• Miebach India

When should I use market trucks?

Most companies like to use existing market trucks for their transportation needs rather than going for custom truck capacity. Even though this heavily increases their dependence on external parties, why do companies do this?

The simplest answer is, someone has already invested in the capacity and it is available for use. It meets the needs of varied requirements and therefore its asset utilization is higher. If on the other hand, you decided to build dedicated truck capacity, the cost would be higher, there may not be many takers and hence the service would come at a premium. New investments would also result in high depreciation of trucks and hence higher cost of operations in the initial year of operations. Continue reading

Levers for Managing Transport Cost

Transportation cost is a key cost component for supply chains. At 2-5% of revenue for most industries (12-15% for some industries e.g. Bulk) , a reduction in these costs can directly impact the bottom-line in a significant way. It is therefore very important to understand the levers impacting transportation costs.

What are these levers? Most of the levers can be classified under the following 4 heads: Usage of market truck capacity, Return load, Truck-turnaround time and economies of scale. Continue reading

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