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Why Auto Industry Growth Increases Logistics Technology Requirements

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In 2015 the US automotive industry witnessed a record 5.7% increase in sales over 2014 to 17,402,659 light-vehicles according to the Automotive News Data Center. The good news continued with Bank of America Merrill Lynch’s annual industry outlook, in which it expects annual sales to top 20 million vehicles by 2018.

According to Merrill Lynch, the continued growth is attributed to solid consumer confidence, a steady job growth since the 2008 recession and an increase in total miles driven by Americans. 2016 started off well for the industry, however May-June “month-to-month” comparison dipped slightly. In the month of June, cars and truck sales were good for Ford which reported a 6.4% increase in sales, Fiat Chrysler was up 7%, Honda was up 3.2% and Nissan reported its best June ever, by being up 13.1%.

Strong Demand For Cars And Light Trucks

The continued strong demand for cars and light trucks in the US is particularly helping the growth in cross-border trade between Canada and Mexico. In fact, so much so, it’s common for trucks to sit and wait for long hours to enter the US and vice versa. Congestion is a problem in which the three governments as well as transportation carriers, are working towards solving.  Meanwhile, the tracking of finished vehicles and parts needed for assembly plants, has to be monitored at all times to keep the industry rolling.

This ‘just-in-time’ business model that many automotive manufacturers ascribe to, begs the need for complete transparency within supply chains.

This ‘just-in-time’ business model that many automotive manufacturers ascribe to, begs the need for complete transparency within supply chains. Whether its congestion on the border, a work stoppage at an assembly plant or a natural event, such as a snowstorm, disrupting a particular location, automotive manufacturers need to respond asap and adjust inventory as needed to keep all assembly plants humming.

Logistics Technology Is Playing A Larger Role

As a result, technology is playing a larger role and is turning the industry upside down with innovations like on demand 3D-printing of parts, and the tracking of shipped parts from manufacturing directly to the assembly floor. Many automotive manufacturers are already utilizing 3D-printing technology for specific components and even more are tracking their part deliveries with amazing accuracy that leads to additional productivity and profits.

Parts manufacturers need to better track and maintain their supply chain to keep up with the new demands placed on them by the automotive manufacturers

Auto parts logistics is shifting, bringing parts closer to the manufacturer. This is creating an impact on transportation demands, not to mention potential change in warehousing locations and inventory management. The parts manufacturers need to better track and maintain their supply chain to keep up with the new demands placed on them by the automotive manufacturers, and may need to utilize a Third Party Logistics (3PL) provider, to keep up with these demands. A 3PL can take current and past shipping data and determine the most effective methods for a parts manufacturer to work with the new freight window scheduling of the the automotive manufacturer while maintaining and even increasing cost savings.

Automotive Manufacturers Team Up With Technology

As the automotive manufacturers increase the technology used to produce their vehicles, the current parts manufacturers’ supply chain can become out dated very quickly. These logistics changes have resulted in redefining the automotive industry into a technologically advanced supply chain monster. The automotive industry continues to reinvent itself and its supply chain will likely change as well. Auto parts manufacturers will need to be more collaborative with its partners, such as a 3PL, to transform each of the major supply chain components including sourcing, manufacturing locations, warehousing as well as transportation.

 

 

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Beauty & Fitness Product Retailers Face Tighter Supplier Compliance Mandates

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Peak season is now upon us as retailers and other businesses alike prepare for the back-to-school rush as well as the holiday season. For the beauty and fitness products retail categories, there’s no holding back.

Market research firm, IBIS World, estimates the US cosmetic & beauty products manufacturing group is valued at about $48.2 billion and grew at 1.1% from 2011 to 2016. Meanwhile, US consumer retail dollar sales of sporting goods equipment, athletic footwear and athletic apparel increased 4% in 2015 to over $64 billion according to the National Sporting Goods Association.

Growth for Beauty & Fitness Remains Healthy!

While growth remains healthy for both retail categories, businesses in each category are facing increasing online competition as well as competition for space on the shelves of large retail stores.

Amazon has often been described as “the elephant in the room” for many businesses across all industries and as it creeps closer and closer to the end consumer, retailers are tweaking their supply chains to match the online behemoth by adding their own last-mile capabilities, automating/expanding distribution centers as well as adding products to brick and mortar stores quicker.

Collaboration between all supply chain partners is more important than ever before however, it seems to be under pressure from large retailers who mandate restrictive Must Arrive by Date (MABD) rules. Target, one of the largest ‘big-box’ retailers, recently changed the rules of their MABD vendor compliance program on May 31, 2016. Previously, Target gave businesses a three-day window to deliver the product by the MABD with a charge-back of 3% of the invoice value. Now the delivery window is one day with a charge-back at 5% of the invoice value.

Target Under Fire Last Holiday Season.

Target is also one of several retailers that came under fire during past holiday seasons for not having enough products on its shelves. As a result, last year Target, as well other retailers such as Walmart increased inventory to assure customers that stores would have plenty of products in-stock as well as online. However, this strategy came at a price with too much inventory left over after the holiday season. Now Target has asked its suppliers to take on up to an extra 3% to 5% of the cost of promotions and price cuts to help reduce unsold inventory.

Make Sure to Know the Rules.

For suppliers, know the rules when working with larger retailers but also make sure the retailer is willing to collaborate. Participation from retailers benefits all supply chain partners and encourages creative problem solving as well as new product development – a plus in today’s retail environment.

 

 

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Vendor Compliance: Are you Retail Ready?

 Compliance Blog 6.16.16

Maximize your Transportation Efficiency to Retail Stores and Distribution Centers this Holiday Season

Huge retailers have very strict rules when it comes to receiving products by a certain date to restock their shelves. If a manufacturer or distributor is not getting their product to the retailer by the (MABD) or Must Arrive By Date, the retailer can hit the business with a ‘charge-back’ for a certain percentage of the invoice value. Not only will the business have to pay a fee, but it will reflect poorly on their business scorecard as well.

