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Choosing the Right 3PL to Align with Your Business Strategy

Most shippers don’t spend much time worrying about who is driving the trucks carrying their goods, but choosing a 3PL with the right carrier network makes all the difference when your business is expanding. B2B and B2C networks are increasingly determined by where the customer is, rather than a companies’ geographical location. With more business moving to online, you need to be prepared to meet your customers where they are. 

When your customers need change, you want to be able to say “yes.” But logistics is a complicated business and when you are examining your choices, there are some factors to consider.

The first step is to understand your internal requirements – consider what your specific needs are before looking for a 3PL. Questions to ask include, what modes of transportation and what services you will need? What volumes do you plan to ship and where? Do you have specific security or visibility requirements? Are your shipments time-sensitive? The list goes on… Despite their expertise, 3PLs are only as useful as their knowledge of your business and customer requirements. 

The right 3PL will also have a network density that connects you with the right carrier, at the right location and with the right capacity and expertise.

Start with Carrier Partnerships

Whether you are shipping intra-warehouse or last-mile, it’s important that your 3PL  has the capabilities to make it happen. Two considerations are technology and partnerships.  

Shippers should look for a partner that allows them to quote, track and control invoicing for their LTL and FTL shipments, across a nationwide carrier network. Because your shipping partner is responsible for integrating different shipments, they are responsible for implementing technology that provides visibility to your shipment across their network of trucks and more. 

The right 3PL will also have a network density that connects you with the right carrier, at the right location and with the right capacity and expertise. With capacity being tight these days, partnering with the right 3PL will increases the chances that your time-critical shipments will be delivered on time and at a competitive price. That means, if you have warehousing and delivery needs in Houston, your 3PL  should have vehicles available to accommodate those needs, and quickly. 

Door to Door deliveries

Not all trucking companies handle door-to-door deliveries and some don’t have to. What matters is that your 3PL is partnered with carriers that offer fleet capabilities that meet your needs. For your urban customers, the trucking company might need to deploy a fleet of smaller trucks or even vans. If your requirements are FTL B2B shipments, you need a trucking company with that sort of capacity. For many shippers, their requirements fall in-between, or into the ‘all-of-the-above category.’ In those cases, your 3PL needs to have a range of carriers available to facilitate your business. 

Experience matters

Shippers should ask themselves if their 3PL understands their business and customer base. For example, a company shipping high-value electronics, will want to check with their 3PL about security protocols. Are trucks secured? Is there a system in place to alert management when drivers divert course? Proactive 3PLs will have systems in place so that your customers can rely on you in turn.  

Shipping disruption is an unfortunate reality in the business, ranging from weather disruptions to dock strikes. The right 3PL will have a plan in place to make sure that you are taken care of. 

Do the services match the requirements?

Some 3PLs specialize in specific modes of transportation, commodities, dealing with regulations and origin/destinations. Others are generalists. Make sure that you ask potential 3PLs if they have experience handling the cargo that your business will be shipping. The right partner for your business will be able to walk you through the different steps required, allowing all parties to agree on the correct protocols and procedures.  Reviewing a 3PLs Case Study library can help you better understand their expertise.

How many modes?

There are four common modes – ocean road, air, and rail. Many 3PLs will offer “intermodal” services, but if they don’t have the size and experience to properly manage that freight in-transit, they are essentially handing off responsibility to another party. 

To avoid this uncertainty, make sure your 3PL works with established rail and intermodal carriers. That way, you get the most options. Offering a variety of modes that let shippers choose slower transit times when possible, which lowers costs. On the flip side, if you need something shipped fast, having a 3PL with a dedicated expedite team will help to ensures that your shipment gets where it’s going, in the time it needs to be there.

How’s their customer service? 

This might seem too obvious to print, but it’s important to distinguish between friendly phone conversations and 3PLs that can get you the information you need when you need it. If there’s a disruption or other events along the shipment chain, you need a 3PL that can reach out proactively to help you make the necessary adjustments on your end. There will always be disruptions, but that doesn’t mean they need to put you on your back heels. 

Customer service is also about finding a 3PL that’s willing to take the time to help you set up the right solution. If your business is experiencing sudden growth, you might not have all the answers.

Is your 3PL BlueGrace?

At BlueGrace, our freight specialists work with you every step of the way to understand your requirements and set up a solution that’s tailored to your needs. BlueGrace provides scalability for growing companies to achieve their goals without labor or technology investments. With a fully built-out national network and global partners, BlueGrace makes it easier than ever to reach your markets in an efficient and cost-effective manner. Our expertise and processes provide clients with the bandwidth to operate efficiently and drive direct cost reduction, backed by procurement and dedicated management. For more information on how we can help you analyze your current freight issues and simplify your supply chain, contact us using the form below: 

Freight Damage: 8 Practical Ways to Avoid It 

Whether you are a shipper, receiver or trucker, freight damage affects all equally. Freight damage not only increases your cost and affects your revenue, but recurring or heavy damages can cause friction between supplier and end users. 

As a Freight Operator, you can take several measures to avoid freight damage and shipping claims. 

1. Understand your cargo

Understanding the nature of the cargo is of utmost importance so that you can use the correct type of transport for your cargo and the correct type of packaging. For example, if you are shipping drummed cargo you don’t need the same level of protection as you would if you shipped fragile or bottled cargo such as sauces, jams, etc. If you are shipping cargo that is more volumetric in nature than weight (example Cotton Bales) you need a truck with a bigger space capacity than weight capacity. 

2. Choosing the right packaging

This is a critical aspect of trying to avoid freight damage. Once you have understood the nature of your cargo, which may be fragile, heavy, sensitive to water, sensitive to heat, etc., you need to carefully assess the type of packaging required for your product. For example, if you are packing fragile cargo such as bottles, it is important to ensure that these cargoes are packed using durable packaging like corrugated cardboard which is then palletized on wooden pallets for easy and safe handling. 

Use quality pallets that will last longer than cheaper pallets. Cheaper pallets may give in a short term, and better quality pallets will allow for double stacking as required. Don’t take shortcuts or skimp on the proper packaging material as this short-term saving could result in a much bigger expense at a later stage in case of any claims. 

3. Label your goods correctly

While it sounds like a no-brainer, a lot of freight damage can be avoided by labeling the cargo correctly. For example, if you are shipping liquid cargo or any other cargo that needs to be kept upright, it is important to label it correctly so the cargo handlers know which way to carry it. Similarly, if the cargo is hazardous, then it is important to label it appropriately. You should use the required hazardous labels so safety precautions can be taken. 

4. Protecting your packaging 

Cargo such as clothing, shoes and other high-value retail goods are special targets for thieves and protecting your cargo is of utmost importance. Protecting your packaging is also essential against weather and dirt, especially if you use cardboard cartons. 

You can protect your cargo by sealing it with good quality tape (usually with your company branding on it), strapping it and shrink wrapping it.

5. Stow the goods correctly

Stowing of goods on the pallet or the truck is absolutely essential to avoid freight damage. Due care must be taken to stack goods in a uniform and stable manner so that weight is equally distributed across the pallet(s) and the truck. Your products must stay within the dimensions of the pallet such that it cannot get damaged during handling. 

If your cargo has a mixture of heavy and light goods (say boxes of canned food and boxes of marshmallows), ensure that the boxes of canned food are stowed at the bottom and the boxes of marshmallows are stowed on top of the canned food. 

6. Stow the truck correctly

A lot of freight damage happens when cargo shifts inside the truck during transit. Cargo moves inside the truck due to improper stowage inside the trailer.  Whether it is palletized cargo or non-palletized cargo, the cargo should be stowed inside the truck as tightly as possible to avoid movement. 

