Supply Chain Optimization

Give Up On Relationships

 
At the CSCMP conference, I heard a lot about the need for good relationships with carriers.  Given that more than 50% of the for-hire trucks are in fleets of less than 20 trucks, having a relationship is impractical. (It is like one girl wanting to date everybody in the Marine Corps).  My thesis is that:
  • Most transportation contracts are too vague to be the foundation of a relationship
  • Carriers have a responsibility to their employees and shareholders to maximize profit and thus should not run at below-market pricing without long-term guarantees
  • Shippers have a responsibility to their shareholders  to pay the least possible rate to provide the level of service needed
  • All this creates conflict 
  • We will be better served to treat transportation as a commodity
 
Oil is hovering around $75…oil at $100?  Lots of traders are betting on this.  Hang on for the ride!