Term Paper on "Procurement in Transportation the Role"

Term Paper 5 pages (1293 words) Sources: 6

[EXCERPT] . . . .

Procurement in Transportation

The Role of Procurement in Transportation Planning and Policy

As industries struggle to maintain an edge in the marketplace, often one of the first places they look to find cost cutting measures is in their procurement processes. This is true in the transportation industry as well. As the transportation industry seeks to streamline and economize the procurement of goods and services while maintaining safety standards and service quality, other industries seek to streamline their procurement of transportation services. This paper analyzes the role of goods and services procurement within the transportation industry as well as the role of transportation procurement within the broader marketplace.

Types of Procurement in the Transportation Industry

Procurement plays two roles in the transportation industry: an internal role and an external role. Both of these roles must be taken into account when addressing transportation planning and policy.

Within the transportation industry, procurement of supplies and services is an integral component in the design, construction, implementation, and maintenance of infrastructure and machinery. The procurement of sites, construction services, materials, and engineering services is the most important part of infrastructure establishment in terms of cost. In addition, the procurement of the transport machinery itself is always a concern in the transportation industry, as such a process must weigh cost-benefit, cost-utility, and safety concerns. Especially in a tight economic atmosphere, an efficient and accurate procurement process that is able to collect and process bids, analyze them according to the appropriate variables, and acquire the goods and services within manageable timeframes and monetary constraints is key to ensuring the maximum return for minimum outlay.

For other industries, transportation can be one of the most expensive components of the supply chain and therefore transportation procurement is one of the first places they look when operational expenses need to be streamlined. In the current economic climate, transportation procurement is the "hot topic" of logistics seminars and conferences (Gonzalez, 2009). Internet-based procurement processes and bidding optimization has made retooling transportation costs much more efficient and timely. The current climate has propelled a recent upward trend in the use of internet-enabled logistics networks and exchanges (Kuyzu, 2007). These networks and exchanges facilitate the communication between shippers and carriers and allow for more competitive bidding environments.

Procurement Challenges within the Transportation Industry

In the last forty years, a combination of deregulation, fuel price volatility, and environmental pressure have drastically changed the way the transportation industry engages with the procurement process. Between 1977 and 1980, Congress passed a series of acts designed to increase competition in air, water, motor, and rail shipping transportation. This deregulation was furthered by legislation in the 1990s such as the Transformation Industry Regulation Reform Act of 1994.

By increasing competition and eliminating the bureaucratic burden of regulation, the government hoped to make the domestic transportation industry more efficient and more attractive to shippers. While shippers did find many benefits in deregulation, carriers found themselves in a tight squeeze. As Monckza et al. (2007) point out, "these laws took away a comfortable blanket of governmental protection and significantly reduced profit margins on almost all national contracts" (p. 625).

In addition to the financial pressures created by government deregulation, carriers have recently had to absorb a wildly volatile fuel market. The fuel price spike in 2008 and 2009 forced most carrier companies to rethink their procurement methods for fuel. Many fleets found it necessary to negotiate preferred fuel rates, become part of a fuel purchasing system, and/or retrofit their fleet for fuel economy.

Many also turned to fuel purchase optimization programs, designed to get the best price-per-gallon within company-specific parameters such as existing routes and cleanliness and safety factors. Sometimes these optimization programs were as simple as having drivers compare prices along their routes before purchasing fuel, or having them take advantage of internet-based fuel price comparison programs on their cell phones. Some companies opted for… READ MORE

How to Reference "Procurement in Transportation the Role" Term Paper in a Bibliography

Related Term Papers:

Strategic Planning for Organizations Research Paper

Management of U.S. Airways

Strategic Planning for Organizations

Based in Tempe, Arizona, U.S. Airways is considered the financially weakest of the major American carriers. With a focus city at Ronald… read more

Research Paper 8 pages (2005 words) Sources: 6 Topic: Transportation / Mass Transit

---

Procurement Proposals Business Proposal

Planning and Project Management

The process of planning procurements is a multi-step process that involves the task of selecting the items that need to be purchased, at what time and… read more

Business Proposal 3 pages (1035 words) Sources: 1+ Topic: Management / Organizations

---

Role of Land Settlement Cooperative in the Kingdom of Thailand and Its Business Performance Term Paper

Role of Land Settlement Cooperative in the Kingdom of Thailand and Its Business Performance

Prior to the Cooperative Crisis

Agriculture is a mark of civilization for the mankind.

It is… read more

Term Paper 70 pages (18921 words) Sources: 1+ Topic: Agriculture / Food / Culinary

---

Financial Acts and Cios Research Paper

The experience of the private sector and international organizations is also taken into account while making an assessment about how to best manage IT (Schick, 2001). Management of the quality… read more

Research Paper 8 pages (2236 words) Sources: 6 Style: MLA Topic: Transportation / Mass Transit

---

Drones, Unmanned Aerial Systems (Uav), and Violation of Citizens' Privacy Constitutional Rights Thesis

Drones unmanned Aerial Systems (UAVs) and violation of citizen's privacy constitutional rights

Drones or Unmanned Aerial Systems (UAVS) 3-9

History of the Unmanned Aerial Systems (UAVS) Technology 4-5

Current Trends… read more

Thesis 40 pages (12745 words) Sources: 25 Topic: Transportation / Mass Transit

---

View 100+ more related papers  >>