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Shippers continue to examine transportation budgets. It is time to inspect both sides of the transportation equation, including logistics planning and execution solutions for shippers and carriers alike, cutting costs for both parties.

Sifting through the logistics lingo, the subjects clearly indicate that the shipping industry has to think ahead and direct the Logistics managers to serve them best.

For this reason, it becomes vital for companies to promise competitive transit times that meet customers' requirements and ensure exact planning accuracy and maximum planning reliability. Among other things, modern online booking and ordering systems are an absolute must for companies that provide logistics services.

This also pertains to IT-based monitoring and information systems used to plan and track shipments, which can be called up over the internet. The logistics company should take action concerning the provisions of liability in intermodal traffic, which clearly must be brought into line with one another.

Today companies are much more cautious in their views about doing business with the end consumer. For many logistics experts, the greatest cost-reduction potential lies in viewing the logistics chain as a whole and taking advantage of potential synergy. According to Rolf Rohde from Kuhne and Nagel, who is in charge of logistics for kitchen manufacturer Kruse and Meinert, focusing more on service is increasing costs:

"More and more customer requirements must be taken into account during planning, and they do not necessarily make the final product more affordable." That is why he is calling for "new logistics centres for small shipments at strategic locations throughout the country that are well organised and can take care of deliveries between manufacturers and retailers."

Therefore, there is still a great deal of streamlining potential here. Logistics prices in most companies are also premised upon the market and the contracting company's cost structure. On the other hand, almost none of the companies seem to be ready to pay extra for logistics services. Various studies conclude that many providers of logistics services expect the cost of shipping to increase. Could shipping by rail offer them a way out of their dilemma? Perhaps, some feel that the railway has a great deal of growth potential, others also believe that it could be even better than shipping by truck under certain circumstances.

However, do they have the connections to the third-party carriers that are contracted to deliver the merchandise directly to the customer? Also shortcomings could easily tarnish the image of the contracting company. All providers of logistics services find themselves having to satisfy demanding requirements. More than any thing else they must find a way to adjust their cost-efficiency to their contractors' needs. In many cases, that means a suitable fleet and a full-time workforce, the ability to meet delivery schedules a 24-hour service is expected for direct delivery and flexibility when dealing with the customer.

How will both large and small providers of logistics services deal with the ever-increasing requirements in the shipping industry? Will the smaller companies realise such benefits? Do their volumes give them the same power to discuss the best shipping rates? Integres, will offer small companies strategic real-time logistics services. According to their President and CEO Jim Hartigan, "the accumulated volume of many small shippers using Integres will give them the power of large companies to negotiate prices."

How easy is real-time logistics software to implement? Software must be integrated with a company's back-office operations and those of transportation carriers and trading partners. AMR Research analyst Chris Newton says, "Some carriers refuse to provide real-time updates because being behind at some point in the schedule doesn't mean the delivery will be late. "They can make up for lost time, but if they're seen as behind at some point, it's a black mark against them."

The chance to harvest savings and efficiencies is to espouse third party enterprise application systems. Nonetheless, the challenge for business today is to choose the system with functional flexibility that is scalable to current and future technology.

(Source: Hill Street Academy)

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