Capacity — the amount of freight that can be moved by the number of assets (trucks, trains, containers, etc.) available at any given time — has been tight for years, thanks to a global driver shortage and widespread consolidation throughout the industry. It’s only gotten worse as climate change, global unrest and now a worldwide pandemic have added increasing strain to global supply chain infrastructure. All of these factors have combined to give us the carrier-favored market conditions that we face today, meaning it’s harder than ever to find the transport you need to get your goods to market at a reasonable price point.
I’m writing this piece to let you know that even with things as tight as they are today, you still have options. Whether you find yourself in a shipper-favored market or one that favors carriers, having the capacity you need to meet customer demand and minimize operating costs is always a critical priority.
How to Improve Capacity Within Your Organization
You can unlock additional capacity within your supply chain using a variety of different strategies. Of course you can usually work with more carriers or bid a little higher in your carrier selection process, but this approach can be costly in the short term, and risks locking you into less-than-favorable rates for the long term.
What if instead you could change the game entirely?
Technology is advancing within the logistics space by leaps and bounds, and the right information at the right time can give you a major edge in improving efficiency throughout your operation.
Resolve Bottlenecks to Boost Capacity
In a lot of ways, supply chain management is a zero-sum game. Delays at one end of your supply chain will cause delays elsewhere, as someone else has to pick up the slack. This means, however, that the opposite is also true. Using modern visibility tools, you can take pressure off of your carriers in other areas of your business, such as dwell time, thereby freeing up capacity that would otherwise have been wasted.
Some of the most groundbreaking research on this topic happened in 2019, when FourKites teamed up with the Trading Partner Alliance, Coca-Cola, Land O’Lakes and other top food shippers to investigate the impact of real-time, targeted data on facility dwell times.
What we discovered was that dwell is often the result of many different factors, ranging from day of week to type of loads being delivered. No surprise there. But what really blew us away was the results that we saw when we finally implemented the suggestions that the data highlighted. Simply by making small changes in the operations of each facility (better balancing of load schedules, changing guard shack procedures, etc.), these shippers were able to not only reduce dwell times at their target facilities, but they also determined that their efforts, when expanded to include other shippers, would serve to increase capacity throughout the entire industry by 4%.
Free Up Trucks By Eliminating Empty Miles
Some new technologies will even allow you to eliminate backhauls entirely by harnessing the power of a logistics network that stretches far beyond your own supply chain.
Experts estimate that as many as 40% of trucks on the road are empty at any given time. Many times these trucks are journeying back to their original pick-up empty because traditional load-matching approaches lack the raw data needed to match a time-sensitive shipment to available capacity in real-time. All that changes when you have a solution capable of drawing capacity and shipment data from hundreds of shippers within a mutual network, and analyzing that data against various real-time conditions, such as stop delays, traffic congestion and disruptive weather events. An industry that can better share capacity among its shippers and carriers is an industry that can better withstand massive disruptions like COVID-19, as well as major economic downturns and capacity crunches.
In many ways, FourKites’ Lane Connect is the leading example of this kind of tool. By combining machine learning with data gathered from within your extended freight network, Lane Connect helps you identify overlapping lanes between partners in your logistics network, optimize freight planning and share capacity between dedicated fleets.
Top Strategies for Improving Capacity
These are some of the strategies that top companies are using right now to guarantee availability of supply chain capacity and streamline their businesses:
- Improve forecasting with data-driven techniques
- Identify chokepoints and bottlenecks with advanced analytics
- Eliminate deadhead to maximize capacity with available assets
The benefits of taking steps to improve capacity are many. Not only are you realizing less strain on your business related to capacity; you’re also taking the opportunity to strengthen relationships with your carrier partners and improve your ability to meet customer demands in a timely and satisfactory manner. In short, everybody wins.
If you want to find out more about how real-time visibility can help you get the most out of your available capacity, I invite you to get in touch with our team at firstname.lastname@example.org.