If in spite of your best efforts there is some space between the cargo, you should use suitable dunnage material like airbags (inflatable dunnage) to absorb sudden impacts and to prevent the load from shifting. In the case of fragile cargo, you can use cargo nets to secure it, so it doesn’t move during transit. 

7. Ship in bulk

Try to consolidate your goods and move as FTL (Full Truck Load) to avoid using LTL (Less than Truck Load) as much as possible. LTL moves multiple handling before the cargo gets to its final destination. However careful one is, multiple cargo handling has a possibility of damaging your cargo. 

8.Choose reliability over price

Choose the right supplier. Using a reliable freight partner is of utmost importance in the whole supply chain process. You should choose your reliable carrier based on a few factors such as their FMCSA score, the trucks that they use, the age of their fleet, their insurance and liability cover, their cargo handling safety record and their staff training methodology. While these may not guarantee the safety of your goods, it can give you a pretty good idea of your supplier. 

To summarize, 

Freight Suppliers

  1. Ensure the cargo is properly packaged before you accept to ship it 
  2. Ensure that the cargo is properly labeled and marked
  3. Ensure that all documentation for the cargo is correct 
  4. Ensure cargo is stowed properly and can handle the various weather and transit conditions while en route to its destination 

Freight Customers

  1. Ensure that you know how to properly pack and stack your goods, or use a qualified company to do this job for you 
  2. Check and recheck your cargo, its packaging, its labeling, stacking/packing and documentation before it leaves your warehouse 
  3. Ensure you have the correct receipt from your supplier when you are handing over your cargo
  4. Ensure you choose the right supplier for the movement of your goods 

Whether you are managing your own processes or you are using the logistics services of BlueGrace, proper preparation is one way to help prevent damage. 

By working closely with all suppliers involved in the movement of your goods, you can ensure that your cargo will reach its destination in time, within your budget, and in the condition that it left the origin. 

Do You Need Help With Understanding Your freight?

Whether you are managing your own processes or you are using the logistics services of BlueGrace, proper preparation is one way to help prevent damage. If you have questions about how you can better prevent freight damage, or just how to simplify your current transportation program, contact us via phone at 800.MY.SHIPPING or using the form below, we are here to help!

Surviving the Digital Race: What to Watch for in 2018

As we enter into a brand-new year, it’s time to start looking ahead to what 2018 will hold. The past few years have been considerable, in terms of both changes and technological advancements, with the freight industry seeing some of the most drastic changes. Mergers and acquisitions have challenged the playing field by taking smaller players off the board and strengthening the position of others. As for technology, the freight industry has undergone a veritable renaissance. Data analysis and predictive modeling are just the beginning of the industry’s new bag of tricks.

In 2018, it’s going to come down to the 3PLs and freight forwarders to help bridge the gap in supply chains – for both shippers and carriers.

That being said, shippers and carriers will still need help making it through. While 2017 was certainly better than 2016, it’s still going to be a slog to get back to the post-recession era. In 2018, it’s going to come down to the 3PLs and freight forwarders to help bridge the gap in supply chains – for both shippers and carriers. This change won’t take place overnight of course, but the gradual change will build up to a complete revision of the industry. “The next few years will see an evolution of the sector rather than a big-bang revolution. Undoubtedly, there will be change and those companies who cannot adjust to the new environment will drop out of the market. However, for most of the largest providers at least, the new technologies offer another way of differentiating their products and services; of driving down costs and of creating efficiencies in their networks,” according to Transportation Intelligence.   

It’s the technology that will pave the way for the future, and if 3PLs want to stay viable, they’ll have to adapt. They’ll need to be able to provide higher levels of service such as big data analysis and real-time visibility, all at competitive prices.

As we move forward we’ll eventually see a shift, not just in the way companies perform logistics, but in how they think about logistics as well. Real-time shipping quotes are something of a bonus right now, a feature that shippers appreciate but aren’t demanding just yet. Within the next decade however, real-time quotes and total visibility will become the norm. The next generation of logistics planners will see these ‘smart-contracts’ as part of the everyday operations. It’s the technology that will pave the way for the future, and if 3PLs want to stay viable, they’ll have to adapt. They’ll need to be able to provide higher levels of service such as big data analysis and real-time visibility, all at competitive prices.

What to Watch for 

Big technology trends that started up in 2017 are expected to continue as the new year progresses, as they’ve given visibility to some of the long overdue changes within the industry. As it stands, technology is going to be the lynchpin for 3PLs and forwarders, leaving its mark on the industry as a whole.

Here are the biggest trends to keep an eye on as 2018 gets underway.

Visibility, in particular, is going to be essential for supply chain management in the future.

Digitization- The digitization of the supply chain is a significant move as it completely overhauls the way the industry has been run for the past several decades. Not only is it more efficient, but the amount of accessible information allows more insightful decisions at every step of the supply chain. With the increase in focus on digitization throughout 2018, many companies will realize that in order to survive they’ll have to join the digital ranks. Digitization incorporates many different strategies ranging from a focus on hiring to technology investment strategies. Visibility, in particular, is going to be essential for supply chain management in the future.

Adaptive Organizations and Capabilities– A strong supply chain relies on its flexibility above all else. It’s the ability to adapt and react to any changes or potential obstacles in the environment. “In terms of organizational structure, the largest difference between more and less mature supply chain organizations is typically a broader span of control that includes strong relationships with functions such as customer service and product development, in addition to traditional planning, sourcing, manufacturing and logistics. More significant differences emerge in the scope of responsibility for functional owners and how they partner internally and externally to manage end-to-end (E2E) business process flows such as design-to-launch, requisition-to-settlement, and order-to-cash,” says Supply Chain Management Review.

Automation- Drones and robotics are just the beginning of automation, but they will undoubtedly play a big role in the future. Warehousing and order selection is slowly being automated, but so are last mile deliveries, as drones and automated delivery robots are allowing packages to be delivered quickly in urban settings. Warehousing will see some of the biggest investments in robotics over the course of 2018. As pick-and-pack order selection tends to be the most time and labor-intensive process, a robotic workforce could provide a considerable ROI over time. A culmination of EFT’s 2017 Research and Reports data, as well as the 2018 Third Party Logistics Study report, says that roughly 70 percent of supply chain executives have plans to automate their warehouses.

Electronic transmission of data gives companies more insight to work with, and the amount of raw data that is generated by blockchain will certainly give companies plenty to work with in terms of increasing visibility and reliability

Blockchain Technology- Blockchain has slowly gained traction over 2017 and it’s expected that it will only continue to gain ground. Electronic transmission of data gives companies more insight to work with, and the amount of raw data that is generated by blockchain will certainly give companies plenty to work with in terms of increasing visibility and reliability. As it stands, many in the industry still don’t know enough about blockchain to make much of a comment, but that will change as time progresses and more companies begin to adopt and adapt to the new technology.

Supply Chain Management 

Ultimately, controlling the supply chain and managing it properly will be one of the most crucial service offerings for 3PLs. Management solutions in today’s marketplace will require forwarders to offer shippers access to a myriad of different carriers, routes and modes of transport, and instant pricing. Strong management will be heavily reliant on big data; data gathered via the IoT, blockchain and any other technology will need to be broken down into actionable data and analyzed into something that can be used, whether in predictive modeling or direct decision making.

For 3PLs that want to stay in the game and do better than just survive, it’ll be a matter of harnessing the power of digitalization and information technology. That information will need to be applied in the best possible way to suit the needs and desires of their customers.  

