Distribution

Freight Rates Force Change

Retailers and manufacturers are taking stock of their transportation costs and exploring alternatives as a capacity crunch in freight is driving up prices and causing shipping delays.
 A variety of companies, including food producer Hormel Foods Corp. and retailer Dollar General Corp., have reconfigured their supply chains, including building out their own truck fleets, reducing the frequency of pickups and deliveries, and shopping around for better rates.
 Freight rates have been climbing in recent months, making it harder and more costly for shippers

UPS is Running Late

MESQUITE, Texas — In the sticky Southern heat, hundreds of workers streamed in for the 11 a.m. shift last month at United Parcel Service Inc.'s local package- sorting facility, one of dozens nationwide that help it move millions of parcels daily.
 In a windowless room, a 30- year-old analog control panel about the size of a chest freezer monitors operations, with rows of green and red lights indicating when something goes awry in the building's web of conveyor belts.

Alibaba Battles for Delivery Edge With New Investment

SHANGHAI—Facing tougher competition in online retailing, Chinese e-commerce giant Alibaba Group Holding Ltd. and its logistics arm are leading a $1.4 billion effort to boost their delivery capabilities.
 Under a deal announced Tuesday, investors led by Alibaba and its majority-owned logistics unit, Cainiao Network, will spend almost $1.4 billion to buy a 10% stake in express-delivery company ZTO Express Inc. of Shanghai, which delivered more than 6 million parcels last year.

Freight Tracker Adds Funding In Hot Market

FourKites Inc., a startup that tracks freight shipments in real time, said it has raised $35 million to expand its operations abroad and improve its ability to predict shipping times.
 The Chicago-based company makes software that shows shippers and logistics companies the location of their cargo and alerts them to potential delays.

Freight forwarders and transportation providers

Transportation providers and freight forwarders are also controlled by a supply chain management practitioner. Transportation providers pick up product from one location and deliver them to another. Obviously, it is very costly to pick up some cargo in Los Angeles and drive it all the way to New York for delivery. For this reason, these companies consolidate shipments from different places in a departing hub (whether it be a port, a warehouse, or an airport), send them to an arriving hub, and then deliver them to their final destination.

Contract manufacturers

Contract manufacturers are the third type of suppliers, in which formal contracts between the supplier (the contract manufacturer) and your manufacturing company are relied upon. The contract manufacturer purchases or makes all of the components, assembles the product, tests it, and ships the finished product either directly to the customer or to a warehouse. Companies that want to get out of the manufacturing aspect of their products turn to contract manufacturers. The supply chain manager finds suitable contract manufacturers and manages the relationship after a contract has been signed.