How to Optimize Dedicated Fleets—Even in a Dynamic Market
By: Ben Cubitt, SVP of Consulting & Network Services
Over the past five years, shippers—especially consumer packaged goods (CPG) companies—have added dedicated fleets to their transportation networks to gain greater control over some volume of their freight spend. Dedicated fleets help shippers minimize reliance on the spot market with associated higher costs, as well as improve performance and service.
When dealing with weather emergencies, healthcare and economic crises that disrupt traffic and supply chains, flexibility in fleet capacity is a must. Dedicated fleets help avoid ongoing disruptions in over-the-road (OTR), rail and intermodal markets. Shippers with flexible fleet capacity have greater control to better manage their transportation planning and budgets.
Shippers have multiple dedicated fleet options with various designs based on their network flows, profiles and logistics needs. Whether shippers have a local fleet, regional network fleet, surge fleet or multi-shipper collaborative fleet, it is critical for fleets to be actively managed from design to execution.
Here are some tips to help companies optimize dedicated capacity:
- Fleet Design: Shippers need to analyze and identify core freight that fits their needs, as well as gaps to be addressed. Creating more flexible capacity may require a certain number of trucks and or trailers and surge capability—all while balancing costs and potential risks. Fleet profile and volume can be extended with a high percentage of backhauls in longer haul lanes.
- Carrier Selection: Finding the right carrier partners is critical. Shippers need to understand that market fluctuations, carrier capabilities and network changes mean the “best fit” carrier can change. Carrier networks are important to support backhauls and must be consistently managed for a smooth-running supply chain.
- Active Fleet Management: Shippers must consistently monitor lanes to optimize freight moving through their dedicated fleets. Ongoing monthly and quarterly reviews are required to determine which lanes will meet the needs of their dedicated fleet, as well as what lanes to add or remove from their fleet.
- Continuous Improvement of Fleet Operations: Shippers need to schedule regular reviews of fleet optimization initiatives including heavy haul and light weight equipment, slip seating and collaboration with other shippers to increase performance.
Managing Fleet Capacity
Shippers need to decide if day-to-day management of their fleet capacity will be a core competency or will be outsourced. Some shippers build this capability in-house while others partner with a 3PL or logistics technology and services providers to manage the complex and time-consuming process.
A third party provider can bring many benefits to fleet management including experience across multiple industries, core carrier fleet capacity and an ability to leverage their network for fleet backhauls. They can also establish best-in-class fleet dashboards and KPIs that drive fleet optimization and continuous improvement, help shippers with short-term surge or pop-up fleets and include shipper lanes in a multi-customer collaborative fleet network.
At Transplace, we are seeing that dedicated fleets are a growing trend throughout our network and we are partnering with shippers to help evaluate opportunities such as:
- Fleet assessments and design
- Fleet sourcing
- Fleet management and optimization
To learn how Transplace can support your business with dedicated capacity or provide a fleet assessment, reach out at https://www.transplace.com/contact/connect-with-an-expert/