Recently, we announced the successful completion of an integrated fleet and small package transportation management project for Canadian Blood Services. From our experience at Canadian Blood Services and with other customers, we see that many logistics organizations face the same challenge that Canadian Blood Services has - when to leverage its internal resources and when to contract for additional small package transportation services. In the past, logistics organizations had to assemble transportation technology from several vendors to attempt to achieve this capability. Now, Descartes offers it as an integrated solution that extends into the transportation execution processes.

The common thinking is that companies with private fleets should fully utilize them and then look to commercial carriers to handle over capacity conditions. While private fleets can be considered "sunk costs" and maximizing their utilization is critical to achieving a strong return-on-investment, they are not always the most cost effective choice nor have the ability to provide the greatest customer service level.

An example of such a case is "outlier" pick-ups or deliveries that drive a disproportionate amount of transportation costs. Private fleets produce their greatest productivity when the stops are relatively dense - that is grouped within a region that does not drive up the distance traveled or significantly reduce the stops that can made on a given route. Depending upon the cost of the vehicles (vehicle, operating and driver costs), the argument can also be made for the "low value" stops and customers with lower service requirements. In those cases, the cost to serve the customer with a private fleet is most likely to be more than with a small package carrier who regularly serves that area. A similar case can be made for customer service. Since it is too expensive to more frequently serve dispersed customers, the optimal frequency of service by the fleet might not be enough to meet disperse customer's needs.

It is for these reasons we have integrated fleet and small package planning into a single transportation management solution. By being able to look across all of the orders, their geographic locations and understanding the costs associated with the fleet and the small package couriers, logistics organizations can minimize their total logistics costs while best serving their customers. This holistic view allows logistics organization to create intelligent, fact based, strategies to occasionally or even permanently "park" a vehicle or look outside their own organization to reshape their logistics costs and customer service policies.

Rather than stopping with the planning process, our solution extends into execution to make sure that the plans are followed in the most efficiently and effective way. Through integration of our GPS-based mobile solution, we ensure that the driver is enabled to execute the route, track their performance stop to stop and record key commercial information such as signatures capture. We also reach deeply into the small package execution process with optimal carrier selection using certified rates, carrier compliant manifest labeling and connectivity.

Managing fleet and small package transportation decisions holistically provides logistics organizations with the opportunity to lower their overall costs and provide the best customer service possible. Descartes now provides a domain expertise rich solution that brings together the planning for the two modes along with the execution to help ensure the most efficient and effective logistics operation possible.

Written by Chris Jones

Executive Vice President of Marketing and Services