Business Scorecards 

If a business receives enough bad marks on their scorecard, they could become ‘Black Listed’ and have their product pulled from the shelves. For example, if 80 percent of  “XYZ” business is sold at Wal-Mart, that business will suffer. Target, one of the largest ‘big-box’ retailers, recently changed the rules to their MABD vendor compliance program on May 31, 2016. In that past, Target gave businesses a three day window to get the product by the MABD and the charge-back was 3% of the invoice value. Now the window is one day with a charge-back at 5% of the invoice value.

Planning Ahead

It is time for businesses to start planning for the 2016 holiday season. We all know that once summer is over, people start counting down the days until Thanksgiving and Christmas. Black Friday will be here before you know it so here is a small checklist to ensure that your business is ready.

  1. Are you partnered with carriers that can hit a MABD in +/- one day?

  2. Do you have the ability to analyze the results or charge-backs and poor scorecards?

  3. Do you know how much business you would lose by not being able to sell your product at bigger retailers?

  4. Do you have the procurement strategy to go to carriers that can hit specific MABD?

Your 3PL should have a vast amount of success in partnering with customers that ship their product to big-box retailers. There should be specific mitigation strategies set in place by your 3PL, to reduce charge-backs on day one. A good 3PL should have long lasting relationships with their carriers and have shown great success in procuring aggressive freight rates that are on the big-box list of approved carriers.

 

 

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What are some rules of thumb when shipping LTL freight?

LTL 6.8.16

 

Regarding the media, it’s hard to tell exactly where the world stands on a position. There are always two or more sides to the story, and it seems the freight industry isn’t any different. Transportation execs tout words like “recession” owing to dismal growth and plummeting freight volumes while millions of dollars are being poured into technology driven logistics startups. Even traditional logistics functions such as Less Than Truckload (LTL) are experiencing new levels of growth by building new terminals, expanding territory, and growing their customer base.

In fact, the rise of eCommerce lowered the entry costs for shippers and trading companies coming into the market place, while LTL carriers are quickly shaping up to be in a favorable position when it comes to freight.

While there are no rules other than regulation that could be carved in stone, we collected some advice and other helpful tidbits for shippers considering shipping LTL, based on a good old rule of thumbs to consider:

Common Issues with LTL

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.

To reduce re-class fees, shippers should always carefully enter the product description, weight, dimensions, class and proper NMFCs (National Motor Freight Classification).

Avoid Disappointments

To avoid disappointments, it’s good to know that an LTL carrier’s transit times doesn’t count the day of pick-up, holidays, or weekends. For example, if a shipment is picked up on Friday, and the transit time is two days, then the shipment will be delivered on Tuesday.

Just as airplanes won’t wait if the passenger is late, the driver can’t wait if a shipment is not ready at time of pick up. Typically in these events, shipment must be rescheduled for the following day. While scheduling, also keep in mind that carriers require a two-hour window to schedule a pick up. Additionally, to ensure that the freight meets the on-time delivery standard to the customer, it must be shipped before 5:00 PM.

Be Aware of Any Accessorials

An LTL shipment can be anything from a household item to larger industrial equipment. If a lift-gate, a pallet-jack or other equipment is required, the customer must specify that in the special instructions and remember that special delivery can add a couple of days to the delivery date.

Last but not the least!

Drivers, fortunately with very few exceptions, will make every attempt to protect the customers items. However, accidents do happen. Although carriers have their own insurance against losses, shippers should acquire extra insurance to limit liability. The limits of liability vary carrier to carrier and more so, when FAK (Freight all Kinds) rates are applied. Other insurance options include purchasing your own coverage from companies like UPS.

Utilize these simple rules of thumb every time you ship freight, and minimize your surprises when it comes time to billing.

 

 

 

 

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International Shipping Part II: Are You Ready to Comply with the VGM?

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In part one, we looked at some of the complexities of international shipping, and why working with a logistics partner is vital to helping navigate the pitfalls of shipping cargo internationally.

The most recent issue that is causing headaches for the industry, is The International Maritime Organization’s (IMO) critical amendment to their Safety of Life at Sea (SOLAS) regulations. This amendment is called Verified Gross Mass (VGM) and it will require containers to have their weight verified before being loaded onto a ship. It will go into effect on July 1, 2016 in 171 nations that
 comprise IMO’s membership.

Preparedness

According to the most recent survey, conducted by American Shipper, 69% of shippers and 60% of freight forwarders that were polled said they don’t understand how to comply with the VGM.

The biggest stymie point for shippers, is that most of them don’t understand exactly how their cargo will be affected when the VGM goes into place. Shippers are also concerned about what will happen with the containers that were loaded before the new regulation goes into effect?

Although the Maritime Safety Committee (MSC) has introduced new paragraphs relating to the verification of the gross mass of packed containers at its recent meeting, stating “Administrations and port State control authorities should adopt a practical and pragmatic approach when verifying compliance with the requirements of SOLAS regulations VI/2.4 to VI/2.6, for a period of three months after 1 July 2016, with a view to permitting packed containers that are loaded on a ship before 1 July 2016 – see the full document here – nearly 70% of shippers believe they will have containers held when the regulation goes into effect July 1 according the same survey conducted by American Shipper

Some Advice

By following reports, interviews, and market surveys, it is safe to say that there will be chaos.  However, the best way forward is to plan ahead and make the necessary preparations to minimize the fallout. Since the origin of the cargo is where the documentation and verification will take place, shippers are recommended to contact their logistics and trading partners to make sure they are prepared and that the logistics are under control.

Additionally, having the right logistics partner in place whose technology is connected to the ocean carriers’ online platforms, will help to ease the submission process.

Ultimately, understanding the procedures and maintaining compliance will be vital for international shippers. Working with a 3PL partner that shippers can trust, can be a tremendous help to mitigate the impact on their supply chains and will keep their cargo moving.

