Shippers re-examine logistics management

Skyrocketing diesel fuel prices that continue to push trucking costs higher may convince shippers to take a fresh look at how they manage logistics.

“The logistics aspect of a businesses operation—whether in manufacturing, retail, etc—has become much more important because costs are rising so rapidly,” said Elijah Ray, president of the Council of Logistics Management, at the presentation of the annual State of Logistics Report at the National Press Club in Washington DC.

“Logistics is becoming much more challenging to manage today, especially in light of higher diesel fuel prices and the cost of security regulations, and how those two trends are affecting the cost of transportation services,” he said.

Ray, senior vice-president–customer solutions for Greenville SC-based Standard Corp, added that for shippers to reduce their logistics costs, they must reduce inventory carrying costs as a whole, not just the cost of transportation.

“It’s going to take a renewed focus on supply chain management, looking at the entire process end-to-end on a global basis to see where cost savings can be achieved,” he said. “We can’t focus on just reducing costs in one part of the supply chain. We have to look at the whole process and manage it better from there.”