Stuffing a 70-pound bag into the overhead

With rising transportation costs and an emphasis on sustainability, load building is more important than ever.

By John M. Hill, principal, TranSystems | ESYNC -- Modern Materials Handling, 6/17/2008

Were it not so frequently dangerous, the comedy show put on by far too many air travelers during the boarding process warrants coverage on “America’s Funniest Home Videos” or at least on “YouTube.” 

The size of the bags some people attempt to jam into overhead compartments defies the imagination, triggering hernias, departure delays, harsh words from flight attendants and glares from frequent travelers. 

And, it’s getting worse now that the airlines have begun to impose a $25 surcharge for checking a second bag. Better planning and common sense might help—by the traveler during the bag sizing and packing process—and, failing that, by the airlines and TSA with carry-on size restriction enforcement at check-in and security check points. On the other hand, if there’s a will, there’s a way—and, I suspect that the comedy will continue for some time to come.

It’s not a comedy for shippers and carriers who face analogous challenges tackling not only higher transportation costs, but also the growing emphasis upon carbon footprinting and sustainability. Solid load planning and building tools address these challenges and can improve efficiency before orders are released for picking and shipments enter the transportation network, but there are myriad trade-off’s to be examined before committing to a plan.  

Balancing the interests of shippers and carriers with those of the consignee is a very complex process, exacerbated by disparate customer demands and varying order profiles. Though by no means exhaustive, the following table highlights a few of the conflicting objectives that beg for collaborative assessment and resolution.

Using one example, the demand for reduced order cycle times generally leads to higher warehouse processing costs and higher rates for smaller, more frequent deliveries. Many shippers, Amazon.com comes to mind, thrive on this model, clearly having rationalized the added costs against the increased sales and hard margins that drop to their bottom lines. 

For others, however, the approach might actually erode margins to intolerable levels. The answer lies in defining multiple scenarios for addressing the logistics implications of:

• meeting (or nearly meeting) customer requirements,
• assessing warehousing and transportation costs and risks,
• developing a value proposition for each scenario, and
• matching the results to the customer’s perception of that value.

And here, by the way, is a good place to factor in both the hard and intangible values associated with carbon footprint reduction.

Then comes the “horse trading.”

If order consolidation and extension of the delivery window would enable you to contain or reduce associated costs, will your customers accommodate you? What would they expect in return? Conversely, would your customers be willing to pay a premium for meeting their requirements (or give you carbon offsets)? (I detect a snicker or two, but “nothing ventured, nothing gained” or “don’t knock it until you’ve tried it.”) On another tack, would partnering with a specific carrier or carriers for the bulk of your business be sufficiently attractive to them to yield rate concessions or guaranteed delivery performance? And, the list goes on.

The value of performance improvement in the warehouse must be measured by its impact upon transportation and the customer – and, vice versa. It’s a bit like cutting sideburns. If you’re not careful, you’re liable to look like the barber used a bowl to cut your hair.

On the other hand, if you take the time to carefully characterize the alternatives and substantiate them with defensible benefits and costs, you’ll be in an excellent position to meet with your trading partners for collaborative discussion of the options. At the very least, you’ll be able to profile the logistics impacts and costs associated with current and proposed marketing and sales policies for your own management team. Then, let them make the call!