James R. Stock is the Frank Harvey Endowed Professor of Marketing at the University of South Florida, Tampa campus, and is the editor of the Journal of Business Logistics. His teaching focus is on supply chain management and logistics, and he has authored or co-authored more than 100 publications on the topic. He has consulted with and conducted research for manufacturing and service companies worldwide. His areas of research include reverse logistics, product returns, the marketing/logistics interface and supply chain management.
Q. What does a business need to do to benefit the most from transportation logistics?
It’s a basic decision to figure if you want to outsource or bring the process in-house. Depending on your industry and size, you will handle that differently. Even if you outsource, you’ll need someone at your company to manage the process. Using a third-party logistics firm means the responsibilities are largely transferred over to them and you can monitor that using their Web-based software which is a necessary addition in order to trace and track goods. Working this way eliminates invoices and you can tailor your needs with the company instead of making lots of software purchases yourself and hiring staff to manage it.
Q. What can a company eliminate or add to its transportation logistics strategy to save money?
If you are in-house shipping, maximize each outbound load. Find out what customers are willing to do. See if they are willing to wait a day for delivery so you can fill the truck with more orders or if they’re willing to purchase in greater quantities. Also find out the services you are paying for with your third-party firm and see if those are useful to you and your goals.
Q. What advice can you provide to other companies looking to reassess their in-house shipping process?
If you haven’t revisited new ways to manage your logistics in awhile, there’s likely bigger savings available. See if your company has developed contracts separately with shipping or logistics companies because they are managed under your roof separately. If you combine these needs into the use of one third-party firm, you will save money because you are shipping in bulk. You’ll also have more leverage when negotiating contracts and likely get better rates.