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8/15/2006



Rail News: Logistics

Shippers making supply-chain efficiency gains, study says


Shippers are doing their part to keep freight moving these days, according to a study recently issued by research firm ProLogis.

Authored by University of Denver logistician Paul Nuzum, the ProLogis Supply Chain Review report – “Moving Freight Today: How Shippers Are Creating Greater Capacity, Reliability and Rate Stability” -- explores strategies and tactics that shippers are using to improve supply-chain network efficiency in the face of higher transportation costs; port, rail and highway congestion; labor shortages; and complex security issues.

ProLogis interviewed supply-chain execs at more than 30 major companies from a variety of industries. Among the report's findings:

• Many companies are adding consolidation and deconsolidation centers that serve as “freight pooling hubs” to their supply chain networks to ensure that freight gets moved in full container loads and truckloads.

• Companies are "de-coupling" freight costs from product costs. In the past, suppliers generally paid freight charges and added them to their materials invoices. Now, they’re adopting practices that ensure that they receive the best shipping rates available on a consistent basis, through centralized command and control of freight movement.

• Shippers are working hard to improve collaboration with carriers and other transportation providers, through better forecasting, shorter payment cycles and implementation of two-way operational scorecards.

• Logistics managers are creating new capacity in their networks by eliminating sources of waste and inefficiency. Techniques include collaborating with other companies to reduce the number of empty trucks on the road and establishing 24-7 work schedules at distribution centers.

For a copy of the report, go to www.prologisresearch.com/movingfreight.


Contact Progressive Railroading editorial staff.

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