Providing your logistics partner with additional lead time can be critical in ensuring better rates and securing capacity in any market.
But with freight conditions like those we have seen throughout most of 2020, building in additional lead time is an even more essential piece of your logistics operational puzzle. It can help you, and your logistics providers mitigate common issues that have plagued the industry since the late spring.
According to an article recently published by JOC, longer than expected transit times are hampering logistics performance for a majority of organizations.
In a survey of a variety of shippers, the publication found that “longer transit times were an issue for 87.9 percent of survey respondents, with 70.2 percent reporting LTL transit times had been extended by one or two days, and another 16.4 percent saying transit times were extended by three days or more.”
While some of those issues will be present regardless when the freight market sees the type of surge in volumes that have hit since May, many can be avoided by avoiding last-minute freight decisions and giving logistics partners ample lead time.
Building-in additional lead time in a tight freight market is crucial. It can help secure scarce capacity and reduce costs associated with highly demanded freight services. Let’s explore why else it matters.
What Is Shipping Lead Time?
Lead time typically refers to the total time needed from purchase order origination to delivery to a customer.
For best logistics outcomes, shippers should look to arrange transportation as soon as possible following a completed purchase order.
Doing so gives the logistics provider executing the shipment as much lead time as possible, which allows for a multitude of benefits like:
- More favorable freight rates
- Efficiency improvements
- Better carrier arrangements
- Ideal delivery times
Why Providing More Lead Time is Beneficial
While it may not always be possible, shippers should arrange transportation agreements far in advance of their required arrival date at a customer.
Last-minute issues and orders do occur, but CPG brands should aim to eliminate them when possible. Reaching out to your logistics provider as soon as you know orders are ready can lead to:
- Reduced rates
- More available capacity
- Better service
- Improved on-time performance
- More control of expenditures
- Improved organizational efficiency
When comparing shipping costs for a Zipline customer, having additional shipping lead time provided the shipper with substantial savings.
In a year-over-year comparison, one snack food manufacturer found that costs per load were reduced between 15-19% by providing 2.21 additional notice days from the previous year. When applied to a total transportation budget, that equates to substantial savings.
On-time freight performance also increased to 99.27%. With more shipping lead time, Zipline Logistics could book preferred carriers on orders and offer even higher levels of customer service.
In addition to immediate improvements in performance and costs, providing ample lead time for your orders can allow you to exert additional control over your supply chain and the remainder of your operation.
Effective supply chain control has emerged as a substantial differentiator for brands that have succeeded in the post-COVID retail environment.
Knowing when purchase orders will be filled and when orders will be ready is essential for creating additional lead time and exerting control over your supply chain.
How to Build-In Additional Lead Time
Working with a logistics partner on a deeper-than-transactional level can create more lead time for brands and unlock operational efficiencies.
By utilizing a logistics partner’s industry knowledge and technology stems, you can more accurately forecast orders and anticipate shipments, creating more lead time between you and your customers.
True logistics partners can help you uncover supply chain efficiencies that will allow for greater visibility into crucial production and other processes that can improve outcomes for your shipments.
Work with a True Logistics Partner
Zipline Logistics provides managed transportation services and consultation to brands looking to improve performance. With our powerful shipper intelligence toolset and full outsourcing program, customers gain a holistic view and maximum transparency into their transportation data and performance.
Improved access to critical logistics information and ongoing consultation from Zipline’s transportation experts allow customers to unlock the ultimate optimization of pricing and service.
Want to see the difference a true logistics partner makes?
The post Why Shipping Lead Time Matters in a Tight Freight Market appeared first on Zipline Logistics.