As the old adage goes, knowledge is power, and in today’s marketplace that certainly holds true. For 3PLs that want to stay in the game and do better than just survive, it’ll be a matter of harnessing the power of digitalization and information technology. That information will need to be applied in the best possible way to suit the needs and desires of their customers.  

How BlueGrace Can Help in 2018

When companies want superior supply chain management services and best-in-class technology, they turn to BlueGrace. Our proprietary technology is designed to put the power of easy supply chain management and optimization back in your hands. BlueGrace Logistics offers complete, customized transportation management solutions that provide clients with the bandwidth to create transparency, operate efficiently, and drive direct cost reductions. For more information on how we can help you analyze your current freight issues, feel free to contact us using the form below:

Retailers Say Don’t Let Your Freight Be Early Or Late

The transportation industry is perhaps one of the most daunting when it comes to rules and regulations. Hours of Service and Electronic Logging Devices are just a few of the most recent roadblocks to come up recently. Merely staying in compliance with these new regulations can be a costly endeavor. What’s worse is that being caught out of compliance could mean penalties, fines, or even a trucker losing their job.

As if all that wasn’t bad enough, truckers and freight forwarders have to balance all of that on top of growing customer expectations. WalMart, in particular, is starting to crack down on deliveries with their OTIF program. Kroger, another heavy-hitting retailer, is also beginning to levy penalties on tardy shipments. Missing the delivery window could mean hefty fines for carriers. However in this case, missing the delivery window doesn’t just mean being late, but even arriving early could prove costly for carriers.

Tardy Carriers Will Pay the Price

Retailers are warning retailers that disputes simply won’t be tolerated. On Time. In Full. Or Else.

WalMart can be rather ruthless when it comes to their profit margins, but other retailers are starting to rally to the call, creating an unforgiving environment for errant carriers. Retailers expect their loads to be packaged properly, delivered in full, at the designated time. To that end, retailers are taking a very defensive stance over their new initiative, warning retailers that disputes simply won’t be tolerated. On Time. In Full. Or Else.

Wal-Mart has signaled it could do more than levy fines if problems persist. Charles Redfield, executive vice president of food for Wal-Mart U.S., told suppliers they could also lose shelf space if they don’t solve their delivery issues, according to people in attendance at a supplier meeting earlier this year. “Retailers can threaten suppliers with loss of promotional space in stores”, analysts said, according to the Wall Street Journal.

In the few short months that the program was unleashed upon carriers, WalMart has already been dishing out the penalties. For example, late or missing freight could cost a carrier up to 3 percent of its value. Early arrivals are no less forgiving due to the fact that they create an overstock. This overstated Just In Time philosophy keeps the shelves full and the WalMart customers spending, which is all well and good for WalMart as it means they can run with the big dogs like Amazon.

it’s likely only a matter of time before more retailers jump on the no-nonsense bandwagon.

“Wal-Mart executives say a more-precise delivery window keeps shelves stocked and the flow of products more predictable, while reducing inventory—all of which are increasingly important to the retailer as it invests heavily to compete online. The change could create $1 billion in additional sales over time, they said. “We hope we don’t have to collect any fees from suppliers. We would much rather have all the product we ordered on time,” said Wal-Mart spokesman Kory Lundberg,” the WSJ adds. While Kroger is seemingly more lenient, simply charging a flat $500 for late shipments, it’s likely only a matter of time before more retailers jump on the no-nonsense bandwagon.

Carriers Feeling the Pressure

These new policies will be costly for carriers for more reasons than just the fines.

These new policies will be costly for carriers for more reasons than just the fines. Simply implementing the procedures and equipment necessary to hit that 95 percent compliance mark could prove to be too much for smaller carriers. While bigger carriers can just add some new factory processes to help with packing and loading, smaller carriers don’t always have that luxury. Many new carriers are just hoping to break even for their first few years of operation until they can build both a steady reputation as well as a customer base.

Furthermore, WalMart and Kroger’s steadfast approach to “no excuses” will mean that carriers can be slapped with a fine for circumstances that are beyond their control. Anything from heavy traffic and construction work that causes serious delays to severe weather events that makes travel all but impossible will all have a negative impact on carriers. Conversely, what happens if a carrier does happen to show up early? Is it better to take the financial hit for the early delivery or shell out for extra meals and more time on the road for the driver?

There’s also the concern that drivers might take it upon themselves to exceed the daily drive limit to ensure their delivery is on time. Not only is this dangerous, not to mention illegal, but soon driver’s won’t even have that as an option when the ELD mandate goes into effect this December.

The Bitter Citrus Industry

A growing concern over these new on-time delivery policies is what it will mean for Florida’s citrus growers. As both Walmart and Kroger are considerable retailers of foodstuffs and produce, that makes them some of the biggest customers for such items. As Florida citrus groves have not only been ravaged by HLB for several years, but hurricane Irma caused some considerable damage.

“Andrew Meadows, a spokesman for Florida Citrus Mutual, a trade organization for growers, predicts growers statewide will end up losing more than half of this year’s crop to Hurricane Irma. The Florida Commissioner of Agriculture has estimated the cost of Irma to Florida’s farm sector at $2.5 billion, with projected losses to citrus producers the worst of any sector, at $760 million,”according to an article from Marketplace.

Suffice it to say, this policy might create better profit margins for retailers, but it’s not going to make them any friends among the carrier community.

This puts both the growers and their carriers in a serious predicament. As much of the damage won’t be fully realized for another two years at least, making guesses on shipments is a dangerous gamble. Guessing too low means crops left unsold which is money wasted. Guessing too high, however, means that carriers won’t be able to make full deliveries which means the fines will get passed down the line back to growers. In either case, it’s a lose lose for an industry that’s already in danger. Suffice it to say, this policy might create better profit margins for retailers, but it’s not going to make them any friends among the carrier community. As the regulations begin to tighten from both retailers (who will undoubtedly add more to the list) as well as the ELD mandate, we’ll have to wait and see how carriers respond to the growing pressure.

Do You Need Help With OTIF Issues?

A 3PL, such as BlueGrace, can help your business overcome the challenges of OTIF and other supply chain issues. If you have questions about OTIF or just how to simplify your current transportation program, contact us via phone at 800.MY.SHIPPING or using the form below, we are here to help!

How Shippers Should Already Be Prepared For The Holiday Season

Do you smell the pumpkin spice in the air? If you close your eyes, do you hear the faint jingling of bells in the distance to be? That’s because the holiday season is approaching. And, it’s approaching fast.  The busiest time for all, logistics companies, retail stores as well as shippers.

This is the season that can make or break shippers.

This is the season that can make or break shippers. If they are properly prepared, they can take advantage of having their items on the shelves faster for consumers to buy and reap the financial benefits. However, if they aren’t prepared, they could find themselves in a world of stress trying to find carriers to move their freight. – So, what can shippers do to prepare?

Plan For Unexpected Events

Remember while planning for the holiday season that it’s an incredibly busy time filled with unforeseen events. More people will be on the roads to visit their friends and family, and with more people on the road, more wrecks occur. More wrecks, more traffic jams, may cause your freight to be delayed.

Also, the holiday season usually packs a cold punch with winter storms creating dangerous conditions for drivers that could even keep them off the road for a few days. Be sure to track the weather before scheduling shipments around winter storms.

Things get hectic around the holiday season, making it more necessary to keep your documents accurate.

Things get hectic around the holiday season, making it more necessary to keep your documents accurate. One common mistake we experience time over time is the misclassification of freight. Minimize these errors by using a density calculator.

