Any disruption in the supply chain could affect a company’s bottom line, and ultimately their customers. As the transportation market evolves, shippers need to find ways to mitigate risk. One transportation solution that could help make operations more resilient is a dedicated fleet. Working with a third party logistics provider (3PL) can help companies be proactive and reduce the risk of disruption to their supply chain.
Maximize Capacity With Dedicated Assets
Utilizing a dedicated fleet can help shippers avoid the risk of elevated spot rates when capacity tightens while providing consistent capacity for the operation. Capacity in the transportation market is constantly changing, and it’s expected that capacity may continue to shrink into the next year as a result of the ELD Mandate4. A 3PL can work with the shipper to ensure that adequate resources are available for surges and seasonal changes. A logistics partner can also identify backhaul opportunities that can allow shippers to maximize asset utilization and potentially minimize costs. In addition, a 3PL with brokerage capabilities can also provide additional resources and solutions.
Leverage Partnerships for Labor Retention and Talent
A recent survey from the Business Continuity Institute (BCI) states that the loss of talent is one of the top supply chain risks among industry professionals1, but outsourcing to a third party logistics company can help alleviate this potential risk. An experienced 3PL could be an extension of the shipper’s in-house transportation operations, giving them the ability to leverage the talent and expertise of their 3PL.
A lack of supply chain talent is not the only potential disruptor that shippers have to consider. There has been a driver shortage across North America for quite some time. The American Transportation Research Institute recently stated that the driver shortage could reach 50,000 positions by the end of this year and if current trends continue, there could be a shortage of 174,000 drivers by 20262. When leveraging a dedicated fleet, carriers bring expertise in hiring and retaining drivers. Carriers also have the resources and experts to fulfill driver openings allowing shippers to focus on their core business.
Keep Compliant to Keep Running
One factor for the driver shortage and tightening capacity is regulation change. In turn, carriers, drivers, and owner operators are expected to stay informed and make the appropriate adjustments to remain operational, which at times could be expensive. For instance, the recent Electronic Logging Device (ELD) Mandate, which requires electronic logging devices to be installed in trucks to automate processes by recording data, was considered one of the biggest trucking concerns3. When utilizing a dedicated fleet, carriers ensure that drivers, equipment, and freight are always compliant with laws and regulations and that correct measures are taken to avoid fines or fees for noncompliance, enabling freight to continuously move.
Improve Service with Equipment and Expertise
Any delay can affect the rest of the supply chain process. Delays can be caused by various circumstances, some of which cannot be controlled such as natural disasters. Fortunately, potential issues such as breakdowns and poor scheduling can be prevented. Delays can lead to unexpected expenses and poor service that, at times, can directly impact customers. Dedicated fleet providers employ consistent and preventative maintenance programs that can help shippers reduce delays. Carriers today also have the technology to predict malfunctions before breakdowns occur. Aside from predictive technology, a carrier ensures that equipment undergoes regular maintenance to ensure that equipment always runs at optimal levels.
A dedicated fleet can also prevent delays by having a team of transportation professionals equipped with the knowledge and technology to determine the best routing and improve real-time visibility. A skilled driver will also be working dedicated routes, which allows drivers to become more familiar with routes and the opportunity to establish relationships with facilities or stores. The addition of this team can improve communication between the carriers, shippers, and customers.
Utilizing dedicated fleets with a knowledgeable 3PL can improve communication and help shippers become more resilient to risk by maximizing capacity, investing in labor, improving compliance, and avoiding delays. Partnering with a 3PL can further support risk mitigation by adding additional resources to better prepare and safely execute a successful supply chain.