BY JAMES A. COOKE, EDITOR AT LARGE
TMS
technologyreview
Reality check
IMAGE COURTESY OF MERCURYGATE INTERNATIONAL INC.
In a bid to cut
costs, shippers are
increasingly using
computer modeling
to decide whether
to take control of
their inbound
shipments. But be
prepared: Suppliers
might not be willing
to play along.
BUYERS AND SELLERS HAVE BATTLED OVER CONTROL OF
inbound shipments for decades. But in today’s tough economy, that
conflict has intensified as buyers—especially retailers—step up their
efforts to cut supply chain costs.
As part of these initiatives, buyers are looking at the economics of
inbound freight—that is, whether they could save money by assuming
control of the inbound move, instead of paying whatever the seller
charges to deliver its freight to the buyer’s door. To help with this determination, many are making use of transportation management systems
(TMS). Because this type of software allows them to model so-called
“what-if” scenarios, it’s a useful tool for weighing the pros and cons of
taking control of their inbound moves. But, experts caution, logistics
managers should not assume they will automatically reap all the benefits the model suggests are available.
MODELING THE “WHAT-IFS”
The growing interest among buyers in managing inbound freight was
highlighted in a recent Kane Research study, “Key Supply Chain
Challenges of Mid-Sized CPG Companies.” A number of the consumer
packaged goods executives who participated in the study reported that
the retailers they do business with want greater control of inbound
freight than in the past.
That’s not surprising given that many retailers believe their market
power enables them to negotiate more favorable rates with truckers
