Do you remember three-legged races at summer picnics, where you and a partner each put one leg into the same burlap sack and then, holding up your respective sides of the bag, loped together toward the finish line? The winners were invariably those who were the quickest to establish a rhythm that enabled them to run in step without tripping one another or falling down in a tangle. Well, the industry's quest to improve productivity has become a championship sack race if ever there were one.
Carrier and shipper partners each have one leg of their business in a common logistics initiative and are trying to master the steady, run-hop-run step in unison that will put them out in front in the race for more efficient freight movement. It has not been an easy or popular event — in part because carriers and shippers have not always shared the prizes as well as the effort — but it is the contest of the day, and some teams are emerging that are well worth watching.
One example of successful 21st century-style gamesmanship in action is taking place at Nistevo Corp. The Minneapolis-based company provides a web-based, collaborative logistics network that, in the last year, has signed up 22 shippers and more than 200 carriers managing more than $10 billion in logistics spending, according to Eric Lien, director of carrier relations. After a three-day meeting this spring (attended by representatives from 26 companies, including 17 of Nistevo's Fortune 500 customers) to capitalize on collaborative opportunities via the Nistevo network, the company reported some amazing findings.
“Using our Network Builder system, which identifies, scores and ranks companies that would benefit from collaborating on common lanes, we found 12 million potential lane matches among members,” says Rick Parker, vp-marketing for Nistevo. “Cross-industry collaboration yielded a 53% increase in opportunity in comparison to considering only partners from the same industries.
“A number of companies in the retail industry ship goods from both the East and West,” he explains, “while many packaged goods companies ship from the Midwest to both coasts. This means the opportunity to fill backhauls is much greater if shippers collaborate with businesses outside their own industry. And that improved asset utilization can mean very good news for both shippers and their carriers.”
Recently, Nistevo has been giving some extra thought to its fleet partners to assure that trucking companies as well as shippers share in the benefits of improved efficiency. For example, the company recently formed a Carrier Advisory Board. “Generally speaking, efforts to make supply chains more efficient have been very shipper-centric,” Lien explains. “Our shippers, however, wanted to make sure that there would be real value and functionality in the Nistevo network for the member carriers as we move forward. After all, without carrier participation, nobody wins.
“Board members discuss topics that would benefit carriers and shippers alike. For example, both carriers and shippers benefit in an environment where more business is done on a dedicated basis,” he offers. “Carriers have much better visibility for planning purposes, which also enables better asset utilization. Their drivers appreciate the more regular income and time at home that highly predictable lanes enable, and shippers see better service.”
While hauling freight has never been, and never will be, a picnic in the park, it has become a sort of high-tech, high-stakes three-legged race, and that is a new take on an old game every fleet already knows how to win.