Supply Chain Supply Chain
Supply Chain
Supply Chain
Supply Chain
Link01 Link01
Link02 Link02
Link03 Link03
Link04 Link04
Link05 Link05

Introducing Aptitude4 Inc.

Aptitude4 a company that understands your supply chain, especially in today's economic environment. We provide solutions to solve challenges and improve your bottom line. Our consulting team members have many years of experience with the core competency and knowledge to help with supply chain strategy, leadership, process improvement and cost reduction. We are a solution provider with excellent project management skills that can help your company's competitive advantage.
Services Menu
Sharing the Load, Collaborative Transportation
Rate and Wrong, Consumption Based Fuel Surcharge
Finding The Win Win Deal, Freight Negotiations
Fuelling Your Supply Chain, Inbound Freight Programs
Green Your Logistics, Reducing Emissions
Out Of The Woods, Lean Logistics
Putting Out the Call, Request for Proposals
Affordable Supply Chain Technology, Transportion Management Systems

Sharing the Load

Collaborative Transportation

With today's focus on reducing costs and protecting the environment, the time for collaborative transportation management may be here.
Canada, the second largest country in the world - about 5,000 km from Vancouver to Conception Bay - is one of the most challenging, high-cost countries in which to distribute goods.
Forty-two percent of the population inhabit five urban areas where manufacturing and distribution facilities face common transportation challenges. Meanwhile, disproportionate shares of transportation resources are required to service the balance of the population, scattered over 10 million square kilometers. The situation dictates a high use of less-than-truckload delivery, and all-too-frequently, pick-up and delivery trucks simply aren't full.

Rate and Wrong

Consumption Based Fuel Surcharge

Fuel needs to be a flow-through consumption-based charge - a system that would fair for everyone.
Fuel costs are the largest ongoing financial concern for both carriers and shippers. Fluctuating fuel costs create challenges for companies to remain on budget, which ultimately impacts bottom lines.
The current recession has tempered the volatility we've seen creating chaos in previous years. Rack fuel prices this year have been trending between $0.692/litre and $0.792/litre, according to Freight Carriers Association (FCA) data. The truckload rate for fuel surcharges ranges from 16% to a recent high of 21.4%. Compare this to July 2008 when fuel peaked at a rack price of $1.33/litre with the truckloads surcharged at 49.9%.
The recession has reduced the demand for fuel, and that has provided relatively stable pricing. Fuel consumption will inevitably pick up again, once the economy begins to recover, and many of the issues that existed prior to the recession to create fuel shortages (and drive prices up) are still in force. This will leave Canadian consumers paying considerably more for fuel. Carriers will be forced to increase the fuel surcharge. and transportation service purchasers will have to pay.
The logistics community needs to start reviewing how it deals with the cost of fuel. The current method of surcharge using a percentage doesn't account for how fuel is consumed. Percentage based fuel surcharges have no real bearing on how much fuel is required to haul a particular load. It creates an unequal cost for fuel for the shipper paying a higher freight rate than a shipper with a lower rate for a move for a similar lane.
Take, for example, "Shipper A," rated at $1,200, and "Shipper B," rated at $1,000. The extra cost of the fuel surcharge at 21.4%, once the rate differential is removed, is $42.80 more for "Shipper A," who has not consumed any more fuel to move his load.
The original concept for fuel surcharges was cost recovery, according to the FCA's fuel bulletin of August 13, 1999. The idea was to compensate carriers for incremental fuel costs that were occurring at any given time. But when fuel is charged on a percentage basis, a portion of the rates is compounded into the total freight costs, causing a hidden increase. How many rate increases have carriers submitted over the past 10 years since the original percentage based fuel surcharge of 1999?
The best way to change this is to use a distance formula based on average vehicle consumption of fuel. Therefore the formula would be the rack price per litre use the current $0.792, less the $0.39 litre cost that was embedded in the original freight rate when fuel surcharges were implemented, equals $0.402. Divide this by the average kilometres per litres providing a cost kilometre travelled. A good conservative benchmark for a tandem tractor is 2.3 kilometres/litre. This provides a fuel surcharge of $0.175/km. On the $1000 rate for a recent trip of 842 kilometres, the percentage fuel based on 21.4% was $214 but as cost per kilometre it is $147, a difference of $67. For the low volume shipper the fuel reduction difference was $110.
Opponents of this method will indicate trucks pulling heavier loads use more fuel versus lighter loads. Then there's the question of what to do with LTL. When I look at the Freight Carrier Association fuel charges there are three classifications LTL, TL, and Heavy TL. This could be easily adapted into a distance based formula. With the LTL being the most complicated to develop. However nothing is insurmountable, a cost per cube kilometre could be developed similar to how the FCA developed the LTL percentage surcharge.
The other issue opponents have against using a per- mile fuel formula is empty miles, summer versus winter utilization. Trucking companies benchmark fuel consumption on an ongoing basis. The number of 2.3 kilometres/litre was for a tandem fleet of 150 tractors that operated over a number years. It has everything embedded in it: summer, winter, empty, full, city and highway travel.
Fuel needs to be a flow-through consumption-based charge - fair for everyone, based on the original intention.

