Just-in-time manufacturing is a tremendous advantage in supply chain when everything works perfectly. However, there are many chances that will cause the delay, such as an overseas supplier has equipment problems, environmental factors delay deliveries or defective parts are discovered on the assembly line.
To avoid these problems, premium freight, which is the last-minute rush shipments to bring in materials or components, is the best way for the firms. Although premium freight is costly, it is unavoidable. Premium freight is the way out of trouble when the things in automotive supply chain go wrong. It provides an emergency response to an emergency situation, using whatever modes of transport are required to get the job done.
Traditionally, someone at the JIT plant would work piecemeal each time a premium-freight shipment was required. They would call an expedited carrier, but not necessarily one that would provide the best price or service. Premium freight expenses are often contained within general inbound or outbound freight budgets, and are not singled out as separate line items.
The entire process of ordering premium freight has been revolutionized, however, by the emergence of third-party logistics companies. These companies are unbiased in their choice of carriers, using performance data to make their selections. TNT Express is one of the premium freight providers. They added the values in their service, such as providing information during transshipment via emails, phone calls, faxes and web-based updates.
The big advantage of premium freight providers is that they use the web to notify a base of carriers quickly, receive immediate bids, and rapidly assign shipments. This gives carriers the ability to link electronically into the JIT process. With these helps, the supply chain can be fluently. Premium freight provision can be a back-up in case planned inventory reduction and just-in-time initiatives backfire.