Diversity and Uniqueness in the Transport Industry

We have come to expect that no two transport companies operate in the same way. Management styles vary from micro-management to flying by the seat of your pants!

The different types of operation - whether full truck loads, consolidated loads or contract work create their own particular workflows and methods.

Do you agree that ...?

• Every transport company is unique: Some companies use sub-contractors, some only do full loads, some need a warehousing component. Many companies act as transport brokers for the transport industry.
• Information is power: Allowing management to be proactive rather than reactive.
• Management Information Reporting needs vary greatly from company to company: The need for up-to-date management, statistical and accounting information is a vital aspect of any transport business. How you want it, when you want it.
• Crisis-management has far-reaching repercussions. Often the "left hand doesn't know what the right hand is doing" within the various divisions of the company.
• Divisions such as Operations, Warehousing, Maintenance and Accounting need to share common data.
• Every transport company operates in their own unique way, based on their management-style.
• The size and type of the fleets expand and contract constantly. Scheduling and allocation of available resources, re-routing and breakdowns are difficult to monitor.
• The availability of in-service trucks changes constantly with maintenance, delays, breakdowns, etc. - this impacts forward planning and results in lost business and poor customer service.
• Methods of fleet maintenance are different - servicing in-house or outsourced. Tracking of costs always becomes vital.
• Some companies use sub-contractors on a regular or irregular basis.
• The territorial areas differ - some only local within RSA, many across our borders with special requirements for customs, multi-currency and differing VAT / GST.
• Divisions such as Operations, Warehousing, Maintenance and Accounting need to share common data.
• Duplication and recapturing of data results in wasted man hours and human error. The number of administration staff required always seems to become "top heavy".
• Management Information Reporting needs vary greatly from company to company. Month-end consolidations are time-consuming.
• Many Transporters make incorrect assumptions about areas of their operation with regard to profitability / non-profitability - because they lack the ability to quickly produce up-to-the minute reports at any time of the month or summaries for any time-period.

Are you part of the Transport Recession?

In the current economic climate today, we have to ask the question "Why are so many transport companies shutting their doors - from huge established transporters who have been around for 20 years or more to the many medium and small transporters?"

We know that the abnormal load transporters are hurting because of the downslide of the engineering / construction industries at this time. However, the competition in the other areas of the transport industry has not changed drastically - Transnet has not taken away business with a fancy new railway system, our shipping ports are still relatively active, cross-border work is still happening ... so what’s the problem?

• Clients have tightened their own belts and now demand more realistic load pricing and transport services – and they shop around to get the best quote. Their loyalty is only to the transporter with the best price.
• Transporters have overstaffed administration and accounting departments and their operations departments spend their time on chasing paper instead of getting new loads – and being competitive in the market. The “tail wagging the dog” syndrome.
• Transporters are cutting prices just to get the loads – but doing so without any solid management information to back up or support their price cut decisions - this is a recipe for sure disaster.
• Many transporters (big and small) don’t have a clue where money is being wasted in their day-to-day operations and without this information, can’t take decisive action to fix the problem areas. This mis-management has been the death of many transport companies recently.
• Lack of controls and procedures leads to bad operations and accounting practices which result in loss of revenue e.g. Transport loads not being invoiced because quotes and PODs disappear.

Can you identify with more than one of these problems?
What proactive steps are you taking to avoid landing in the same position?