Editor-in-Chief Paul Page • 202-355-1170 ( ppage@trafficworld.com)

Executive Editor William B. Cassidy • 202-355-1152 ( wcassidy@trafficworld.com)

Deputy Managing Penny Brown • 202-355-1154 Editor ( pbrown@trafficworld.com)

 

Beyond 2009

For just about anyone with a hand in moving goods or handling

inventory, 2008 was a year that truly put the management into

supply chain management.

That really is the only way companies and executives who have made it through the financial wreckage of this year can look at the lessons of 2008 as they move toward 2009. For many logistics managers, the only comparable year was 2001, when the terror attacks in the United States sent an already weak economy reeling.

The economy recovered back then, of course, just as it will come back from this recession in the coming months. But closing the books on 2008 shouldn’t mean shutting the door on lessons shippers and carriers have learned, and continue to absorb, during the year’s financial roller coaster ride.

It may seem ages ago, for instance, that diesel prices pushed so shockingly beyond $2 a gallon at a dizzying pace to the point where they even skirted $5 a gallon in the middle of the summer. Retailers responded by looking for savings strategies, downshifting modal choices and looking for greater strategies for efficiency.

But many global shippers have gone deeper, looking closely at the intertwined financial dynamics and relationships across the supply chain too long considered unassailable. They started looking at the intricate web of suppliers, manufacturers, distributors and consumers across the globe and what they look like with oil selling for $40 a barrel and at $100 a barrel or more.

Do declining oil prices mean the pressure for energy savings and greater efficiency is off? For some shippers and carriers the answer might be yes, but any company that is not asking the question is

leaving itself open to more financial turmoil in the future.

Will companies with savings in hand from reformed supply chain strategies throw the savings away? Will businesses that weaned customers from the luxury of next-day delivery succumb start stuffing overnight parcels in a recovery?

Will drivers who absorbed a doubling of gasoline prices and lopped off 100 billion highway miles from their timetables now understand that raising the fuel tax a few cents won’t send the nation into a tailspin?

It’s hard to see the future across a landscape strewn with fallen companies and laid off workers, but those businesses that succeed on the other side of this downturn will be the ones that treat the faltering economy not just as a challenge but also as opportunity.

That true for any company looking to not merely survive but prosper is looking closely at business models, and what will work in the long run and what may not make sense. Shippers are examining their own models, looking at whether global supply chains as they are configured make sense. And carriers, most notably trucking companies and ocean container lines, are looking at them on a lane-by-lane basis.

No one really relishes taking on the hard questions that 2008 brought, of course, but the companies that take them on directly will be those that move ahead in 2009 and after.

Associate Editors

Government & Ari Natter • 202-355-1145 Regulation ( anatter@trafficworld.com)

Rail & Intermodal John D. Boyd • 202-355-1161 ( jboyd@trafficworld.com)

Logistics & William Hoffman • 202-355-1160 Technology ( whoffman@trafficworld.com)

Trucking John Gallagher • 202-355-1156 ( jgallagher@trafficworld.com)

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