 

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Do You Have Access To Your Supply Chain Data In SAP?

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Are CIO’s, CFO’s and executive suite getting the supply chain business intelligence and data they need? If not there is a way to get that much needed data and even cut costs in the process with a 3PL (Third Party Logistics) integration with SAP.

BlueGrace Logistics recently visited SAP Sapphire 2016 and spoke with many executives from businesses across the world. What we found is that it is either very difficult or incredibly time consuming to get the vital data they need from the supply chain and transportation departments within their organizations. We also found that when competing 3PL’s have integrated with their ERP system such as SAP, the integration was either clunky or just did not deliver the benefits. As a 3PL, it is our responsibility to arm the executive suite with the data and business intelligence they need to make better business decisions regarding supply chain and freight.

 

Here is how BlueGrace approaches a 3PL ERP integration:

Discovery Call

We begin with a call to find out about your current state of your transportation management and providers. During the call the search begins to find inefficiencies and ask your team about user facing functions in the ERP, WMS, and TMS.

Questions are asked about your order placement process from the order initiation to final delivery, how costs are calculated and what the current transportation procurement methodology is and finally a review your current transportation KPI’s.

Overview Presentation

BlueGrace will perform our overview on site so we can sit down with key stake holders and share findings about what solutions we can provide. While onsite, we will also meet with the heads of key departments to learn more about your business processes. At this point the customer will present BlueGrace with a full transportation data set which we use to provide our in-depth transportation management analysis. This engineering analysis of your data is the most powerful tool we provide our customers. With these results we will help determine cost savings and consolidation opportunities.

Integration

BlueGrace will look to integrate with the current ERP system and will begin to develop the business intelligence reports and dashboards for executive leadership. At this time BlueGrace will also be developing the standard operation procedure for the day to day performance and operations of the account. Our implementation team will begin their setup and transportation procurement activities at this time.

KPIs & Ongoing Program Management

After the customer begins shipping with BlueGrace, we will have executive business intelligence KPI dashboards set up. As your new logistics partner, BlueGrace will always be searching for ways to improve your transportation management and these will be seen through your selected KPIs. The more data we process, the better we will be able to find additional cost savings and opportunities during the life of the program.

Success Through ERP and 3PL Integration

The CIO, CFO, and executive suite are now being provided the information, data, and business intelligence reports they need to make their business more profitable. Key business decisions involving your supply chain can be made for the future with confidence. If you would like to learn more about this process in further detail, please reach out today and speak with BlueGrace at 844.360.2926.

About BlueGrace Logistics:

Founded in 2009, BlueGrace Logistics is one of the fastest growing leaders of transportation management services in North America. As a full service third party logistics provider (3PL), BlueGrace helps businesses manage their freight spend through industry leading technology, high level freight carrier relationships and overall understanding of the complex $750 Billion U.S. freight industry. BlueGrace is headquartered in Riverview, Florida with over 60 corporate and franchise locations across the U.S. For more information, visit www.mybluegrace.com

 

 

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Would Commoditizing Work for Ocean Freight?

Would Commoditizing Work for Ocean Freight?

As ocean freight rates have been in a near steady decline, carriers have been in a scramble trying to find ways to offset the weak demand and glut of over capacity with little to no success. With shippers benefiting from low prices, some carriers, the Hyundai Merchant Marine (HMM) and Hanjin, are balancing on the brink of bankruptcy. Other carriers like Hapag-Lloyd reported USD 48.5 million losses for the first quarter of 2016 alone.

Because of the low shipping cost, consumers are getting a good deal, so why is it so bad? Well, if Economics 101 taught us anything, it could be disastrous. The problem here is that if a few of the carrier companies merge or drop out of the game, leaving only a few of the biggest carriers on the market, rates will skyrocket; Xeneta CEO Patrik Berglund commented in an interview with Professor Andrew Lubin.

However, since neither multiple GRIs, nor slower steaming couldn’t make anyway at improving the situation for carriers, not even temporarily, what can be done?

Berglund in the same interview revealed his vision of turning containerized freight into a commodity. A possible solution that some have called revolutionary or even radical, while others doubted if this old fashioned industry would ever come around to using this new technique.

Why Commoditizing Would Work

There are a number of resources and goods that have been made into commodities such as coffee, sugar, aluminum, and other materials. Trading with commodities are highly regulated and protected and can be sold and bought forward for many years. Making containerized freight a commodity would not only create price transparency in the industry but it would also mean shippers can use hedging techniques to reduce their exposure to prices going extremely high or low.

What is Hedging and Why is it a Good thing?

Although it’s more complicated than simply paying insurance, hedging is a form of investment that works very similar to it in a lot of ways.

Let’s see how this would work with an example. A shipper who worries about the volatility of freight rates and skyrocket shipping prices would mean serious losses in profit can enter into future contract which allows the company to buy TEU space on vessels at a specific price at a set date in the future, three, four or even more years ahead.

This would be a completely new way of doing business, however, whether the conservatism of our industry will let such new waves to reach the shores remains to be seen.

About BlueGrace Logistics:

Founded in 2009, BlueGrace Logistics is one of the fastest growing leaders of transportation management services in North America. As a full service third party logistics provider (3PL), BlueGrace helps businesses manage their freight spend through industry leading technology, high level freight carrier relationships and overall understanding of the complex $750 Billion U.S. freight industry. BlueGrace is headquartered in Riverview, Florida with over 60 corporate and franchise locations across the U.S. For more information, visit www.mybluegrace.com

 

 

 

 

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BlueGrace Review of Your Typical Shipping Complaints

We’ve heard them all before.

  • “My freight arrived a week late.”
  • “I have 5 claims out with this carrier and it’s going nowhere.”
  • “I’ve had to re-class my freight twice with this shipment.”
  • “My actual cost came in higher than I was quoted.”

