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June 11 2018

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30 The Journal of Commerce | June 11 2018 Surface Transportation THERE'S A CLOCK that regulates supply chains, and lately it is losing time, not just by a beat, but hours and days. That throws off sales forecasts and orders, lengthens transit times, and leads to missed deliveries and a pervasive imbalance in assets, people, and goods throughout the economy. The cost of this loss of time in sup- ply chains is likely huge, and a major factor behind higher transportation prices that have stunned US shippers. The reason the supply chain clock is out of beat isn't hard to find. The US electronic logging device (ELD) man- date knocked it out of kilter. As cut fulfillment cycles from days to hours, the ELD mandate in effect extended delivery times from hours to days. In many cases, shippers found that same-day loads became next-day deliveries as truck drivers ran out of on-duty time or refused loads that cost them a weekly turn. The result is a further drain on surface transportation capacity already stretched thin by high freight demand and a shortage of qualified drivers that is getting worse as the US unemployment rate drops toward 3 percent. Supply chains need not just truck drivers, tractors, and trail- ers, but more time. The result of the shortage in capacity and time is evident in recent earnings reports from public com- panies such as Coca-Cola, Hershey, Hasbro, Deere and Co., Nestle, and Unilever. "Everybody is seeing an increase in the freight cost," Unilever CFO Graeme Pitkethly said on an earnings call. The good news is that by better managing time in the supply chain, shippers can create capacity. That may require them not just to polish their logistics networks but to change processes to free up time where it's needed most — with the trucker on the highway. Technology will be part of the solution. "I rarely get to talk about time, but it's fundamental," said William Salter, president and CEO of Paragon Software Systems, a British-based developer of truck routing and sched - uling software. In shipping, "time can be saved in lots of different ways; it depends on the angle from which you want to approach it." Simply reducing the time it takes drivers to load or unload creates capacity by allowing those drivers to fully utilize their available hours. But shippers will have to dig even deeper, Salter said. "You've got to make the best use of all the resources you have available," including tractors, trailers, and time. "If you're dropping trailers, then you've got separate availability of tractors and trailers," he said, refer- ring to carriers that "drop and hook" trailers, a practice that requires a higher ratio of trailers to tractors. "You need to make sure you're not over-resourced on equipment and under-resourced on drivers." The supply chain clock already was wound tight when the ELD mandate arrived, thanks to decades of effort by logisticians. From just-in- time manufacturing to narrow deliv- ery windows, time has been siphoned from either end of the supply chain, It's about time With better time management, shippers can alleviate truck capacity shortage By William B. Cassidy Trucking | Rail | Intermodal | Air & Expedited | Distribution

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