Cost Containment

An example of cost containment is fuel prices. When prices escalate, distribution strategies are re-evaluated and third party logistics providers are used more extensively. When fuel prices fall, distribution and transportation methods become more lax as businesses and companies concentrate more on service than cost. This leads them to revert back to smaller more frequent shipments via faster modes. Businesses are now taking longer term views on managing costs. They are moving toward supply chains that allow faster responses to changes in market conditions. Flexibility is key.