Compete With Larger Shippers

WalMart and Amazon are two of the biggest powerhouses in the world during the holiday season and can make it difficult for smaller shippers to offer competitive rates. Often times carriers can be lured away to make deliveries for these larger shippers on a seasonal basis.

We’ve seen this way too often. To be able to compete with larger shippers and keep their products moving, small and medium-size companies will have to offer and pay higher rates for carriers. If this story rings a bell, consider partnering with a 3PL. More often than not, 3PLs can provide better service and competitive rates.

Carriers enjoy working with 3PLs because they consistently engage with them by offering year-round agreements to keep their trucks rolling.

They can do so as they have an extensive network of carriers. Carriers enjoy working with them because 3PLs consistently engage with them by offering year-round agreements to keep their trucks rolling. Plus, the fact that they move such a high volume of freight that gives them a stronger buying power, which results in highly competitive freight rates.

Reflect On The Past

Think back to last year. Did your entire operation run smoothly with only a few minor hiccups or were you pulling your hair out? Make changes to improve your business from the inside out by locating the problems and finding solutions for them.

Did you have enough manpower to handle packaging and loading extra freight? You may need to implement an all hands on deck policy for the holiday months or hire a few seasonal employees. The key here is to hire good employees to keep your operations running smoothly. Also, consider a preseason training program for new and veteran employees to boost efficiency and minimize mistakes.

Did you have enough office staff to handle all of your paperwork in a timely manner? If not, consider getting a few extra secretaries or finding a way to automate processing all of this information digitally to cut costs and save time. Programs like Quickbooks could really help you transform your office.

Also, check out our latest technologies to see how to improve tracking, addressing, and product listing. By automating your services to become more efficient, you will be able to cut down on document processing time, costly accounting mistakes, and build more productive relationships with carriers.

Are You Ready? The Holidays Are Coming

Prepare your business now for the holiday madness!

 

 

Is WalMart’s OTIF Initiative Placing Impossible Pressure On Carriers?

Carriers already face many challenges in the transportation industry. It includes a multitude of rules and regulations that they must follow or else they could be fined. Or, even worse, drivers could lose their CDLs.

Now on top of all of their rules and regulations, WalMart is making it even tougher for carriers by imposing their OTIF program on them. Carriers can expect, heavy financial penalties for making late deliveries, for having missing freight, and for even delivering freight early.

OTIF – On Time In Full

WalMart is known for trying to squeeze profits in every area they can, even when it comes to receiving freight and their ‘OTIF’ or On Time In Full program is their way to crack down on carriers to become more efficient at delivering loads and properly packaged freight on time. This initiative should provide WalMart with an extra $1 billion in revenue by simply getting items to the shelves faster.

WalMart has already warned retailers that disputes will not be tolerated.

WalMart’s logistic center that includes over 150 distribution centers will greatly be impacted by their aggressive program that not only fines drivers for being late, but for being early and improperly packaged as well. If the carriers want to dispute a fine, that won’t work. WalMart has already warned retailers that disputes will not be tolerated. This unforgiving campaign already began in August with a previous goal with a 4-day delivery window and hitting OTIF regulations 90 percent of the time. Now by February  Wal-Mart wants to see deliveries on time and in full 95% of the time or carriers can face the penalties.

Since this program began in August, some carriers have already been invoiced for penalties. For example, if items arrived late or missing carriers receive a fine of 3% of their value. Items that arrive early are fined because they create overstocks. WalMart expects this initiative help them compete with major retailers like Amazon because let’s be honest, people are happier with stocked shelves and when people are happier, they spend more. With more revenue flowing WalMart will continue to squeeze and pinch pennies in the freight industry regardless of the unfair pressure that it puts on them.

Let’s Talk More About the Unfair Pressure Placed By OTIF

OTIF will be expensive for carriers not only because of the fines, but to implement. Bigger carriers can add new factory processes to help with the packing and loading of freight, but smaller carriers may not be able to handle those costs. Plus, smaller carriers, who are just emerging into the market sometimes start off by trying to simply break even on deliveries until they can build a good reputation for themselves. If they incur the cost of fines they might go under.

This program will force carriers to become responsible for making deliveries on time even when they face factors that they can’t control.

What happens if a carrier realizes they will make the delivery a day early? Do they face the costs of the early delivery fee or do they face the costs of having to find somewhere to park overnight and to pay for meals not to mention the hours being out of business? Also, an extra day on the road away from families can put a lot of demoralizing stress on truckers. This program will force carriers to become responsible for making deliveries on time even when they face factors that they can’t control. For example, inclement weather could force drivers off the road, or they could get stuck in major traffic jams.

In order to make deliveries on time, some carriers may feel pressured to drive past the daily limit of 11 hours, which is extremely dangerous and illegal. Driving is exhausting and driving tired is the equivalent of driving drunk. Paper logs can easily be forged for now, but in December once the ELD mandate goes into effect records will be harder to forge, so drivers won’t even have the option to push themselves to make a delivery in time.

At the end of the day, WalMart will do whatever they can to improve their bottom line, even if it imposes impossible stress, extra operational costs and fines on carriers, who will have to completely rethink their operations in order to make deliveries on time, in full.

Do You Need Help With OTIF Issues?

A 3PL, such as BlueGrace, can help your business overcome the challenges of OTIF and other supply chain issues. If you have questions about OTIF or just how to simplify your current transportation program, feel free to contact us via phone at 800.MY.SHIPPING or using the form below and we will be happy to assist.

 

 

Strong Supply Chains Create Strong Customer Experiences

Regardless of the industry, customer service will always be the cornerstone of a successful business foundation. Ask anyone you know, and they can tell you about a time they received subpar service, and they will always remember the business who delivered it. It’s that little facet of human nature, the ability to recall something that displeased us so vividly, that makes customer service so vital to a company. Yet even knowing that only 27 percent of companies believe that they offer a superior service over their competitors according to research from Gartner.

A significant opportunity for companies to up their game isn’t from the front end, but the back

While customer service representatives play a prominent role in managing customer relations, a significant opportunity for companies to up their game isn’t from the front end, but the back. The supply chain is pivotal in both marketing and customer service, and strong supply chain organization can make a tremendous difference.

“The supply chain organization typically plays a secondary role to marketing in driving customer experience strategy,” according to Lisa Callinan, a research director at Gartner. “Things are changing, however, in forward-thinking organizations, because the supply chain is uniquely placed to identify customers’ needs and drive better customer experiences.”

Connection Between Supply Chain and Customer Service

Of course, many big name companies understand the importance of the supply chain when it comes to driving up customer satisfaction. Apple, Johnson and Johnson, and Toyota are just a few. Amazon is perhaps the reigning champ when it comes to their supply chain and customer satisfaction. “Customers are influenced by their experience of the supply chain — even in the simplest terms, it’s easy to see that a late delivery can disappoint, whereas an expedited delivery can delight,” Callinan added.

Logistics and customer service make up the backbone of customer interaction

Logistics and customer service make up the backbone of customer interaction, yet many companies still haven’t discovered the best way to obtain the maximum value from either aspect.

A Case Study

At BlueGrace we have the privilege of serving a broad range of companies and industries. One company in particular highlights just how important strong supply chain management can be when it comes to customer satisfaction.

In this particular example, we worked with a company that is the leader in lifting and moving equipment rentals for the U.S. and maintains a comprehensive inventory of equipment. However, despite being best in class for customer service, the company began to suffer when rapid growth began to affect their supply chain.

