The rate for sequential transport usually exceeds average prices on the transport exchange? However, comparing Just-in-Sequence (JIS) logistics to standard spot transport is a flawed approach.
JIS logistics goes beyond ordinary transport. Here, you pay for peace of mind and operational continuity. A dedicated vehicle and precision deliveries give you the confidence that your assembly line will run smoothly.
The cost structure in this model is different from that of traditional freight forwarding. Factors such as standby costs, closed-loop handling and reverse packaging logistics come into play here. Paradoxically, a higher transport invoice often means a lower total cost of ownership (TCO) for the factory. How is this possible? The elimination of expensive warehouses generates savings that more than cover the difference in freight costs.
Jasek Transport carries out demanding transport orders throughout Europe, relying exclusively on its own fleet and proven processes. We rely on a permanent team of drivers trained in load securing standards (VDI) and notification procedures in large industrial plants. We guarantee full control over the goods entrusted to us and timely deliveries, eliminating the operational risks typical of inexperienced carriers.
In this article, we analyse the price components in sequential logistics and explain exactly what you are paying for and why this fee is an investment and real protection for your company’s capital.
Why does the standard price list not work in the JIS model?
Comparing sequential transport pricing to transport exchange rates (spot market) is like comparing two different products. Standard freight forwarding is based on consolidation and statistics. The carrier strives to fully utilise the cargo space. If a vehicle is travelling from Poznań to Berlin, the freight forwarder looks for any return cargo to cover fuel costs. This reduces the rate per kilometre, but increases the risk of delays.
In Just-in-Sequence logistics, this mechanism does not exist. Here, the principle of operational exclusivity applies. The vehicle serving the production line is permanently assigned to the project. It cannot pick up loads ‘on the way’ or wait for a better return order. Its schedule is dictated solely by the factory’s pace.
This creates a financial category called standby cost. In the JIS model, the customer pays not only for the physical movement of goods. They pay for the reservation of resources. The vehicle must be available 24 hours a day, even if the production line is on a technological break. A tariff based on ‘normal kilometres’ does not take into account the fact that the fleet is excluded from the open market and cannot generate revenue from other sources. This is the price for stability, which the spot market does not offer.
Dedicated fleet and no additional loads
In sequential logistics, there is one ironclad rule: one vehicle, one customer. In standard groupage transport, you only pay for the pallet space you use. The rest of the costs are covered by other shippers whose goods are transported on the same trailer (consolidation).
In the JIS system, this cost sharing disappears and the entire cargo space is exclusive. From a financial point of view, it does not matter whether the sequence takes up the entire trailer or only half of its volume. The rate must cover the labour cost of the entire set.
Why do we give up cheaper additional loads? It is a matter of process safety. Every additional opening of the trailer to pick up goods from another company generates risk. It is a waste of time and a threat to the integrity of the sequence. In the JIS model, the vehicle becomes a link in the production line. Therefore, there is no room for additional stops and loads that could delay delivery or negatively affect the production process.
Reverse logistics and the cost of ‘empty’ runs
Standard freight forwarding models aim to reduce costs by acquiring return loads from the open market. In sequential logistics (JIS), this strategy is impossible to implement. This process is based on a closed loop system, where the vehicle performs fixed shuttle connections dedicated exclusively to servicing a specific production stream.
The return journey is often mistakenly classified as unproductive. In fact, it is used for the return transport of certified load carriers (Gitterbox cages, KLT containers, specialised racks). Maintaining a smooth rotation of returnable packaging is a prerequisite for maintaining the continuity of the production cycle at the component supplier.
From a budgetary perspective, this necessitates a pricing structure based on the full logistics cycle. Operating costs – including fuel, fleet depreciation and driver man-hours – are generated over the entire distance of the loop. Due to operational exclusivity, the vehicle cannot generate revenue from other sources, so the freight rate must cover the total commitment of resources to the customer’s process.
Staffing and time requirements – the cost of continuous operations
The specific nature of sequential deliveries requires full synchronisation of logistics with the work schedule of production plants, which often operate on a three-shift or four-shift system. This means that transport processes must be carried out 24/7, including nights, weekends and public holidays. This operating regime directly translates into the structure of labour costs, forcing the inclusion of shift allowances and higher rates for availability during holiday periods.
A key constraint that must be included in the calculation is the restrictive regulations on drivers’ working hours. To ensure timely deliveries over long distances without violating legal regulations, JIS operators often use a double staffing model. Engaging two drivers to operate one vehicle allows for continuous movement and drastically reduces transit time, but obviously doubles the labour costs assigned to a given order.
Furthermore, the contract valuation must take into account the cost of maintaining staff reserves. The guarantee of reliability of supply excludes situations where an employee’s illness paralyses transport. The logistics operator is obliged to keep drivers on standby, ready to take over the route immediately. The customer therefore ultimately finances not only the effective driving time, but also the operational capacity and staffing security of the entire project.
Modern sequential logistics
Modern sequential logistics relies equally on the flow of goods and the flow of data.
Contract pricing must therefore take into account the costs of maintaining the advanced IT infrastructure necessary to ensure full system integration. The implementation and operation of EDI (Electronic Data Interchange) or API protocols, which enable the automatic exchange of orders and statuses between the manufacturer’s ERP system and the logistics operator, is a significant item in the operating budget (CAPEX/OPEX). In this way, the customer finances the digital transparency of the process and the elimination of the risk of human error when entering data.
Another price-determining factor is the specific nature of the insurance. A standard OCP (Carrier’s Civil Liability) policy usually only covers the value of the cargo being transported, which is insufficient in the JIS model. Due to the risk of production line stoppages, the operator must have extended insurance coverage covering so-called consequential damages and high guarantee limits in the event of contractual penalties. The premiums for such policies are many times higher than for conventional transport, which directly affects the final freight rate. However, this is a necessary cost to protect the financial interests of the factory against the effects of unforeseen events.
How to optimise sequential transport costs?
Cost efficiency in JIS logistics depends on process optimisation, not just on reducing freight rates. The key parameter is the load space utilisation rate. Since the labour cost of a dedicated vehicle is fixed, the unit cost per component can be reduced by adjusting the logistics packaging. The introduction of collapsible containers or increased stackability of Gitterbox cages allows more modules to be transported in a single cycle. This increases the profitability of transport, especially in reverse logistics (return of empty packaging).
The second area of optimisation is route reconfiguration. Replacing direct point-to-point deliveries (one supplier – factory) with a consolidated loop system (milk run) allows loads from several sub-suppliers to be collected within a single order. This solution allows for full utilisation of vehicle capacity and distribution of fixed transport costs over a larger volume of goods.
The contracting model plays an important role. Long-term contracts based on the ‘Open Book’ principle allow the operator to optimise fleet purchase costs and secure fuel prices. The stability of the cooperation eliminates the commercial risk premium and allows for more effective fleet depreciation planning, which translates into lower rates for the customer.
JIS transport costs – summary
In the Just-In-Sequence model, the freight rate represents the cost of guaranteeing continuity of production, not just the cost of moving cargo. Increased expenditure on dedicated rolling stock and IT infrastructure is offset by reduced storage costs and the release of working capital.
A reliable assessment of profitability requires the use of the Total Cost of Ownership (TCO) indicator. From this perspective, the logistics operator acts as a technical safeguard against losses resulting from downtime. Jasek Transport implements this model through dedicated transport solutions. We ensure timely deliveries, thanks to which the cost of logistics services remains lower than the financial losses generated by a potential stoppage of the assembly line.
