Transportation as a commodity

Here is an interesting video on supply chain brain about trends in transportation in a study by the University of Tennessee and Georgia Southern: It is interview of Mary Holcomb of the University of Tennessee by the magazine Supply Chain Brain.

It starts off with a finding that many organizations are joining their procurement (purchasing) departments and transportation into one entity in the organization. It has the effect of commoditizing transportation as just another commodity the firm buys.

The onus is on the transportation staff to point out the importance of value added services of a carrier otherwise it will strictly be on price and meeting service standards. In some cases that may all that is needed. But for many organizations, the carrier’s transportation knowledge of the customer is key selling point. Another key is a commitment to service the account even when there is tight capacity. The last few minutes of the interview, Dr Holcomb discusses these type of issues.





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