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Top 10 Blunders #7 – Disregarding Transportation Market Realities

The current state of the transportation marketplace is unlike anything seen in the last two decades.

The power in shipper-carrier relationships has changed dramatically. The pendulum has swung far in the favor of carriers who now have pricing power thanks to a shortage of capacity and a robust economy.

Failing to recognize this environment may lead supply chain managers to embrace traditional win-lose rate negotiation tactics and bad behavior like paying invoices slowly, which carriers are no longer willing to tolerate. Today, carriers can simply walk away from difficult customers and fill trailers with more desirable freight.

To avoid a loss of critical capacity, produce transportation managers must understand that the market now favors carriers.

To acquire needed capacity at a reasonable price, shippers must be carrier-friendly, meet volume commitments, match inbound and outbound volume, treat truck drivers with respect, and load or unload trailers quickly.

The goal is to create stability and save time so drivers spend more time on the road and less time at the dock.

This is an excerpt from the most recent Produce Blueprints quarterly journal. Click here to read the full article.

Dr. Brian Gibson is executive director of Auburn University’s Center for Supply Chain Innovation and a former logistics manager. He is coauthor of Supply Chain Management: A Logistics Perspective (10th ed.) and active in supply chain executive education, research, and consulting.