But it’s not all bad news for 2009: By shining a light on these problems, they catapult to the front burner for many companies.

If there was one theme to tackling these problems, it would better cooperation between the players involved.

A recent study showed that only 11% of companies said their supply chain planning and operations were highly integrated with the rest of company functions.

But the same study also points out that 92% of the same companies are planning to implement better planning and execution of supply chain strategies over the next three years.

Three strategies are cited in bringing that about:

• better supply chain visibility
• linking existing supply chain software systems with internal and external customers, and
• improving collaboration with suppliers and customers.

The other area of focus in improving supply chain operations is transportation.

There are three main aspects to transportation that supply chain operators hope that implementing will lead to better integration with all customers — inside and outside of the company.

• Squeezing more pallets, cartons or product onto every truck leaving the docks. This can be achieved with optimization technology or good old elbow grease and common sense.
• Dock door scheduling systems, which puts the function in the hands of the people who have most at stake. Better scheduling of supplier deliveries is a win-win.
• Trying new transportation strategies, like switching from truck freight to intermodal transportation. Another strategy: setting up a consolidation center for shipping when distance is involved, rather than have all shipment originate from home base.

In better times, average shipping costs were generally 5% to 10% of gross revenues. But now, higher transportation costs — mainly fuel — is pushing this percentage upward. As a result, third-party logistics providers are anticipating an increase in business of 30% to 40%.

Short of simply hiring a 3PL, there are four steps you can consider taking:

1. Consolidate/combine shipments headed in the same direction. If you’re currently making a trip on Monday to one place, and Tuesday to another spot that’s in the same neck of the woods, arrange with the folks on the other end for the flexibility to save one of the trips.
2. Establish strength in numbers. Smaller companies that lack the heft to secure discounted rates have another option. Freight forwarders and 3PLs can coordinate shipments from multiple locations. The fee you pay for the service can be more than offset by the discount you’ll earn.
3. Renegotiate current terms. Charges and surcharges that might’ve seemed reasonable when a pact was signed could have become outdated in light of today’s economy. In the interest of keeping your business (and waning business from customers overall), you might be able to set new terms for freight contracts. One area to target: fuel surcharges. Most are tied to national averages; if your local prices are lower, ask that your surcharge be based on that.
4. Tinker with the timing and shipping methods. Is it possible to negotiate longer lead times with vendors or customers? What about changing the mode of shipping to a less-expensive option?

In 2007, about $1.4 trillion was spent to send goods from one place to another, more than 10% of our country’s Gross Domestic Product (GDP). Historically, logistics costs as a percentage of GDP hit a low of 8.6% in 2003. Since then, transportation and inventory costs have steadily increased.

There are several factors at work in driving up transportation costs. Of course, there’s the price of fuel. But that’s taken an even bigger toll — more 2,000 trucking companies (of five trucks or more) filed for bankruptcy last year. It’s not getting better: More than 900 trucking companies filed for bankruptcy in the first quarter of this year alone.

So how can you turn this grim assessment into an opportunity?

First, it’s a good time to re-assess some of your Purchasing decisions. Maybe there’s a vendor you use already for one product, and you go to a second vendor for another product because he under-cut the first vendor.

How much money are you saving by buying from the second vendor? Could you purchase the same goods from the first vendor, at a slightly higher price, but more than make it up by paying one shipping bill instead of two? The rules have changed, and consolidating purchases among fewer vendors might save you more money in the long run.

 Second, it changes the dynamic in the bidding process. You can negotiate with vendors, promising more business for discounted shipping costs. Increasing your range of purchases with a specific vendor gives you more bargaining power — more money is on the table.

Finally, it wouldn’t hurt to check in with your shipping department to get their perspective on rising transportation costs, and what you might be able to do to help them save money. It could be yet another negotiating point with vendors.

How major? Hold on to your wallet: Transportation costs on inbound shipments can amount to nearly 40% of the product cost.

The primary cure to this: Keep transportation decisions out of suppliers’ hands. If suppliers are calling the shots, they usually aren’t compelled to make transportation decisions that are cost-effective.

Most companies don’t give this too much thought. The standard instructions in many contracts between supply chain networks and suppliers is to designate incoming shipments ”Freight Pre-paid and Added.” 

With this kind of situation, there’s no incentive for the supplier to conserve delivery costs. The shipping expenses are added to the product invoice. The company then gets the stuck with the bill, so who cares?

When the supplier makes that transportation arrangements, it costs nearly 40% more than it does when the company makes it own freight arrangement.

Solution: Buyers should spend a little time looking around for their own freight carriers, and work with those carriers to hash out delivery schedules and financial arrangements. By consolidating your freight shipping operations and making the contract calls yourself, it’s likely you’ll come out ahead.