filter-solution-freight-management

Automation may be reshaping most logistics areas, including freight management (FM), but human expertise and interpersonal relationships still underpin the efficient movement of freight.

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You have set routes you run regularly. But if you have empty return loads, you could be losing valuable revenue. Even more, empty return loads hinder your efforts to provide the highest level of customer service and the most dependable deliveries.

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As various forms of uncertainty and supply chain congestion continue to disrupt trade flows, the specialized logistics skills and infrastructure required to manage cross-border freight continue to be tested as never before.

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Amid a significant merger, a food and beverage ingredients manufacturer faced the challenge of centralizing transportation management processes across business units to control costs and improve efficiency.

With over 30,000 employees and 340 locations across 60 countries, the manufacturer outgrew their previous logistics partner and sought a new partner capable of managing their diverse supply chain needs while also accommodating growth.

Process discipline was a critical component from the very beginning due to the complexities of the merger and the manufacturer’s business model. This included a thorough assessment by Penske Logistics of all trucking carrier sourcing and management needs and a comprehensive rate audit and negotiation to identify potential savings opportunities.

The manufacturer welcomes challenges posed its by customers, but they don’t take chances on their business operations. Meticulous attention to detail is vital for efficient operations, cost-effectiveness and optimal performance in logistics and supply chain management. Penske stepped up to provide the necessary expertise and support to launch the first business unit on an expedited timeline of 90 days.

Navigating a Lot of Supply Chain Change All at Once

Transitioning to a new freight management and supply chain partner presented significant exposure and risk to continuity of service for their customers, especially when it came to establishing new processes regarding contracting and compliance with their previous carrier base. It was critical that there was no lapse in service to their customers or current operations. With this level of expectation, Penske had to demonstrate its ability to add value and earn trust through communication, planning, discipline and project execution.

To ensure a smooth and timely transition without disruption, the right approach was vital. Penske first conducted a thorough Value Stream Mapping exercise to fully understand the business intricacies and discover opportunities to standardize key processes. This approach unveiled specific improvement areas related to carrier management, centralization of systems across business units and overall process management.

Carrier Management

Through disciplined planning and procurement, Penske optimized freight movement, synchronized lead times and managed all carrier interactions, enhancing the manufacturer’s network reliability and reducing costs.

As a customer, the manufacturer benefited from Penske’s carrier management expertise and vast network of qualified carriers. The client requested to transition their existing carrier base, so Penske qualified them, established contracts and negotiated rates on their behalf.

Making an impact from the start, Penske introduced a $1.1M estimated annual savings within the first 90 days through a combination of rate reductions, routing improvements and better carrier selection.

A strategic partnership with Penske Logistics added value to the customer’s operations. With Penske assuming responsibility for carrier management, the client was able to shift focus to core business activities.

Centralized Systems and Increased Visibility

Historically, the manufacturer grew through acquisitions but did not merge systems. Recognizing the client’s need for a centralized solution across business units, Penske consolidated multiple operating systems into one for enhanced efficiency. Each location had been operating differently and independently of each other, leading to inefficiencies. Despite the challenge of merging organizations with disparate systems, combining these technologies brought everything under a single, unified framework.

Penske facilitated a seamless integration under one umbrella, streamlining access to comprehensive metrics, reporting and data analysis tools. To eliminate excessive work for the client, Penske even extracted all the manufacturer’s existing files and fully integrated them into a single platform.

Process Improvement

What differentiated Penske from the competition was the process approach to delivering solutions. Along with disparate systems, the client also had disparate logistics processes across business lines from acquisitions. Given the need to streamline processes, establishing process discipline along with effective communication was paramount.

Penske Logistics established a dedicated operating team and presented a cohesive vision to lay the foundation for future transformation. This collaborative team dynamic is essential as new business lines are launched.

Clear Path Going Forward

As a result of these efforts, cost savings have already been realized and the leadership and support of the operating team earned the trust of the manufacturer.

