By: Taylor Mason
The trucking industry provides an essential service to the US economy. Having first-hand experience in the trucking industry working at Penske Truck Rental and Leasing, I have come to the realization that as the economy continues to expand, trucking companies have been put under more pressure than ever to keep up with ever-growing freight demand. Indisputably, transportation is one of the most important physical distribution function. Furthermore, with any disruption in the trucking industry we would have no way of transporting over ten billion tons of various commodities throughout the country.
I recently came across an article in the Wall Street Journal by Robbie Whelan and Brian Baskin, entitled Drivers Ride High on Trucking Boom. I found this article to be relevant to this week’s course content as it discusses the implications that trucking has on distribution networking strategy. The article focuses on Whirlpool, a prominent manufacturer and marketer of home appliances and how more recently they have contemplated reconfiguring their supply chain in order to avoid rising transportation costs. Ultimately, Whirlpool’s goal is to get their products out the door in the most efficient and effective manner. Due to the location of their new distribution center in Chicago close to the railroad they have discarded the usage of trucks and have shifted towards loading their appliances directly on to trains.
It cannot be emphasized enough that the trucking industry has everything to do with the world’s distribution network. It is apparent that Whirlpool can be presented as both an expert power and a referent power within the industry. Although they possess fond knowledge of the industry, they have failed to realize how abandoning the utilization of trucks in total will effect their overall transportation of freight. Trains cannot deliver to half as many locations as trucks, which as stated by the article “carry some two-thirds of cargo nationwide.”
As explained in the textbook, logistics is a key aspect when it comes to supply chain management. There are several different characteristics that marketing managers need to take into account when determining the best way to approach the market. These include order processing, warehousing and materials handling, inventory management and lastly transportation. As my focus is on transportation, I find it crucial that companies pay close attention to their transportation management. Nowadays, many are arguing that the price of fuel and the rise in driver’s wages are the primary factors refraining them from using trucks to transport their finished goods. In the article, Jim Keppler, Whirlpool’s vice president of integrated supply chain even states “given the fact that the cost of transporting products over the road is rising, it has forced us to rethink our distribution network strategy.” Although this may be the case, transportation through trucks and other motor vehicles is the most flexible mode of transportation and the second fastest. Personally, when I order a product from an online retailer, I want it delivered to me as fast as possible.
Statistically, the trucking industry collects annual revenues of approximately $650 billion dollars. Businesses of all sizes have used trucks at one point or another to ship their products all over the country. It is imperative that marketers understand the importance of this industry in regards to the distribution network. When you put it into perspective, there would be no online retailing if you did have the transportation to get these products directly to the consumers. This would be a huge defeat especially with the recent growth of electronic commerce. More and more consumers are choosing to facilitate communication and use services that in essence allow them to avoid ever leaving the house. No matter what you may or may not think about the trucking industry it is the backbone to American retailing. Commercial goods will always require the trucking industry. Similarly to Whirlpool’s situation, as a developing and thriving business, time is of the essence. That is the central reason why people must comprehend the significance of the trucking role in our society and the complexity of life without it.
Whelan, Robbie, and Brian Baskin. “Driver’s Ride High on Trucking Boom.” The Wall Street Journal. The Wall Street Journal, 13 Oct. 2015. Web. 14 Oct. 2015. http://www.wsj.com/articles/drivers-reap-benefits-of-trucking-boom-1444728780