One of the big trends in the last twenty to thirty years, which has accelerated even further in the last three or four and will probably accelerate even faster in the future, is that companies continue to get leaner and flatter as they downsize and utilize technology more. They’ve reduced costs even after previously reducing costs, and are reducing them once more. There is tremendous pressure on continually reducing costs and doing more with fewer people.

What does that mean to our logistics industry?

We find that as companies have downsized, they have fewer people to execute the same or even an increased workload. What also happens, in many cases, is that you have people that were typically “do-ers” that find themselves in the position of being managers. This can decrease the executive “know-how,” while also reducing a company’s ability to execute.

One common challenge is that many companies are doing with 5 people what they used to do with 7 – 10 people. Despite that, they continue to manage functional areas in the same manner as before. Companies continually try to buy transportation piecemeal on a transactional basis. This forces the company to do (and manage) countless transactions, as opposed to stepping up and operating from a higher level, segmenting pieces of business and allowing a specialist to manage the process more efficiently. The provider can then provide key performance indicators that are mutually developed and make the process more cost effective – giving the company more leverage and control.