Blog Posts Why You Should Consider Reducing Your Length of Haul
- More companies are expanding their DC networks to better manage transportation needs
- Transit time and cost and a tightening freight market are driving the trend
- Third-party logistics providers can help companies shorten their length of haul
What do a growing number of brick-and-mortar retailers, food-and-beverage companies, and ecommerce companies have in common? They’re adding nodes to their supply chains in an effort to shorten their length of haul.
“At one time, it was common for companies to service customers across the country from one or two distribution centers. But today we’re seeing a natural evolution toward multi-node distribution networks as companies work to place their products as close to the consumer as possible,” explains Brad Rolland, Senior Director, Business Development at Saddle Creek Logistics Services.
Reducing transit time and cost are two primary reasons for this industrywide trend. In both B2B and B2C channels, customers are demanding faster and more cost-effective deliveries. By moving products closer to their customers, companies can utilize less expensive ground service to deliver shipments efficiently.
The tightening freight market is another factor. Capacity issues are anticipated well into 2021, due, in large part, to the growing driver shortage which has been exacerbated by the COVID-19 pandemic. Drivers are more willing to make shorter trips than to drive cross-country, so short-haul loads are easier for carriers to cover. Those who tender them are more likely to be viewed as preferred shippers.
“When you’re trying to service a customer from 2,000 miles away and the market is tight, it will be hard to find a carrier to cover your freight,” Rolland says. “More often than not, you’re going to be late. That could cripple your business financially and from a service perspective.”
Transporting goods across the country by rail and using trucks for final mile delivery is another option, but most companies that can take advantage of intermodal have already done so, Rolland says.
3PLs Can Help to Expand Distribution Network
Companies interested in adding distribution nodes to reduce length of haul may be able to leverage the expertise and resources of a third-party logistics provider.
The ideal 3PL will offer supply chain planning services and can help to guide distribution network optimization. They’re likely to have established facilities in strategic locations ready to start up quickly and offer a range of fleet services, including regional services and local shuttle services. They also should provide brokerage services to ensure capacity for every shipment. For additional convenience, they’ll serve as a single point of contact for integrated logistics services.
“Today’s customers require a higher level of service than ever before,” Rolland says. “Whether you’re a new ecommerce brand, an established food and beverage company or a major big box retailer, a knowledgeable 3PL can help to strategically position your products closer to your customer to make it easier and more affordable to deliver the service they expect.”