How to Manage Transportation in any Environment

Before members of Congress left Washington, D.C. for the Memorial Day recess, one of the issues being debated was the potential of changing the Hours of Service (HOS) rules for truck drivers. An effort to reverse trucking-related provisions from a fiscal 2017 funding bill was defeated, although the topic could still be raised when the bill is debated on the floor of the House of Representatives.

A little history about the HOS- they were updated in 2011, with effective dates for some provisions delayed until July 2013. In 2015, those provisions were reversed as part of an appropriations bill. Now, the issue has come up again in Congress. Trucking companies breathed a collective sigh of relief that the recent effort to change the rules was defeated, and the industry’s lobbying group, the American Trucking Associations issued comments expressing gratitude to the Committee for its handling of this issue.

Why? Because the reality is that any change in rules for truck drivers could require trucking companies, many with razor thin margins, to undertake the costly and time-consuming tasks of reconfiguring networks. Carriers could also be looking at needing to hire more drivers for their re-configured networks, no easy task with a driver shortage of 30,000 and turnover rates at some carriers in excess of 102 percent on an annual basis.

Uncertainty about HOS rules and a driver shortage are not the only issues that trucking companies are facing today. Carriers are also adjusting to requirements for electronic logging devices and working to maintain appropriate ratings within the Federal Motor Carrier Safety Administration’s Behavior Analysis and Safety Improvement Category (BASIC) scores.

So, why should you care about these issues? Because any dynamic that affects the carriers you count on to transport goods for your company impacts your business. The downstream effects of the issues mentioned earlier, potential HOS changes and a driver shortage, could be tighter capacity, making it more difficult for shippers to obtain space with quality carriers at reasonable rates. And, if you are a shipper, this is only one aspect of your job. At the same time, you are also being pressured to reduce supply chain costs on an on-going basis and improve service to customers, regardless of regulatory dynamics.

How does a company create and execute an effective transportation plan that meets customer expectations, regardless of potential market disruptions? While there is no silver bullet, there are steps that shippers can take to obtain capacity and optimize performance. And, the heavy lifting begins before a single shipment is loaded or moved.

Here are five ways that shippers can actively work to get the capacity they need with the carriers they want at rates that work for them.

1. Establish positive carrier relationships through a systematic and streamlined freight procurement process.
2. Monitor carrier data on a routine basis so that you are aware of any market changes that could impact carriers handling your freight.
3. Review up to date key performance metrics so that you realize if there is a problem with a carrier before you experience service issues.
4. Optimize loads, consolidating multiple LTL shipments into a single truckload shipment, reducing carriers and costs.
5. Gain access to the same bidding boards used by forwarders or third party logistics providers for those occasions when a spot quote is needed immediately.

Technology is a key enabler for all of these functions. Transportation management systems have long been a mainstay in helping shippers plan routes and track shipments. Today, new solutions are becoming available in the marketplace that go beyond those basic capabilities to include other functionality including procurement, carrier management and optimization.

For example, by using systems specifically designed for freight sourcing, shippers can expedite the bid process by aggregating rich data from a variety of sources. They can also improve carrier participation by making it easier to complete bid requests and providing ongoing updates to carriers regarding their status throughout the process.

Once a shipper has the right carriers on board, they can begin to develop relationships and begin addressing the other strategies outlined in this article. So, it is true- you can’t fight City Hall and you cannot control what happens on Capitol Hill. But, with good business processes and advanced technology, you can create and execute an effective transportation plan, regardless of market disruptions or DC Beltway rhetoric.

Debra Phillips, Director of Marketing for MercuryGate International, has worked in the transportation, logistics and supply chain industries for more than 20 years. She has held positions of responsibility with a global transportation services provider, a national industry trade association and a truck rental, leasing and dedicated logistics firm. A graduate of the University of West Georgia, she is a resident of Jacksonville, Fla.