Logistics & Supply Chain Forum: Overcoming Capacity Volatility

This was RateLinx’s fourth time attending the Logistics and Supply Chain Forum and we really like how well run it is. The companies that attend are looking to learn, speak with fellow colleagues and suppliers to see what is new and strategize how they may be able to leverage new logistics trends to improve their processes, overcome capacity volatility and increase ROI. As a supplier, we only attend the keynote address, which was given by Team Rubicon and Take Command author Jake Wood. The delegates split their time between meeting with suppliers and attending workshops. Many delegates told us they prefer this format. They are able to schedule meetings with the suppliers that they are interested in, which means that they don’t have to wait in line or have another delegate waiting on them to finish their conversation with a supplier.

Using Freight Audit to Improve ROI and Carrier Relations

We had several great conversations at the forum but one really stands out. We were speaking with a company that has been looking for a transportation management software (TMS) solution for years but has been having a hard time finding one that provided a good return on investment (ROI). On the surface, it seemed an attractive ROI wouldn’t be that difficult because their main modes of freight are Small Parcel and Less-Than-Truckload (LTL) shipping. After digging deeper into their challenges, we found that the issue is their LTL rates. They are using a common rate base for all of their carriers, and they’ve squeezed as much as they can out of their carriers.

We discussed how we might help solve their problem by the way we partner with companies that use our RateLinx Enterprise Solution. Through these partnerships, we leverage the data collected during the Freight Audit to help a company remove the need for a common rate base. Then, by implementing ShipLinx TMS, they now have a strategic platform that will allow them to unlock the hidden savings in their current LTL spend through our Modeling Engine. All we need is a few months of historical shipment data and we can model the data to show them how they can utilize the carrier’s rate base to achieve significant savings. Based on their volume, it wouldn’t be out of the question to save them $10 million or more.

The Challenges and Opportunities of Capacity Volatility

This year’s Forum was an excellent illustration of how much can change in a year. At last year’s show, some companies we spoke to were having challenges with supply chain freight capacity. This year, we talked to many food companies and were surprised to hear that capacity is not as big of an issue as everyone feared it would be.

The drought in California really changed the landscape in regards to truck freight. What they found was more capacity going out of California because of the goods being shipped into California. Normally, there is so much produce leaving California that it’s hard to find capacity, but the drought caused less produce to be grown and exported. Now, more produce and supplies are coming into California. It’s always interesting to hear how volatile capacity can be and how Mother Nature does play a big part in how a company’s supply chain operates. By having real-time visibility and accurate supply chain data, companies are better able to deal with the challenges of capacity volatility.

Logistics and Supply Chain Management: Diverse Challenges, Shared Solutions

Based on the conversations we had with delegates at the show, everyone was looking for ways to improve their supply chain. Some were focused on how they could optimize their inventory, some were focused on how they could improve supplier relations and others were focused on how they could optimize their freight spends.

No matter what they were focused on, it all came down to the same common theme: data and visibility. If they had the proper data, they would have visibility into how they are performing. Not only that, they could also figure out what they can do to improve in their area of focus. This lines up perfectly with what we do at RateLinx. Our Enterprise Solution collects the data, standardizes it, normalizes it and turns it into the Integrated Shipping Intelligence to allow our customers to improve their supply chain performance.

If you’d like to know more about how RateLinx can help you optimize your supply chain, please send me an email. I’d love to discuss how our software solutions can help you achieve your goals.