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Putting The Pieces Together

February 27, 2012

Transporting merchandise from point A to point B seems like a pretty straight forward undertaking. Yet it may not be that simple. There may be a host of elements involved in it. The merchandise has to be picked up by a truck and it has to be transported by plane or boat to another destination where it will be off-loaded to be loaded to another truck then delivered to a warehouse. From the warehouse it will be taken to its final destination.

Just on the issue of trucking, is there an available truck in the area to haul it? What about the boat and air plane, will these forms of transportation be available? Is there warehouse space available?

In one area of the transportation market there are drivers who own their own trucks and obviously don’t want to become employees of another company. There are also warehouse owners who have available space for lease. There are also sales agents wanting to make deals.

Landstar Systems, Inc. is a company that puts all these transportation market players together. It is into managing transportation assets instead of owning them. Through its vast network of independent truckers, warehouse owners, and sales agents, it can provide a solution that can transport goods from A to B, with reliability and in a cost effective manner. This brings about market efficiency as some of these truck owners and warehouse owners may just have idle assets if they cannot not regularly find customers. It’s also too expensive on their part to be continuously advertising to get customers and their own market area may be very small.

Landstar has been in this business since 1988, continues to do well and is a recipient of many awards. Now based in Jacksonville, Florida, the company is known for its focus on safety. One of its earliest and simple innovations was to put reflective tape on the side of trucks. This reduced cars running into the side of the trucks by 75%.  This company was one of the early users of onboard collision avoidance radar in the mid 90’s.

There is of course a lot of management sophistication and technology involved to get this to work altogether but it shows how asset owners and transportation management professionals can work together to benefit everyone involved.

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