Premium Freight Logistics - Supply chain Essay Example


Just-in-time manufacturing is a tremendous advantage in supply chain when everything works perfectly - Premium Freight Logistics introduction. However, there are many chances that will cause the delay, such as an overseas supplier has equipment problems, environmental factors delay deliveries or defective parts are discovered on the assembly line. To avoid these problems, premium freight, which is the last-minute rush shipments to bring in materials or components, is the best way for the firms.


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Although premium freight is costly, it is unavoidable. Premium freight is the way out of trouble when the things in automotive supply chain go wrong. It provides an emergency response to an emergency situation, using whatever modes of transport are required to get the job done. Traditionally, someone at the JIT plant would work piecemeal each time a premium-freight shipment was required. They would call an expedited carrier, but not necessarily one that would provide the best price or service.

Premium freight expenses are often contained within general inbound or outbound freight budgets, and are not singled out as separate line items. The entire process of ordering premium freight has been revolutionized, however, by the emergence of third-party logistics companies. These companies are unbiased in their choice of carriers, using performance data to make their selections. TNT Express is one of the premium freight providers. They added the values in their service, such as providing information during transshipment via emails, phone calls, faxes and web-based updates.

The big advantage of premium freight providers is that they use the web to notify a base of carriers quickly, receive immediate bids, and rapidly assign shipments. This gives carriers the ability to link electronically into the JIT process. With these helps, the supply chain can be fluently. Premium freight provision can be a back-up in case planned inventory reduction and just-in-time initiatives backfire. Comments In today’s world, saving time and money is important for every firm.

Good planning in supply chain is necessary as there will do the product design and manufacturing at the same time. In my opinion, premium freight can gives companies competitive advantages because it helps cut costs and ensure projects are completed near budget, and on time. First, premium freight increases flexibility when companies need to make quick decisions, react rapidly to marketplace changes, and launch products speedily. Companies need a supply chain that is equally nimble, with backup logistics.

Original equipment manufacturers have given suppliers the flexibility to use premium freight if they change its schedule and a supplier cannot meet the contracted price, the manufacturers will absorb the shipping costs if it is in a controlled environment. Moreover, it is common for the firm to do business with foreign companies. Global companies find many locations pose barriers to transportation, so they need a good plan in place with a pre-constructed carrier network. Under the planning, the goods can transfer fluently and the lead time can be reduced. On the other hand, pre-planned premium freight can actually reduce costs.

The plant does not have to keep as much inventory and avoids the penalties associated with slowing the line or disrupting the supply chain with the visibility of delivery times, reporting techniques and better negotiated rates. By planning ahead and working with a high-tech, dedicated logistics partner, companies can relieve pressure on the supply chain, increase flexibility, make JIT a better fit, and cut costs. Therefore, the premium freight plays an important role in the supply chain. More effective process planning, system design and integration can culminate in continuous supply chains and hard cost savings.

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