Perspectives from Freight Transportation Users
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Perspectives from Freight Transportation Users US Department of Transportation – Federal Highway Administration. Consumer Electronics – Overview. High Value commodities Profitability challenges due to price erosion, operating costs, and Customer requirements

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Consumer Electronics – Overview

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Consumer electronics overview

Perspectives from Freight Transportation Users US Department of Transportation – Federal Highway Administration


Consumer electronics overview

Consumer Electronics – Overview

  • High Value commodities

  • Profitability challenges due to price erosion, operating costs, and Customer requirements

  • Small, Medium and Large boxes utilizes a multitude of shipping modes

  • Highly competitive and growing in competition

  • 5 years ago major Electronics vendors were: Sony, Philips, Thompson (RCA), Zenith, Sharp, and Panasonic

  • Today major Electronics vendors are: Sony, Philips, Thompson, Panasonic, Samsung, APEX, Audiovox, Sharp, and Sanyo.


Consumer electronics overview1

Consumer Electronics – Overview

  • New Competitors in 2004: Dell, Gateway, and Virgin Companies launch new products in the CE sector.

  • Forecasting, Order, and Shipping migration from Monthly Cycle to Weekly cycle

  • Customer Requirements

    • Radio Frequency Identity (RFID)

    • Vendor Compliance


Philips overview

Philips - Overview

  • Philips Consumer Electronics balances Customer demand and requirements with 300 model variations to ensure timely delivery of our product.

  • Product sizes vary from the size of a disposable razor to a 60” projection television.

  • The customer mix ranges from small to large companies.

  • 3 Outbound Distribution points in the US

    • Greeneville, TN

    • Roanoke, TX

    • Riverside, CA

  • Products are manufactured in Europe, Asia, and Mexico.


Philips overview1

Philips - Overview

  • Inbound shipments

    • Port of Entry (Asia and Europe)

    • Moving product from Port to Warehouse

    • US/Mexico Boarder crossing

    • Third Party Logistics Provider involvement (3PL)


Philips overview transportation

Philips – Overview Transportation

  • Restructured the Supply Chain (3PL)

  • Modes of Transportation

    • Air (Next Day, 2nd Day, 3 Day)

    • Ground (Parcel Ground ie. Fed Ex, UPS)

    • Less Than Truckload (LTL)

    • Truckload

    • Intermodal (Rail)

  • Transition from LTL and Ground (150lbs+ shipments)

  • LTL Expedited service vs. Traditional “Air” service


Philips overview transportation1

Philips – Overview Transportation

  • Hours of Service – Challenge in 2004

    • Multiple Stops (More than one customer on a trailer)

    • Increased charges from Carriers for Detention and Multi-Stops

    • Equipment Demand moves from Moderate to Severe

    • Driver retention and expansion

    • Will force more equipment on the road vs. less

    • Capacity battle transforms to a capacity war

    • LTL shipments will increase as will costs of operations (Carriers, Shipper, and Customers)

  • 2001, 10% of all truckloads shipped by Philips were multi-stop shipments

  • 2003, 46% were multi-stop shipments.


Philips improvement opportunities

Philips – Improvement Opportunities

  • “Being an attractive fish, in a Big fish pond”

    • Carrier relationships

    • Equipment utilization

    • Equal profitability

    • Automating Truckload “tender” process

  • Rail congestion

    • Utilization can increase if transit time improved

  • Factory Direct

    • Customer’s Freight Forwarder

    • Mexico Direct


Transportation statistics

Transportation Statistics


Transportation statistics1

Transportation Statistics


Transportation statistics2

Transportation Statistics


Transportation statistics3

Transportation Statistics


Transportation statistics4

Transportation Statistics


Transportation statistics average cubic feet utilized truckload volume

Transportation StatisticsAverage Cubic feet utilized (Truckload volume)


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