The list for complaints, where shipping customers feel they are a part of some ‘ripoff agenda’, is a mile long.  Your 3PL should be your biggest advocate for keeping all lines of communication open. Logistics and freight is a complex product with many moving parts for the customer, the carrier and the 3PL provider. Issues and complaints are not always avoidable so it’s imperative that each detail is covered with your 3PL. We have a deep and long-term relationship with each of our carriers so we want to ensure that all parties are taken care of. In fact, we will ensure that your business model is in line with the carrier we set you up with, before we ever move your freight!

Having a thorough understanding of the following details, usually can derail any negative outcomes:

  1. What are you shipping?
  2. Where is it being picked up and where is it going?
  3. What freight class is the shipment?
  4. What are the dimensions, how much does it weigh and how is it packaged?
  5. Do you need any special services? (i.e. Lift gate, residential drop off, re-consignment, etc)
  6. How fast do you need it there? Transit time?

Your dedicated 3PL consultant should be an expert when it comes to finding you the best carrier for your shipment based on the components you provide. Should a complaint arise with your freight, your consultant should review the process from start to finish and discover where the lines of communication became distorted.

BlueGrace Offers You a Dedicated Team

Aside from having a dedicated sales consultant, BlueGrace Logistics also employs a committed Customer Support Team whose sole focus is YOU. When a BlueGrace customer submits a complaint, the resolution and follow up are critical. It is paramount that our customers know that they are important and deserve to be updated as soon as possible, so the complaint can be resolved.

When you choose BlueGrace Logistics as your 3PL, you’re getting an extended family to handle your shipping needs. Shipping is essential to a business’s success and we strive to provide a cost efficient, complaint free, transportation plan.

About BlueGrace Logistics:

Founded in 2009, BlueGrace Logistics is one of the fastest growing leaders of transportation management services in North America. As a full service third party logistics provider (3PL), BlueGrace helps businesses manage their freight spend through industry leading technology, high level freight carrier relationships and overall understanding of the complex $750 Billion U.S. freight industry. BlueGrace is headquartered in Riverview, Florida with over 60 corporate and franchise locations across the U.S. For more information, visit www.mybluegrace.com

 

 

 

 

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Where do Freight Forwarders Invest to Weather the Next Five Years?

In our previous blog post of How Shippers Can Reduce Transportation Costs we briefly touched upon how much of an impact the right technology can have for a business. Both shippers and carriers can benefit from process automation, control of carrier selection, optimization of rates and transit times, visibility in the entire logistics program and compliance – just to mention a few.

A The Evolving Freight Forwarding Market report conducted by The Elite-League and Logistics Trends & Insights LLC, in March surveyed logistics professionals asking what their strategy was to differentiate themselves from their competition. It doesn’t come as much of a surprise by 47.01% of the companies interviewed that say it’s their investment in new technology that is helping to set them a part from other companies in what is an otherwise fragmented market. In addition to new technology, other strategies included introduction of new services and new trade lines (39%); mergers and acquisitions (10%) and only 3% had an undefined method.

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                               Source: The Evolving Freight Forwarding Market report

What Technology will be the Most Vital?

From the survey, we saw that 39% of the companies were looking for new technology to improve operational efficiencies and 30% to improve customer service. Conversely, 25% of the respondents said that visibility was the most important area where they expected technology to return their investments. However, several survey respondents indicated investments are being made to increase flexibility. 

Best Practice for Implementing new Technology

Although the advancement of cloud based solutions has significantly reduced the time and efforts of introducing a new technology into a supply chain, the process is still considerably more involved than plug ‘n play. It is a massive undertaking that needs to be managed carefully, otherwise it can have a negative impact that is both financial and collateral when it comes to operations management and customer service. To help ease the transition of technology integration, we’ve partnered with ERP Integrated Solutions to show businesses how they can save both time and money by utilizing their new technology platform to help make their business more efficient.

BlueGrace® Logistics offers innovative logistics technology to companies across the nation and around the globe. We are constantly updating our logistics and transportation management technology, adding new benefits, and continuing to meet the business needs of our customers. Our goal is to alleviate additional cost and liability associated with their business’ transportation needs.

 

 

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BlueGrace Logistics Marketing Wins Big with TMSA for Partnership with Lightning

 

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The Transportation Marketing & Sales Association (TMSA) will award the BlueGrace Logistics Marketing team with a Compass Award this June, for their outstanding efforts in marketing their partnership with the Tampa Bay Lightning.

BlueGrace Logistics recently entered a three-year agreement, to be the “The Preferred Shipping Partner of the Tampa Bay Lightning” and with this partnership comes many opportunities for the third-party logistics provider to increase brand awareness.

BlueGrace Sees Increase in Brand Recognition with Lightning Partnership

Since the launch of the partnership in October 2015, BlueGrace Logistics has seen a significant increased brand recognition of the BlueGrace name both locally and nationally.

“The BlueGrace brand has been seen locally and nationally on TV, photographed by the official Lightning photographers, and shared on social media for the entire season.” said Adam White, Director of Marketing of BlueGrace Logistics. “The national exposure of the BlueGrace brand is huge for our fast growing company and the ongoing relationship with the Lightning has become quite special for our employees. Our two winning teams working together cannot be beat.”

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Fans of any sport are typically competitive and BlueGrace employees are no different. With recruitment booths set up outside the arena and the increase in visibility at the games, BlueGrace Logistics has seen a rise in recruiting and retaining solid sales employees. These recruiting events have enabled BlueGrace to stand by its job creation commitment made  to the State of Florida and Gov. Rick Scott, and the hiring of 200 employees by the end of 2016. BlueGrace looks forward to more great seasons ahead and the opportunities it provides for our charitable, recruiting and sales initiatives.

