Elasticity in Transportation Planning Key for Retailers

An article in this week’s Transport Topics detailed the operational challenges facing intermodal shippers in the face of growing economic activity. The double whammy of increasing freight volume and an ongoing, acute driver shortage has driven a boom in the utilization of intermodal truck to train shipping. The article reports that intermodal carriers are having a great year in spite of “an array of operational, financial and technical issues” challenging their ability to handle the growth. The inadequacy/inflexibility of planning strategies and processes is frequently to blame for the inefficiencies identified by intermodal carriers in this article. Here’s some insight into how the struggle is effecting all shippers; but particularly those reliant on imports such as retailers.

Some of the problems are structural. For example, container ships have grown larger yet terminal space has remained the same size resulting in longer waits to turn trucks at the ports. Other problems are borne of regulatory issues like driver restart rules. Still others are borne of exigent circumstances such as the recent closure of West Coast ports. Intermodal shippers have been the beneficiaries of these challenges largely as trucking capacity has been forcing shippers to seek alternative to OTR shipping. However, as the article notes, intermodal shippers are struggling to keep up with demand.

So where does this leave the shipper – particularly those reliant on imported goods flowing into US ports from overseas? With so many factors seeming to conspire against the shipper, how can a business overcome the challenges and deliver goods on time?

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The key to ensuring a high degree of elasticity in supply chain planning is building a logistics IT framework. So if a shipper has to diverge from the normal process, there is infrastructure in place to enable quick, yet data-driven modifications to the transportation plan.

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The answer lies in ensuring a high degree of elasticity in the transportation planning process. It begins with the ability to quickly and efficiently modify the transportation plan in response to any external disruptions. When the West Coast ports were closed, some shippers were able to successfully redirect freight to Gulf Coast or East Coast ports, and had the ability to quickly line up OTR carriers in lanes where they did not typically operate. As the Transport Topics article notes, the government’s 34-hour restart rule for truck drivers was recently suspended shifting shippers back from intermodal to OTR shipping. These sudden changes can come as a shock to shippers lacking the ability to flex their plans to overcome such obstacles. Moreover, as the current political gamesmanship being played with the Federal transportation bill currently being debated in Congress demonstrates, more fluctuations to the rules are likely to occur.

The key to ensuring a high degree of elasticity in supply chain planning is building a logistics IT framework – transportation management systems, freight/route optimizers, yard management tools and others – designed to foster exceptional control and visibility across operations. So if a shipper has to diverge from the normal process, there is infrastructure in place to enable quick, yet data-driven modifications to the transportation plan. Without end-to-end visibility as provided by logistics IT tools, this level of elasticity is difficult to achieve. And remember, if you cannot bend, you’re liable to break.

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