One way to increase your profit margin is to establish better usage of your capital assets. Goods that are portable, such as transport equipment, are a best fit for this. Many retail companies realise that ‘on time’ delivery at any given moment is essential to survive in the competitive landscape. Customer’s demands are resulting in stricter deadlines, shorter contracts, higher peaks and more volatile demands. Therefore, we have to adapt our business models to the new requirements and rules created by the ‘on-line’ customer. Charles Darwin said it like this, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change”. But how can your transport company adapt in the most profitable way and without the headaches?
The first question to ask is “Is your company and trailer fleet management structure flexible enough to adjust?” If the answer is “No”, a trailer pooling concept might help you to stay in the ever-changing logistics game. From an asset management perspective, pooling is a very logical move towards increasing flexibility.
The concept of trailer pooling is simple:
– Having the right equipment
– At the right place
– At the right time and at the right cost.
The basic requirement to make this all work is…….VOLUME (or in our case Trailers).
Pump up the volume
Mathijs Slangen, Head of Strategy and Strategic Accounts at TIP Trailer Services: “If the supply and demand analysis of your business has resulted in clear patterns (80% of the traffic on similar routes), you should be able to create a controllable pool environment. But, if your traffic analysis does not show a clear pattern, the task is simple – you must find more volumes.”
So where to find the volumes?
- Source the volumes within the different entities inside your own organisation
- Pooling between different countries within your organisation (partner network)
- Involve your suppliers and hauliers
- Involve your competitors or industry peers
- Look outside your industry
The first two options are obviously only applicable for very large firms. The other options however, are applicable to any size of company. The commonality of all these options is that they require a change within your organisation as well. Fleet planning, equipment requirements, and locations will need to be shared and aligned with others.
Operational or Strategic decision
Mathijs Slangen: “There are two important questions to answer about how to value my equipment availability.
- Do I see this as a means to deliver certain services to my customer, so part of my standard operating procedures and unique selling point?” Simply stating: “I win from my competitors because I have better processes in place.
- Do I see this as a vital element to continuously create value for my customer? In other words, am I making sure that my customers get the best quality out there even if that means I lose my competitive edge of equipment availability?
If your answer is mostly steered towards the first answer, the decision about pooling is more an operational excellence theme rather than a strategic one. The probability of making a pooling concept a success is much lower than if you lean more towards answer number two. Operational excellence in many cases means finding improvements in your current processes, whereas setting up a pool concept requires a completely different mindset, and more drastic changes to the organisation.”
Join the shared economy
If you can find the best reason as to why a trailer pool setup is desired, you are probably better equipped to make the right decision and find the right partners. The configuration and design of trailer equipment pools at TIP are our ‘bread and butter’, so needless to say we fully embrace this shared economy concept.
TIP is constantly looking at new ideas, customers, and partners who would like to go the extra mile with us. Our experience at TIP is that many organisations do not have any issues in sharing requirements, and locations with others. Changing internal planning systems accordingly is, however, a different ball game.
Contact the TIP team if you want to start improving your margin and discuss a trailer pooling.