The Power of Consolidation

The Waste of Transportation

Waste of Transportation

The waste of transportation is a disease that causes companies to drain money at an alarming rate. Think about all the costs that come together for transportation; you have to pay for material handling equipment, staff to operate it, training, safety precautions, extra space for the movement of material and so forth. Often, transportation leads to operations having to wait for the product to be delivered due to delays (waste of waiting), which is costing more money as well as extending lead times and creating delivery problems.

The waste of transportation can relate to Wile E. Coyote. We all grew up watching Wile E. Coyote and the Road Runner. In each cartoon, Wile E. Coyote utilizes absurdly complex gizmos and elaborate plans to try to catch his prey (Road Runner), but fails every time. He continuously wastes Road Runner’s time trying to capture him through his tricks and games, which will result in Road Runner arriving late to his destination. There are a host of reasons why shipments can be delayed: late pick-ups, equipment failures, driver failure, inclement weather, and traffic congestion, among endless possibilities. Despite these maintaining challenges, there is decidedly less patience for failure and inability to meet on-time delivery commitments today.

Transportation, like inventory, is a necessary activity within logistics. Transportation consumes well over half of a company’s total logistics costs. About $600 billion is spent each year on transportation in the United States alone. The vast majorities (almost 83 percent) of those dollars spent on transportation are directed toward motor transportation services, and since teleportation does not exist it takes time to move product from one place to another. So how can we minimize the daily waste in transportation?
Minimizing the Day to Day Waste of Transportation

Inefficiencies and waste of transportation are rooted in the poor utilization of equipment, operators, and a host of other limited resources found in the transportation operations. There is, in fact, a strong correlation between sound operations at the ground level and sound management of network-wide resources. Properly utilized assets will dampen the requirement for additional assets. However, many companies fail to recognize opportunities for load consolidation that can save money and improve service.

One prime example is found in shipping multiple less-than-truckload (LTL) shipments in the same direction at any point in time. Let’s assume that each shipment consists of a single pallet weighing 1,200 pounds. The natural decision might be to contact the LTL carrier to handle each of the single pallet shipments. Each shipment would be charged separately and require multiple handlings as the loads are picked up and delivered to the terminals for sorting. A line-haul vehicle might then transport each shipment to its respective destination terminal, where the shipment would be sorted yet again for local delivery. These sorting and resorting take time and introduce the potential for damage that comes with each handling of the freight.

To eliminate the waste of transportation, the shipments could be combined and picked up by a truckload carrier. A single rate would be negotiated for line-haul service to the final destination. With this there is less potential for damage due to rehandling, and at a lower cost for the combined shipments. The obvious challenge with load consolidations is the coordination of the loads assuming all customers will be ready to accept the load as scheduled, and then to deliver consistent with schedule.

With that being said, address the waste of transportation issues today and focus on the future. Ask yourself:
• How will waste be utilized and managed in the future?
• How can we integrate the efficient management and minimization of waste into transportation operations and maintenance?


References: “Waste of Transport; causes, symptoms, examples, solutions”
  Related Posts
  • No related posts found.