Increasing Transportation Costs

As transportation costs continue to rise, companies in this industry are continuously looking for any way to reduce that cost. Even UPS uses software to eliminate left hand turns when delivering packages. In 2010 alone it reduced miles for delivery routes by 20 million miles. By reducing the amount of miles traveled it not only saves money but emissions as well. To see more in depth about UPS and their decision to rarely turn left see the video below:

UPS is not the only one using software to reduce costs. International Asset Systems (IAS) has created software, Dispatch Optimizer (used with Dispatch Manager), that can benefit most motor carrier companies. Dispatch Optimizer provides up to minute updates on shipments and is able to sort them with criteria such as distance or time. Simply choose shipments, hit optimize, and it will give potential routes. In addition, it takes into consideration roads that trucks are not allowed to travel on, other shipments for a return haul, and any extra expenses such as tolls. Not only can this software help save money but also reduce congestion and improve the environment.

Although software can reduce transportation costs, it is not the only way. Some companies choose to build or buy infrastructure, mainly called terminals, where they can consolidate orders. Terminals are used for companies to allow their trucks a place to take smaller shipments and consolidate them into one load. Delivering a shipment when a container is not full is looked at to be wasteful. There could be other shipments going in the same direction or close by the destination. Why not consolidate these orders and save on fuel costs and time? There is one reason, initial investment. Even though it can save money in the long run, it is expensive to build or buy the infrastructure needed to consolidate the shipments. It is important for each company to review their operations and find inefficiencies that can be improved upon.

References:

http://techniglee.com/2011/01/ups-trucks-almost-never-turn-left/

http://www.interasset.com/dispatch-optimizer.php

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s