“Within their industry, this company has a well-earned reputation for best in class customer service. However, faced with changes brought on by rapid growth, they experienced increased inventory management costs and a negative impact on invoicing as a result of delays associated with rentals placed in Off-Hire status but not yet returned to them.”

Given the changes and increased volume of demand, the supply chain became disrupted which then created a domino effect. Inventory management costs began to rise while invoicing suffered because the supply chain stuttered. As a result, a company who typically excels in customer service started lacking which hurt the business as a result.

Through our four step transportation management process, the solution left the company in much better standing:

  • Discover – Research and analysis of current processes,
  • Engineer – Build the solution and plan for integration of process improvements,
  • Execute – Implement recommendations/support and finally
  • Perform – Measure, review and ongoing process improvement

Improved return rental cycle time by 7.3 days, reduced pickup information errors by over 95% and sped up invoicing of returned equipment by 80%.

With the solution in place, the company was able to improve their return rental cycle time by 7.3 days, reduce pickup information errors by over 95% and speed up invoicing of returned equipment by 80%. By making these improvements to the supply chain and making the process more efficient the level of customer satisfaction rose significantly.

This goes to show just how truly interconnected the supply chain is with good customer service. Customer service and the supply chain are the building blocks for any good business foundation. Handling them both properly is what separates a good business from a great business.

 

 

OTIF – The New MABD for Walmart Suppliers

Walmart and other big box retailers introduced us to the “Must Arrive By Date” or MABD several years ago, which held suppliers to tighter compliance regulations. These regulations raised quite the concern over suppliers getting the right products to the right stores or distribution centers by a certain time or they would pay a fee.

Fast forward to now and we are having a similar discussion with suppliers and shipping companies about the new “On-Time In-Full” OTIF, policy. Although this mandate has been in the introductory phase since January of this year, the short pays will begin now and suppliers will most likely see their first chargebacks from Walmart in September! This program mandates that if any shipment arrives early, late, or on-time but is not packaged properly, the shipper will be charged 3 percent of the total items’ value. (i.e. a supplier has a purchase order of $10,000 but their product didn’t meet the OTIF guidelines so Walmart will only pay $9700 for the merchandise.)

The short pays will begin now and suppliers will most likely see their first chargebacks in September!

OTIF > MABD

The OTIF is still very much a part of the MABD, but with much more focus on the “in-full”. In the past, if less than 90% of merchandise cases were received within the MABD delivery window, the supplier would pay 3% of the cost of goods. Now, full-truckload suppliers of fast-turning items must arrive by the specified date 75% of the time, 100 in-full.

The OTIF is still very much a part of the MABD, but with much more focus on the “in-full”

Any items claimed late or missing during a one-month period will be fined 3 percent of their value. Starting in February 2018, OTIF will go into full effect, requiring deliveries to be on-time and in-full 95 percent of the time.

The MABD Window vs. OTIF Window

The MABD Window was a three-day grace period for perishables and a four-day grace period for food, consumables and general merchandise. The OTIF window is much tighter with a one-day for perishables and a two-day for general merchandise.

“Variability is the No. 1 killer of the supply chain,’’ Kendall Trainor, a Wal-Mart senior director of operations support and supplier collaboration.

Variability is the No. 1 killer of the supply chain

In some cases, a problem will be Wal-Mart’s fault, so the retailer has developed a scoring system that breaks down reasons for non-compliant deliveries and will fine suppliers only if they’re responsible. If suppliers don’t agree with the fine, too bad: Disputes “will not be tolerated,’’ Wal-Mart says.

This change is expected to add $1 billion in revenue.

Arriving early, arriving late, not arriving in full will be the issue in a shipper’s supply chain. This change is expected to add $1 billion in revenue. Walmart had to find efficiencies wherever it could and they feel a sense of urgency as the rival between them and Amazon amplifies.

FTL and LTL Guideline Breakdown

Here are the latest OTIF guidelines for full truckload (FTL):

  • Starting August 2017, FTL suppliers must deliver orders 100% in full, on the must arrive by date, at least 75% of the time.
  • By February 2018, FTL suppliers must deliver orders 100% in full, on the must arrive by date, 95% of the time.
  • Non-compliance will result in a fine of 3% of the “missing case” value; early deliveries will also be penalized, to eliminate overstock situations. (Penalties will be short paid monthly.)

For less-than-full truckload (LTL):

  • Starting August 2017, LTL suppliers must deliver orders 100% in full, on the must arrive by date 33% of the time.
  • By February 2018, LTL suppliers must deliver orders 100% in full, on the must arrive by date, at least 36% of the time.
  • If OTIF was 36% or better in August 2017, then the supplier must demonstrate a 20% improvement.
  • Non-compliance penalties (3% of non-compliance COGS) will be short paid monthly.

What does this mean for YOU?

Manufacturers and suppliers that work with large retailers like Walmart are more successful in getting their merchandise on the shelves with the proper lead time due to partnering with a third party logistics provider (3PL).

Suppliers scorecards will inevitably be affected

Suppliers scorecards will inevitably be affected, so it is imperative for a supplier to find a 3PL they can count on for navigating these changes. A 3PL, is an expert in transportation management and supply chain optimization and has the ability to help estimate from start to finish where the OTIF will impact the suppliers products.

We look at every aspect of your shipment and find the appropriate fix

BlueGrace has the ability to work with suppliers on freight consolidation, chargeback auditing and management as well as load planning and optimization. We look at every aspect of the shipment and find the appropriate fix for the shipments to reach the shelves on-time and in-full. Combine this with our proprietary technology BlueShip™ and your chances for success during these mandates/compliance regulation changes will undoubtedly increase!

 

 

 

The Rising Risk of Technology | Internet of Things

The World Economic Forum (WEF) recently released it’s 2017 risk report on the possible dangers of new technology. As the world begins the verge into the Fourth Industrial Revolution and new technology is emerging at an ever increasing rate, it’s important to consider the inherent risks associated with these new forms of technology.

It’s important to consider the inherent risks associated with these new forms of technology.

While it’s true that new tech, if not governed properly, can cause some considerable harm on a geopolitical scale, there are also some significant advancements that are both useful, as well as necessary for success in invaluable global functions, such as freight delivery and supply chain management. Given that humanity relies on the commercial and domestic goods that are being delivered through these supply chains, it’s important to understand what it is that the WEF fears could happen from the new technology.

Job Displacement

One of the 12 key emerging technologies on the WEF risk list, is the development of artificial intelligence and robotics. The key cause of concern is that as robots become more proficient in performing labor oriented tasks, the needs for human laborers will begin to drop. As economic stability hinges on the general populace being employed, the utilization of a robotic workforce could present some concern for the future. However, we must also look at the other side of the coin in this matter.

The needs for human laborers will begin to drop.

With the implementation of robotics in a manufacturing setting, there is a considerable reduction of risk to human life. This is especially true when it comes to more dangerous manufacturing processes. Not only are robotics able to increase production values at a safer rate than humans, there is also the need for maintenance and governance over these machines. In short, while the work force might be displaced from the production floor, it is possible for them to be retrained to employ a different skill set. Additionally, the increased profitability from efficiency boosts can create more possibilities for growth, expansion, and better pay for the adaptation to new skill sets for workers.

It is possible for them to be retrained to employ a different skill set.

“Technology not only addressed disruptive threats to business and improved service quality and productivity, it also improved workplace conditions,” said a DHL spokesman during an interview with The Loadstar.  “At the same time, our workforce has grown over the last five years, from 471,654 employees in 2011 to 497,745 in 2015,” he said. “Our chief executive stated in interviews last year that our workforce could grow to 600,000 by 2020 on the back of online retail driving further growth in parcel delivery,” he added.

