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BlueGrace Logistics

It’s Yappy Hour, Not Happy Hour! BlueGrace Helps Homeless Animals Of Tampa Bay.

Each Friday afternoon, bars and restaurants across the nation receive an influx of patrons ready for drink specials and relaxation after a long workweek. The Humane Society of Tampa Bay decided to put their own spin on this time-honored tradition and begin hosting “Yappy Hours” to raise money for their shelter in various locations around Tampa. “Yappy Hours” have become a popular event for young professionals and a great fundraising opportunity for HSTB. As a longtime partner of the Humane Society of Tampa Bay, BlueGrace decided to host its very own Yappy Hour at a local employee favorite, Fuzzy’s Taco Shop.

Puppies, Drinks and Tacos!

Fuzzy’s Taco Shop in Brandon, FL provided indoor and outdoor space so attendees could bring their own dogs, and Humane Society of Tampa Bay brought adoptable dogs in an effort to find their forever homes. “As a proud owner of three rescues of my own, we were excited to participate in such a great cause” said Ian Lieberman, co-owner of Fuzzy’s Taco Shop.

BlueGrace worked with Fuzzy’s to gather raffle prizes that would generate as much buzz and excitement as possible. Luckily, many members of the Tampa Bay community were more than thrilled to donate prizes to the cause. The Tampa Bay Lightning, Rays and Bucs happily donated memorabilia and tickets for the raffle, while local attractions such as Lowry Park Zoo, MOSI, Busch Gardens, Big City Events and the Florida Aquarium donated tickets for admission. If sports or theme parks weren’t enough of an attraction, pet lovers had the opportunity to win a custom pet quilt and footprint keepsake from The Pet Loss Center. Local restaurants Brocato’s, WOB, The Columbia and Fuzzy’s themselves donated hundreds of dollars in gift cards. For our fitness-minded attendees there were health supplements donated by Southern Muscle, a one-month program package from Camp Gladiator, a five-class package from Orange Theory Fitness in Brandon, and one free month membership at Crossfit BNI. In total, over $5,500 in prizes were donated and raffled off.

A total of $1,013 was raised for Humane Society Tampa Bay

“As an organization we’ve hosted an annual food drive competition we call ‘Cats vs Dogs’ for HSTB for six years now” said Courtney Smith, Manager of Culture and Engagement.“We were excited to extend this effort out to our community and had a really great turnout!” In addition to the raffle, Fuzzy’s offered homemade dog treats and brownie sundaes with 100% of the proceeds going to HSTB. They also donated $1 from each frozen drink sold that night. Overall, the community response was tremendous. With over 200 in attendance,  a total of $1,013 was raised for Humane Society Tampa Bay to support their continuous efforts towards the homeless pet population in Tampa Bay. “Humane Society of Tampa Bay is such a phenomenal organization that does so much to help the homeless animals in our community” Smith continued. “Partnering with them for this event was truly a labor of love, we can’t wait to start planning the next one!”

Check out these photos from our Yappy Hour event!

Thank you to Dosia White Photography for capturing these awesome moments.

 

 

BlueGrace Helps Houston With Truckloads Of Clothing

We are all aware of the damage inflicted on the Houston area from Hurricane Harvey. The amount of homes and lives destroyed was beyond what any of us could imagine. As a 3PL freight provider, there are many ways we can help; by utilizing our carriers we have had the ability to assist in tragedies like Hurricane Harvey. Trucks can bring the necessary items that people need in times like this and they can do it quickly. They can deliver essential items needed right now, like clothing, food, water and supplies that are more important than money at that specific time. BlueGrace was proud to able to help those in need after receiving a call from a clothing supplier August 30th for just this type of relief project.

Supplier Jumps In With Clothing

This particular customer provides southern theme apparel for its distributors across the US.  They reached out to BlueGrace Logistics on August 30 to inform us that they had 45 pallets of overstock socks, shoes and shirts that they wanted to donate to the Hurricane Harvey relief efforts. While they had the merchandise that Houston residents needed, they felt items would be best distributed by another party. Our team was able to support them by providing transportation to a non-profit specializing in charitable clothing – which was already set up to distribute to the neediest of Hurricane Harvey victims.

BlueGrace Team Steps Up

Within 20 minutes the request for multiple truckloads was processed, and shortly after the Full Truckloads (FTL’s) were scheduled. BlueGrace was able to utilize our close relationship with our carriers and cover all of the freight costs for the supplier. The first truckload was dispatched the following day and the second the day after. The Less Than Truckload (LTL) portion of the shipments were also taken care of, which included 33 more pallets of emergency items shipped to the non-profit for distribution.

Be Caring Of All Others

At BlueGrace we stand by our 5 Core Values, and Core Value #1 is Be Caring of All OthersWhen an opportunity to help others arises, especially when it is something we specialize in like Truckload and LTL transportation, there’s never a hesitation to jump at the chance to assist in any way possible. Shortly after Hurricane Harvey, our own team at BlueGrace Headquarters in Tampa was effected by Hurricane Irma. We felt the support from so many carriers, vendors, partners and employees this week and we truly appreciate it as we help get Florida back on its feet.

For everyone in Houston, we are here to assist you through these tough times and will continue to help both locally and nationally when we are called on to do so. 

 

Embracing the New Future of Logistics

When it comes to transportation and logistics, the market is a decidedly different place than it was only a few short decades ago. These changes are not small things either, and given the speed at which these changes are coming, it’s creating a rift between those that are willing to plunge headlong into the abyss, and those that are still afraid to look over the edge.

While firms like Amazon are leading the charge, more companies are warming up to the idea of the new ways of doing business by embracing the digital chasm, as it were.

According to the findings from the “26th Annual Study of Logistics and Transportation Trends (Masters of Logistics)”,  more companies are beginning to understand that new business models and new competition in the field are changing customer expectations.

“Results from the 2017 study show that roughly 75% of respondents are using the mix strategy (be all things to all people) as the predominant approach for their companies compared to the 51% who we reported utilizing a mix strategy in our 2016 results. However, unlike 2016 where many of these same companies focused on reducing cost as a primary objective, respondents this year were almost equally focused on increasing customer service or reducing costs—31.3% and 30.9%, respectively,” says Logistics Management.

The Structure of Service

A strong structure is becoming even more important than it has been in the past. Part of the focus for this years study is the relationship between strategy and structure. Simply put, if a company’s strategy aligns with its objectives, then the structure of the company will naturally develop in a way that makes those goals achievable. While this seems straightforward enough, there is a surprising gap between strategic focus and organizational structure for many companies.

Companies that reported a cost leadership focus strongly agreed that transportation is strategically important to them

“For example, companies that reported a cost leadership focus strongly agreed that transportation is strategically important to them. However, there is not this same level of strong agreement for elements that would provide the supporting organizational structure, such as working together with transportation service providers to be successful or spending time with those providers to learn more about various aspects of their business,” LM explains.

