keep on trucking
Despite all the talk of a rail renaissance, trucks will continue
to dominate the market in 2010. When asked what types of
transportation services they planned to buy, DCV’s readers
put LTL motor freight at the top of the list.
Type of service
Less-than-truckload motor freight
Small package
Truckload motor freight
Air freight
Express/Expedited/Time-critical
Transportation-based third-party logistics services
Maritime/Ocean
Private fleet tractors and/or trailers
Rail/Intermodal
Barge
of respondents*
69
65
57
41
36
34
30
28
28
4
*Note: Survey respondents were allowed to select multiple responses
When asked what types of material handling equipment
they plan to invest in, 40 percent cited safety products for
their distribution operations. That was followed closely by
racks and shelving ( 39 percent) and lift trucks ( 37 percent).
As for software, it appears sales of warehouse management systems (WMS) will be reasonably strong in 2010.
Thirty-eight percent of the respondents said they planned
to purchase a WMS sometime in the next 12 months. Next
on the list were transportation management systems
(TMS), which were mentioned by 25 percent of the respondents. Other common responses included planning and
forecasting software, and inventory planning software,
which were each named by 23 percent of the survey takers.
A watchful eye on costs Although signs of economic recovery are in the air, it appears that distribution pro- fessionals aren’t backing off from their cost-cutting efforts just yet.
EXHIBIT 2
the cost-cutting continues
An economic recovery may be in the offing, but DCV’s readers aren’t backing off from their cost-cutting efforts just yet.
When asked about their plans for trimming expenses,
respondents mentioned shipment consolidation most often.
Cost-cutting action of respondents*
Consolidate more shipments into truckloads 42
Renegotiate rates with carriers 40
Cut back on express shipments 31
Redesign supply chain network 21
Reduce shipping frequency to customers 20
Use fewer carriers 19
Use more rail in place of truck 15
Lay off workers 11
Outsource more distribution tasks 10
Use more air in place of ocean 9
Use fewer DCs 7
Set up more DCs 6
The vast majority of respondents indicated they would continue working to trim distribution expenses in 2010. When
asked what measures they planned to take, 42 percent of the
survey respondents mentioned consolidating more shipments into truckloads. Forty percent said they intended to
renegotiate rates with their carriers. Other common
responses included cutting back on express shipments ( 31
percent) and redesigning the supply chain network ( 21 percent). (See Exhibit 2.)
While they’re guardedly optimistic about the economic
outlook for 2010, a significant number of respondents see
at least one troubling sign on the horizon. A full 85 percent
expressed concern that oil prices would head back up,
which would almost certainly lead to higher freight rates. ;
