When industrial activity picks up across the U.S. economy, freight management software can help fleet owners successfully meet sudden increases in demand for the fast, reliable transportation of raw materials. After a year of unpredictable market behaviors, the latest data released by the U.S. Federal Reserve indicates manufacturing production is on track for a steady increase in the near future. For example, the monthly report revealed total industrial output rose 1.1 percent between October and November, the single largest monthly increase since November 2012.
The role of transportation in the production cycle
As production activity picks up, fleet owners may likely find themselves responsible for managing more assignments than before. Manufacturing is a complex industry that includes a wide variety of moving parts often spread out across great distances. Technology such as advanced warehouse distribution software has the ability to make it easier for business owners to organize assignment scheduling and ensure goods are delivered on time. The transportation element of manufacturing often has a major impact on customer satisfaction. While there are many steps to take between production and consumer purchase, companies that sell products in the market often take the grunt of customer service issues. A recent report from Arizona State University's W.P. Carey School of Business found there is roughly $76 billion in revenue at stake in ensuring individuals are fully satisfied with their purchases, whether that be through the timeliness of delivery or the overall quality of the product in question. Secure and efficient transportation operations have a much greater impact on these issues than many people may expect.
The movement of raw materials and natural resources is another element of the freight management industry that will likely experience an increase in demand in the coming months. Much of the growth in manufacturing activity between October and November of this year was attributed to the mining sector. According to Reuters, production in this industry rose 1.7 percent in November after various oil and gas rigs in the Gulf Coast region reopened after being temporarily shut down during Tropical Storm Karen. Between September and October, mining activity experienced a 1.5 percent decline.
A growing demand for sand mining
In addition to the oil and gas industry, weather-related issues in coastal areas throughout the U.S. have led to growth in sand mining. For example, The New York Times recently reported on the efforts of many municipalities in South Florida to find ways to replenish a diminishing supply of sand as sea levels continue to increase as a result of global climate change. Because so many different towns are short on sand, many have looked to sand mining companies as an alternative supplier. However, the process of transporting sand to and from production is full of various obstacles.
"There would be 20,000 trucks going through South Beach in tourist season, so you can imagine that," Jason Harrah, project manager of Miami-Dade County beach restoration initiatives with the Army Corps of Engineers, told the Times.
The Wall Street Journal indicated sand mining has also become an essential element in new oil and gas extraction methods such as hydraulic fracturing. As a result, sand mines in coastal areas such as Florida and California may soon be responsible for transporting raw materials across longer distances to supply manufacturers in regions of the U.S. that are particularly rich in natural gas.
Logistics software and other route planning tools can help fleet owners in this industry effectively meet the demands from municipal governments, private companies and other organizations. Many of these businesses have a limited number of resources available, which means the ability to limit overhead costs will have a profound impact on long-term savings. Boosting the efficiency of transportation operations will also ultimately lead to a more effective supply-chain, which may even improve customer service at the consumer end of the spectrum. When all of the elements of the production cycle are running smoothly, the user experience is likely to be much more positive. The recent boost in manufacturing activity in the U.S. presents a unique opportunity for fleet owners. The right technology can help these companies un-tap larger profit margins in the long run.