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TMSA Conference June 5-8

The 2016 TMSA-Logistics Marketing and Sales Leadership Conference will be held June 5-8 at The Ritz-Carlton in Ft. Lauderdale, Florida. Over the course of three days, attendees, honorees and award winners will be networking with other logistics marketing and sales executives and will attend educational sessions, listen to keynote speakers and much more. Adam White, Director of Marketing for BlueGrace Logistics, is one of four panelists to be selected to discuss Partnership and Event Strategy in the logistics industry.

About BlueGrace Logistics:

Founded in 2009, BlueGrace Logistics is one of the fastest growing leaders of transportation management services in North America. As a full service third party logistics provider (3PL), BlueGrace helps businesses manage their freight spend through industry leading technology, high level freight carrier relationships and overall understanding of the complex $750 Billion U.S. freight industry. BlueGrace is headquartered in Riverview, Florida with over 60 corporate and franchise locations across the U.S. For more information, visit www.mybluegrace.com

 

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When Is Your 3PL Not Proactive Enough?

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At BlueGrace, we have heard many times from potential customers that their current Third Party Logistics (3PL) provider is not proactive. They only interact with them when something goes wrong. At BlueGrace, we like to use the term “Continuous Improvement” with our Transportation Management customers. We keep building a better program from the first shipment, and we achieve it through proactive interaction with our customers.

Businesses using a 3PL for their transportation management were asked in a web survey where their 3PL was falling short of expectations. The answers are interesting but we’ve heard them multiple times. At BlueGrace, we have solutions for all of them:

“My 3PL Is Not Proactive Enough Identifying Continuous Improvement Opportunities”

The customer is left at a severe disadvantage when their 3PL does not actively search or report on continuous improvement opportunities. A 3PL needs to be a partner to the customer so they can work together to find these opportunities. Some come through day to day contact between the two parties and others come from data and business intelligence. Either way, KPIs and constant program monitoring combined with the communication between the customer and the 3PL can create some fantastic new scenarios. These opportunities can be as simple as changing to another a carrier for certain lanes, or on a larger scale- opening a new distribution center. Your 3PL should be able to determine these options at any time, using their own tracked data and support.

Your 3PL should be able to determine these options at anytime, using their own tracked data and support.

“Performance Issues Not Addressed In A Timely Manner”

This issue is very similar to a 3PL not being proactive with their customer. As shipments become delayed or product becomes damaged, a 3PL needs to help determine the issue and change the way the freight is handled. This all has to be done quickly and effectively so the program can continuously improve. It’s simple to avoid the performance issues until they become a major problem, but BlueGrace uses a proactive approach. By monitoring the data of customer shipments and comparing it to data from our extensive customer base, we stay ahead of performance issues.

“Slow To Implement Process Changes Or Other Requests”

BlueGrace isn’t the largest 3PL, but we certainly are not the smallest. We’ve built our company around our own technology platforms that have been customized by our IT department. When we need to integrate to save our customers time, we can do it fast. When we need to change support routing to handle increased issues or carrier changes, we can respond immediately. The larger the 3PL, the more difficult it is for them to be agile. We pride ourselves on the ability to move quickly in what can be a industry that normally reacts slowly.

The larger the 3PL the more difficult it is for them to be agile with your account.

“Poor Reporting and Visability Capabilities”

This last issue comes at no surprise to us. We’ve built our BlueShip 3.0 TMS system to integrate directly into any existing ERP or WMS system, including SAP. We can offer the highest level of visibility to our customers, so both sides know what is happening each day. The visibility we provide is a major benefit to our customers and even more so to our staff that can proactively manage your account. Our QBR (Quarterly Business Report) is designed specifically for your team to see your program based on quarterly data, providing an in-depth understanding of how the current logistics industry might be effecting your business.

Your 3PL should constantly be thinking outside of the box for your transportation program. They should be providing you with the tools and metrics that optimizes your freight spend, quarter after quarter. If they are not, contact us today and we’ll be glad to get your freight into a BlueGrace Transportation Management program. Our team is ready to turn your data into success!

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How Shippers Can Reduce Transportation Costs: Part 1

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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.

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Join BlueGrace Logistics at SAP SAPPHIRE 2016 May 17-19

 

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Does your business use SAP? Are you planning to attend the largest SAP tradeshow in Orlando on May 17-19? BlueGrace will be there at Booth #455 with our partner ERP Integrated Solutions ready to discuss how our transportation management expertise and their SAP integration can lead to massive cost savings for SAP companies who ship.

“We are excited about the synergies this partnership brings to our existing clients and the competitive advantage for future opportunities.  Our core competencies complement each other well and we have streamlined our backend processes to present a seamless solution.” says Jason Lockard, Vice President Enterprise. “We are looking forward to discussing those opportunities to visitors at the SAP SAPPHIRE 2016 show.”

Please take the time to stop by the booth and hear more about our case studies on how BlueGrace can help reduce overall costs from your transportation program.

For more information on the show please visit http://events.sap.com/sapandasug/en/home.html

For more information on how BlueGrace can help your transportation department leverage SAP and realize significant cost reductions, please contact Jason Lockard at 844.360.2926

Day One Update – Tuesday, May 17th 2016

BlueGrace is at the SAP Sapphire show from today, May 17th to Thursday May 19th. Stop by our booth to learn more about our SAP integration partners and how we can cut costs for SAP users that ship. We have customers on hand to discuss what we have done for them and how we integrated into SAP.

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Day Two Update – Wednesday, May 18th 2016

Thank you to everyone who stopped by to chat with BlueGrace on day 1 at SAP Sapphire 2016. Day 2 has kicked off and our team is at booth 455 ready to discuss how our integration with SAP can cut your shipping costs.

BlueGrace Logistics at SAP SAPPHIRE 2016 Booth 455

Day Three Update – Thursday, May 19th 2016

The SAP SAPPHIRE 2016 event is coming to a close today and what an amazing event this has been. Thank you to everyone who has come by and talked with BlueGrace Logistics.  Don’t leave early – stop by booth 455 to learn on how BlueGrace can help your transportation department leverage SAP and realize significant cost reductions.