Companies with a focus on customer service, however, have a strategy that better aligns with a transportation oriented structure. So why would a company that’s focused on customer service have a better transportation network than a company that is more dedicated to a cost leadership strategy? Because in the now digitized world of transportation, both transportation and speed of service are goals that directly align with customer service. This means that by focusing on customer service, a company can naturally set itself up to have a more efficient and successful supply chain.

The Impact of Technology

Cost is, of course, another important aspect of running a successful business. When developing a successful cost strategy, it’s crucial to understand the tradeoffs between cost and service. Sacrificing good service for the sake of cutting costs is just as bad, if not worse, than overpaying for subpar service. Additionally, the speed of service becomes even more important when it comes to the digital economy. Companies as well as their transportation service providers “must be able to quantify the cost/value of increasing service levels.”

“Understanding transportation pricing should rely heavily on data science,” says Tommy Barnes, a sponsor contributor. “Currently, there are a lot of decisions being made without a firm grasp and understanding of how they will affect transportation costs—both in the short-term and long-term.”

While we can certainly agree with that, Barnes also believes that most transportation providers don’t have the necessary technology in place to accurately determine the cost of delivering services to their customers.

“Without that, they can’t accurately convey the value associated with increasing service levels or capabilities, leaving their customers to make decisions on a commodity price basis only,” Barnes said.

Having the “right technology” in place is simply a matter of having the right Transportation Management System (TMS) in place.

Yet having the “right technology” in place is simply a matter of having the right Transportation Management System (TMS) in place. The transportation industry, as a whole, are embracing and utilizing a TMS and even those that don’t, can have access to a world-class TMS for free!

Improving Data Shows the Real Strength of Trucking

There is an interesting correlation between the success of the survey and the data technologies that are utilized as more companies start relying on digitized services. As more manufacturers and companies go digital, the ease of gathering information increases, which allows the survey to get a better feeling for what’s going on in all parts of the industry.

A company must have real-time visibility into the entire lifecycle of their freight—all the way from quote-to-invoice

The report credits this improvement as a direct result of adopting modern automation and visibility tools. “To compete in a digital economy, a company must have real-time visibility into the entire lifecycle of their freight—all the way from quote-to-invoice—in order to manage exceptions, and even prevent errors from happening altogether.”

“The most efficient way to achieve this is through a multimodal, multiservice connectivity platform, a single source that views and analyzes all inventory and transportation positions,” he added.

While new data does reveal a larger portion of the industry, it also highlights some of the troubled areas. Capacity in the LTL sector is beginning to tighten, owing to a lower availability of equipment. Additionally, we’re seeing a growth in turndown rates, which usually bodes ill for the industry.

“All of this is happening at a time when we’re also seeing some interesting changes in the transportation spend by mode. There was a sizeable increase in spend for private fleet/dedicated (23.8% in 2017 versus 20.8% in 2016). This was the largest shift in transportation modal spend YOY. LTL remained essentially unchanged despite healthy rate increases during the past 12 months. Surprisingly, TL showed a 2.1% increase in its share of the transportation budget despite significant pressure to reduce prices as capacity outpaced demand,” says TM.

All of this to say that despite the troubles the trucking industry has been facing, between new regulations, bouncing freight rates, and weak demand, the trucking industry is still going strong. In fact, trucking remains the favorite mode of transportation for the United States.

Embracing the Change

Fortune often favors the bold, and it will be the bold that emerge victorious in the changing market place. For companies who are still taking their first tentative steps to technology and digitization, embracing this new methodology sooner rather than later will pay off in the long run. Fortunately, trailblazing and pioneering isn’t necessary, especially when it comes to strengthening logistics and your supply chain. Find out how BlueGrace can help your company run more efficiently and let us help you take those first steps into the new market landscape.

 

 

Hurricane Irma – BlueGrace Tampa Update

BlueGrace Post-Irma | We Are Up And Running

It has been a challenging weekend at BlueGrace corporate headquarters in Tampa, Florida. Hurricane Irma came in to our area Sunday night and left a trail of destruction, flooding and power outages, but we were prepared. BlueGrace got right to work, getting all of our cloud based systems transferred to our regional locations in Chicago, Boston, Los Angeles and Richmond.

Yesterday we were able to get our generators online and power restored to most of the office, and the Tampa team started back to work. We did have some obstacles with our systems but as of this morning, Tuesday September 12th, we are fully functional and providing the world class service our customers expect.

We want to thank you all for your patience! Now that we are up and running, we are ready to handle all of your freight and shipping requests.

Why Heavier Trucks Aren’t the Answer

While the American Trucking Association has been rallying in an attempt to get approval for heavier trucks on the road from Congress, they might not be aiming in the right direction. The obvious standpoint is that heavier trucks would mean better business. As U.S. trucks haul hundreds of billions of dollars across the country annual, a heavy truck would mean more freight can be moved and therefore better profit margins, right?

The trucking slump has nothing to do with the weight of the trucks

But the truth of the matter is that the trucking slump has nothing to do with the weight of the trucks, desired or otherwise, and everything to do with the pricing and the trucking environment as a whole.

A Necessary Change of Perspective

It’s no secret that the U.S. trucking industry is going through a pretty rough patch. The driver shortage alone produces a myriad of problems as trucking companies struggle to retain drivers against new regulations, time spent away from home, and adequate compensation. Even as the industry looks to employ female drivers in what is typically considered a male dominated labor force, filling the gap is proving to be more than difficult.

Driver shortage notwithstanding, the biggest issue that the industry is facing is when it comes to pricing, not the weight allotment 

“Some of the industry’s challenges with achieving adequate profit levels result from overcapacity because of a failure to realize that trucking depends on derived demand for volumes, and that lower freight prices will not stimulate more shipments if the economy is not growing,” says the JOC.

What many carriers aren’t understanding is that price is the one aspect they do have control over. Unfortunately, many of them had fallen into the trap of using a pricing model that was created before many regulations were passed, meaning they’ve had the power to change pricing for the past 30 years but simply failed to do so.

The Turning Point

That’s right. Most trucking companies are using a service pricing system that should have been phased out 30 years ago. Interstate loads were deregulated in 1980 and the same for intrastate loads in 1995. Parcel carrying companies charged based on distance and weight since 1985, leaving some gaps in their plan that didn’t account for oversized packages. During this time there were only five accessorial charges.

Now, 30 years later, parcel companies have shifted over to DIM (dimensional) weight pricing

Now, 30 years later, parcel companies have shifted over to DIM (dimensional) weight pricing. Now, not only can they capture the dimension of all packages they process, but the added charges based on the new pricing structure lead to higher revenue for carriers. Additionally, the accessorial charges have changed from five to 60, which makes up close to 11 percent of the parcel carrier revenue.

Weight Vs. Distance

While the LTL sector has made some changes to incorporate DIM pricing, it’s the FTL sector that is lagging behind. The problem is that the truckload segment is still relying on the distance to create their price point. While load weight does affect variable and fixed costs, the industry has yet to fully incorporate weight into price point generation. Because of this outdated model, shippers with lighter loads can subsidize the heavier loads of other shippers which are hurting the industry as a whole.

