Three years ago, logistics' next big thing was going to be the collaborative network. Developers promised shippers that by banding together, they'd wield the kind of bargaining power enjoyed by the Wal-Marts of the world.
So where are they now? Most of these networks have long since faded from the scene or are madly reinventing their business models. In a classic miscue, they misread the industry. Transportation capacity remains tight in today's market, which means truck owners have little difficulty keeping their equipment loaded and running, albeit at low margins. It's hard to see how a large network could wield significant bargaining power in this environment. Beyond the economies of dealing with fewer customers, carriers have little incentive to drop prices in exchange for more volume—unless they can add capacity at a lower cost. And that's unlikely given the costs of hiring, insurance and the new low-emission engines.
The case of the collaborative networks isn't so very unusual. Every 10 years or so, someone in the logistics industry feels compelled to reinvent the wheel. All too often,the effort fizzles. Undeterred, the search teams fan out to look for the next silver bullet.
There is no silver bullet, of course. But if you're willing to settle for a lesser metal, we can offer four lead bullets that have hit their targets time and again over the years. If you've set your sights on a cost effective and service-sensitive transportation network, then focus on the following:
Silver bullet solutions come and go. But these timetested lead bullets have remained effective over the years. Some managers use their in-house staffs to design networks or oversee bidding; others seek outside expertise. How these projects are carried out is not as important as making sure they are carried out. And there's no reason to wait: Hot lead's remarkably effective at "neutralizing" problems like bloated costs and indifferent service.