Tailored Transportation

Tailored transportation is the use of different transportation modes and networks based on product and customer characteristics. Most firms sell a variety of products and serve many different customer segments. A firm that sells office supplies and furniture will have a very different tailored transportation strategy than a firm that sells bulk oil products.

A firm can meet customer needs at a lower cost by using tailored transportation to provide the appropriate transportation choice based on customer and product characteristics. There are numerous forms of tailored transportation in supply chains, including tailored transportation by customer density and distance, tailored transportation by size of customer, and tailored transportation by product demand and value. For example, tailored transportation based on customer density and distance can look like this:

Short Distance:
High density - private fleet with milk runs
Medium density - third party milk runs
Low density - third party milk runs or LTL carrier

Medium distance:
High density - cross dock with milk runs
Medium density - LTL carrier
Low density - LTL or package carrier

Long distance:
High density - cross dock with milk runs
Medium density - LTL or package carrier
Low density - package carrier

The key point is that tailoring transportation based on customer density and distance, customer size, or product demand and value allows a supply chain to achieve appropriate responsiveness and cost.

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