Since they’ve begun to incorporate DIM weight pricing, LTL carriers have seen a growth of 3.2 percent per hundredweight for the second quarter of 2017

So what results has the LTL industry seen for their changes? Since they’ve begun to incorporate DIM weight pricing, LTL carriers have seen a growth of 3.2 percent per hundredweight for the second quarter of 2017. This follows the average growth trend of 3.3 percent per year from 2013 to 2016 since the changes have been made.

The FTL sector, however, has seen a nominal growth of 0.5 percent for the second quarter, down from the 1.8 percent over the 2013 to 2016 period. This shows a proof of concept that taking control over the pricing structure can have a much greater impact than bickering over the weight limit.

“As noted, other industry segments have changed business processes and pricing to capture the cost associated with different shipments and value added for various customer groups. Instead of spending resources on uncertainty associated with getting legislative relief for heavier trucks, which will likely create a more negative image with the public, truckload carriers should focus on digging out of the pricing pothole, which is within their control,” the JOC added.

Overall rate costs would be negligible for shippers and manufacturers

While shippers might not necessarily be thrilled at the prospect of higher rates, the overall rate costs would be negligible for shippers and manufacturers. Even a modest 7 percent increase in shipping price would have a negligible increase in production cost, which can easily be passed on to consumers, thus increasing the quality of service and easing the woes of the trucking industry.

 

 

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.

 

 

Trucking is Still America’s Favorite Mode of Freight Transportation

The American Trucking Association recently released the latest edition of the ATA American Trucking Trends 2017 which serves as a compilation and benchmark of data for the trucking industry. Interestingly enough, despite the lull in trucking over the past few years, the ATA report shows the trucking industry’s revenues for 2016 to be upwards of $676.2 billion dollars for the year.

ATA report shows the trucking industry’s revenues for 2016 to be upwards of $676.2 billion dollars for the year.

“The information in Trends highlights exactly what I tell elected officials, regulators and key decision-makers every day: trucking is literally the driving force behind our great economy,” said ATA President and CEO Chris Spear. “Safe, reliable and efficient motor carriers enable businesses throughout the supply chain to maintain lean inventories, thereby saving the economy billions of dollars each year.”

Trends don’t just cover revenues either. Just about any data you could want or need about the trucking industry in the U.S. is at your fingertips. Here are some other interesting statistics uncovered by the ATA’s Trends

  • Trucks carried 70.6 percent of all freight moved in the U.S., about 10.42 billion tons.
  • In 2016, there were 33.8 million registered commercial trucks including 3.68 million class 8 trucks.
  • Combined they used 38.8 billion gallons of diesel, 15.5 billion gallons of gasoline and traveled a distance of 450.4 billion miles.
  • U.S. commercial trucks paid $41.3 billion in state and federal highway fees and taxes.

The trucking industry is one of the most resilient in the country

While it might seem like the U.S. trucking industry is on the ropes, the nation still depends on trucks to haul freight and keep the country moving. The Trends report just goes to show that the trucking industry is one of the most resilient in the country and will continue to be so for years to come.

Partner with BlueGrace Logistics

BlueGrace is an award-winning, full-service Third Party Logistics (3PL) provider that helps businesses manage their freight spend through industry leading technology with a large network of established carriers to customers across the country. Sure, lots of firms may claim that, but what really sets us apart is our passion to support your success in this complex $676.2 billion Billion U.S. trucking industry.

Walmart OTIF Policy – What are the Challenges and Concerns?

Walmart’s new addendum to their Must Arrive By Date (MABD) provision is making some suppliers more than a little nervous. OTIF (On Time In Full) rule will begin to punish suppliers for late deliveries with a 3 percent charge back if they are not made in a timely fashion. While this extension of the MABD fits with Walmart’s ever growing expectations, it could create some significant challenges for the supply chain, particularly when fresh produce is involved as it narrows the delivery window from MABD significantly.

It could create some significant challenges for the supply chain, particularly when fresh produce is involved

While MABD isn’t anything new as other major retailers such as Target and Home Depot have been using the threat of the 3 percent charge back as a means of encouraging more timely deliveries from shippers, OTIF significantly narrows the grace period a shipper would have to make the delivery.  

“Walmart is going to require its suppliers (shippers) to meet a two-day shipping window instead of its previous four-day window, as well as up its required compliance rate from 90 percent to 95 percent,” says Logistics Management.

Tightening Expectations

Under the MABD guidelines, suppliers had a four-day window to ensure that product was delivered to it’s intended destination. Under the OITF policy, that window will narrow significantly, only allowing a one day window for produce and perishables and a two-day window for other general goods. Suppliers will be hit with the 3 percent chargeback penalty if goods arrive late, incomplete, or even early. Additionally, if Walmart decides the supplier is, in any way, responsible for a variance in the delivery, they’ll receive a chargeback, end of story.

Under the OITF policy, that window will narrow significantly.

Good For The Customers But Tough For The Suppliers

Walmart’s plan does make a lot of sense when you consider they are working with JIT (Just in Time) principles. They don’t want excessive inventory sitting in stockrooms or in trailers behind the store, and they expect their suppliers to help make that a reality.

They don’t want excessive inventory sitting in stockrooms or in trailers behind the store

“The impetus for these types of changes over the years, according to Walmart, is part of an effort to ‘streamline its supply chain and cut costs,’ adding that ‘stores are no longer acting as warehouses, with too much inventory in back stock rooms or in trailers behind stores. Walmart wants merchandise to arrive in stores just in time to restock shelves and serve customers,’ ” Logistics Management adds.  

Compliance for shippers and suppliers is a going to be much tougher

While this is a sound decision from the retailer standpoint, compliance for shippers and suppliers is going to be much tougher, especially when you consider the nature of the produce industry.

“We predict in advance when the crop is going to come off, but weather can change that. Are we going to be held accountable for that? That’s going to cause a problem,” says one Walmart produce supplier.

Walmart produce executive, Bruce Peterson of Peterson Insights Inc says “The fresh produce industry is different and there should be ‘at least some degree of tolerance.’ From his more than 20 years of experience as the top produce executive at Walmart, he noted that almost all of the violations of the OTIF policy are at the beginning or the end of a season when weather and timing do play an out-sized role.”

The fresh produce industry is different and there should be ‘at least some degree of tolerance.’

The Blame Game

Obviously, no one wants to take the financial hit for falling out of grounds on compliance. So the question being asked is if there is a violation, who’s at fault, the supplier or the carrier?

Who’s at fault, the supplier or the carrier?

Take a look at the industry wide issue of assessing a fee or a fine on someone involved in the logistics of the supply chain. Holding the supplier of the transportation financially responsible is problematic when factoring in the risk-reward nature of the total transaction.

For example — A supplier could have a load of product with a value of tens of thousands of dollars. A trucker may only be getting $3,000 for the delivery of that load. Assessing the trucker a fee, which could easily be 30 percent of his take, for a delivery out of compliance seems unreasonable.

