Modern logistics resembles a high-stakes game of chess. Every move carries weight, and deciding to diversify carriers or rely solely on one can mean the difference between checkmate or defeat. Banking solely on one carrier is like leaving your king exposed; unforeseen events, labor disruptions, and market challenges can jeopardize your strategy.
A recent Deloitte study illuminated this concern, with many CFOs emphasizing the need for diverse strategies. These tactics defend against potential supply disruptions, from multisourcing to regional sourcing shifts. Central to these strategies is creating a robust, diversified carrier network. It’s easier said than done, but in the following sections, we'll break down the three steps you can take to make it happen.
Picture this: It's August 2023, and you're a client of Yellow Corporation, one of North America's leading logistics and less-than-truckload (LTL) networks. Suddenly, the news hits – they've gone bankrupt and shut down immediately. With them as your sole carrier, you're likely reeling. For sports enthusiasts, it's like the New York Jets losing Aaron Rodgers to a season-ending injury just four plays in. Single-carrier-dependent supply chains mirror this vulnerability. They can fall apart instantly, much like teams heavily relying on a 39-year-old quarterback. However, there's hope. Follow these three steps to strengthen your strategy and fully embrace carrier diversification.
Imagine your logistics operation as a chef’s kitchen. Each ingredient—representing your carriers—is essential for crafting the perfect dish. For a successful restaurant, relying solely on salt for flavor wouldn't make sense. Similarly, overreliance on a single carrier can upset the balance of your operations. That's why step one, "assessment and evaluation," becomes a pivotal carrier taste test.
In this context, data acts as the cookbook for your logistics operations, enriched with insights from sources like TMS data and carrier feedback. Moreover, just as chefs learn from past dishes to perfect their recipes, historical metrics shape future logistics decisions, refining operations and highlighting areas for improvement.
The second step involves defining your criteria for diversification. Selecting the right carrier isn't just about ticking boxes. Beyond freight audit and payment best practices, imagine understanding your shipment's unique story, from its physical dimensions to its final destination. Plus, who doesn't appreciate transparent pricing? Surprises are best left for birthdays, not invoices. And comprehending a carrier's service? It's like having a backstage pass, knowing what they offer. Wouldn't you sleep better knowing your carrier has a track record of on-time, damage-free deliveries?
Zooming out to a grander vision, it’s also important to have future-focused diversification criteria. Picture your warehouse by 2026. Previously only imagined in science fiction, robots may soon redefine your logistics. Anticipations suggest that three out of four major enterprises will employ them. Given that the transportation and warehousing industry has the third-highest automation potential of any sector, the horizon gleams with potential. But harnessing this potential hinges on remaining adaptable and diversified in a dynamic world riddled with unpredictability and supply-demand imbalances.
The research, selection, and implementation process is the third and final step in building a diversified carrier network. In the rapidly expanding logistics world, forecasted to reach an astounding $14.37 trillion by 2028, pinpointing the right carrier is no small task. Leveraging cutting-edge market analysis and trusted referrals provides shippers with a competitive edge. However, the challenge continues beyond identification.
Using logistics network optimization solutions not only refines the selection process but also accelerates it, ensuring shippers choose not just any carrier but the right one. However, onboarding a new carrier is more nuanced than inking a contract. It's a commitment to forging enduring partnerships. Seamless synergy is crucial, with every component interlocking flawlessly. Furthermore, in-depth training initiatives equip teams with the expertise for continued success.
Modern logistics require both carrier diversification and a strategic plan to implement it. Having discussed the significance of carrier diversification and detailed the three pivotal steps — evaluating current carriers, establishing diversification criteria, and expertly selecting and integrating new carriers — it's time to move forward.
As Joe Wilkinson, VP of Professional Services at Intelligent Audit, aptly puts it, "Shippers swing back and forth between savings and diversification as if it’s a binary choice. While that may have been true at one time…Today, you can have it all." True to this belief, Intelligent Audit provides a spectrum of services, ranging from freight audit and payment to advanced analytics, real-time visibility, machine learning, and logistics network optimization. These comprehensive solutions ensure businesses can efficiently diversify while also optimizing costs.
Ready to bolster your logistics strategy? Now is the time to get started with Intelligent Audit. Don't let supply chain disruptions set you back—prepare, diversify, and succeed.
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