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About BlueGrace

Founded in 2009, BlueGrace Logistics is one of the fastest growing leaders of transportation management services in North America. As a full service third party logistics provider (3PL), BlueGrace helps businesses manage their freight spend through industry leading technology, high level freight carrier relationships and overall understanding of the complex $750 Billion U.S. freight industry. BlueGrace is headquartered in Riverview, Florida with over 60 corporate and franchise locations across the U.S. For more information, visit www.mybluegrace.com.

 

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About ERP Integrated Solutions

ERP Integrated Solutions provides innovative solutions in support of SAP applications that help customers achieve a higher level of business performance. With a diverse collection of seasoned consulting professionals, ERP-IS provides broad subject matter expertise to deliver right-sized solutions to address business needs. For more information, visit www.erp-is.com.

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How To Determine LTL Freight Classes & Avoid Reclass Fees

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Written By: Steve Daniels, Account Executive at BlueGrace Logistics – 855.878.2556

One of the most common complaints our LTL Account Executives hear is that our competitors repeatedly send them invoices for shipments that are double the amount of their original LTL freight quotes. When we start doing deeper research into their invoices through our free cost analysis we often find that our competitors are using the old bait and switch to get them to accept a LTL rate that is unbelievably low, only to come back after the shipment has been delivered and add on reclass fees to the final invoice.

It’s unfortunately one of the many shady tactics other logistics companies will use to gain your company’s business. BlueGrace has a zero tolerance for this practice, and we’ve developed technology and tools to help you prevent these unexpected fees. Our experts have put together a brief lesson below on the freight class system used by most LTL carriers and how using this system will help you avoid reclass fees when quoting and booking LTL freight shipments.

The Freight Class System

Almost all LTL freight carriers use the National Motor Freight Classification (NMFC) system to design their pricing structures for transporting LTL freight shipments. There are a total of 18 NMFC freight classes ranging from class 50, up to class 500. Shipments classed at class 50 would be the least expensive to ship, while shipments at class 500 would be the most expensive. This is where other logistics companies will try and take advantage of you. They’ll often give you a rate for a shipment at a lower freight class than the actual class of your shipment to give you the impression they’ve giving you a good rate, but once your shipment is in transit and gets inspected by a carrier you’ll receive an invoice after delivery with additional fees resulting from the reclass and inspection of your shipment.

Reclass fees can have a huge impact on your company’s profitability.

Does your company charge your customers for shipping based off your LTL quotes? Imagine that you’ve broken even on shipping a product to a customer, on the sale of the item you’re making $50, but you’ve just received a freight invoice that is $100 over the original LTL freight quote you were provided by your logistics company. You can’t go back to your customer and ruin that relationship so you have to absorb the cost of that reclass fee, now instead of making $50, you’ve lost $50.

To avoid this we recommend determining the freight class of your shipments yourself and utilizing our BlueGrace Freight Class Density Calculator to make the job easier. While some items such as automobile engines and flooring might have standard freight classes that don’t change, there’s thousands of other commodities that have their freight classes determined by the density of the shipment.

BlueGrace Freight Class Density Calculator

In the below screenshot you can see for yourself how simple using this system is to obtain your own freight classes! Using our Freight Class Density Calculator you would simply type in the dimensions of the pallet (length x width x height) and input the total weight to have our system provide you with an accurate freight class.

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You would then take this freight class and input this into our Blueship system to obtain quotes, book your shipment and retrieve your BOL all on your own and within just a few minutes without having to put your faith and company’s profitability in the hands of another logistics’s company Account Executive. Not only will this save you time on quoting and booking shipments, but it’ll give you extra peace of mind knowing that you aren’t being taken advantage of.

If you’re ever in doubt about the correct freight class for a shipment don’t hesitate to reach out to our BlueGrace Team directly at 800.MY.SHIPPING or via Live Chat!

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Shifting Winds of the US Trucking Market

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As vital as the trucking industry is for the United States, handling almost 70% of the total freight that passes through the U.S., it’s facing some dark times. With increasing regulatory pressure and the CSA coming into effect, truck driver turnover is now higher than ever. With an incredibly short retention span for drivers, the industry is facing increasing costs in a less than desireable marketplace.

In 2015, the US trucking market showed a slight dip when compared with previous years. SJ Consulting’s top 50 trucking firms only managed to show a 3.1% increase in revenue, compared to the nearly triple 9.1% increase seen in 2014. 2015 has, in fact, marked the slowest year-over-year increase since the recession in 2009.

Reasons for the Drop

There are a number of reasons that are slowing the growth of the trucking industries. Low cost fuel, for example, might sound like a good problem to have as it lowers operating expenses, however it also lowers fuel surcharges. Combined with a weak demand, it makes for considerably weaker growth potential. The Journal of Commerce notes that the average price per gallon of diesel fuel has dropped about 97 cents over the course of 2015, approximately 30% in total by the end of the year. Because of the lowered fuel surcharges, most carriers saw decreased revenue. However, the flipside to the low fuel costs is that many carriers so improved profitability which helped them stay afloat amid the weak demand.

The Era of Mergers and Acquisitions

With freight demand dropping across the board for global trade, the market place became somewhat of a wellspring for M&As. Larger carriers began to gobble up smaller carriers in the hopes of strengthening their resources in order to weather the coming storm. XPO Logistics, for example, has made their way to the top 50 after taking in Con-Way and French logistics firm Norbert Dentressangle. However, XPO wasn’t the only carrier part of the feeding frenzy as many other companies merged and combined their assets to form a larger, more cohesive unit.

What does this mean for Shippers?

As you can see, the logistics market is in a somewhat erratic condition right now, with a good number of things in a state of flux. As a shipper, especially those that are trying to cut costs, the US trucking industry is becoming even harder to navigate. Because of this, many shippers are looking towards brokers  to help connect them with the trucking company that best fits their needs, while other shippers are looking to 3PLs to help them shore up and optimize their supply chain, determining the best modes of transportation for their business.

