Finding the Sweet Spot

Tennis and golf are on the minds of many at this time of year.

One of the secrets for success in both of these games is to find and consistently hit the ball with the sweet spot of your racket or club. The resulting increase in both distance and power can be astounding and make the difference between winning and losing in these competitive sports.

Likewise in these competitive times in freight transportation management there is also a sweet spot that one can hit to outperform their competition.

 Many it seems are unfamiliar with this sweet spot, or perhaps choose to ignore it, avoiding the inconvenience (and perhaps additional work) required of the logistics manager to operate transportation with a mix of both common carrier and fleet. Some simply use common carriers for all volumes, or on the flipside, fleet managers stick with the status quo where the solution has always been to use your own or a third party dedicated fleet for one hundred percent of deliveries.

This sweet spot relates to the break point in your transportation service area between where you use common carriers and where you operate your own or a third party dedicated fleet. Hitting this sweet spot instead of opting for an all or nothing solution of either all common carriers or all fleet operations can mean significant transportation savings in many cases.

Typically urban areas with a high density of customer deliveries can often justify the operation of a fleet whether you directly own and operate it, or use a third party to operate it for you on a dedicated basis. Additionally, a spin off benefit is the ability to outfit these vehicles graphically with your corporate logo and or marketing message enhancing brand recognition in these typically heavily populated areas.

So how do you find the sweet spot? Well depending on your company size, budget and/or technical capabilities there are a few different options. But in all cases you require detailed information on your current shipments relative to location, size and frequency.

For completely non-technical individuals who are unfamiliar with the use of even a spreadsheet, the option is to collect all of your outbound shipment information and sort it into rural and urban deliveries. Depending on if you are currently all common carrier or all fleet operations there are different next steps required. For those who are all common carrier, select one to three reputable dedicated fleet operators in these areas and provide them with the urban shipping information requesting a dedicated fleet quote. For those who are currently all fleet deliveries, select one to three quality common carriers again operating in the areas under review and provide them with the rural shipment information.

Once you have received the responses, you are then ready to identify potential savings opportunities. Simply compare the current common carrier costs for the urban area with the proposed dedicated fleet quotes, or compare your current fleet costs for the rural areas with the common carrier quotes. Although by no means rocket science, you may be pleasantly surprised with the potential savings identified through this process. And for current fleet operators, keep in mind the potential cost to reduce in-house drivers and downsize the fleet depending on equipment age and method of financing of any vehicles made redundant through this process.

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