Procurement in Transportation
The Role of Procurement in Transportation Planning and Policy
As industries struggle to maintain an edge in the marketplace, often one of the first places they look to find cost cutting measures is in their procurement processes. This is true in the transportation industry as well. As the transportation industry seeks to streamline and economize the procurement of goods and services while maintaining safety standards and service quality, other industries seek to streamline their procurement of transportation services. This paper analyzes the role of goods and services procurement within the transportation industry as well as the role of transportation procurement within the broader marketplace.
Types of Procurement in the Transportation Industry
Procurement plays two roles in the transportation industry: an internal role and an external role. Both of these roles must be taken into account when addressing transportation planning and policy.
Within the transportation industry, procurement of supplies and services is an integral component in the design, construction, implementation, and maintenance of infrastructure and machinery. The procurement of sites, construction services, materials, and engineering services is the most important part of infrastructure establishment in terms of cost. In addition, the procurement of the transport machinery itself is always a concern in the transportation industry, as such a process must weigh cost-benefit, cost-utility, and safety concerns. Especially in a tight economic atmosphere, an efficient and accurate procurement process that is able to collect and process bids, analyze them according to the appropriate variables, and acquire the goods and services within manageable timeframes and monetary constraints is key to ensuring the maximum return for minimum outlay.
For other industries, transportation can be one of the most expensive components of the supply chain and therefore transportation procurement is one of the first places they look when operational expenses need to be streamlined. In the current economic climate, transportation procurement is the “hot topic” of logistics seminars and conferences (Gonzalez, 2009). Internet-based procurement processes and bidding optimization has made retooling transportation costs much more efficient and timely. The current climate has propelled a recent upward trend in the use of internet-enabled logistics networks and exchanges (Kuyzu, 2007). These networks and exchanges facilitate the communication between shippers and carriers and allow for more competitive bidding environments.
Procurement Challenges within the Transportation Industry
In the last forty years, a combination of deregulation, fuel price volatility, and environmental pressure have drastically changed the way the transportation industry engages with the procurement process. Between 1977 and 1980, Congress passed a series of acts designed to increase competition in air, water, motor, and rail shipping transportation. This deregulation was furthered by legislation in the 1990s such as the Transformation Industry Regulation Reform Act of 1994.
By increasing competition and eliminating the bureaucratic burden of regulation, the government hoped to make the domestic transportation industry more efficient and more attractive to shippers. While shippers did find many benefits in deregulation, carriers found themselves in a tight squeeze. As Monckza et al. (2007) point out, “these laws took away a comfortable blanket of governmental protection and significantly reduced profit margins on almost all national contracts” (p. 625).
In addition to the financial pressures created by government deregulation, carriers have recently had to absorb a wildly volatile fuel market. The fuel price spike in 2008 and 2009 forced most carrier companies to rethink their procurement methods for fuel. Many fleets found it necessary to negotiate preferred fuel rates, become part of a fuel purchasing system, and/or retrofit their fleet for fuel economy.
Many also turned to fuel purchase optimization programs, designed to get the best price-per-gallon within company-specific parameters such as existing routes and cleanliness and safety factors. Sometimes these optimization programs were as simple as having drivers compare prices along their routes before purchasing fuel, or having them take advantage of internet-based fuel price comparison programs on their cell phones. Some companies opted for a more comprehensive fuel purchase optimization system specifically tailored to their fleet. For instance, FleetNav, developed by Maptuit Corp., is designed to be used in conjunction with a vehicle’s in-cab navigation and routing system. This program makes suggestions based on many fleet-specific variables, including “existing fuel purchase arrangements, the amount of fuel onboard, the size of the fuel tanks, and the out of route miles required to fuel at a particular station” (Leavitt, 2006). With optimization programs such as these, companies found that they were able to save as much as 4 cents per gallon (Ibid).
As an indirect result of the recent fuel crisis, carriers have found themselves under an enormous amount of market pressure to provide environmentally friendly, or “green,” transportation alternatives. Sustainability has become a major business driver, stemming from a combination of fuel price worries, foreign oil concerns, and consumer sentiment about global warming. More and more, companies are creating green procurement procedures and insisting that transportation companies meet their sustainability requirements. This often involves monitoring CO2 emissions and using biofuel.
