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Sharing the Load
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Collaborative Transportation
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With today's focus on reducing costs and protecting the
environment, the time for collaborative transportation
management may be here.
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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.
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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.
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Rate and Wrong
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Consumption Based Fuel Surcharge
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Fuel needs to be a flow-through consumption-based charge
- a system that would fair for everyone.
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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.
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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%.
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Finding The Win Win Deal
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Freight Negotiations
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Freight negotiations don't need to be like poker games,
where only one side can win the pot.
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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.
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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.
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Fuelling Your Supply Chain
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Inbound Freight Programs
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When purchasing and transportation come together
they are not only helping to improve operations, they
are also contributing to the bottom line.
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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.
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Green Your Logistics
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Reducing Emissions
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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.
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10 ways to reduce your environmental footprint and
improve profitability.
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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.
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Out Of The Woods
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Lean Logistics
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Lean logistics will help any company - during hard
times and hay-days alike.
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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.
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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.
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Putting Out the Call
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Request for Proposals
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Requests for proposals and quotations show suppliers
that you're organized, impartial. and growing.
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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).
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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.
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Affordable Supply Chain Technology
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Transportion Management Systems
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Transportation Management Systems (TMS) over the
internet allows any company, regardless of size,
to obtain the benefits of a good transportation
management system.
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Not long ago the high cost of Transportation
Management Systems meant they were used almost
exclusively by large shippers and carriers.
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Well, things have certainly changed - especially
with the advent of "software as a service" or
SaaS as it is commonly called.
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These days, companies of all sizes can pay a relatively
low subscription cost to enjoy the benefits of a powerful
TMS which will help them manage their transportation
strategies - whether it is by road, rail, air or ocean.
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With SaaS, software is not installed on a company-
domiciled computer or server, but is accessed through
the Internet. Companies simply log on to a web-based
program that is used simultaneously by many other
companies. Hundreds or even thousands of users can work
with a single program. Users are plugged into an instant
network of shippers, carriers, freight brokers, third
party logistics providers, suppliers, consignees, and
trading partners executing millions of transactions
through a single system. The system is very secure,
allowing each subscriber's personnel to be in control
of their own transactions and managing logistics
relationships through a common network.
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Subscribing to a SaaS to manage your transportation
functions allows a company to handle all the operations
management processes. Not only can customer orders be
converted instantly into optimized shipments, but the
system stores and retrieves costs for all modes and
types of movements, performing carrier selection, best
rate, and most efficient routing based on shipment size
and destination.
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Subscribers can also tender freight through electronic
data interchange (EDI) and monitor performance through
electronic track and trace. Bill creation, bills of lading,
manifests, and carrier audits are all part of the process.
Report generation provides key performance indicators,
visibility to costs by lane, customer activities and
allows for claims management.
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Benefits to using a SaaS system provider are many.
Companies enjoy a return on investment without the start
up cost, capital investment, or ongoing maintenance fees.
Training is minimal and user friendly. SaaS providers are
constantly upgrading their technology so you get the latest
and greatest, without the hassle of having to develop it
yourself.
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You can also choose only the modules you need. And in most
cases what you choose can be integrated seamlessly into
your existing business processes, providing end-to-end
workflow. Ultimately, you can have total visibility of
your entire transportation operations.
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SaaS also gives you better handle on carrier selection,
performance, and payment.
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The main drawback is that because a subscriber isn't
purchasing the software, it cannot be customized.
However most companies that have subscriptions believe
this is unnecessary and the benefits far outweigh the
concern. This becomes a platform for logistics benchmarking
and continuous improvement.
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Cost savings touted by SaaS vendor case studies indicate
a 15% to 40% transportation spend reduction. Even at the
low end of that scale, a company with an annual freight
bill of $500,000 would save $75,000. This money flows
directly to the bottom line. Think of the number of new
sales dollars that companies need to gain for this kind
of net profit!
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SaaS is an important logistics tool for companies looking
to reduce costs and optimize service. |
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