Jeff Berman, Group News Editor -- Supply Chain Management Review
When the price of a barrel of oil hovered around $150 and diesel was nearly $5 per gallon less than a year ago, the subject of shippers re-designing supply chain operations to cut down on transportation expenses ostensibly gained a lot of steam. But since then, though, the economy has suffered through a near-collapse of the financial markets and an ongoing recession, which has led to oil and gas prices plummeting in conjunction with the economy.
This leads to the question of whether shippers are still focusing on supply chain re-design strategies since energy prices have tailed off from the record levels reached in 2008. According to the results of a recent Logistics Management reader survey in which more than 130 transportation and logistics executives participated, supply chain re-design strategies are still top of mind, with more than 100—or 78 percent of respondents—indicating supply chain re-design is a priority for them.
This data lends credence to the importance on supply chain re-design at a time when demand and freight tonnage volumes are down and not showing any meaningful signs of picking up in the near-term, even through oil and gas prices have inched up in recent weeks.
Some of the supply chain re-design steps LM readers said they are taking include modal shifts, consolidating shipments from suppliers, re-negotiating fuel surcharges, and transportation network restructuring, among others. Meanwhile, those that said they are not considering making changes cited reasons such as a viable lack of options, and contractual obligations.
Regardless of where oil and gas prices go, many shippers said it is imperative to find ways to reduce expenses during a time when there are many triggers that can alter logistics operations.
Read the rest of the article from Supply Chain Management Review here.
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