Procuring transportation is a skill that is continually developed over time. Most companies have teams that work on the execution and procurement functions of transportation. The logistics of collecting, servicing, ensuring safe and timely delivery requires multiple teams. Not by design, but all too often the everyday demands create departmental silos.

These operational silos can hinder the holistic approach to supply chain savings. The procurement team believes they have the lowest cost on a lane, the operations folks know a specific carrier will have the needed trailers to not slow up production, and so on. You planned, met with every team, and crossed off each item on the checklist; to have the invoice not align as planned.

I compare this to the likes of purchasing a car. You researched and picked out the truck you want, and priced it at dealer A. You go across town to the same brand dealership closer to your home, for convenience when having your new truck serviced. However, when the pricing is worked up, the price you thought would be suddenly turns out higher. This is aggravating in its self, not to mention trying to have the salesperson explain why the cost is what it is. I hate this process and feel others share in this frustration. Only if there were logistics companies for purchasing cars like there are for carrier transportation. You would go to your car buying expert, explain your needs/wants, and have them use their expertise, network vantage point, and purchasing power to deliver the car you want.

I’m not suggesting driving additional steps or costs in the process, but rather relying on a strategic partner to deliver purchasing efficiencies.

This is what logistics companies do. They have the ability to analyze the flows of multiple providers for a lane, negotiate bulk pricing, and standardize accessorial costs. In doing so, they take out the additional steps experienced in dealing with multiple carriers. In addition, they provide the operational planning and network oversights to mend silo’s and deliver efficiencies.

If you have enough time on your hands to embark on multiple discussions to procure transportation, and have to constantly educate teams how your network flows; then using a logistics company might not be ideal. However, if you are looking for streamlined discussions, one point of contact to multiple companies, which gives you more time to analyze your supply chain; then try utilizing an industry leading logistics provider.

An interesting read regarding a collaborative effort between a european pallet pooler (LPR), their service provider (Norbert Dentressangle), and a manufacturer (Weetabix) can be found here. Much in the same line of thinking as a Reverse Logistics Center, these companies have integrated their supply chains to reduce overall movements of product, reducing environmental impact while saving money. The typical flow (as in the U.S.) of the supply chaing including pallets is Pallet Depot to Manufacturer to Retailers to Pallet Depot. This partnership has integrated the depot entirely (sort and repair) into the Manufacturer location, reducing unnecessary legs of transportation. This is accomplished only through active collaboration between all parties, and demonstrates a proof of concept in pallet pooling that is growing in popularity as all companies look to streamline logistics, reduce environmental impact, and drive out unnecessary cost.

It's hard to imagine a paper pallet capable of withstanding the rigors placed on a traditional wooden pooled pallet, but furniture retailer IKEA plans to prove it's worthiness beginning this January. The retailer will begin shipping paper (compressed cardboard) pallets to suppliers for shipments through their supply chain. What remains to be seen is numerous, some more obvious than others. The durability of a the pallet, and its inability to be subsequently repaired, stand out as the biggest question mark.

To IKEA's credit, they are actively seeking what they consider to be a more environmentally friendly shipping platform, while also seeking a transportation cost savings from a lighter pallet. Bloomberg provided a thorough, although perhaps ambitious in its title, commentary on the subject which you can read by clicking here. Whether this is a long-term solution or not, it's clear that the pallet industry still has room for innovation to what others may consider a simple product. As the demands of the economy and the environment continue to evolve, we're sure to see more of these type of ideas come about.

From a transportation perspective, it's easy to understand the impact fuel cost has on your overall balance sheet. But to simply state that fuel is the only thing impacting the industry is a long "haul" from the truth. For those looking for a broad based, well thought out analysis of overall market forces impacting the transportation world, check out the 2011 State of Logistics Report, published by Inbound Logistics. Some of the usual suspects pop up, such as the state of the U.S./global recession/recovery, but you'll quickly recognize what a truly globalized supply chain economy faces in the coming year(s).

A very insightful, well-referenced article by Pallet Enterprise regarding the challenges of running a pooling network can be read here. Propak's partnerships with many of the companies interviewed, among others, is integral to offering poolers the most options possible while their assets are within our facilities. We recognize transportation costs are such a large component of the cost to serve in a pooling network, therefore we offer as many value-add services as possible. We pride ourselves in delivering cost-savings options, and in a complex pooling network nothing is more important than options at every stop in the supply chain.