It doesn’t seem right to punish a good shipper in the off chance that they’ve had a late delivery due to weather or some other unforeseen circumstance. Rather, if there’s a serious problem with the shippers, then it’s time to find a better shipper.

The Solution

Proper lead time is crucial for suppliers and manufacturers that work with larger retailers like Walmart. One way to increase your chances of success is to partner with a third party logistics provider (3PL).

The new OITF mandate is going to have an impact on supplier ratings,

The new OITF mandate is going to have an impact on supplier ratings, so finding a 3PL who is both consistent and reliable is critical for navigating these new changes successfully. A good 3PL partner can examine your supply chain from start to finish and help to strengthen weak spots that might create issues in the future, reducing the chances of chargebacks and other issues that might be caused by OITF.

A good 3PL partner can examine your supply chain from start to finish and help to strengthen weak spots

BlueGrace can 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!

 

Tampa Manufacturing and Logistics – A Perfect Marriage.

Manufacturing in Florida, is the backbone of the state’s economy.

Florida has nearly 18,000 manufacturers in all types of industries ranging from traditional such as plastics and printing to breakthrough technologies like aerospace and medical devices.

Tampa Bay knows a thing or two about manufacturing and economic development, as it is home to 19 corporate headquarters with over $1 billion in annual revenue, eight of which are Fortune 1000 companies.

The depth and diversity the city provides for its economy makes for the perfect marriage of logistics and businesses, especially manufacturers.

Manufacturing Growth Perfect for 3PLs

While the manufacturing businesses in the region are continuing to see a huge amount of growth, the infrastructure that Tampa Bay provides, is allowing modern logistics and Third Party Logistics (3PL) providers to grow and adapt alongside the companies they ship for.

Florida is second in the nation for transportation infrastructure with our ports, airports, rail and roadways.

Logistics and 3PLs providers are always looking for ways to improve these modes to help businesses move raw materials, components and finished products. With these options, logistics and 3PL providers have the ability to provide customized transportation programs that help grow local manufacturing.

E-Commerce Puts Pressure on Logistics

Both regionally and nationally based manufacturers are seeing a demand to keep up with e-commerce giants like Amazon, which means that their logistics provider needs to stay one step ahead to provide efficient and cost effective transportation management. Much like consumers, big box retailers and mom and pop shops now demand the product to be on their shelves at a quicker pace. This “just-in-time” mentality is what puts a strain on manufacturers who rely on an in-house transportation department. Business intelligence and carrier advocacy are critical to these companies in order to keep up with the changing market.

The Value of Business Intelligence

Of all the resources that a logistics or 3PL providers delivers to its customers, the most underrated yet most valuable is business intelligence. A 3PL has the ability to take a company’s current freight data and see where opportunities are being missed, find ways to shave costs and offer an efficient transportation program that ultimately mirrors their business model and will push for more growth.

This valuable data, when run through the right engineering platforms, can help decide the best modes, which carriers to use and even help pinpoint where the best location for a new distribution center would be, based solely on past data and performance.

By partnering with logistics or 3PL providers that have access to multiple modes of transportation, large carrier networks and the ability to review current freight data, solutions can be provided that better fit the company’s business model. Manufacturers can adjust rapidly to the increased supply chain demands, without expensive increases to the head count of their transportation department.

Job Opportunities for the Future Generations

While the logistics and 3PL providers continue the push to deliver customized and adaptable transportation programs for manufacturers, the state of Florida is also striving to increase job opportunities to fulfill logistics and distribution demands. Currently the logistics and transportation industry employs more than half a million Floridians. 85,500 of these employees are working at companies that specifically provide logistics and distribution services. The future is also bright as Florida has ten public high school career academies offering training in Global Logistics and Supply Chain Technology.

Optimization and Forward Thinking Manufacturers

Today’s technology and service that a logistics or 3PL providers utilizes, paired with a forward thinking manufacturer looking to optimize their supply chain, will prove to be a successful marriage for growth. This growth is what will help bring even more success and jobs to Florida for both the manufacturing and logistics sectors.

Contact the experts at BlueGrace Logistics Today

To find out more about BlueGrace Logistics and how we help all types of industries streamline their freight, click here or contact a Transportation Management expert today using the form below.

Is Intermodal on the Rise with ELD, Driver Shortage and Tightening Capacity?

A recent Cowen & Co survey discovered that 65 percent of shippers didn’t move their freight from road to rail during the second quarter. This result was also backed by a survey from Morgan Stanley, which had 59 percent of respondents indicating the same. However, while few shippers decide to make the switch, that could be changing this December. Why would shippers decided to hop the rails instead of utilizing trucks? Because of the Electronic Logging Device mandate which will be going into effect at the end of the year.

65 percent of shippers didn’t move their freight from road to rail during the second quarter.

The Reluctance to Shift

While rails are touted as a way to save money, more than a few shippers are reluctant to shift away from using trucks to haul their freight. Ideally, railroads as an intermodal service can offer a lower price at the expense of some speed. When it comes to inbound costs, it can be a way for some shippers to cut down on expenses in order to remain competitive. Or at least, that is the reasoning being sold to them.

Railroads as an intermodal service can offer a lower price at the expense of some speed

According to the Cowen survey, nearly half of the shippers surveyed stated that intermodal options only saved them upwards of five percent. A quarter of the respondents said that truck prices were lower than intermodal options. It’s that tight gap that might be responsible for making the reluctance to shift from road to rail. As there isn’t a huge cost advantage for sacrificing speed, most shippers prefer to stick with trucks as they don’t believe that rail can keep up with the speed of inventory turnover.

They don’t believe that rail can keep up with the speed of inventory turnover

Rails Starting to See Growth

Whatever reservations shippers might hold for rail and intermodal options will soon be falling to the wayside. For shippers that already made the switch, they noted not only better intermodal service but also the tightening of truckload capacity as their main reasons why.

Tightening of truckload capacity is a BIG concern

“Morgan Stanley asked shippers to rank truckload capacity in six months based on a scale where one equals abundant, five is balanced, and 10 is very tight. Shippers put the current market at 6.3 and projected 6.8 in six months. One year ago, the number was 4.9,” according to Transport Topics.

Executives believe that many truckers will leave the industry rather than deal with the ELD mandate

Another factor to consider is the potential spike in truck rates as truckload executives believe that many truckers will leave the industry rather than deal with the ELD mandate. Which, in turn, could cause a modest 3 percent increase in intermodal rates over the next six months due to a rise in demand.

“Overall, we view the results of this survey as positive for the railroads,” says Jason Seidl, a Cowen & Co analyst. “The 3.0% price increase expectation leaves additional breathing room from the all-important 2% rate, which is important because rail-cost inflation typically hovers in that area, and pricing will need to remain above that level in order for the railroads to improve their operating ratios.”

