If you pay attention to transportation and long haul trucking rates, you know that the current driver shortage is a real problem and is causing increased rates and reduced load acceptance ratios. For more details on the driver shortage and how it effects transportation costs, check out this article by Michael Kilgore.
The most widely accepted solution to the driver shortage is to increase compensation for over the road truck drivers so that the profession remains competitive against other appealing semi-skilled construction jobs that are on the rise. That will definitely help with the supply end of the equation and probably deserved for quality drivers, but at the same time those wage increases will just transfer through to your company in the way of rate increases across lanes.
Here is an alternative way of thinking about this problem from the the demand side of the equation. Shipping less product is obviously not a solution to reduce demand and unless you own your fleet, you can't really hire or pay drivers more, you rely on your carriers for that. So lets look at something you do have control of. Believe it or not, it starts with your packaging, specifically your distribution and unit load packaging.
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Many customers we help achieve 5-15% improvements in full truck load densities, which usually translates 10-15% less truck load shipments. This improvement obviously generates immediate transportation savings but also reduces the demand on their carriers and improved load acceptance ratios. Now while one company reducing a few truck load shipments a week is not going to solve the driver shortage by itself, but a small percentage shift across the market would. Not to mention, this would result in significant savings for companies and a large reduction in truck emissions from a sustainability standpoint.
To learn more about Packaging Optimization, follow the link.
Great article! An alternative way to be more efficient. It's small actions like these that helps a business to achieve cumulative productivity! Keep up the good work!
ReplyDeleteWhat most of us don't realize is that packaging is not a generic option. It needs to be customized in accordance to the product or object being packed. Therefore, the job is best left to professionals. Since they know their task, they will be able to do the packaging in a better way. For example a glass statue may need more padding while being packed as compared to a metal box.
ReplyDeletePacking is Fun