Report Examines How Shippers Are Creating Greater Capacity, Reliability and Rate Stability

ProLogis (www.prologis.com) (Denver), a provider of distribution facilities and services, has released a new study authored by Paul Nuzum from the University of Denver, Moving Freight Today—How Shippers Are Creating Greater Capacity, Reliability and Rate Stability (www.prologisresearch.com/movingfreight). The report explores some of the tactics that shippers are using to improve the efficiency of their supply-chain networks in the face of higher transportation costs; port, rail and highway congestion; labor shortages; and security issues.

Based on interviews with supply-chain executives at 30 major companies from a variety of industries, the report documents how:

  • Companies are adding consolidation and deconsolidation centers to their supply chain networks to ensure that freight gets moved in full container loads and truckloads. These centers serve as "freight pooling hubs" and, under the right circumstances, can substantially increase the efficiency of a company's logistics operations.
  • Companies are "de-coupling" freight costs from product costs. In the past, suppliers generally paid freight charges and simply added them to materials invoices. Today, companies are adopting practices that ensure that they receive the best shipping rates available on a consistent basis, through centralized command and control of freight movement.
  • Shippers are working to improve collaboration with carriers and other transportation providers, through better forecasting, shorter payment cycles and implementation of two-way operational scorecards.

Logistics managers are creating new capacity in their networks by eliminating sources of waste and inefficiency. Techniques include collaborating with other companies to reduce the number of empty trucks on the road and establishing 24x7 work schedules at distribution centers.

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