We view the results of this survey as positive for the railroads

The ELD mandate, the tightening of capacity, and the driver shortage could all be contributing factors to shippers taking a more favorable look at intermodal and rail options. In any case, 72 percent of respondents for the Morgan Stanley survey indicated that they would be increasing their rail spending in the next six months. However, in order to close the gap between either mode of pricing to err on the side of rails, there would have to be a serious shift in the trucking industry.

 

 

Supply Chain: Nervous Over NAFTA

The White House has released President Trump’s plans to “renegotiate” the North American Free Trade Agreement. While it comes as a welcome sight for investors, it’s only sent the logistics industry into a mild state of panic as they try to determine just what effects these changes will have on the supply chain.

While on the campaign trail, Trump cited the deal as “the worst trade deal signed maybe anywhere” making a bold proclamation that maybe it was time to leave it altogether. However, in a recent press release, the administration suggested a slight restructuring, rather than a total withdrawal.

Sudden Changes Can Hurt the Industry

Trump’s business demeanor has a lot to do with the reason that the logistics industry is nervous, according to the president of the Arkansas Trucking Association, Shannon Newton. She said that a sudden change to the free trade agreement between the U.S. and its neighbors could cause some serious issues in the supply chain, especially when there isn’t time to adapt to these changes.

The industry has anxiety over change.

“The industry has anxiety over change, and it’s not necessarily that the way we are doing it is the best way,” Newton said. “It’s that the way freight currently flows dependent upon the methodologies that are currently in play.”

A sudden change in any trade agreement, could upset the way shippers do business.

A sudden change in any trade agreement, let alone NAFTA, could potentially upset the way shippers do business. Combine that with innovations in technology and rapid changes in consumer demand and renegotiations could have some serious adverse effects on shipping.

The Ripple Effect: Automotives

Just how bad could this ripple effect hit U.S. industries? Quartz explains that renegotiating NAFTA would more likely kill jobs in the U.S. auto industry rather than improve them.

Renegotiating NAFTA would more likely kill jobs

“Take the proposed (and widely criticized) border-adjustment tax proposal, which would result in higher taxes for imports. If it was applied at a 15% rate, it would raise the cost of making a car by $1,000, according to the BCG analysis. That’s too small of a difference to warrant moving production from Mexico to the US but large enough to force manufacturers to adjust—at the expense of US suppliers,” Quartz says.

So the manufacturers pass the buck, and the consumer pays a little more for the end product, right? Not exactly. What would likely happen is that automakers would simply offer vehicles with fewer features. Those features, such as automatic braking systems, would shut down other jobs somewhere down the supply chain.

Automakers would simply offer vehicles with fewer features

The Boston Consulting Group projects that 20,000 to 45,000 US jobs could be lost this way if the US adopts a 15% border adjustment tax. Which not only goes against the grain of the “America First” initiative proposed by the Trump administration but also make the United States significantly less competitive in the global market. And that’s just for the automotive industry, saying nothing of other manufacturers that rely on goods from Mexico.

Not All Doom and Gloom

Most of what is causing the anxiety in the trucking industry is simply the uncertainty of what’s to come. However, there are some positives to the new proposals. For instance, the new proposals heavily support the automation and streamlining of the customs procedures at the border which could help to be boost efficiency of cross border logistics.

The new proposals heavily support the automation and streamlining of the customs procedures

“For its part, the U.S. has already indicated an interest in automating and streamlining customs and border procedures. Those were among negotiation objectives released on July 17 by the Office of the United States Trade Representative (USTR). That 18-page document asks for ‘automation of import, export, and transit processes’ as well as ‘reduced import, export, and transit forms, documents, and formalities [and] enhanced harmonization of customs data requirements’ for goods crossing the border,” according to an article from Today’s Trucking.

If President Trump’s negotiations could help to address the imbalance, specifically in wage and labor gaps between the U.S. and Mexico, while streamlining trade between customs process, then it could end up as a win for the logistics industry. As it stands, however, only time will tell.

 

 

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!

 

 

 

BlueGrace Awarded Top 100 3PL By Inbound Logistics

Over the last nine years, BlueGrace Logistics has been awarded Inc. 500, Best Places to Work, Top Minority Owned Business, Happiest Company Award, Inc. Hire Power Award, and many more. As one of the fastest growing leaders of transportation management services in North America, BlueGrace is now being awarded the Top 100 3PL prize from industry publication, Inbound Logistics.

Inbound Logistics editors selected this year’s class of Top 100 3PLs from a pool of more than 300 companies.

“Today’s leading companies are struggling to balance the need for advance planning against the demands for supply chain agility, low-inventory schemes, and complex omni-channel and e-commerce distribution regimes.  BlueGrace Logistics continues to provide solutions to help companies meet those challenges, and that’s why Inbound Logistics editors have recognized BlueGrace Logistics as one of 2017’s Top 100 3PL Providers.” said Felecia Stratton, Editor at Inbound Logistics.

Top 100 Selection Methodology

Inbound Logistics’ Top 100 3PL Provider’s list serves as a qualitative assessment of service providers they feel are best equipped to meet and surpass readers’ evolving outsourcing needs. Distilling the Top 100 is never an easy task, and the process becomes increasingly difficult as more 3PLs enter the market and service providers from other functional areas develop value-added logistics capabilities.

Distilling the Top 100 is never an easy task

Each year, Inbound Logistics editors select the best logistics solutions providers by carefully evaluating submitted information, conducting personal interviews and online research, and comparing that data to our readers’ burgeoning global supply chain and logistics challenges.

“The service providers we selected are companies that, in the opinion of Inbound Logistics editors, offer the diverse operational capabilities and experience to meet readers’ unique supply chain and logistics needs.” said Stratton.

A Look Ahead

BlueGrace Logistics will continue its quest to be the best 3PL, by offering its freight customers the ability to ‘Simplify their Freight’ by providing customized transportation management through their proprietary technology, BlueShip™. By developing tighter integrations with BlueShip™ and major ERPs such as SAP and NetSuite, the transportation management team can offer more tools to help consolidate, streamline and predict future freight issues and opportunities. The BlueGrace team of transportation management experts have already helped many companies reduce their over freight spend through a tight combination of data engineering, carrier relationships and excellent customer support.

The transportation management team can offer more tools to help consolidate, streamline and predict future freight issues and opportunities

About Inbound Logistics

Inbound Logistics is the leading trade publication targeted toward business logistics and supply chain managers. Inbound Logistics’ mission is to help companies of all sizes better manage corporate resources by speeding and reducing inventory and supporting infrastructure, and better matching demand signals to supply lines. More information is available at www.inboundlogistics.com.

 

 

 

The Battle for The e-Commerce Market Continues on The Logistics Front

The battle for the e-commerce market continues between Walmart and Amazon. As both are vying for every customer they can get, Walmart has decided to take a new strategy against the e-commerce giant. A warning to Walmart carriers has been issued. Do business with Amazon, and you may not be doing business with us in the future.

So the question is, is this simply a threat to divert carriers away from Amazon, or is there something else to it?

