Corporations that rely on the cost-effective and rapid distribution of commodities from the industries to the customers and vendors of products face capacity shortages present in the transport industry. The shortages accrue due the prevailing financial depression that forces companies to develop strategies that would ensure that they generate the same profits and remain lean (Cullinane, 2005). However, when there are shortages in the capacity of products to be transported, corporations have to report increased amount of idle transportation assets and fleets.
As economies booms, producers and vendors are enthusiastic to move their goods to the delivery ports for transportation. For example, booming economies increase the pace at which the confidences of clients develop. The resultant effect is that warehouses at the docks become packed with products as a result of the inadequate means of transport. If the capacity to transport commodities becomes inadequate, transporters are faced with a state of dilemma (Plant, 2007). The choices available to the haulers could be to forgo the lucrative business opportunities or charge premiums for alternate shipments.
The ability to transport the available capacities of products at the docks is a recurring challenge. In fact, the periodic nature of this shipping problem necessitates that transporters must effectively monitor and manage a sequence of the unpredicted fluctuations. Whether the fluctuations occur due to an increase in trade or financial slumps, the businesses conducted in the transport industry are uncertain.
Producers and vendors struggle to eliminate the present transportation setbacks. As a result, flexible shipping strategies must be created to deal with the expected fluctuations in available means of transportation and consumers demands (Cullinane, 2005). The last two elements name the available means of transport and consumer demands results into the cyclical nature of the transport industry.
Steps to mitigate the negative impacts of the cyclical nature of the shipping industry
In order to avoid or mitigate the negative impacts of the cyclical nature apparent in the transport industry, corporations must change their respective shipping approaches. In fact, the most significant strategy is to use the logistics managers’ capabilities to develop the shipping industry constantly via the planning procedures called the closed loops. The loops often collect and solve the previous historical problems based on the available outcomes (Morschett et al., 2011).
Whereas all corporations tend to gauge their shipping productivities quantitatively, just the logistics managers study the shortages and origins of such outcomes. After that, the logistics managers address the primary causes in order for the upcoming outcomes to be improved.
The shipping management tool called the closed loop hardly incorporates desperate undertakings. However, it includes sets of procedures that are carefully interwoven. In terms of capacity, the closed loops are supported through technological keys including manageable business procedures, which guarantee that innovative capabilities become leveraged in a planned way (Cullinane, 2005).
Thus, the following closed loops steps should be observed by shipping corporations to mitigate the negative impacts of the cyclical nature apparent in the transport industry. The procedures have focused and resulted in the solutions for well-known corporations involved in the transportation of commodities.
Step 1: In order to avoid or mitigate the negative impacts of the cyclical nature apparent in the transport industry, corporations ought to analyze and model the shipping system or networks. For instance, the transporting corporations should incorporate the products to be shipped after outlining all the available shipment alternatives, haulers as well as the distribution costs to be incurred in the supply chain procedures.
Step 2: Corporations should provide clear details of their guaranteed capacities, the level of their services, and the charges imposed on procuring services. Such information will set the basis for implementing the strategies to be used by the corporations to alleviate or mitigate the negative impacts of the cyclical nature apparent in the transport industry (Plant, 2007). The cooperation of transporters as well as their strategic forecasts may enhance the restraints that should be considered when the implementation process continues.
Step 3: While planning to transport products, corporations should ensure that the continuing optimization and scheduling paths dynamically permit re-planning and take into consideration capacity limits as statuses shifts.
Step 4: At the implementation phase, scientific solutions ought to feed additional analytics, trace the deficiencies caused by productivity, and put compliance into effect.
Step 5: Finally, corporations must always carry out the unplanned investigation that questions and offers solutions to the major inquiries (Morschett et al., 2011). For example, corporations should be able to determine where the processes were incorrect and ascertain what must be done to obtain the best outcomes the following period.
Corporations must have lasting strategies that replace the temporary approaches designed to solve the shipping shortages as well as excess capacities to be transported to the consumers. The problem eminent in the hauler’s sector can also be solved by adopting the novel technological solutions and scheduling procedures.
The strategies allow logistics managers to design enhanced abilities that help in planning and forecasting for the forthcoming shipping requirements (Cullinane, 2005). Through these strategies, the managers can organize and monitor carefully any shift in the volumes of goods transported. Such smart approaches may help shipping managers to realize the productivity and efficiency goals even when the capacities to be shipped are limited or excess.
Cullinane, K. (2005). Shipping economics. Philadelphia, PA: Elsevier.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2011). Strategic international management: Text and cases. New York, NY: Springer Science & Business Media.
Plant, J. (2007). Handbook of transportation policy and administration. Broken Sound Parkway, NW: CRC Press.