Monitoring CO2 emissions involves an additional procurement step for carriers. While it is not currently mandated by federal regulations, many shipping companies are feeling pressure from clients and consumers to comply with international standards of CO2 emissions. In Europe, carriers are subject to environmental regulation and must absorb the cost of procuring and implementing CO2 tracking technology. Some large companies have decided to skip this procurement altogether, opting instead to develop their own carbon emissions measurement software (Green Transportation Report, 2009).
Procurement of biofuel has been a difficult road for the transportation industry. Ethanol, made from corn products, seemed to be the answer to the non-renewable resource problem and for a while it was also proving helpful in keeping fuel costs low. The high demand, however, caused ethanol prices to rocket upward, and many carrier companies found it no longer economically feasible (Kanellos, 2007).
Whatever difficulties transportation companies may have complying with demands for green transportation initiatives, the marketplace is begin to reward those who have implemented environmentally friendly changes. A 2008 survey found that 62% of participating companies expected to see “both a financial and public relations ROI on their green investments over the next three years” (Green Transportation Report, 2009).
The recent economic downturn has led many industries to seek cost-cutting measures in all areas, but especially in transportation procurement. This has put tremendous pressure on transportation prices and increased competition in a market that was already highly competitive thanks to deregulation. As companies streamline their transportation budget and renegotiate fees, the transportation industry also finds itself rethinking its procurement practices. This is especially the case in fuel procurement, where volatile fuel prices and client demand for more environmentally friendly fuel practices has led companies to renegotiate fuel purchasing terms and take advantage of software that allows on-route fuel price comparisons.
The push for “green” transportation is the variable most likely to have an impact on procurement within the transportation industry in the future. If the U.S. joins many developed nations in regulating carbon emissions, the procurement of emission tracking software and fuel efficient technology will replace fuel expenses as the central procurement concern of the transportation industry. If we can take Europe as an example, however, we can predict that those companies that do invest in a “green” procurement process will see a sizeable return on their investment.
Gonzales, Adrian. (2009, May 21). Transportation Procurement is “Hot” Right Now. Logistics Viewpoints. Retrieved from http://logisticsviewpoints.com/
Leavitt, Wendy. (2006, June 1). Fuel Optimization: Not a Penny More. Fleet Owner Magazine. Retrieved from http://fleetowner.com/mag / fleet_fuel_optimization_not/
Monczka, Robert, Robert Handfield, and Larry Giunipero. (2008). Purchasing and Supply Chain Management. Florence, KY: Cengage Learning.
Kanellos, Michael. (2007, Dec. 20). Growing Pains for Green Transportation. CNET Year in Review. Retrieved from http://news.cnet.com/Year-in-review-Growing-pains-for-green-transportation/2009-13833_3-6223159.html.
Green Transportation and Logistics European Report. (2009). Retrieved from http://www.greenlogisticsforum.com/europe/free_report.shtml
Get Professional Assignment Help Cheaply
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Why Choose Our Academic Writing Service?
- Plagiarism free papers
- Timely delivery
- Any deadline
- Skilled, Experienced Native English Writers
- Subject-relevant academic writer
- Adherence to paper instructions
- Ability to tackle bulk assignments
- Reasonable prices
- 24/7 Customer Support
- Get superb grades consistently
Online Academic Help With Different Subjects
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
What discipline/subjects do you deal in?
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Are your writers competent enough to handle my paper?
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
What if I don’t like the paper?
There is a very low likelihood that you won’t like the paper.
- When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
- We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.
In the event that you don’t like your paper:
- The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
- We will have a different writer write the paper from scratch.
- Last resort, if the above does not work, we will refund your money.
Will the professor find out I didn’t write the paper myself?
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
What if the paper is plagiarized?
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
When will I get my paper?
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
Will anyone find out that I used your services?
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
How our Assignment Help Service Works
1. Place an order
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
2. Pay for the order
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
3. Track the progress
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
4. Download the paper
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!