The Peak (Season) Concern

There certainly is a sense of pragmatism behind this threat. If carriers are hauling for both companies, then Walmart could lose out, specifically during peak seasons when freight volumes tend to spike.

Satish Jindel, head of SJ Consulting out of Pittsburgh says one of Walmart’s chief concerns is freight cyclicality and securing trucking capacity to move during busy seasons. “The genuine concern is that when [Walmart] needs 30 trucks from a company, that they get those 30 trucks instead of losing out because they are [working] for Amazon,” he says. The company is “protecting its ability to get capacity when they need it,” he says.

The company is ‘protecting its ability to get capacity when they need it’

This practice doesn’t stop with just Walmart’s carriers, either. The company has issued a similar warning to other suppliers. Typically those that make use of Amazon’s cloud storage capabilities.

The Possible Storm Among the Cloud

Why would Walmart be concerned with suppliers using the Amazon cloud? Well, would you feel comfortable storing data in a competitor’s server? In the cases of a supplier, having proprietary information in the digital hands of a competitor can be more than a little discomforting. To that end, Walmart warning stands: Use this service, lose our business.

In the cases of a supplier, having proprietary information in the digital hands of a competitor can be more than a little discomforting.

It’s not just the proprietary information that makes Walmart execs a little uneasy. In the wake of the Petya cyber attack in June, there are a number of companies who are getting more than a little uncomfortable with the idea of all their precious information being vulnerable. But just how vulnerable is the cloud? Based on the service interruption that happened only a few months ago, it might be more vulnerable than you would expect.

But just how vulnerable is the cloud?

“Amazon Web Services, by far the world’s largest provider of internet-based computing services, suffered an unspecified breakdown in its eastern U.S. region starting about midday Tuesday. The result: unprecedented and widespread performance problems for thousands of websites and apps,” says a article from Georgia based Newspaper.

While there was no reported leak of information from this outage, consider again the recent wave of cyberattacks. The Petya ransomware virus all but decimated the shipping industry including ocean carrier giant, Maersk Line. Given the amount of information that’s stored in the cloud, it’s reasonable to expect that a competitor might consider a use of the service to be a potential breach of trust.

Is Walmart being reasonable with their concerns

At the end of the day, the question is this: Is Walmart being reasonable with their concerns, or are they simply trying to put pressure on their carriers to steer them away from Amazon? While both sides of the argument can be made, the answer likely lies somewhere in the middle.

 

Understanding and Managing Your Hazardous Materials Supply Chain (hazmat)

Shipping Hazardous Materials

Any company that ships hazmat knows that every piece of the puzzle needs to be perfect before the freight gets moving. Between surcharges, accessorial fees, packing groups and hazmat classes, every aspect of each shipment needs to be in its place or else someone gets fined.

With the government mandates and regulations so heavily involved in every aspect of the transportation industry, it is imperative for a logistics coordinator or a third-party logistics (3PL) provider to be knowledgeable and current with industry and carrier regulations. Here is where it can get sticky for some providers who may not have excellent carrier relationships.

Our relationship with our carriers is different.

Our relationship with our carriers is different. They are as important to us as our customers, so it is to our benefit to work with them to stay up to date on industry and carrier regulations. We are constantly training our transportation and freight representatives as well as communicating weekly with our ‘Carrier Update’ that goes out to our entire company, not just sales!

How BlueGrace is Different

BlueGrace is different than other 3PLs for several reasons, but one that sticks out above the rest; Business Intelligence and Transparency.

Business Intelligence and Transparency

A massive agriculture chemicals manufacturer in the United States was with another large 3PL when an opportunity came across for BlueGrace to do a consultative review. Upon conducting the review and data engineering screening, this company felt that BlueGrace offered greater transparency and pricing structure than their current provider and ultimately made the switch.

See How BlueGrace Helped an Agriculture Chemicals Manufacturer Realize a Cost Savings of 14% YOY

Download Case Study

Use a Proven 3PL for Your Hazmat

 

 

Shedding Some Light on Dimensional Pricing

As more carriers are beginning to make a move to dimensional (DIM) pricing, it’s important that we take a moment to understand what this means exactly. Just like any change that happens in the shipping industry, being aware of it before it becomes the norm is the best way to stay ahead of the curve and to mitigate any unwelcome surprises in the form of higher shipping rates.

So what is dimensional pricing?

So what is dimensional pricing? Simply put, DIM pricing is a way for carriers more accurately price packages that take up more space rather than simply basing it on weight. A blog released earlier this year from EasyPost sums it up like this.

“Dimensional pricing (or dimensional weight) is a pricing technique for carriers to better reflect the cost of carrying bigger packages, regardless of their weight. Traditionally, carriers have used weight as the major determinant in rates. But by charging only by weight, carriers lose money when carrying bulky and lightweight packages that take up valuable space. Space can be just as important to a carrier as weight since bulky packages limit the amount of total packages the carrier’s vehicle can carry,” says EasyPost.

While the calculations might vary from carrier to carrier, there is a basic formula used by most.

Some carriers, like USPS, offer a DIM weight calculator so you can plug in your dimensions and see what your dimensional factor would be before you take your package to be shipped.

Understanding What this Means For Your Business

Once a carrier has their DIM factor, they can determine the rate to ship the package. However, here’s the catch. A carrier will also determine the weight rate as well and likely charge you the higher of the two. Understanding how your carrier will use dimensional pricing, as well as what the rates are will give you some insight as to how to move forward.

Understanding how your carrier will use dimensional pricing, as well as what the rates are will give you some insight as to how to move forward.

If their dimensional pricing is higher than their weight pricing, it might be time to rethink your packaging process, breaking items down into smaller packages or changing your packing material and box sizes for example.

LTL Shippers Might Get Hit Harder Than Most

The thought behind DIM weight pricing was born from both necessity and technology. Given the boom in e-commerce, many carriers realize that they’re maxed out on space, rather than weight, making their trips less than efficient. Given that we have the technology to accurately measure the dimensions of packages, this move is the next logical step for the LTL sector.

The thought behind DIM weight pricing was born from both necessity and technology.

‘The (LTL) industry in the last three or four years has rapidly embraced dimensioning (measuring) machines,” said Satish Jindel, principal of SJ Consulting, which closely tracks trends in the LTL sector. “It works, and it’s cost effective—the payback comes in just a few months,’ according to an article from Logistics Management.

How BlueGrace Can Help

While LTL carriers have been slow to react in comparison to parcel carriers, Dimensional Pricing is a reality in the future of our business. The DIM weight trend is beginning to grow, quickly. With the increased usage of dimensioners, carriers can more accurately capture cost data and ensure that price is compensatory with the cost to move it. The ultimate laggards here will be big shippers migrating off of the conventional class based system. Dimensional pricing is prevalent throughout the world, now the U.S. based shippers will have to play catch up. Not only will it apply to boxed parcels, but to palletized freight as well. Shippers will feel the sting of excessive packaging quickly if they don’t start making changes now.

Shippers will feel the sting of excessive packaging quickly if they don’t start making changes now.

