One of the most pressing logistics issues that companies face today centers on the question of dedicated fleets. Many companies struggle with the best way to structure their own private fleets, others are facing the question of using dedicated fleets from third party logistics providers, and still others question the need for any aspect of an internal or outsourced dedicated fleet, instead relying on common carries.
Understanding the Options
With many companies facing ever-increasing expectations from their customers, making the right logistics decisions is a significant success factor. From carrying bulk cement to fresh produce, supply chain management is no longer a secondary or tertiary management issue. The costs and concerns of logistics are now top issues for both the smallest and largest firms.
Effectively evaluating the tradeoffs in costs and benefits of a dedicated fleet includes consideration of alternative designs. When the term dedicated fleet, or its alternative of dedicated contract carriage, is used, it is referring to third party owned equipment such as trailers, tractors, drivers and related resources.
In a dedicated fleet, the items are committed to fulfilling the shipping needs in a designated set of facilities or lanes in a transportation network. Such networks are national or limited to regions, such as southeast US. The core advantages of a dedicated fleet are assumed to be
- – The availability of guaranteed capacity
- – A reduction in total transportation costs
- – Increased percentage of on-time deliveries.
In today’s increasingly complex logistics environment, these fleets are either owned or leased and controlled by a motor carrier or logistic service provider. Making the options more varied, shippers will operate a private fleet, contract with 3PL providers, use common carriers, or utilized a combination of these options. As might be expected, each design has its own advantages and disadvantages, with the best choice driven by a shipper’s specific logistics requirements.
On top of all these elements, there are additional concerns over maintaining government compliance; safety and accountability compliance is a must. This is especially the case in the face of increased enforcement from the CSA. Meeting these regulations in central Florida is often quite different than those just a few hundred miles away, such as in South Carolina.
Choosing the Right Solution
As the above points show, today’s shipper faces a large matrix of decision factors in choosing the optimal logistics solution. In fact, several software vendors now provide sophisticated software products to help in this analysis of various aspects of supply chain management. The primary challenge is, of course, to achieve the lowest possible transportation costs while ensuring customer satisfaction with pricing and delivery performance.
In addition to making a choice based on the numbers, many shippers recognize that the reliability of the chosen provider is more important than their pricing. Noting again the hyper competitive environment facing many companies and manufacturers, their transportation provider must deliver the goods – literally.
Achieving these results requires today’s trucking company – whatever its ownership and design – to focus on utilization, best practices and the highest standards of performance.
The good news is that the logistics and transportation business is booming and allowing merchants of all sizes to provide unprecedented levels of capabilities. As this growth continues, the questions of how to best utilize the available shipping options will require even more focus from those responsible for a company’s supply chain.