Governing The Growth

By and large, one of the biggest concerns that WEF has with the rate of new technologies, is how they are to be governed. On one hand, overly strict regulations can stifle progress and therefore stifle the potential benefits gained from utilizing this new technology. On the other hand, if there is a lack of governance, new technology can fall into misuse, leading to a public discreditation of the technology and make potential investors nervous. WEF uses self-driving vehicles as an example, “autonomous vehicles will inevitably cause some accidents; whether this leads to calls for bans will depend on whether people trust the mechanisms that have been set up to govern their development.”

Autonomous vehicles will inevitably cause some accidents

So the question that remains unanswered is how exactly do you establish a set of rules for governance that is not too tightly controlled to inhibit innovation, yet flexible enough to keep pace with the creation and release of new tech?

Interconnected Technology

Perhaps one of the most important forms of technology for the supply chain comes in the form of the Internet of Things (IoT) and emerging logistics technology. This allows for increased data collection, deliverable in real time to every aspect of the supply chain and creating an overall efficiency boost. With the condition and location of all goods in transit being accessible to supply chain managers, the supply chain can flow more efficiently. The concern with this level of interconnectedness comes in the form of cyber security. The more data points you add to any process, the more chances there are for cyber intrusion.

The concern with this level of interconnectedness comes in the form of cyber security.

“There is money to be gained by performing attacks such as ransomware attacks denying access to data in the supply chain. In addition, you have to remember that supply chains typically involve a large number of stakeholders, making it very difficult to secure the entire chain – often a cyber attack only needs one weak link,” said Lars Jensen, the founder and chief executive of CyberKeel.

New technology also represents a lot of opportunity.

However, this again leads to the consideration of a need for more skill sets as cyber security gains momentum as a growing field of employment. While the WEF does bring up some valid concerns over emerging technology, they are representing one extreme end of the spectrum. New technology also represents a lot of opportunity not just for global supply chains, but the world in general.

Is Your Freight Protected? Freeze Protection For Temperature Sensitive Shipments

As the holiday season approaches, there are a number of freight tips companies should take into account to ensure that their supply chain continues to function efficiently and cost effectively. Companies must also consider the challenges presented by winter weather that accompanies the holiday season.

Anticipating transportation delays and mapping suppliers that could be affected by big storms and freezing temperatures, are good first steps.

Winter Giving Transportation the Cold Shoulder

The 2015 – 2016 winter season was responsible for a record-breaking blizzard that brought freight transportation in mid-Atlantic states to a halt for a number of days as crews worked to clear the roads of upwards of 3 feet of snow in cities such as Richmond, Baltimore, New York City and Philadelphia. Immobilizing snow also fell across areas in Tennessee, North Carolina, Kentucky and Arkansas and thousands of freight cargo flights were grounded as major transportation hubs were closed.

Outside of unavoidable transit delays, companies also need to consider physically protecting their freight shipments from the harshness of winter.

Outside of unavoidable transit delays, companies also need to consider physically protecting their freight shipments from the harshness of winter. You should also consider working with a third-party logistics (3PL) provider that is able to offer an all-inclusive coverage plan for freight shipments to alleviate the pains of not only damaged freight, but to protect temperature sensitive shipments as well.

Technology Gives Logistics Some Valuable Insight

Weather forecasts are all well and good, but even preparing for delays due to the weather will only go so far. What about when the unexpected should occur. A truck carrying temperature sensitive materials breaks down and will miss its scheduled drop off. Will it be caught in time to make other arrangements? This creates a rather dangerous guessing game when it comes to sensitive freight. Fortunately, that doesn’t have to be the case.

The Internet of Things (IoT) is creating a valuable web of information that users can access, in real time…

The Internet of Things (IoT) is creating a valuable web of information that users can access, in real time, to check the location and the status of their freight. That sort of information can make the difference between arranging a truck transfer to get cargo to its destination on time and watching, in horror, as millions of dollars of product simply goes to waste because of a mechanical error, as was nearly the case for Biogen, whose truck carrying temperature sensitive pharmaceutical components was nearly lost when a truck broke down.

Not only does this information greatly help with making logistics decisions, especially when it comes to rerouting a truck due to weather concerns, but it can also help to control shipping costs and strengthen the working relationship of a shipper and a 3PL service provider. That alone can be reason enough, especially when it comes to dealing with the rather unpredictable Winter weather.

Find a 3PL Who can Handle the Cold

It’s important to understand that ‘Acts of God,’ such as extreme winter weather, are not covered when it comes to guaranteed or expedited freight. Being prepared in advance and moving shipments earlier than routinely expected when weather is expected, is something a transportation partner would help with.

A prepared 3PL will understand that every company has its own specific needs in relation to freight transportation and in the winter months

A prepared 3PL will understand that every company has its own specific needs in relation to freight transportation and in the winter months that can mean that some shipments need to maintain an above freezing temperature in order to maintain their quality and value. As many items such as perishable foods, chemicals & electronics are ruined and become useless if they reach a temperature below freezing, it’s important to be ahead of the coming cold.

There are several different means of protection available for shipments such as these and a reputable 3PL will work with specific carriers to make sure that your freight is taken care of properly. From heated or insulated trailers and temperature sensitive load planning and routing technology, to on-site snow removal and cargo quilt thermal blanket protection, your shipment will be protected.

Finding a 3PL that has a large network of LTL and truckload providers that offer freeze protection services to ensure that your shipments arrive safely, and on time, is key to your supply chain’s success this winter.

The challenges of winter are nothing new but preparation in advance is key. Are you prepared?

 

How Shippers Can Reduce Transportation Costs: Part 2

Earlier, we looked at how technology can make a big difference in transportation management. Making sure data entry is accurate and shipments are properly classified are key when it comes to increasing operating efficiency and reducing logistics costs.

And the pressure is on! The most recent Cass Shipment Index, a measurement of shipping volumes, has risen 0.7 percent, meanwhile, payments for freight have fallen 8.3 percent year-over-year, according to Cass. Since the numbers indicate weak freight rates it’s vital now, probably more than ever, to take a closer look at the logistics program and working relationships with carrier partners to find best practices and identify areas in need for improvement.

Aside from having a strong TMS program in place, here are a few other ways shippers can help their carrier partners control costs:

  1. Strong Communication is Key: Make a habit of good and honest communication with your carriers. Logistics is a fast-paced industry with so many things that can go wrong. By keeping everyone briefed about disruptions in the supply chain, you can avoid anything, which might become a larger problem further down the line.
  1. Forecast the volumes by lane for your carrier base: Forecasting usually starts at an annual level during the bidding process, but fine-tuning this to a monthly, or even weekly forecast will let your carriers easily update their capacity allocation models. Preferred carriers of each lane, which are probably the most competitive, would accept a higher percentage of loads since much of their trucking capacity is uncommitted at that point.
  1. Make it a Round Trip: One of the most efficient means for moving truckload shipments is to combine shipping lanes into continuous moves or round trips. By opting for round trips, you’re introducing outbound as well as inbound flows to your supply chain. Not only does this increase your efficiency, but it also reduces empty running, shorter transit times that make more cost effective experiences for your carriers and allows them to give you a better price.

While it’s not always possible to create round trips or even continuous moves, shippers may consider collaborating with their business partners, other suppliers, companies that sell to a similar market, or deliver to the same warehouses. Without competing directly, you’ll both be able to make significant savings – steady flowing supply chain and improved on-time delivery performance.

It’s time to start asking less about what your carrier can do for you to lower cost, and more about what you can do with your carrier to help control costs. Treating your carrier as a business partner, rather than merely a supplier, will often yield better results than simply working with whoever is the cheapest at the time.

