How an advanced supply chain can create extra budget
Optimizing a complex supply chain is rife with challenges. Multiple transport modes, locations, and sensitive goods can quickly create inefficiencies and unnecessary costs. But with careful planning, you can transform your supply chain into an efficient, cost-saving machine.
Where do you start? Before taking the plunge, consider three key steps:
Once you’ve taken these steps, the foundation will be in place, and a wealth of optimization strategies will become available. The path to supply chain optimization is clear — now, let’s begin the journey to maximize efficiency and cost savings.
By combining multiple less-than-truckload shipments into full truckloads, your supply chain unleashes itself from high-touch shipping, maximizes cubage and reduces traffic at facilities.
What if you could make your incoming freight deliveries faster, cheaper, and greener all at once? Consolidating less-than-truckload (LTL) shipments into full truckloads can help do exactly that.
By mixing freight from multiple vendors or origins into a single trailer, you’ll benefit from fewer trucks clogging up your dock doors while slashing costs through better utilization and lower claims. Your supply chain will see improvements across the board — from increased efficiency with fewer stops per shipment to reduced emissions thanks to better capacity usage.
LTL consolidation optimizes your operations and helps you meet your sustainability goals. It’s a win-win for both your bottom line and the planet.
LTL consolidation has some potential pitfalls. Shipments may need an additional stop at a cross-dock facility, increasing transit times if not managed properly. Mixing freight from multiple vendors also increases the risks of shipping errors or damaged goods from mishandling.
A lack of oversight procedures and quality checks or carrier partners who aren’t capable of smooth cross-docking and freight mixing can also create chaos.
Network Requirements:
Technology needed:
Shippers may not realize it, but a common inefficiency in supply chain management is shipping multiple orders to the same customer across multiple loads. Combine those shipments into a single truckload and reduce shipping costs.
Sailing schedules optimize loads destined for the same customer by consolidating multiple orders onto fewer trucks. Shippers may not even realize they are shipping piecemeal to a given consignee across fragmented orders.
Sailing schedules help identify such cases, avoiding dispatching partially filled trucks and requiring less equipment to haul the same volume. Trucks depart full instead of half-empty, maximizing cube utilization with each outbound load. Overall, sailing schedules boost efficiency, cut costs, and promote sustainability for shippers by enabling tighter consolidation and better asset utilization. Careful planning and execution keep operations flowing smoothly while leveraging freight efficiencies.
Sailing schedules also come with delivery delays and warehouse operations risks. With multiple orders consolidated on one truck, a late arrival jeopardizes every part of that shipment. Additionally, holding freight to build full truckloads ties up dock space and strains inventory capacity over longer dwell times.
Load planning and scheduling grow more complex relative to direct shipping methods. While proper analytics, oversight, and agile operations can mitigate these drawbacks, be realistic about labor bandwidth, space constraints, and tolerance for shipment delays to avoid sailing schedule pitfalls. Choose carrier partners adept at consolidated shipping and account for buffer room in arrival times depending on freight combinations for efficiency gains.
Network Requirements:
Technology needed:
Converting some of your truckload network to intermodal service can help move the needle on savings and sustainability for your supply chain.
Shifting from truckload to intermodal rail transports yields major cost and sustainability advantages. Intermodal service can cut freight spend by 10-15% while slashing CO2 emissions by nearly 65% compared to over-the-road trucking. Service levels also find parity on the rails with consistent, reliable delivery timelines across North America.
Shippers gain access to scale capacity through partnerships with Class-I railroads and 3PLs focused on intermodal shipping efficiency. Damage and claims also shrink without the variability of truckload transit. For shippers able to plan farther ahead and leverage containerized rail transport, intermodal unlocks game-changing savings and efficiency.
Intermodal rail has slower transit times, given railway timetables and ramp processing. Infrastructure gaps also cause inefficient routing and long truck drays to connect endpoints. While cost and sustainability gains outweigh lagging service for many shippers, properly plan for timing needs and endpoint dray distances when shifting modes.
Network Requirements:
Technology needed:
Get rid of 40’ capacity closer to the port and reduce the number of inbound trailers to your facilities by transloading into 53’ trailers.
Transloading lets shippers optimize international containers inland by consolidating ocean freight for domestic transport. Instead of rail or trucking heavy 40-foot boxes directly to destinations, transload sites near ports transfer cargo into lighter 53-foot trailers. Three 40s fit into two 53s based on pallet space savings.
This capability terminates ocean container assets sooner while reducing domestic equipment needs by a third. Shippers also mix freight from multiple ocean carriers into shared trailers, promoting consolidation. Transloading international shipments into domestic containers can save on transport legs, asset repositioning, and overall door-to-door costs.
Transloading comes with added product handling that can increase the risk of damage compared to direct freight paths. Ocean carriers still need their containers returned promptly to avoid fees. Ensure transload staff takes precautions against rough treatment that could affect product integrity or packaging.
Additionally, plan for container repositioning needs when mapping out freight flows. With proper oversight on gentle handling and container logistics coordination, transloads unlock significant efficiencies.
Network Requirements:
Technology needed:
Turn your supply chain into a revenue generator by selling empty miles to 3PLs or other shippers who can take advantage of your private fleet.
Selling unused freight capacity on return lanes minimizes wasted mileage while serving sustainability and profits. Instead of trucks running empty after unloading, fill vacant space with other shippers’ volumes. Backhaul programs reduce operating costs by generating revenue on non-revenue miles, decreasing wasted CO2 emissions from empty runs.
Driver satisfaction also sees a boost with increased drop-offs, providing higher returns and playing into improved retention outcomes. Backhauling unused capacity turns wasted miles into mutual gains across financial, environmental, and human capital realms. The result means greener, smarter shipping buoyed by collaboration.
Backhauling unused capacity requires balancing priorities — avoid taking on too much third-party volume at the expense of customer service and core operations. Shipping times and routing efficiency may require additional stops to accommodate new freight. More drop-offs also accelerate asset wear and tear, increasing maintenance needs.
Ensure backhaul programs match capabilities without distraction from main revenue channels. Vet collaborative shippers, set utilization limits, get executive buy-in and adjust risk-sharing contracts. What seems like easy money from selling unused truck space loses appeal if delivery KPIs trend downward. Keep collaborative initiatives in check through governance models upholding standards.
Network Requirements:
Technology needed:
Whether you’re looking to reduce costs, improve service, or promote sustainability, you can’t do anything about it without having a baseline and a method for measuring your progress. That’s where supply chain visibility comes into play.
Supply chain visibility platforms, like FourKites, can help measure your progress, deliver insights on inefficiencies, and help teams operate more efficiently. These systems help break down the barrier of entry for creative strategies by continually monitoring each order or shipment across your entire supply chain so that you can confidently transform.
Need a hand in getting your supply chain budget in check? FourKites can play a role. Learn how supply chain visibility can open new opportunities and help track your progress.
