choose up to three common carriers and ask for quotes based on your rural-shipment information. You can now compare your current common carrier costs for the urban area with the dedicated fleet quotes, or your current fleet costs for the rural areas with the common carrier quotes. You may be surprised with the potential for savings that are identified.
But the gold standard for determining the sweet spot in transportation volumes between common carrier and fleet operations is advanced logistics modeling software. These tools can analyze and make specific recommendations on the trade-off between common carrier and fleet options, right down to the individual customer. The software can also be used to find sweet spots in other areas of your operation, including warehousing and inventory.
To find companies that offer strategic modeling software, go to http://logistics.about.com. When choosing a program, make sure to select one that supports transportation modeling in both common carrier and fleet (direct vehicle cost) formats. A number of the most popular software packages available use only common carrier analysis and rate methods in their network modeling functions. This may be one of the reasons common carriers are selected so frequently as the primary transportation mode.
Although costs continue to drop, this software can be expensive. If purchasing one of these programs is not in your budget, you do have another option: work with a consulting firm that has the software and can run some analyses for you on a project basis.
But however you get there, finding the sweet spot in your freight transportation operation is worth the effort. It can lead to significant savings for your fleet and perhaps even a bonus for you. That could come in handy the next time you shop for a new racket or set of clubs.
Jeff Ashcroft is President of Strategic Logistics Partners and Guide to What You Need to Know About Logistics/Supply Chain. [email protected]; (905) 953-9963