Why are transportation costs going up?

Logistics professionals no matter what industry they work in, no matter where in the country they're located all have to endure the same edict from their

Dave Blanchard

Dec. 8, 2005

Logistics professionals — no matter what industry they work in, no matter where in the country they're located — all have to endure the same edict from their bosses: Keep transportation costs down.

At the recent Council of Supply Chain Management Professionals conference in San Diego, John Hulton, director of inbound transportation at retailer Staples Inc. (www. staples.com), and Mike Kilgore, CEO and president of consulting firm Chainalytics (www.chainalytics.com) , offered several reasons to explain the high cost of logistics. Use them one at a time or all at once, depending on the severity of your boss' latest tirade.

Regulatory

• Hours of Service rules/revisions

• Cleaner burning engines (2007/2010)

• Ultra-low sulfur diesel

• Higher tolls/more tollroads

• Homeland security measures

Market forces

• Global sourcing/offshoring

• Driver wages and shortages

• Fuel price volatility

• Highway/port congestion

Customer requirements

• Smaller shipment sizes

• Increased service reliability

• Event-specific/timed delivery

• Customer-specific packaging.

About the Author

Dave Blanchard

Senior Director of Content

During his career Dave Blanchard has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeek, EHS Today, Material Handling & Logistics, Logistics Today, Supply Chain Technology News, and Business Finance. He also serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2021), which has been translated into several languages and is currently in its third edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.