In the aftermath of the pandemic, the resurgence of just-in-time (JIT) manufacturing is becoming evident. The short-term preference for just-in-case inventory has produced a renewed emphasis on efficiency and cost reduction.
This pivot within the post-pandemic logistics landscape has influenced digital freight network Convoy to launch Guaranteed Just-In-Time. This solution ensures an on-time delivery, within a 15-minute window, for its shipper customers with fully vetted carriers that understand the firm delivery standards needed to provide JIT offerings.
Mitch Violett, Convoy’s senior director of product and engineering, told FreightWaves that carriers traditionally work directly with JIT shippers for weeks to review production plans and strategize asset placement to make sure that the high service requirements are being met.
“The problem is that is very rigid,” Violett said. “If the production plan changes, if demand surges, that extra volume goes to expedite carriers. … When that happens [transportation costs] become very expensive, sometimes thousands of dollars more per shipment, often resulting in up to an 11% increase in costs for shippers.”
Not only do these extra costs incur when demand surges, even larger costs accrue when production lines shut down.
According to a Forbes study, an average automotive original equipment manufacturer can see up to 800 hours of downtime per year, costing up to $22,000 per minute. In the past, these down production lines cost industrial manufacturers up to $50 billion a year.
Since beta testing the offering with select manufacturers, Convoy has seen 98% on-time delivery performance while covering agreed-upon penalty costs for the other 2% of shipments.
Carrier experience
Convoy’s Guaranteed Just-In-Time service offering. (Photos: Convoy)
As shippers utilize Convoy’s new offerings, its network of more than 400,000 carriers will now see uniquely designed load offerings within the company’s application. Not every carrier will qualify to service JIT shipments, but by utilizing over 1,000 data points from past shipments, Convoy’s machine-learning models will vet carriers with service records that qualify them to accept these loads.
Convoy stressed the importance of load transparency when offering carriers JIT shipments, as they often come with a number of standards, including check-in procedures, tracking capabilities and punitive damages.
“We understand what the shipper is looking for with these critical shipments, so we have added individual steps into the workflow so we can provide all necessary information well ahead of the actual delivery of the shipment,” said Grayson Deitering, engineering manager at Convoy.
“We want drivers to be well aware of their responsibilities. … We are not surprising anybody when it comes to the shipment [requirements]. … This is a huge efficiency gain for shippers and we don’t have to worry about plant stoppages.”
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