Choosing transportation services doesn’t necessarily have to be a one or the other scenario. In fact, utilizing dedicated fleets and brokers in unison can optimize your supply chain operational efficacies and financial objectives.
A dedicated fleet is a transportation solution that creates a network of trucks that is exclusively used for a company’s transportation network and facilities that is ideal for companies that have unique delivery requirements and require consistent capacity. On the other hand, brokers often fill a niche or a specialization for a shipper. Typically this is something that is outside of the core competencies of the shipper, providing operational flexibility, ad hoc capacity, and management of the customer’s vendors.
The quintessential solution would be using a dedicated fleet for the shorter hauls and a brokered solution for the longer-haul volume. Combining both would provide better visibility and usable data on all transportation volume, creating potential synergies between the two. These synergies can result in reduced costs through shared resources, added capacity through the use of the dedicated fleets, a potential reduction in empty miles, and increased service levels. Below are a few benefits to leveraging both methods:
Holistic Network Coverage
One of the biggest challenges of a dedicated provider is increasing efficient utilization of the trucks and keeping driver turnover low. This can be done by keeping the shipping distance relatively low (250-350 miles), minimizing fuel usage and getting drivers home every night. When shippers rely exclusively on dedicated services, they are limited when they need a wider service area.
By integrating dedicated and brokerage solutions, a 3PL can create a network of long haul moves with managed carrier partners and combine that with the shorter-haul dedicated moves. This way, the shipper gets a holistic service from one provider while the carrier maximizes utilization of its equipment.
Surge Capacity Support
Whether its beverage manufacturers who have volume surges in the summertime or retail partners that have volumes surge in the fourth quarter, most shippers have a need for more capacity than the average at some point through the year. If the dedicated solution were designed to support surge volume there would be inefficiencies during the slow times, resulting in idle trucks and underutilized drivers. Brokerage enables a shipper to use a dedicated solution for the consistent capacity and use broker’s partner carriers as surge support without the burdensome annualized equipment costs for the shipper.
One of the biggest factors in reducing the total overall cost of a dedicated program is the ability to fill the empty trucks on the way back to the origin after they have delivered for their dedicated customer. The “backhaul” or empty miles on the truck can be some of the most meaningful savings a shipper can see from a continuous improvement program with a carrier. When a 3PL has a robust brokerage offering alongside a dedicated service, it allows engineers to optimize tractor and driver utilization by filling the backhaul. By engineering solutions with dedicated and brokerage working in concert with each other, it allows for a lower overall cost to the customer, and a more efficient use of the equipment.
The ideal solution for your business may be to take advantage of both forms of transportation solutions to have the optimal supply chain. Few 3PLs offer both of these solutions, but when they do it makes moving freight seamless. Finding the right collaboration could yield a solution that will save both time and money.