Finding The Win Win Deal

Freight Negotiations

Freight negotiations don't need to be like poker games, where only one side can win the pot.
Negotiation is something logistics professionals will be called upon to conduct many times throughout their careers. It comes with the territory. Successful negotiation is essential in business - especially when the economy is struggling. Everyone strives for the best value and the lowest costs when obtaining the best service possible.
Unfortunately, however, when it comes to freight negotiations, many companies specialize in the "win-lose" approach - a positional or distributive negotiation whereby one party's gain is another party's loss.

Fuelling Your Supply Chain

Inbound Freight Programs

When purchasing and transportation come together they are not only helping to improve operations, they are also contributing to the bottom line.
One of the hottest trends in business by large corporations is Inbound Freight Programs. Most perceive this program as a means to reduce costs by capturing the transportation component included in the line item price by receiving a discount or refund from the vendor which creates a revenue stream. The revenue stream is then applied to the costs of transportation for the goods which returns a margin due to their buying power with their carrier(s) of choice. At Aptitude4 our perception of an "Inbound Freight Program" has more opportunities then the transportation savings.

Green Your Logistics

Reducing Emissions

GHG emission reductions must be tackled the same way you achieve safety in the workplace. You need to implement a strategic plan and stick to it.
10 ways to reduce your environmental footprint and improve profitability.
Many companies talk about reducing greenhouse gas (GHG) emissions, but too often there's a large gap between words and action. Most companies seem to be holding off on taking any real steps to reduce their environmental footprint because they believe the investment cost is too high.

Out Of The Woods

Lean Logistics

Lean logistics will help any company - during hard times and hay-days alike.
Recent business reports indicate that the recession is over. This may be the case for some leading companies, but not all. Many businesses are still just barely holding their own. Others are in obvious distress. They'd take great exception to overstated optimism.
The true sign that we've come out of the recession is when businesses begin adding full-time jobs again. This will restore consumer confidence and spending. But even then, we will have to continue applying lean principles to our logistics operations.

Putting Out the Call

Request for Proposals

Requests for proposals and quotations show suppliers that you're organized, impartial. and growing.
Generally speaking, logisticians at small- to mid-size logistics firms make too little use of standard Requests for Proposals (RFPs) and Requests for Quotations (RFQs).
Both are important parts of the logistics buying process, allowing potential suppliers to join the competition to provide a business with goods or services. The issuer makes available the specifications and requirements to several candidates, and then waits for the competitive responses to be submitted.

Affordable Supply Chain Technology

Transportion Management Systems

Transportation Management Systems (TMS) over the internet allows any company, regardless of size, to obtain the benefits of a good transportation management system.
Not long ago the high cost of Transportation Management Systems meant they were used almost exclusively by large shippers and carriers.
Well, things have certainly changed - especially with the advent of "software as a service" or SaaS as it is commonly called.
Ontario Division
210 Main Street, P.O. Box 159
Erin, ON N0B 1T0
Telephone: (519) 833-0820
Quebec Division
18 Quarry Point Road
Hudson, QC J0P 1H0
Telephone: (514) 213-5321
    link link link link link link link link link link link