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Shipping Relationships Critical But At Risk

shipping failureShipping - it's one of the most critical components of the supply chain. And the logistics providers are increasingly feeling their position. With the growth, consolidation, and differentiation going on in the logistics sector there is no lack of attention on companies and their function. In fact, there the definitions are expanding all the time. With logistics providers being the central link in the supply chain, they are increasingly finding themselves in the power position; so much so that suppliers making unreasonable demands may be at risk of losing the service from their chosen logistics provider.


As Gerry Fay, Chief Global Logtistics & Operations officer for Avnet explained in his article on EBN "In addition, as consolidation in the carrier community has limited the number of viable suppliers, the balance of power between shippers and carriers has shifted." He points out that because carriers can be more selective in their choices of customers, shippers may want act more like partners than like demanding customers.

Logistics providers hold a critical position, but some are not equipped to handle the details of providing real-time tracking information to their customers. So the issues cross the lines between capabilities and demands. Then there is the constant problem of providing the right data to the right parties along the way. EDI shipping documents can certainly enable the process, but when logistics partners are not technologically equipped and shippers are not formatting documents correctly problems are compounded rather than relieved.

The most important factor in this relationship is defining the needs and expectations up front - prior to becoming partners. Of course most of these relationships are already well established, and functional to some extent. Making them work better and longer boils down to working through the issues before they grow to be expensive to both partners. It's nothing other than the need to step outside the automated data-centric relationship and discuss the issues. It they are not resolvable, it's better to know that before the relationship ends abruptly so that both partners can find substitutes in an orderly manner.
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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

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