Explore the cutting-edge trends and valuable insights shaping the logistics industry from Mike Regan, the Co-founder of TranzAct Technologies.
Trends in the Logistics Industry
The logistics industry is constantly evolving, and it's crucial for businesses to stay updated on the latest trends in order to remain competitive and navigate the ever-changing landscape. In the last few months, TranzAct's Co-Founder has participated in a number of interviews where he shares insights addressing a wide range of logistics industry trends and topics.
Here are a few highlights and where you can find the interviews.
Truckload and LTL Rates Diverging
One significant change in the logistics industry that Mike has noted is the divergence of LTL and truckload rates.
In a recent interview with economist Gary Shilling, Mike observed, "One thing you could always count on is that the LTL rates moved in tandem with the truckload rates. If truckload rates were going up, LTL rates were going up. But what has made this particular freight market so unusual is that they’re not moving in tandem."
For decades, these rates followed each other directionally and now we're seeing them move independently. He credited this largely to the closure of Yellow and increased consolidation of the LTL market.
C-Suite Involvement in Supply Chain Management
Another topic addressed in the interviews is the role of the C-Suite in supply chains.
In today's increasingly complex and interconnected business landscape, the supply chain plays a critical role in the success of an organization. It is no longer just a functional area but a strategic asset that can directly impact the bottom line. As a result, the supply chain has gained greater attention and recognition from the C-Suite. Effective collaboration between the C-Suite and supply chain professionals is important for driving innovation and achieving organizational goals.
In a Logistics Management podcast, Mike mentioned a theory that he often refers to called the Iceberg of Ignorance which is based on a 1989 study by Sidney Yoshida. According to this theory, the people at the top of an organization only know about 4% of the problems, while the people on the front lines know 100%. He emphasized that as a result, it's critical for problems to be communicated upwards, but people often don't know how to do that. He also encouraged people to ask for help.
What it means to be a strategic vs transactional shipper
Being a strategic shipper involves taking a proactive and holistic approach to managing logistics operations. Strategic shippers view transportation and logistics as a strategic asset that can drive competitive advantage. They focus on optimizing the entire supply chain, rather than just individual transactions.
Strategic shippers prioritize long-term relationships with carriers and logistics partners. They invest time and effort in building strong partnerships based on mutual trust, collaboration, and shared goals. This allows them to negotiate favorable rates, secure capacity during peak seasons, and access value-added services.
Furthermore, strategic shippers leverage data and analytics to make informed decisions and drive continuous improvement. They utilize technology solutions to gain visibility into their supply chain, track performance metrics, and identify areas for optimization. By analyzing data, they can make data-driven decisions that improve efficiency, reduce costs, and enhance customer satisfaction.
On the other hand, transactional shippers focus primarily on individual shipping transactions without considering the broader supply chain implications. They often prioritize short-term cost savings over long-term benefits. Transactional shippers typically rely on spot market rates and do not prioritize building long-term relationships with carriers.
In an article in Supply Chain Xchange, he commented, "One item I would like to see strengthened is the quality of communication between companies and carriers. Since supply chains haven’t been prioritized in the past, there are many simple improvements that could yield greater efficiencies."
Being a strategic shipper is important because it allows businesses to achieve several benefits, such as more resilient supply chains fewer capacity constraints, and less drastic market fluctuations. It also can enable supply chain optimization for all parties involved.
Future Predictions for the Logistics Industry
The logistics industry is expected to continue transforming in the coming years. Shippers may need to navigate changing trade policies, geopolitical uncertainties, and shifting consumption patterns.
The future of the logistics industry looks full of challenges, opportunities and change.
Resources
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TranzAct "On the Record" Interview In this interview, Mike Regan asks Gary Shilling about his perspective on the economy and shares a few thoughts of his own. |
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Logistics Management 247 Podcast In this podcast, Jeff Berman from Logistics Management magazine interviews Mike Regan about a wide range of supply chain topics, such as nearshoring, global events, and trends to watch.
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Supply Chain Xchange In this article, Mike Regan responds to questions about how supply chain management has changed and what's expected ahead. |
