In today’s volatile economic environment, shippers need reliable, cost-effective solutions to meet customer demand. Dedicated transportation solutions, which mitigate capacity risk and improve on-time delivery, are often a preferable option.
Q: What are the factors driving demand for dedicated transportation solutions?
A: First, companies understand, now more than ever, they need reliable partners. Interruptions in raw material supplier networks, drastic changes in consumer behavior, and the need for agile manufacturing have forced shippers to increase flexibility in their supply chain without increasing inventory or warehouse expense.
For shippers without this flexibility, the impact in direct cost and lost opportunity can be significant and often exceeds additional expense from a dedicated solution.
Second, companies should anticipate that as the economy rebounds, capacity will tighten. The factors underlying capacity challenges and transportation inefficiency, including the driver shortage, aging infrastructure, and carrier closures, have not been resolved.
As the economy returns to pre-COVID-19 levels, those challenges will reemerge, impacting truckload capacity. As customers investigate potential dedicated providers, they’ll find that recent conditions have forced more carriers out of the business. As a result, dedicated transportation partners with solid financial underpinnings are more valuable than ever.
Third, with higher costs on the horizon, including insurance, equipment, driver pay, fuel, etc., as well as additional regulations ahead, companies need reliable partners to manage an uncertain economic future.
Q: How can shippers use dedicated relationships to build supply chain resilience?
A: Some companies are turning from private fleets to dedicated solutions to better control labor costs and insurance exposure. Those who utilize Red Classic’s dedicated solutions receive the same guaranteed capacity and reliable service as a private fleet, but with greatly reduced risk and investment.
Dedicated relationships provide enterprises more flexibility since dedicated carrier partners can more closely mirror changes in shipper needs. A collaborative dedicated provider can deliver on critical service metrics and adjust to demand changes, while helping eliminate unfavorable market exposure.
Securing reliable capacity and on-time delivery is essential for retaining high-priority customers, especially those who levy performance fines. Customers who contract Red Classic’s dedicated services under these conditions have seen significant savings in fine elimination year over year.
The negative perceptions of dedicated shipping—that it is more expensive and less flexible—are simply no longer true when working with a quality dedicated provider. For shippers with high-value customers and complex freight-handling requirements, dedicated is often a financially sound and operationally effective solution.