Dimensional shipping might seem like a quick grab for a few extra bucks on shipping rates, but it’s actually a more accurate and fair way of doing business for all parties involved. Still, it can be a bit confusing at first, especially when dealing with other changes at the same time. At BlueGrace, we make it our mission to not only keep pace with these changes but to help you do the same. Whether it’s getting a better handle on dim weight, or finding carriers at the best rates to help you keep your supply chain moving, we’re here to help.

 

CSA Report Card: Room for Improvement

Compliance, Safety & Accountability

While the Compliance, Safety, Accountability (CSA) scoring mandate is meant to improve carrier performance and safety for trucks on the road by providing a scoring metric, it wasn’t without its blind spots. A recently released report from the National Academies of Science, Engineering, and Medicine (NAS) shows that the CSA scoring method has some pretty glaring flaws when it comes to the Safety Measurement System (SMS) which can lead to an unfair scoring for a company.

CSA scoring method has some pretty glaring flaws

The main issues brought up by the NAS report include “some BASICs lack correlation with crash risk, data insufficiency, use of relative rankings, use of non-fault or non-preventable crashes, state variations in inspections and violations, lack of consistency in violation coding, a lack of transparency of the SMS algorithm and the public availability of SMS rankings,” according to GloStone.

The DOT will need to make the SMS metrics more fair and accurate

A point to note from the NAS report is that they believe the premise behind the SMS is fairly solid; it’s the FMCSA’s execution of the program that leaves something to be desired. The DOT will need to make the SMS metrics more fair and accurate when it comes to assessing actual safety risk.

Recommendations for the SMS

Again, the idea of the SMS is sound, the main problem is when it comes to the execution of the SMS. “The Safety Measurement System is used to identify commercial motor vehicle carriers at high risk for future crashes. It’s the heart of the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability enforcement regime, known as CSA. After numerous criticisms of the methodology from the industry, Congress called for the review of SMS as part of the Fixing America’s Surface Transportation (FAST) Act of 2015,” according to TruckingInfo.

Congress called for the review of SMS as part of the Fixing America’s Surface Transportation (FAST) Act of 2015

The current SMS metric fails to take into account some variables that play a bigger role in safety practices. Some of these faulty measurements include:

  • Using highly variable assessments
  • Not accounting for crashes where the motor carrier is not at fault
  • Including carriers that have very different tasks in the same peer groups
  • Using measures that are sensitive to effects from one or more individual states
  • Using measures that are not predictive of a carrier’s future crash frequency
  • Using measures that are not reflective of a carrier’s efforts to improve its safety performance over time.

Statistically Principled Approach

It’s easy to see that these oversights can lead to some bigger issues down the road. For that reason, the NAS study suggests that the current system takes a “more statistically principled approach” when it comes to collecting data. The NAS report recommends using latent trait theory or an “item response theory” (IRT) model. The IRT is the same approach used by hospitals for safety and performance rankings and helps to shape policy decisions.

“We have found, for the most part, that the current SMS implementation is defensible as being fair and not overtly biased against various types of carriers, to the extent that data on MCMIS can be used for this purpose,” said the National Academies panel.

SMS implementation is defensible as being fair and not overtly biased against various types of carriers

“However, we believe some features of SMS implementation can be improved upon, and some of the details of the implementation are ad hoc and not fully supported by empirical studies. Many of these details of implementation would be easily addressed if the algorithm currently used were replaced by a statistical model that is natural to this sort of discrimination problem,” they added.

Quality of Data

Another issue mentioned by the report is the poor quality of data. It’s recommended that the FMCSA continues to work with state departments and other agencies to improve the collection of data when it comes to miles traveled and crashes. Unfortunately, as it stands, this data is either missing or is of poor quality. Should the FMCSA be able to improve the quality of their data, the SMS will be able to take other factors such as environmental factors of travel which will give a better understanding of the crash conditions.

Unfortunately, as it stands, this data is either missing or is of poor quality

There are other, more obscured, data points that the report says should be included when collecting data on carriers, including driver turnover, cargo type, as well as method and level of driver pay. The panel suggests that driver pay is an important factor to consider especially when taking into account that better-paid drivers (those who aren’t paid based on miles traveled) tend to have fewer crashes.

What Does this Mean for the Industry

As you can imagine, the trucking industry has been waiting for NAS findings as it highlights all the issues they’ve had with the program for the beginning.

“This report has confirmed much of what we have said about the program for some time,” said American Trucking Associations President and CEO Chris Spear. “The program, while a valuable enforcement tool, has significant shortcomings that must be addressed, and we look forward to working with FMCSA to strengthen the program.”

we look forward to working with FMCSA to strengthen the program

If the FMCSA does decide to implement the suggested changes, then we can expect a more or less total overhaul of the CSA rating system. Now carriers with a mediocre level of safety performance can’t rely on poorer carriers to make them look good. Simply put, everyone is going to have to step up their game and start pulling their weight, safely.

Carriers with a mediocre level of safety performance can’t rely on poorer carriers to make them look good

In addition to providing more accurate and reliable data, carriers will also be able to get a better understanding of their score as well as how to improve it.

 

What Happens If Freight Economy Rises?

 

A market that is already beleaguered by a significant shortage in workforce is seeing a disturbing trend in the form of an uptick in turnover rates.

“The slight uptick in turnover, despite weak freight volumes in the first quarter, may be indicative of a tightening in the driver market,” said ATA Chief Economist Bob Costello. “The situation bears watching because if the freight economy picks up significantly, turnover will surely accelerate – as will concerns about the driver shortage.”

Turnover will surely accelerate – as will concerns about the driver shortage

Within the first few months of 2017, the annualized rate of turnover for large TL (truckload) fleets, rose three percent, up to 74 percent. While it’s somewhat heartening to know that this is still down 15 points from what it was last year, a 74 percent turnover rate is nothing to be ignored. For small TL fleets, the increase was a bit smaller, two points, bringing the turnover rate to 66 percent.

Fixing a Growing Problem

When you consider the importance of trucking to the United States, the shortage in drivers is becoming a serious issue. Add in the fact that a large portion of the active drivers on the road are just about at retirement age and you have a full-blown crisis for the industry.

The shortage in drivers is becoming a serious issue.

So what is being done to fix or, at the very least, soften the blow of the driver shortage? Well, for starters, many trucking companies are taking steps to recruit more women into what is typically considered a predominately male industry. Anything from offering better maternity leaves to other incentives. At this point, anything that can draw in more personnel and drivers is considered a win.

Many trucking companies are taking steps to recruit more women

‘The American Trucking Associations, declared in a recent report that the industry needs to add almost 1 million new drivers by 2024 to replace retired drivers and keep up with demand. Some companies have added 401(k) and tuition reimbursement programs. Others have hired “female driver liaisons” and started support groups called “Highway Diamonds,” said Ellen Voie, president of the Women in Trucking Association,’ in a quote taken from the Washington Post.

The industry needs to add almost 1 million new drivers by 2024 to replace retired drivers and keep up with demand.

