By Marco Cristini, Business Analyst
The Council of Supply Chain Management Professionals (CSCMP), founded in 1963, is the preeminent worldwide professional association dedicated to the advancement and dissemination of research and knowledge on supply chain management. With more than 8,500 members representing nearly all industry sectors, government, and academia from 67 countries, CSCMP members are the leading practitioners and authorities in the fields of logistics and supply chain management.
This year, Eyefreight had the opportunity to participate in the annual CSCMP conference in San Antonio, Texas. Transportation and technology, the increasing cost of transportation, and collaborative logistics were some of the hot topics discussed at this year’s event. Professionals from all industries recognized the likelihood of shipping costs continuing to surge in the face of a driver shortage and a capacity crunch, and many identified the use of real-time data platforms as a way in which shippers could gain a competitive advantage in this environment.
I couldn’t agree more. In meeting after meeting with Eyefreight customers, I sit elbow to elbow with planners and transportation managers who recount their difficulties allocating incoming transport orders to available resources. As this challenge becomes, well, more challenging, these managers are anticipating an unfavorable impact on business profit margins. And this is just the starting point… These same logistics professionals are then tasked with identifying how best to optimize shipment routes in this environment, maintaining high-level customer service and minimizing ecological footprints throughout.
Consensus at CSCMP was this environment would actually become worse before it becomes better. As the American economy recovers, distribution needs will increase, and thus far there is no indication driver availability will increase proportionally. Speculation was that we may perhaps find ourselves in a new market movement, where cost optimization and customer service are not the main priorities, but rather top billing goes to a shipper’s ability to minimize unallocated items.
In an engaging “State of the Union” debate initiated by Craig Harper, Chief Operations Officer, J.B. Hunt Transport Inc., participants discussed business strategies to promote collaboration between shippers and carriers, thereby mitigating the tight capacity problem. Technology was identified as a vehicle (pun intended) by which companies could better achieve this collaboration. The use of systems and cloud platforms is certainly a way for shippers and carriers to communicate faster and reach a broader audience. In fact, it has been proven the use of technology platforms achieves high-level transparency in business operations, strengthening the relationship between shippers and logistics service providers. Furthermore, a centralized point for communication and data improves decision-making regarding efficient routing, equipment utilization, and carrier-service. In the end, improved decision-making could compensate for higher freight rates.
It is clear the market is becoming more open and dynamic, and now is the time to act. This is why software providers are rapidly moving to cloud solutions, where software deployment is a matter of hours and ROI is ensured within months. The question is: are shippers moving fast enough?