Control What You Can Control
Transportation and supply chains have always involved uncertainty, but in recent years, volatility has become a constant, affecting nearly every aspect of operations. Freight demand shifts. The economy goes up and down. Fuel prices fluctuate. Interest rates change. Equipment availability tightens. Regulations evolve. Weather and global events disrupt supply chains. Driver availability changes.
Many of the factors that have the greatest impact on transportation operations are beyond a company’s control, and that is unlikely to change. What fleets and shippers can control is how they prepare, how they structure their operations and how quickly they can respond when conditions change.
Companies that focus on the areas they can control, including capacity, costs, uptime, fleet age, visibility and network design, are better positioned to manage the areas they cannot. The right mix of transportation solutions can help companies operate more efficiently, make better financial decisions and respond faster when the market shifts.
This article is part of Penske’s “Control What You Can Control” series that explores how leasing, rental, used trucks and logistics solutions each help fleets and shippers gain more control over different parts of their operations.
Building Flexibility Into Fleet and Logistics Strategy
One of the most effective ways to gain more control in an unpredictable environment is to build flexibility. Different equipment and logistics solutions each play a role in giving fleets and shippers more control over different parts of their operations.
Full-service leasing helps companies control maintenance, uptime, fleet age and monthly transportation budgets through pre-set payment terms, access to late-model equipment, and a lease that includes maintenance, roadside assistance and replacement vehicles.
Rental trucks and trailers help companies control capacity by allowing them to add or reduce equipment based on demand, seasonality or new business opportunities without long-term commitments. They can also help companies scale up quickly if demand fluctuates suddenly.
Used trucks help companies control long-term fleet costs, equipment availability and replacement timing by providing a lower-cost way to own and operate equipment.
Logistics services can help companies optimize their networks as well as individual routes, improve contingency planning, increase visibility and boost customer service.
Each of these solutions addresses a different area of the business, but together they give companies more control over costs, capacity, risk and performance to help carriers and shippers manage uncertainty, improve flexibility and put more of the business under the company’s control.
Control Costs, Capacity and Risk
In addition to improving operational flexibility, the right fleet strategy can also help companies better manage financial performance and risk. Transportation is often one of the largest operating expenses for many companies, and decisions about whether to own, lease, rent or outsource logistics can significantly impact total cost of ownership, cash flow and balance sheet management.
For example, leasing can help stabilize monthly costs and reduce exposure to large repair expenses, while rentals can help companies avoid investing capital in equipment that may only be needed temporarily. Purchasing pre-owned equipment can lower acquisition costs and reduce overall capital exposure, and logistics services can help reduce transportation and warehousing costs through network optimization and improved visibility.
When used strategically, these solutions allow companies to align transportation resources with actual demand, improve utilization and reduce financial and operational risk.
Solutions To Increase Control
By combining leasing, rental, used equipment and logistics services into a coordinated strategy, companies can put more of their operations under their control, improving cost management, service performance and the ability to adapt when conditions change.
Penske provides a range of transportation solutions that help companies gain more control over different parts of their operations. These include full-service truck leasing, commercial truck rentals, used truck sales and logistics services such as dedicated contract carriage, freight brokerage and warehousing.
In the following articles, we take a closer look at how each of these solutions helps fleets and shippers control costs, capacity, risk and performance in different ways. Read more in the “Control What You Can Control” series here:
Penske Logistics is a winner of the General Motors 2018 Supplier of the Year Award. In this image from left: James Bovenzi, GM executive director of demand/supply; Bob Black, Penske Logistics Mexico managing director; Stacy Schlachter, Penske Logistics vice president enterprise accounts; and GM's Edgard Pezzo, executive director of global logistics and containers.
Penske associates (pictured left to right) Angelica Hampton, Morgan Vogt, Colleen Walters and Chanley Keathley holding new dresses for the Daisie Foundation's Mother's Day makeovers.
With individual loads, ClearChain can drill down to the part-level details so people within the supply chain can see what is being shipped, where it is, compare the quantity ordered to the actual number that shipped, and track and trace loads to monitor their status. Penske also can configure ClearChain so customers receive real-time notifications related to loads, such as when a load is picked up, enters a certain geographical area or is delayed. The end user can choose an alert preference—email or text. This will allow the warehouse to be ready when a load arrives.
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Alex Graniewicz is the new leader for Penske Logistics Mexico.
The proliferation of technology to support supply chain management has created a high-stakes card game of decision-making for shippers as they design their IT road maps. Is it time to hold, fold or double down? Many shippers need to ask themselves these tough questions:
This illustration is part of the 2016 Third-Party Logistics Study: The State of Logistics Outsourcing. Visit www.3PLStudy.com to access the full study.
has bestowed upon its 2015 Operational Excellence Award, to recognize the third-party logistics provider’s strong performance in the areas of cost, quality and service.
Retailers are continually working to meet consumers’ needs, which means they need to predict purchasing behavior. Predicting that behavior can be more and more difficult as increases. Carlier said this could create opportunities for logistics providers in the future as retailers look to capture and decipher point-of-sale data from multiple supply chains.