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Collaborative transportation management can bring trading partners and transportation service providers together for the sake of win-win outcomes.
The job of moving goods from where they are made to where they are needed is a 24/7/365 job. Transportation consumes 5.5 percent of the U.S. gross domestic product, and approximately the same proportion of a company’s sales revenue.1 These percentages have declined somewhat for U.S. customers of transportation since the industry was largely deregulated in 1980. A deregulated environment has dramatically intensified competition among carriers such that they must either run an efficient operation or close their doors. While efficiency improvements are abundant over the past two decades, there still remain significant opportunities for further improvement. Trucks still run empty a large percentage of the time, generating both operating and opportunity costs for the carrier and driver. Waiting to load and unload shipments consumes 33.5 hours of a driver’s time each week, on average.2 Drivers frustrated with long, unproductive waits are easily tempted to abandon the carrier in favor of another, causing driver turnover ratios to hover at around 100 percent each year. Revised hours-of-service regulations that went into effect in January of 2004 will further impact the hours available for operation and how drivers will use their on-duty time, exacerbating the problems of poor utilization and inefficiency.
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