Message to CEOs (Part 2): Your Logistics People Need Support
May 23, 2018
This may be one of the more challenging Two Minute Warnings we have issued. You see, 2018 is likely to go down as one of the most challenging years logistics professionals have experienced in their careers. The rapid escalation in freight costs has put freight issues under the microscope, and CEOs are asking questions.
And that brings me to the point of this week’s Two Minute Warning. Recently, I received a call from a CEO who got right to the point and asked, “My freight costs are going through the roof, and it makes me wonder—are my transportation and logistics people doing a good job?”
Having received similar calls over the past couple of months, I can definitively state: He’s not the only CEO asking these questions!
Since we’re good friends, he encouraged me to shoot straight with him. So I said, “I know some of your logistics people and they aren’t the problem—you are! Your company is going to continue to have problems until you accept the fact that controlling freight costs is a “top-down” proposition. If you’re serious about reducing your costs, it starts with you!”
Like I said at the beginning, this is a challenging Two Minute Warning because that’s not a message most CEOs want to hear. And frankly, it’s not a message that the folks underneath the CEO are willing to pass upstream. But, it’s the truth.
My message to any CEO who is serious about controlling freight costs is pretty simple. If you want to see your logistics team do a great job, then authorize and provide them with sufficient resources and give them the necessary technology support they need to eliminate time consuming and costly manual processes.
Most importantly, help them tear down the silos that are keeping people from having the intracompany dialogue they need to have in order to address the sales and procurement processes that impact the company’s transportation spend.
In our presentation, Beyond the Perfect Storm, we affirm this message and note that adopting a holistic Transportation Spend Management Program requires support from the entire C-Suite. They need to be engaged enough to authorize and enforce the changes that positively impact their company’s transportation spend.
We encourage you to check out this presentation and use it as a catalyst to get your team together for a dialogue about what is happening in the freight markets, how it is affecting every company, and brainstorm some strategies that will help you get your freight costs under control.
Additionally, I encourage you to watch this week's video above which focuses on four things that should be included in any good transportation plan. We share all of this because we're on your team, we're here to help, and we're passionate about seeing you be successful.