How Does Supply Chain Management Impact Trucking?

Supply Chain Management (SCM) is the strategic coordination of every step involved in the process of getting a product from raw material to the end consumer in its finished form. It involves procurement, manufacturing, warehousing, and logistics.
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Trucking is the physical backbone of this entire process and is the vital connector that moves goods from one part of the supply chain to the next. Understanding how supply chain management impacts trucking is critical for freight carriers, as the efficiency and strategy of the broader supply chain dictates the operational successes — or failures — of the freight companies that operate within it.

5 Ways Supply Chain Management Impacts Trucking Companies

The influence of Supply Chain Management on trucking companies is profound.
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It acts as a double-edged sword that can either streamline operations or create significant complications. When you consider that trucks move an estimated 72% of North America's freight tonnage, the trucking industry is inextricably linked to the health and strategies of global supply chains.
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When managed effectively upstream, SCM provides predictable freight flows and optimized loads for trucking companies. When disrupted, the downstream effects on trucking and freight companies are immediate, costly, and can be disruptive to fleet operations.
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Here are five key ways that broader supply chain management strategies directly impact day-to-day trucking operations:

1. Improved Efficiency and Reduced Costs

An optimized supply chain leads to better forecasting and planning for carriers, which results in fewer empty miles and maximized use of fleet assets. By aligning trucking operations with efficient warehousing and production schedules, fuel costs are lowered and overall operational efficiency increases significantly for freight companies.

2. Delayed Shipments

By comparison, bottlenecks in the larger supply chain — such as port congestion, raw material shortages, or slow manufacturing processes — cascade downhill to the freight carrier. These disruptions in the supply chain leave drivers waiting at docks, cause missed delivery windows, and lead to increased detention times, which impact freight carrier profits.

3. Freight Demand

The strategy driving supply chain management directly dictates the volume, timing, and volatility of freight demand. Shifts in consumer purchasing behavior or inventory management strategies have a direct impact on freight companies and how many trucks are needed on the road and where they are needed.

4. Integration of Technology

Modern SCM partners demand real-time visibility and access to data, forcing trucking companies to adopt advanced technologies like Transportation Management Systems (TMS), GPS tracking, and Electronic Logging Devices (ELDs). This integration is a requirement for businesses that hope to compete in a crowded market and ensures clear communication between shippers, brokers, and carriers.

5. Positive or Negative Driver Experience

The efficiency of shipping and receiving facilities within the supply chain directly impacts the daily life and experience of a driver. Smooth dock operations and predictable schedules lead to better driver retention, while constant delays at shipping facilities create high stress and lead to increased driver turnover.
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READ MORE: 5 Ways a Transportation Management System (TMS) Reduces Costs

The symbiotic relationship between logistics planning and the physical shipping process means that the way supply chain management impacts trucking will always be a primary factor in carrier profitability. To better navigate the complexities of modern supply chains and turn potential disruptions into competitive advantages via better visibility and planning, carriers need to invest in valuable tech solutions.
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Contact TransPlus today to schedule a demo of our TMS software and find out how we can help you synchronize your fleet with supply chain demands!