New motor carrier safety regulations and rising oil prices are just two of the challenges likely to impact the freight marketplace in coming months, says Matthew Menner, senior vice president of Transplace. And the right IT solutions are helping the industry deal with them.
Forward looking shippers are rethinking their sourcing strategies, developing longer-term contracts with transportation providers and taking other steps to be prepared for changing market dynamics, he says.
"As uncertainties around fuel costs, future capacity and safety regulations unfold, we are seeing leading retailers embrace a set of intelligent strategies that include these options as well as other 'out-of-the-box' ideas," Menner says. This is a change from the past few years, when the ball has been squarely in the shippers' court, in terms of defining the commercial interaction with providers, he says. "We now are in a slightly more carrier- or capacity-friendly environment, with retailers constructing more productive relationships with carriers," he says.
At the same time, retailers are becoming more discerning and exacting around the service they expect from suppliers and logistics providers and more rigorous in the imposition of penalties for service lapses, Menner says. "Retailers have invested a lot in information systems that provide data on shipments all the way through the supply chain. They have a full understanding of how their partners are performing," he says. Instead of providing the basis for more confrontation, however, Menner says this knowledge seems, instead, to be supporting more constructive and improvement-oriented conversations. "We hear time and time again from our consumer packaged goods customers that the adversarial relationships they used to have with retailers were caused by a lack of understanding about where they were meeting customer expectations and where they were falling short.
"When the right information is gathered, and there is confidence in its accuracy, companies can use that data to analyze supply chain operations and present it internally and to partners as a basis for improvement," he says.
Menner notes that Transplace has strengthened its IT infrastructure so that it can provide this kind of reliable information to its customers. "In addition to our leading edge TMS, we have made a significant multi-year investment to acquire the entire Microsoft Business Intelligence suite," says Menner. "We are leading our competitive sector in terms of capturing terabytes of data and turning it into actionable information to improve supply chain operations and efficiency."