 

How Shippers Can Reduce Transportation Costs: Part 1

bluegrace_transportation_shipping_reduce_costNEW

The LTL sector of the trucking industry might be seeing some fluctuation in the near future. According to a survey, conducted by Wolfe Research between March and April, many shippers expects that LTL rates will rise by 0.9% — a much lower level compared with LTL carriers’ claims of what they won in first-quarter contract bids.

With any flux in the transportation industry, one of the key factors will always be capacity, which means that shippers will have to work tirelessly to control costs if they want to remain competitive.

In this series of blog posts we highlight areas in logistics programs where, based on our experience, there is great potential for improved productivity and cost savings.

Technology

In an annual study, conducted jointly by Nucleus Research and DC Velocity, transportation management software (TMS) was used by 41% of shippers and 3PLs surveyed.

TMS can aid businesses in 5 distinct ways; automation, control, optimization, visibility, and compliance.

Read more: Shipping and Logistics Technology Solutions

As results are speaking for themselves, it’s no wonder that this shipment and carrier management software is becoming a go-to for any logistics operations.

Data entry

Data entry for such key elements as weight, dimension, and classification, as well as other key information about shipments can easily be a spot for a simple, yet costly mistake causing a loss of both time and money for shippers.

A solid TMS can be very helpful here too, to populate entry forms with info directly from CRM system and/or shipping contracts, reducing the amount of manual data entry necessary, as well as the potential for typos.

Proper Classification

Are your shipments classified properly? One of the most common issues is that LTL shipments are wrongly classified which, for shippers can double the amount of originally quoted freight rates.

The National Motor Freight Classification Guide is updated yearly to standardize freight pricing. Currently, there are 18 different freight classes according to the NMFC, ranging from the lowest, class 50, the most expensive, class 500. Freight rates are calculated according to freight class, so it’s important to have the right class in order to get the best rates for your shipment.

Read more: How To Determine LTL Freight Classes & Avoid Reclass Fees

As time progresses, having the right technology and the right logistics partner not only helps with providing exceptional services but more and more necessary for a business looking to grow.

Your Supply Chain & The Purchasing Managers Index Drop: Why It Matters

BlueGrace Supply Chain

The Purchasing Managers Index or PMI is an indicator for the status of the United States economy for the manufacturing sector. These numbers are economic indicators derived from monthly surveys of private sector companies. According to the Institute for Supply Management, the number dropped to 48.6 from 50.1 in October (anything below 50.0 suggests a decline). The number comes from 5 major factors:

  1. New orders
  2. Inventory levels
  3. Production
  4. Supplier deliveries
  5. Number of employees.

How does this translates to logistics and supply chain consultation?

Businesses can accurately forecast a contraction in the marketplace with proper business intelligence and visibility. Businesses that lack these necessary reporting tools for their supply chain are not able to control OPEX properly and can make their business less profitable overall. Are these numbers available to you from your current logistics provider? Are they able to give you the kind of data that helps your business grow and pounce when the competition least expects it?

Are these numbers available to you from your current logistics provider? Are they able to give you the kind of data that helps your business grow and pounce when the competition least expects it?

BlueGrace deploys the technology and expertise while partnering with businesses to help them visually forecast both hard and soft cost savings.

map2

When we partner with a new business, we develop custom KPIs that determine how we will achieve maximum profitability for your transportation department. Our team has on-going discussions with our clients on how they can develop a better business daily, weekly, and quarterly.

map1

Our engineering team works closely with your transportation team to discover hidden opportunities in your supply chain. Many of these opportunities can only be seen through extensive data manipulation processed by our staff. With data results graphically represented in heatmap, customer distributions and even state lane analysis, we are able to visually find and correct supply chain errors. These errors can slow down production and cost businesses money in penalties and lost sales.

If you are interested in reducing your freight spend while increasing the success of your transportation department, feel free to call us at 800.MY.SHIPPING. We’d be happy to set up a discovery call with your team and discuss how to get started.

How Truckers Should Approach the End of the Business Year

This is a Guest Blog Article from Deborah Sweeney, the CEO of MyCorporation.com:

Though the end of the business year can mean something different to everyone, typically businesses choose to end their business year along with the calendar year in December. So for those truckers that are coming up to the end of their business year, here’s what you have to do to go out with a bang and properly prep for the up and coming tax season:

Keep track of any financial paperwork.          

The end of the fiscal year is a time to calculate annual financial statements. This is because, in many jurisdictions, regulatory laws regarding accounting and taxation require reports once a year. The end of the year could also be a time to focus on income tax reporting. Whatever the case, gathering all your paperwork, down to the receipts you acquire while on the road, is a must at the end of the year. And while you’re at it, pay special attention to those receipts to get the deductibles you’ve earned come tax time! Most truckers will find by their second year in the business that it’s just easier to keep all financial paperwork (receipts included) in one folder for easy reference when this time of the year rolls around.

Straighten out what’s considered a travel expense and what’s not.

The IRS defines travel expenses as anything ordinary or necessary to purchase while traveling away from home on behalf of your job. Though keep in mind that “ordinary” might be different for every profession. What’s ordinary to buy on the road for a trucker will not be ordinary to buy on the road for a sales man. As long as what you’re buying is appropriate to your line of work, it can be considered a travel expense. Go over your purchases from the year and make two piles: travel expenses, and not travel expenses. Not only will you need this later for deductibles, but it’s good to look at what you’ve bought throughout the year and learn from those spending habits.

Evaluate your current accountant.

Another good thing to do at the end of the business year is assess how helpful your accountant has been. Truckers are in a unique situation because, typically, only a specialized accountant who knows all about the trucking industry can really benefit them. Though a specialized accountant may cost more money, they could end up saving you a lot in the long run. No matter the industry, everyone wants to pay the least amount of money possible when it comes to dealing with fees and paying taxes. Paying for someone knowledgeable in your profession can be well worth it.

Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Google+ and on Twitter @mycorporation.

An LTL Insurance Disaster: Don’t Let It Happen To YOU

Every day thousands of shipments are processed by Less than Truckload(LTL) carriers. Many national carriers are trusted by US businesses to ensure that their freight makes it to the final destination safely and in one piece. However, an issue that stands out with many customers is that they do not really understand that when one of their shipments is damaged, just how much the carrier is liable for.

A Logistics Nightmare

Our customer booked an ocean shipment from New Jersey to Hawaii. Any shipments that go to Hawaii are transported by an LTL carrier from the pick-up location to the port in Los Angeles where they are prepared for the steamship.

Initial thoughts were that no one in their right mind would ship $52k worth of material in a cardboard box, across the country.

Freight was booked through the freight forwarder, an inland carrier was selected, and no cargo insurance was applied. The customer “packaged” the freight in a cardboard box on an undersized pallet. By the time the freight arrived to the port in Los Angeles,  the customer’s worst nightmare began – The cardboard box was ripped to shreds and the freight was damaged.

The paperwork process began with the LTL carrier first asking, “what is the value of the freight that has been damaged?” Answer was $52,319.00. Initial thoughts were that no one in their right mind would ship $52 K worth of material in a cardboard box, across the country. Let alone, be put on a vessel and rocked on a boat for a week. But our customer insisted the value was correct, so we began what we knew would be a long claim process.

