Last week, I discussed continuous moves in networks where they could be planned with a high degree of certainty. But there is another form of continuous moves — a more ad hoc, opportunistic type of move — that can be very difficult to operationalize. There are several reasons for this.
First, when a carrier commits to a lane rate, the rate is based on the carrier balancing its network. A shipper is often getting an advantageous rate on a lane because that lane is providing the carrier backhauls from other clients. Kevin McCarthy, Director of Consulting at C.H. Robinson, pointed to research showing how efficient carrier networks already are. The Stephens Index shows that for trips of 600 miles by large public carriers, the average deadhead is only 66 miles. Now imagine a continuous move on a 600-mile trip that requires a deadhead of 20 miles. Decreasing empty miles from 66 to 46 is just not that significant. Carriers often do not see the small savings opportunity as being worth the added billing complexity or risks associated with these moves.
Further, almost all carriers have been burned in procurement engagements where a shipper has negotiated continuous move discounts, and promised a certain number of moves that help the carrier balance its network, and then not delivered on their promises.
Shippers may have every intention of using continuous moves, but find them difficult to execute for a variety of reasons. Poor loading and unloading execution at docks can cause continuous moves to fall apart. A carrier may show up, drop a load, and then be forced to wait to load the next shipment. Detention fines then eat up any savings associated with the continuous moves. Because of this, Fab Brasca, VP of Global Logistics at JDA Software, suggests that shippers build a dashboard to track facilities that have poor dock execution and thus give planners the visibility to not book continuous moves through problematic facilities.
If a continuous move involves the receiving and shipping dock at the shipper’s warehouse, they at least have some degree of control over the trailer load and unload process. Mark pointed out that in this instance, shippers need to ensure the continuous move loads get priority. If a continuous move involves deadheading to a supplier, and the supplier loading the truck in a timely manner, that is obviously harder to execute. In that situation, trailer drop and swap programs work far better.
Another problem with ad hoc continuous moves is that shippers lack visibility to a carrier’s driver Hours of Service (HOS) and scheduling preferences. If the string moves begins and ends with their loads, which would be common for longer strings of continuous moves, the shipper can use their TMS to ensure HOS constraints are honored. But the shipper won’t know, for example, that a particular driver has a “get home” request. And carriers, in this tight driver market, want to keep good drivers happy.
Because of these complexities, longer continuous moves that involve stringing several loads together, or a continuous move that is tendered several days prior to execution, or continuous moves involving deadheads (rather than A-B and then B-A) can all be more difficult to execute. Ken Wood, the EVP of Product Management at Descartes, says these problems result in planners constantly having to unwind these moves. This extra works means that they are often unwilling to even attempt executing these types of moves.
Dave Belter, General Manager of Transportation Management at Ryder Systems, says it is these types of operational issues that require extra effort be put in up front. A logistics executive really needs to talk to the carrier, planners, internal and supplier dock teams, and make sure everybody is on board, before commitments are made to carriers and rates are put in the system.
Everyone agreed, continuous moves, particularly of the ad hoc variety, are pretty rare. In fact, Matt Menner, a Sr. Vice President at Transplace, was but one of my sources that said there were more good examples of continuous moves in the late 80s and early 90s then there are today. Customers are ordering smaller quantities on a more regular basis and consequently forecasting transportation moves is much more difficult.
In conclusion, JP Wiggins, the VP of Logistics at 3Gtms, was one of several TMS vendors that saw ad hoc style continuous moves as a sales feature that potential customers ask for in Requests for Proposals but then never get around to executing. I started with the premise that this type of functionality is a good example of a feature that unnecessarily bloats a RFP and causes some potential customers to buy a bigger and more expensive solution than they really need. That is mainly what I heard.
(Note: C.H. Robinson, Descartes, JDA Software, Ryder, Transplace, and 3Gtms are Logistics Viewpoints sponsors).