Transforming Shipping Logistics

While effective planning and control of logistics lay the foundation for smooth execution of supply chain processes, ‘transportation’ offers significant opportunities to maximize supply chain value. As a critical link in the supply chain, inbound and outbound shipping plays a vital role in executing both forward and reverse logistics operations.  Various issues and challenges call for transformation of  shipment logistics.


Managing transportation, particularly global shipment operations has become a critical & strategic business function for many vendors, manufacturers, distributors, online retailers and carriers. As global sourcing and distribution operations have increased manifolds, several supply chains have blown up in size and complexity  creating need for wider logistics networks and vendor relationships, making the transportation management increasingly complex. Simultaneously, supply chain and transportation executives are under immense pressure to keep transportation costs down in the face of rate increases and keep service levels up in the context of capacity constraints. Besides, gaining competitive edge through more effective shipping operations has become imperative.

In addition to the strategic and operational issues, confidential service contracting as an effect of deregulation in deep-sea transport has made vendor management and allocation more complicated. Besides, the rising security issues have put increased pressure on the shippers to uphold firm control over their supply chains. On the other hand, making transportation decisions which are highly significant for operational success  have become very difficult due to a lack of information and process standardization across the partners. In view of tight carrier capacities, increasing fuel prices, traffic congestions, dearth for drivers, rising security concerns, hours-of-service(HOS) constraints and increasing lead-time variability, collaborative ‘win-win’ transportation management relationships is emerging crucial for both shippers and carriers. In one of the recent issues of Supply Chain Digest, its readers have also expressed the same set above-discussed problems as today's logistics challenges and issues. Given these emerging challenges and concerns, it is indispensable for manufacturers, distributors, retailers and third party logistics (3PLs) to transform their transportation arena so that their shipping operations become more efficient, resilient, responsive and secured.


Best practices such as centralizing the load planning and shipping operations, mechanize the order consolidation process, taking greater control of inbound shipment and self-invoicing persist to drive value for the shippers. As managing the global transportation has become increasingly complex, retailers and manufacturers can embrace a holistic approach called ‘Transportation Resource Planning’ that redefines the processes (plan, optimize, execute and measure) and technology requirements, of shipping operations at regular intervals.

As noted earlier, various factors such as increasing transportation costs, under-utilization of truck capacities, driver shortages, increased security concerns, more trading partners, hours-of-service (HoS) constraints, and increasing lead-time variability are highlighting the need for the shipper, carrier and receiver to work closely. This creates the need for practicing collaborative transportation management (CTM) in three transaction areas that represent key opportunities for CTM viz., capacity procurement, inbound management and integrated movements, while it helps in weeding out shipping inefficiencies. Present-day web-based Transportation Management systems (TMS) are offering dynamic functionalities for managing transportation network and collaborative processes covering all modes of transportation with a global span.

Emergence of Internet has revolutionized transportation procurement landscape increasing the bidding efficiencies through standardization, and leveraging the analytical and decision support. Breakthrough capabilities in TMS are opening door to the truly integrated procurement, execution and analysis that ensures compliance and security. The next generation TMS will synchronize with other supply chain execution processes and systems in order to develop a holistic supply chain system. Further, adoption of workflow standards in TMS supports global shipping operations, with multi-country/multi-language support and, collaboration within the order-to-deliver/order-to-cash processes, while providing interoperability across systems. On the other hand, automatic vehicle locator (AVL) systems provide a real-time view of the vehicle route in addition to shipment or delivery status by using a blend of technologies such as Geographic Information System (GIS) and Global Positioning System (GPS). AVL across wide range of industries including banks offer a set of logistics applications ranging from vehicle tracking to pilferage control. Adoption of advanced AVL systems also verifies the misusage of trucks, checking adulterations and retrieving vehicles from rough terrain.

1 comment:

  1. Thank you for the info. It sounds pretty user friendly. I guess I’ll pick one up for fun. thank u

    Logistics Shipping

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