Penske Logistics built the infrastructure to enable growth and efficiency and set the stage to deploy these solutions within additional business lines. As this partnership evolves, Penske remains dedicated to providing unparalleled support and experience.

Why Penske?

A ripple effect can turn a business upside down with poor attention to detail and lack of expertise. Penske views itself as an extension of our customers’ organizations, and we have what it takes to keep your business moving forward.

Freight brokers play a critical role in connecting shippers with available capacity, but finding the right freight broker can be challenging. Over a thousand brokers are in the market, ranging from multi-billion-dollar corporations to solo operators working from home. The right broker can create a competitive advantage, offering breadth and depth of service, optimized solutions and business insights.

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Technology can be a differentiator among freight brokers, and tech investments continue to advance. Brian Kenney, vice president of brokerage for Penske Logistics, said he is seeing an emphasis on technology that can improve automation, compliance and tracking. Advancements in those three areas can increase efficiency, streamline communication and ensure the secure movement of goods.

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International freight forwarding is a spot-driven market with prices changing week to week and month to month, and shippers are constantly looking to get the best value for their freight spend. At the same time, they are seeking increased visibility, seamless customs clearance and a single source of information.

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The supply chain is increasingly complex and demanding, and there is no one-size-fits-all solution for moving freight. In today’s demanding freight environment, shippers are turning to a range of solutions to get the efficiency and agility they need at the optimal price point. Third-party solutions can complement shippers’ in-house capabilities or even other providers if companies source multiple partners.

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Visibility is critical at the border, and being proactive rather than reactive can keep products moving. Penske has added a border workflow technology tool as part of its ClearChain® technology suite that facilitates collaboration between the many stakeholders involved in a border crossing to mitigate the risk of a delay.

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Visibility and collaboration are at the core of a successful inbound freight operation. By successfully improving overall visibility, you can identify a potential problem earlier and build in a necessary contingency plan.

This new e-book from Penske Logistics includes information about how to create the perfect inbound solution, by taking a detailed look at a variety of options, including:

  • How to effectively make a change in providers
  • What private fleets can do for you
  • The best way to incorporate freight management services
  • Dedicated contract carriage and the ability to secure capacity
  • Keys to finding the right transportation partner

Then take the necessary steps to discover how you can maximize your freight management solutions.

Two new regulations in Mexico — the Suplemento de Carta Porte and Proyecto de Integración Tecnológica Aduanera (PITA) — are expected to create more documentation and record-keeping which may further complicate an already elaborate process.

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Shippers need a seamless process when moving goods between the United States and Mexico, and the handoff is critical. Historically, a black hole existed at the border, which is especially challenging given the many parties involved in a crossing.

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For those of us whose livelihood focuses on supply chain management, it’s clear that disruption is now a normal part of business. Recent examples of front-page news include extreme weather events, the pandemic and international unrest. When managing a supply chain, there are lessons to be learned from each of these events.

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For shippers, at times, there are good reasons for turning to the spot market to secure truck capacity. In general, however, it is advisable to minimize this expensive freight transportation option.

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Businesses considering freight management outsourcing need to weigh many factors. They must choose not only the right logistics provider, but also must know which freight management model will work best for their company. They must understand the benefits of technology and data. They must know when the time is right to outsource. And they need a complete view of their transportation costs.

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A strong supply chain is central to effective operations, but anything from rapid growth to external forces can disrupt operations. When a supply chain is out of control, the right people, processes and technology can bring it back in line to improve service, optimize routes and reduce costs.

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No two shippers — or supply chains — are the same. Some require more complicated freight management (FM) solutions owing to the nature of their businesses. Heavy haul shippers or those with specialized trailer loading requirements are examples; companies with rapidly changing organization structures or high growth trajectories can also fall into this category. When specialized product meets rapid change, the need for support becomes more critical.

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This U.S.-based worldwide Tier 1 supplier of major automotive components was looking to minimize supply chain disruptions, increase visibility and improve cross-border operations. With 52 plants and 3,000 suppliers, the Tier 1 supplier needed a lead logistics provider that could manage inbound freight and support production.

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