May 17, 2016
Sharing supply chain rewards
The costs– both financial and time – flow up and down the supply chain. Managing and containing those costs requires a total supply chain effort.
During a discussion with Ken Kellaway, president and CEO of RoadOne, he commented, “People in the intermodal industry need to take financial responsibility for those issues they create.” From his comments, and those of others over the last three months, it is clear the system isn’t working at its optimum level. It’s not broken, but it is dented. Kellaway was reflecting on a reality of how interconnected supply chains and the supporting intermodal transportation services have become.
Part of Kellaway’s focus was on driver treatment, ensuring drivers are compensated for delays that are not a result of their or the motor carrier’s actions. But read in a broader context, the underlying issue is one of cost accounting. Time that is lost can’t be recovered, but additional costs can be recovered. At least, that’s the theory.
Whether it’s the result of broad trade or economic volatility or operational changes such as larger container vessels creating spikes in density, the intermodal industry is subject to significant swings in demand that test its processes and systems daily. Inefficiency carries dual penalties in time and money. The latter can be recovered, but the motor carrier pays both.
Isn’t it better, however, to “reward” drivers with increased earnings capability by improving their productivity at intermodal facilities rather than to have to compensate them for delays that are a consequence of inefficiency?
Fine tuning the supply chain will help ensure more stakeholders are sharing rewards, not consequences. In the context of Kellaway’s specific comments about drivers and motor carriers, the goal isn’t just to compensate drivers for delays that were not their responsibility. It is to change the operating conditions that are a drain on driver productivity.
Add new comment
2024 PARTNERS
A special thank you to our premium level partners for your continued support.
Comments