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Shipper/Carrier Network Strategies

Shipper/Carrier Network Strategies. Purpose of Network Strategies. Shipper Strategy Purchase/Manage transportation services to meet customers’ needs Carrier Strategy Use resources efficiently to provide economical & efficient service to shippers Maximize return on deployed assets.

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Shipper/Carrier Network Strategies

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  1. Shipper/Carrier Network Strategies

  2. Purpose of Network Strategies • Shipper Strategy • Purchase/Manage transportation services to meet customers’ needs • Carrier Strategy • Use resources efficiently to provide economical & efficient service to shippers • Maximize return on deployed assets

  3. Aspects of Shippers’ General Strategy • Proactive management • Improve information flow • Limit the number of carriers used • Carrier negotiation • Contracting • Review private trucking

  4. Aspects of Shippers’ Small Shipment Strategy • Consolidation • Pooling services • Charge shipper lower volume rates from one origin to one destination • Drayage firm used to separate & deliver individual shipments • Stopping-in-Transit services • Avoid private trucking

  5. Aspects of Shippers’ Bulk Shipment Strategy • Contracts • Long-term agreements with carrier in which shipper agrees to provide minimum freight loads • Balanced loads for carrier • Loads into and back out of a particular facility • Partnership

  6. Traffic Management • Performs all the activities necessary in the acquisition and control of transportation services for the firm, including: • Ensuring quality • Obtaining the best price • Developing specifications • Determining transportation supply sources • Negotiations with supply sources • Inspection and assurance of quality • Properly timing shipments • Analyzing the value of alternative methods & sources • Capital analysis • Engaging in make (private transportation) or buy decisions • Analysis of legal & regulatory constraints • General management

  7. Traffic Management:Transport Selection Decision Process • Identify transport goals • Select the mode of transportation to be used based on: • Service characteristics of each mode • Cost of each mode • Select the specific carrier; again based on: • Service characteristics of each carrier • Cost of each carrier

  8. Traffic Management:Factors Impacting Mode/Carrier Selection • Transport Cost • Rates charged for main carriage • Charges assessed for ancillary services • Transit Time & Transit Time Reliability • Transit time impacts level of inventory held & inventory carrying costs • Transit time reliability impacts inventory levels (less reliable require more inventory to avoid stockouts) • Accessibility • Ability to provide direct service from/to specific locations

  9. Traffic Management:Factors Impacting Mode/Carrier Selection • Capability • Ability to provide unique transport services & equipment • Security • Damaged or lost shipments have the same impact on inventory & stockout costs as unreliable transit time

  10. Line Aspects of Traffic Management • Shipment Planning • Shipping schedules must be coordinated with purchasing, distribution, & production • Carrier Selection • Selecting the actual carrier to be used • Ordering Service • Working with the carrier firm’s dispatcher to actually schedule the transportation • Expediting/Tracing • Keeping track of the shipment progress

  11. Line Aspects of Traffic Management • Preauditing/Rating • Determining the proper freight charges for a shipment • Doing so prior to carrier billing allows avoidance of carrier over/under charging • Auditing/Paying the Freight Bill • Checking the accuracy of the bill & remitting payment • Detention/Demurrage Processes • Detention is charge assessed by motor carrier for keeping equipment for un/loading beyond specified period • Demurrage is the same, but is for rail carriers

  12. Line Aspects of Traffic Management • Claims • Filing claims for loss, damage, or delay of shipments • Motor & Rail carriers are responsible for all losses, damages, or cost of delays except when due to: • An act of God • An act of a public enemy • An act of a public authority • An act of a shipper • Natural deterioration of the goods • Private Car & Truck Fleet Management • Transportation Budget Management

  13. Staff Aspects of Traffic Management • Mode Selection • Monitoring Service Quality • Service/Supply Assurance • Negotiations • Regulatory Matters • Policy Matters • Planning Annual Transportation Requirements • Budgeting • Information Systems • Systems Analysis • Management & Executive Development • Traffic Department Human Resources Management

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