Logistical issues around moving product can affect distributors in many ways, including higher costs throughout the process.
“You’ll have high labor costs, just having to manage the process of trying to find the right carrier,” says Steve Norall, vice president of new business development at Cerasis. “High distribution costs, high management costs, lack of customer satisfaction tools.”
Adopting tools to increase shipping efficiency can lower your cost–to-serve and have ripple effects into other areas, including helping your company differentiate.
Dirk Beveridge, author of INNOVATE!, says he believes that quality employees from the millennial generation will be more likely to want to work for companies that offer them tools to make an impact in their jobs. And many companies are creating sustainability goals to reduce their carbon footprints, according to Jason Mathers, senior manager at the Environmental Defense Fund and author of multiple reports on innovating freight transportation models. Mathers says this business strategy is gaining popularity as demand for environmentally-friendly products and services increases.
Many technology tools exist to help distributors identify the ideal pathways for product to take. Norall says that software platforms will optimize freight options and place shipments in lanes that carriers prefer. Without that capability, some distributors are choosing to ship by rail to fill the gaps.
“The line haul is where they’re having issues getting the capacity to move that freight,” Norall says. “So what’s happening is they’re throwing it on the rail, but then when you throw it on the rail, you get service issues and you get service delays.”
Less-than-truckload (LTL) shipping is one solution, but manually identifying and matching multiple trucks with similar destinations and delivery windows can be time-consuming. This opportunity is another one that is optimized by software capabilities.
Read more about shipping efficiencies in Strategic Options for Increasing Shipping Efficiency.