BlueGrace is one such 3PL that offers unique transportation management and optimization solutions. Our web-based system allows shippers to customize it to fit their particular needs whether it is just the look or the functionality. In addition, our customers can determine and book the best mode of transportation, carrier and rate by utilizing the system and have complete visibility of shipments along with access to important documents such as bills of lading, proof of delivery and weight and inspection documents.

To find out more, check out our website or contact one of our industry experts. We simplify the complex.

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How Small & Medium Sized Businesses Use BlueGrace To Compete Against Larger Competitors

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Written By: Steve Daniels, Account Executive at BlueGrace Logistics – 855.878.2556

In previous posts we’ve discussed the 7 questions transportation  departments should ask before entering into a long term commitment with a logistics company, and also discussed how BlueGrace can optimize your transportation in just 6 weeks. 

While our Enterprise Team focuses on providing customized solutions for companies with freight spend over $500,000 yearly, our LTL and Truckload Teams focus on providing solutions for small to medium sized businesses whose freight shipping runs anywhere from once in a blue moon to multiple times a day or week.

One disadvantage small and medium sized businesses often encounter in the freight industry is that their low volume of shipping provides them with less buying power against their larger competitors when negotiating LTL and Truckload rates with carriers and brokers.

Often these companies find themselves losing customers to their larger competitors because they aren’t able to compete in price due to their higher shipping costs. This lack of buying power also results in lower margins on products they are able to sell due to the high costs associated with receiving supplies from their vendors.

Closing The Gap

BlueGrace has consistently helped companies close the gap in pricing between their freight rates and those of their larger competitors. We’re able to accomplish this by combining the shipping volume of all of our customers and leveraging those thousands of shipments per day to obtain highly discounted tariff agreements from our network of carriers.

In addition to providing companies with highly competitive pricing we also provide our BlueShip Technology for absolutely free! Our competitors often charge their customers all types of nickle and dime fees to access their systems which don’t have nearly the same amount of polish and functionality. Because of how easy BlueShip is to use and access (web-based with no installation necessary) many of our customers are able to increase their speed and efficiency in quoting and booking shipments which of course helps them spend their time in places it’s more valuable.

Every BlueGrace customer is provided with a dedicated Account Executive which means once you’re working with us your days of being bounced around between random customer service representatives and waiting for hours for email replies are over. Our Account Executives are highly knowledgeable in all things freight and can provide advice every step of the way including; packaging guidelines, freight classes and transit options.

Here’s a few tips from our experts!

  • You don’t have to use local carriers to save money. Someone from a local carrier dropped off their business card and said we’re right around the corner but neglected to to tell you they can only ship to a handful of states, now when you need to send a shipment outside of their coverage area you’re making multiple phone calls to see how can handle your shipment. BlueGrace has multiple carriers with nationwide coverage, and regional carriers that can save you time and money in your local areas as well.
  • If you’re new to the position of your company’s Transportation Manager don’t get stuck in the dangerous routine of “well this is how it was done before I got here.” BlueGrace will perform a free zero obligation freight cost analysis for you. We’ll be completely transparent about the number of shipments we can save you money on and provide a report showing the total savings you could expect using BlueGrace. You have our permission to take that report to your CFO to negotiate that well deserved raise.
  • Remember how vital each and every freight shipment is to the success of your company! There’s immense monetary value associated with each shipment (think of all the sales needed to replace a damaged shipment), but your customers’ perceptions are invaluable and sometimes impossible to replace. With that in mind BlueGrace won’t make you compromise reliability for competitively priced rates. Through our network of carriers such as YRC, FedEx and SAIA we’re able to offer expedited options at amazing rates, and our BlueGrace Cargo Insurance provides maximum protection with minimal hassle. 
To learn more about our services please call the BlueGrace Team directly at 800.MY.SHIPPING or find us on the web.
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Is Your Supply Chain Ready For Produce Season?

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Written By: Steve Daniels, Account Executive at BlueGrace Logistics

We’re one day away from April, and 2016’s produce season is almost here. Truckload shipping rates are already on the rise and capacity is increasingly getting tighter. The reason behind these trends is simple economics; specifically you can blame supply and demand.

During produce season there is an abundance of freight to be shipped which gives truckload drivers and carriers the ability to raise their rates beyond what you may expect during other times of the year. In addition to spikes in pricing, you will also find that some lanes are more difficult to cover than usual.

Produce season starts in April and typically returns to normal around July along with market rates, but depending on demand, it can go well beyond that.

With that said, there’s a few steps your company can take to make sure your supply chain doesn’t go bananas (pun fully intended) this produce season.

  • Know the season and which regions are impacted the most. Produce season starts in April and typically returns to normal around July along with market rates, but depending on demand, it can go well beyond that. Rates will spike the most on truckloads leaving the south and you can also expect the same for loads leaving California. You will also find it more difficult to cover truckloads on lanes that are moving away from hotspots with a lot of produce freight.
  • Communicate your needs to your freight provider. A reliable and trustworthy provider is one of the best assets you can have during produce season as you want to have someone in your corner that understands your needs and provides a customized solution for you without breaking the bank. For instance, an honest provider may recommend taking advantage of LTL volume rates for a shipment that was originally intended to go partial truckload to help you avoid paying produce season premiums.
  • Ship via BlueGrace Logistics Truckload! BlueGrace’s Truckload Division has years of combined experience in the industry and we have long-term relationships with hundreds of truckload carriers. Our buying power translates into the best possible pricing for you and our network of trusted carriers means that we can offer reliable solutions that are always available.
To learn more about our LTL or Truckload services please call the BlueGrace Truckload team directly at 855.878.2556
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When The Interests Of The Purchasing Manager & Transportation Manager Are Not Aligned

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In business today there are plenty of  “Managers.” In transportation we often cross paths with both the Purchasing Manager and the Transportation Manager. In organizations where they both exist, they can typically be at odds not even realize it. The Purchasing Manager is concerned with buying better (i.e. lower) costs in all areas of the business while the Transportation Manager is concerned with buying better in transportation alone.

