Key Transportation Optimization Trends and How You Can Respond

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Mary Vasile: Hi everyone. Welcome to 3 Minutes in the Loop, the bite-sized video series where you can stock up on the latest supply chain insights, strategies and news in the time it takes to get your caffeine fix. I’m your host Mary Vasile. And today we’re covering key transportation optimization trends. Our special guest is Mike Green, VP at Transportation | Warehouse Optimization. Mike, welcome to 3 Minutes in the Loop.

Mike Green: Thanks Mary, glad to be here.

Mary Vasile: Great to have you. We know that rising freight costs and delayed shipping are just the latest disruptions to hit supply chains. What are the most critical transportation optimization trends we’re seeing right now?

Mike Green: Yeah. I think two critical trends come to mind. One is capacity, which isn’t new. The other one is inventory. Capacity is fluid based on transportation, supply and demand fluctuations. Right now, the transportation market is experiencing a pretty tight market driven by a lot of the common factors. Driver shortages, etc.

Carriers are having a difficult time increasing that capacity based on equipment availability. And then the other component is inventory, which is relatively new. Shippers have limited inventory; manufacturers are having a difficult time replenishing inventory to pre COVID levels. And the result of that is orders aren’t being fulfilled in full.

So a lot of trucks on the road right now are shipping half full and shipping a lot of air, which isn’t good when capacity is tight.

Mary Vasile: Yeah, and we definitely see that those factors are putting additional pressure on supply chains. And we feel the effects at both the business and the consumer levels. What are carriers and shippers doing to address those transportation optimization trends?

Mike Green: Carriers are obviously trying to add capacity, but it’s challenging right? We talked about it earlier. I think a lot of companies are looking at a dedicated or a hybrid dedicated model to guarantee some level of capacity. I think shippers and carriers are looking at autonomous trucks. A lot of neat concepts with TuSimple and Volvo to offset the driver shortage on high volume, high mile lanes.

And then one of the benefits of COVID is, I think companies are now, more than ever, open to looking at technology for help, which is great.

Mary Vasile: So with all of these challenges facing supply chains, Mike, what advice do you have for companies to overcome them?

Mike Green: I think it’s a common theme; the whole shipper, carrier collaboration. I think we need to get beyond a shipper’s market versus a carrier’s market, depending on the capacities. The other area obviously is to ship fuller trucks with truckload optimization, regardless of market conditions. It just makes sense. It helps reduce capacity, it reduces transportation costs, and quite frankly, it’s the right thing to do for the environment.

Some other areas that we have been focusing on is the whole transportation forecasting piece, where providing visibility of shippers, of what they need from a capacity perspective several days out. And then looking at that capacity over a longer horizon, so we smooth that capacity to reduce the fluctuations to be more in line with what capacity is available.

Mary Vasile: All right. And there you have it. Technology, transportation forecasting and shipping fuller trucks are just a few of the strategies supply chains should adopt to minimize those transportation challenges. Thank you for those insights, Mike, and thank you for joining us today.

Mike Green: Yeah. Thanks for having me.

Mary Vasile: And thank you for watching. Now, you’re in the loop. See you next time.