 

The Importance of Packaging 

Based on the LTL carrier’s rules for the class and limit per pound, the payout from the inland carrier was $1,123.00 and that is only if they agree they are at fault. After a three-month process, including an inspection of the freight, it was determined the freight was not packaged properly. However, the carrier did agree to pay a portion equal to a third of the required amount. Essentially the customer would get $374.33 for a $52,319.00 piece of equipment (a loss of $51,944.67 for the equipment alone). The $374.33 didn’t even cover the freight cost.

This was not a satisfactory solution for the customer. The forwarder was then held accountable for the freight, but again under the limits of liability is only required to pay $1,123.00. After 11 months of negotiations going back and forth, the customer finally received the payout for the damaged freight in the amount of $1,123.00.

This meant that once again, their freight was improperly packaged and would be susceptible to damage yet again.

Several weeks after the first shipment was damaged, the company asked for a rate to ship the same product over. Since the freight was damaged and never made it, they now had to ship the replacement. After being asked if they have had the replacement shipment professionally crated, they replied with “What do you mean – we bought a pallet and shrink wrapped it down, is this not sufficient?” This meant that once again, their freight was improperly packaged and would be susceptible to damage yet again.

Moral of the Story – Carriers know that damages will occur and have built that cost into the shipment ahead of time. The carrier’s liability has been predetermined to cover the bare minimum of what damages have been projected to incur. In addition, customers themselves can put their own shipments at risk with no fault of the carriers by simply not having their shipments packaged properly.

The BlueGrace Difference: No Hassle Insurance

Insuring your products at a minimal cost to you, give you peace of mind that if the worst occurs, you are fully protected.

BlueGrace Logistics can provide full coverage cargo insurance on every shipment regardless of how high the value is. Insuring your products at a minimal cost to you, give you peace of mind that if the worst occurs, you are fully protected. Keep it simple, values are based on purchase order or invoice amount of your product and not some complex or confusing rate table.  Please reach out to your BlueGrace Sales Representative or call customer service today at 1-800-MY-SHIPPING for more information!

#BGInvestigates: Why not use a 3PL?!

No acronym boils the blood of a BlueGrace® Logistics employee more than “3PL”. In our experience, this acronym conveys an adopted meaning that doesn’t give justice to the value added service BlueGrace delivers. We believe 3PL providers should be an extension of your business, not an outsourced process. So instead of a “3PL”, we consider ourselves a Logistics Service Provider.

Phrasing is not the reason that decision makers stray from 3PLs. To further understand the issue, BlueGrace investigated internally. Here are the most common concerns:

 “I’ve been burned by other 3PL’s, so now I steer clear…”

This could be the most common objection to any business considering a new 3PL. To those questioning the use of 3PL’s, we say, “Well you haven’t experienced BlueGrace.” Completely nixing all 3PLs from your life is the wrong move. We have learned the most common reason for failed 3PL partnerships is billing resolutions. At BlueGrace, we take certain precautions to safeguard against mistakes. We know that re-classes and re-weighs are the heartache of any shipper’s existence. Our new and enhanced BlueShip Transportation Management System allows users to enter weight and dimensions into their customized portal; alerting the shipper to contact their rep if the shipment requires special attention (pricing, class, etc.).

Another concern is the lack of education from the provider to the customer. This results in miscommunication and animosity, which potentially leads to a short-lived business relationship. It’s vital for you, the shipper, to understand what we provide. A good Logistics Service Provider (or 3PL) will help their customer understand resources like NMFC codes, cubic capacity and linear feet guidelines.

“If we can be of help, we will. If not, we tell you. We want to create mutually beneficial relationships and properly educate our customers,” says Eric Chambers, Sr VP of Sales.

“You don’t own your own trucks, so why should I trust you with my freight?”

That’s a good question. BlueGrace Logistics has a strong network of top rated carriers to handle our customer’s goods. We use a scorecard with each carrier to monitor overall performance such as damages in transit and punctuality. Our carrier partnerships allow us to negotiate competitive rates on your behalf. Take advantage of the lower costs that the buying power of the right 3PL can get you.

BlueGrace Logistics provides free quotes and internal audits of your current logistics processes. For any questions in regard to your shipping needs call 1.800.MY.SHIPPING

So, we hope this topic was helpful in identifying your concerns in determining whether or not working with a 3PL is right for you. Give us a call, send an email, or follow us on Twitter (@mybluegrace) for more on these important subjects as #BGInvestigates.

Visit us online at www.mybluegrace.com

– Jennifer Masters, Business Information Analyst
Follow @BG_JennyD on Twitter!

Daily Transportation and Logistics News – Mar. 2, 2011

AASHTO: Government Shutdown Could Cost Transportation Sector $100M/Day

The American Association of State Highway and Transportation Officials recently estimated that a full government shutdown would put a stop to $100 million in transportation funding each day that is flowing into the economy.

Cost of CSA Will Rise as Program Ramps Up

The FMCSA has realized that the CSA program will require a much larger amount of resources in order to properly enforce the program. This is because the program will be ramping up to full enforcement and will need more staff to fully implement CSA and integrate it into its operations.

Truckload Index Shows Tightening Capacity

The capacity for truckloads was much tighter in February than in some of the previous months. This was due to weather constraints in both January and February, as well as the stronger demand after the weather had cleared up.

IATA issues positive statement on air cargo growth

The International Air Transport Association has announced a growth in January of 9.1 percent in air freight as compared to January 2010.

Texting Ban Announced for Hazmat Drivers

The Pipeline and Hazardous Materials Safety Administration issued their final rule prohibiting texting on electronic devices by Hazmat drivers.

NAFTA Trade Rose 13.8 Percent in December

For the 13th consecutive month, trade using surface transportation between the US, Canada and Mexico posted a year-over-year increase. The month of December showed a 13.8 percent increase.

– Ben Dundas, Web Analyst

E-Logs, Supply Chains Beware

Recently, I received an email from Tim Higham, the CEO of Interstate Transport, pointing out the new provisions regarding the new E-Log rule. Trust me when I say that this new rule can radically change the transportation industry.

The Federal Motor Carrier Safety Administration has opted to place this new rule into effect June 1, 2012. Basically, the rule states that any carrier that fails a single compliance review will be required to use onboard recorders to track driver hours.

Warning.  The following is my personal opinion on this subject

Having been in the transportation industry during my entire working life, I believe this could be a very dangerous rule if not properly overseen. The basis for this rule is that most violators of hours of service rules have much higher incidence rates for accidents. This statistic is not arguable and has a long and proven history. The belief is that cracking down on these drivers and thus requiring onboard tracking devices will greatly reduce offenders. This may actually work, but at first glance it doesn’t seem that all points have been considered. I believe that it may enable  “cheaters” to cheat with greater ease— offenders are already breaking the rules.

And device tampering is only one concern. Another is the possibility of problems in identifying the respective drivers. I’m not convinced that those who want to will not be able to fool the system that is in place. Further, a portion of those that are compliant will be at risk of being more bound to regulations. Having a family on the road every day, I am rather concerned about highway safety. I just don’t see this rule making a positive impact.  It can only result in greater restrictions for the good guys.

Additionally, this could wreak havoc on already tight capacities. A small reduction in capacity could send rates skyrocketing and create delays and instability in supply chains. This would make big winners out of the offenders and those less likely to comply. A rule meant to crack down on chronic offenders could actually benefit them tremendously.

Keep in mind that this rule can be imposed on a single review. It is my hope and belief that strong domestic manufacturing and a strong U.S. economy will emerge by 2012.  If capacity shrinks due to a non-effective rule, everyone would suffer.

Again, I like the thinking behind greater checks and balances. I just hope these new proposed regulations do not harm the good guys.

Bobby Harris, President and CEO
Follow me @BobbyBG_CEO