Here is a realistic example of a conflict, in order of events:

  1. The Purchasing Manager goes to market and procures a conveyer belt needed to fix a machine as soon as possible.
  2. The Transportation Manager sees the order pop up in the ERP system and tenders the shipment to a low cost carrier, with an extended transit time and poor service record.
  3. The shipment is supposed to picked up on a Monday, and gets picked up on a Wednesday.
  4. The shipment is now in extended transit time.
  5. By the time the conveyer belt is delivered and installed, the conveyer line has been down for two days and the business division is upset at the Purchasing Manager.
  6. The Purchasing Manager blames the Transportation Manager and that is where we have our conflict.

Now let’s think about the concept of total landed cost.

This is the cost of goods sold + the transportation cost + the cost of lost production resulting from the conveyer line being down. That total landed cost is much more than the cost of a conveyer belt or even the cost of freight on a single shipment. Now both sides, Purchasing and Transportation, need to pay closer attention.

BlueGrace works in consultation with all aspects of our prospective clients to make sure everyones interests are in line, showing value to the entire organization from the Purchasing Manager to the Transportation Manager.

Think of how powerful it could be if your 3PL Partner provided you total landed costs of product groups. That would give your business the power to decide on the future of that product! This is what a true 3PL Partner should be helping you do. Please reach out today for more information.

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How The CFO Can Be A Change Agent In The Supply Chain

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“Cash is King.” This phrase is often associated with the CFO of any organization. Balancing the general ledger and finding ways for organizations to reduce costs directly and indirectly are daily activities for the CFO. The supply chain and transportation departments are usually left to handle their own, so long as that portion of the balance sheet and the costs associated with it remain around 10-12%. At BlueGrace, we have found that working with CFOs directly has helped turn over that leaf and make significant cost reductions, positively impacting many of our partner organizations.

Here are a few questions to ask yourself:

Has your transportation spend gone up year over year despite fuel costs dropping 34%?

On January 5, 2015 the cost of a gallon of diesel was $3.14 a gallon. On January 25, 2016 the cost of a gallon of diesel was down to $2.08. If your yearly sales were flat or marginally up and transportation costs went up or stayed the same, you should be seeing a big red flag waving.

Do you have access to the business intelligence needed to accurately forecast transportation cost in relation to budgeting?

One of the most advanced services we offer is business intelligence. We perform quarterly business reviews to report on our savings targets, key performance indicators (KPIs), and special project updates. The CFO of a company in particular is able to use these metrics to budget and forecast for the organization moving forward.

What key performance indicators do you currently use to measure your supply chain and transportation departments?

Many transportation departments use multiple providers for the same service. They have daily interactions with multiple carriers, multiple 3PLs, audit companies, full truckload providers and more. “Best Cost” is not an accurate KPI for a Transportation Manager. They are not necessarily concerned with how long it takes their Accounts Payable department to audit and pay these providers. Transportation Managers are also not concerned with a Wal-Mart charge back or the impact of an empty Menards shelf has on opportunity. Our collaborative customer engineering approach helps develop actual reportable KPI’s for our partners.

Freight cost as a % of sales, total landed costs for the purchasing manager, freight costs per pound, chargeback mitigation- these are all important metrics we use to help your team identify what’s most important to your business.

There are many more logistics topics to discuss.

If you are a CFO, VP of Finance, or Controller and would like to have a discussion on cost reduction and allocation in the supply chain please reach out to us today!

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Converting Logistics Complaints Into A Positive Review At BlueGrace

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What are the common objections to using a 3PL?

  • We will lose control of our carriers
  • Why pay a middle man when we can do it ourselves?
  • Our transportation manager will no longer be needed
  • We have been burned in the past

Objections can be viewed as complaints by both the customer and the 3PL. Let’s review a few real answers to these common objections.

We will lose control of our carriers.

When working with a true 3PL Partner a business would not actually lose control of the carriers, they would actually gain more control. Better reporting can provide clear and on-time percentage metrics, claims ratios, and general rate increase mitigation. Businesses try to do some of this reporting on their own but typically run into roadblocks. Why? Because businesses are experts in their selected fields and transportation is not usually one of them.

Why pay a middle man when we can do it ourselves?

A middle man can do a better job performing many business tasks, such as logistics. People use middle men every day, sometimes without even knowing it, because the middle man has more resources. We don’t go to Kraft to get our cheese, Dove to get our soap, or Coca-Cola to get our soda. Time is money, and less time spent on less profitable tasks only adds to your bottom line.

Our transportation manager will no longer be needed.

In actuality, the job description is the only part of your transportation manager’s position that changes. Some of our largest clients work with their transportation managers on a strategic level, not the day to day booking and tracking of shipments. Transportation managers need to be held to KPI’s like freight cost as a % of sell cost. They can better explain to upper management this information with the help of a 3PL partner. For example, some products were not profitable to ship and more liable to damage. The common role of a transportation manager is negotiating pricing with limited leverage and relationship, booking shipments, tracking them, filing claims, etc. A 3PL partner can help take over this time-consuming role.

We have been burned in the past.

This is very possible. Have you ever been to McDonald’s and were served cold fries? Or to Pizza Hut and got a cheese pizza when it was supposed to be pepperoni? I bet you went back to both of those places! It’s the job of businesses to fully vet their partners. BlueGrace is a privately owned, debt free 3PL. We are not small but we are incredibly agile. It’s always important to leverage companies like Cortera or Dun and Bradstreet to review the credit standing of new partners so you do not get burned. We work tirelessly to provide the highest level of service. It’s very possible to make the change and start using a new 3PL Partner with confidence!

Let’s leave the complaints in 2015 and give a 3PL partners like BlueGrace a shot in 2016!

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