“In 2015, her organization created a Girl Scout badge to teach girls that trucking isn’t just for men,”  WP added.

Women in Trucking

Carriers are really pushing for more female drivers, according to Voie. “They’re facing the retirement issue, yes, but they also know that women tend to be more risk averse, which is extremely important.”

The drive for more women drivers is starting to pay off, however, there was a slight increase in female drivers over the course of the past year, rising from 6 to 7 percent.

There was a slight increase in female drivers over the course of the past year

Even as we see some slight improvements, it’s almost impossible to believe that one of the most predominate fields of employment in the United States might be on the verge of extinction, or at the very least is in danger of heading that way.

Is the Trucker the Only One at Risk?

A recent post from Bloomberg has a rather interesting interactive chart that shows whether or not your job might disappear in the future. For the trucking industry, it’s not just the drivers who might be dusting off their resume, but even shipping clerks and freight agents might soon be out of a job as the industry continues to change and evolve through new technology.

Even shipping clerks and freight agents might soon be out of a job

Most of what the chart predicts is that low skill, low paying jobs, will eventually be phased out by computerization and automation. For example, Shipping, Receiving and Traffic clerks have a 98% probability of having their position becoming computerized in the future. However, as we’ve learned from history, the evolutionary path of technology isn’t always the easiest to predict. While it’s true some jobs might become obsolete, there are a number of jobs that will simply become augmented with technology, still maintaining the need for the human element.

 

What is Volume LTL Shipping?

Businesses who ship product and carriers looking to maximize business revenue have come to embrace Volume LTL shipping.

The simplest explanation is volume LTL provides many of the benefits of truck load (TL) or partial TL with the cost savings associated with less than truckload (LTL). It’s a win-win for everyone.

 It’s a win-win for everyone.

A Quick Definition: A shipment greater than 5,000 lbs, 6 pallets or more and taking up 12 to 32 linear feet of trailer space qualifies as Volume LTL. Although sometimes referred to as partial truckload, volume LTL has distinct size requirements and does need product crated or on pallets, not a requirement for partial TL shipments. If the shipment will take up 20% or more of the trailer, volume LTL may be the way to go.

Volume LTL has distinct size requirements and does need product crated or on pallets

Why Customers Like It?

With Volume LTL, a business only pays the going rate for the space the freight uses and the total weight of the shipment along the shipping lane. This generally results in a lower cost to ship. Plus, shipments get out the door faster, usually same day and there’s a lot less risk of damage for freight. (Freight goes from dock to dock much like partial or full TL, not getting off-loaded at different terminals like standard LTL shipments.)

A business only pays the going rate for the space the freight uses and the total weight of the shipment

Why Shippers Like it?

Shipping companies get more business, more quickly. The daily demand for volume shipping continues to grow as companies look to reduce shipping costs by shipping greater volumes. Shippers do not need to turn down requests for those not-quite-partial TLs. Plus, volume LTL increases the loads on all runs – no more driving empty trucks home, making every trip profitable.

The daily demand for volume shipping continues to grow

Does Volume LTL Replace standard LTL Freight?

Not at all. Volume LTL makes sense for a lot of companies who need to ship products; and for many asset-based carriers looking to expand their business. Standard LTL freight offered by common carriers will continue to meet the needs of businesses in terms of costs, shipment size (5 pallets and smaller) and speed of getting product out the door each and every day.

Volume LTL makes sense for a lot of companies who need to ship products

A Real Win-Win!

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All Hands on Deck for 2017 Backpacks of Hope

Back to School Can Stir Up Many Emotions

A new school year can bring about many emotions. For parents with kids entering kindergarten or their senior year of high school, the first day of school tends to be showcased on social media as a happy and exciting time. What you may not see though, are the extra hours a parent had to put in at work to get their kid a new backpack, or that the youngest of 4 kids is using her oldest sister’s school supplies from last year because the parents couldn’t afford to get all new ones.

Fresh Start for Kids Each Year

What is supposed to be a fresh start to a new year, can mean stress to their families. For this reason, BlueGrace Logistics has partnered with Metropolitan Ministries for the last 6 years, to collect school supplies for “Backpacks of Hope.”

The average cost of school supplies exceeds $600

The average spend on school supplies exceeds $600 and this expenditure can be a huge struggle for many families, and BlueGrace Logistics wants to help in our communities.

It’s All About the Kids

According to the National Center for Education Statistics “In 2015, approximately 14.7 million children under age 18 were in families living in poverty.”

BlueGrace Logistics has regional offices in Boston, Baltimore, Richmond, L.A. and Chicago with additional branch offices scattered throughout the United States. Most BG offices seek out local charities and generate fundraisers around their specific initiatives.

BlueGrace Chicago has partnered with the Chicago Children’s Advocacy Center to raise school supplies for children.

“Our donations only help a fraction of the kids in need throughout the world, but we find hope in the fact that if enough people or organizations like ours, are willing to work together for such a great cause, that number can become much larger,” said Joannah Kalisz, Account Executive, BlueGrace Chicago.

Metropolitan Ministries

Metropolitan Ministries of Tampa Bay, provides backpacks, uniforms, and school supplies to more than 250 children in their care and more than 2,200 in the community at large. All donations help ensure that every child is prepared for the school year.

A backpack carries more than just school supplies.

“Drives like this with Metropolitan Ministries, mean so much to our organization as we have a huge place in our hearts for children and want to make a difference in their lives. Most of our efforts throughout the year focus around children and animals because they are the most vulnerable and don’t always have a voice. said Whitney McKay, Marketing & Brand Manager.

See What BlueGrace has to Say about Backpacks Of Hope

Caring for All Others | It’s What We Do

Core Value number 1 at BlueGrace is Be Caring of All Others and Backpacks of Hope is just one of the many ways we can express that core value. We believe our people make the difference and we strive to create an environment where our employees truly feel like family and feel the urge to help others.

“We understand that when you’re excited about the company you work for and feel like you’re part of a purpose, you’ll inevitably be more fun to work with, loyal and highly effective in your role,” says Whitney McKay, Marketing & Brand Manager at BlueGrace. “Since day one of my six years at BlueGrace there’s been something organic and genuine about our culture. It doesn’t matter how much we grow, you just can’t get the same experience anywhere else.”

We strive to create an environment where our employees truly feel like family and feel the urge to help others.

“Giving back to the community gives us a purpose, it’s a huge part of who we are as an organization. Being caring is engrained in our company culture,” said Courtney Smith, Culture & Engagement Manager at BlueGrace Logistics. “It’s easy to keep the culture alive when you have a core foundation like Bobby has created.” 

Do you want to help?

If you feel the desire to help, no matter how small, please reach out to the organizations below to donate your time, money or supplies.

Metropolitan Ministries – Outreach Center

Tampa, Florida
2301 North Tampa Street
Tampa, FL 33602

813.209.1200

Chicago Children’s Advocacy Center

1240 S. Damen Ave.
Chicago, IL 60608
312.492.3700