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How Do You Cut Supply Chain Costs On Your Next Acquisition?

BlueGraceBlog_Private Equity9.7.16

The size of the private equity market is huge.

Assets under management have grown from just $30 billion to $4 trillion over the past two decades.

In the last few years the news has been inundated with “Private Equity Firm Invests in Logistics Company” types of articles. We have all seen it before and most recently here at BlueGrace Logistics where Warburg Pincus invested $255 million for a minority stake in the company. It’s a daily conversation in this space and will continue to be, as Third Party Logistics (3PL) start-ups build momentum.

But what if we twisted the story?

What if BlueGrace Logistics could assist with an acquisition from a private equity group? What if we could aid them in reaching their ROIC in a timely fashion?

These types of transactions aren’t always front and center. For example – a Private Equity Firm is considering investing in a restaurant supply company and this company has been operating their supply chain at a dismal pace with an inefficient system and extremely high costs. When identifying proprietary opportunities, a PEG should consider partnering with a 3PL.

According to the State of the Logistics Market Report, two-thirds of US total logistics costs are attributed to transportation spend. Additional industry reports further corroborate the high cost of transportation spend citing it as either the #1 or #2 largest line item cost driver for many manufacturers.

Private Equity Groups can often lack the capabilities, sophistication, experience or resources to truly transform this major line item cost into a strategic competitive advantage over their competition. For many of these clients, as business grows, transportation can exceed its internal capacity and resources thus proving difficulty to manage its day-to-day transportation function on its own. As such, partnering with a logistics provider like BlueGrace can prove beneficial.

New BlueGrace and PEG Case Study - 12% Reduction In Costs

Before The Investment:

We review your data before the investment to determine potential issues.

No cost consultation – with no upfront cost to the private equity group, VC or even the business being acquired, we can immediately offer:

  1. Introductory discovery call
  2. Historical data review
  3. Engineering reports of data
  4. Potential transportation issues
  5. Integration opportunities

After The Investment:

After the investment is finalized, an ongoing partnership would ensue and BlueGrace Logistics would continue to work with the PEG to grow profits and reduce costs.

BlueGrace clients on average, save 8% on freight costs.

We would work directly with the investment to provide ongoing logistics expertise, dedicated service reps, ERP systems integration, KPI and Goal setting, and Business Intelligence reporting.

In the case of this restaurant supply company, we were given a set of parameters and a timeline to achieve certain cost reductions and integrations.

We were able to provide 12% reduction in transportation costs – a $300k in annual savings. The PEG was also able to see their ROI within 11 months of the acquisition.

BlueGrace can vet and bring acquisition opportunities into shared services.

BlueGrace can vet acquisition opportunities for our clients. If the customer decides to acquire the prospective business BlueGrace will bring them into shared transportation services.

It doesn’t end with reporting.

BlueGrace Logistics will provide the investment and PEG with suggestions and plans to execute the changes. Lost profitability, warehouse relocation studies, consolidate shipments and much more will be addressed in order to cut costs.

BlueGrace provides scalability for PEGs to achieve their aggressive cost cutting and profit goals without labor or technology investments.

Our expertise and processes provide PEGs with the bandwidth to operate efficiently and drive direct cost reduction through our procurement and dedicated management.

It’s a partnership worth investing in.

When a private equity group is considering acquiring any company, especially a manufacturer, a 3PL with a track record of success should definitely be brought into the mix. BlueGrace Logistics brings a tremendous amount of knowledge and skill to quickly assess situations which in turn generates substantial savings and performance improvements to supply chains.

New BlueGrace and PEG Case Study - 12% Reduction In Costs



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The Challenges of Exhibit and Trade Show Freight

tradeshow blog 8.31

Trade show freight is a very time-sensitive segment of the transportation industry.

In fact, due to the extremely high standards within this niche, there are companies solely dedicated to trade shows.  Trade show freight requires narrow pickup and delivery windows, no tolerance for damage and a “get it done-no matter what” type of attitude.  Most transportation companies do not normally provide this level of white glove service, therefore a logistics company dedicated to trade shows and exhibits must be called upon. These full-service companies will help plan, create, transport, set up and tear down trade show exhibits – all for a premium price.

If a shipment is late – at best, there will be higher costs for last minute material handling, up to a 30% increase.  At worse, it can cause the exhibit to miss the show entirely.  Very high penalties are involved if that happens.

3PLs can provide the type of service that most trade show exhibiters require.

Companies with large marketing budgets and complex displays are perfect customers for these premium turn-key trade show logistics providers.  However, most exhibiters do not require an all-in-one type of solution.  3PLs can provide the type of service that most trade show exhibiters require.  Even though a 3PL does not have its own assets to support a trade show event, they do have many contacts within the industry to call upon.  Their access to the best carriers in the industry, coupled with a strong team of logistic professionals that plan and coordinate challenging moves on a daily basis, makes an excellent choice for moving trade show freight.

3PLs – dependable and more economical than specialized logistic providers

The dependable carriers that partner with a 3PL are the best for a reason.  They consistently perform at a 100% on time service rate and utilize good communication with the 3PL.  This is vital in making any move a success.   A carrier must constantly inform the 3PL of current location of shipment, alert them of anticipated problems along the route and communicate a back-up plan in case of something that could delay the shipment.

If you are planning on participating in a trade show in the future, start planning now.  This will allow plenty of time for you and your 3PL to garner support with their carrier partners and coordinate for the specialized needs of a trade show move.

A 3PL can perform as well and more economically than a specialized turn-key trade show logistics company.



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Out with the Old: Changes to the Bill of Lading


Last week saw a change to the National Motor Freight Classification (NMFC) bill of lading, as a supplement was released by the National Motor Freight Traffic Association (NMFTA) which changes the terms and conditions of the Uniform Straight Bill of Lading.  According to a missive released by the Airforwarders Association, there are some rather substantial changes to the long standing and widely used bill. Two trade organizations that represent shippers in such matters, the Transportation Logistics Council (TLC) and the National Shippers Strategic Transportation Council (NASSTRAC) filed a petition for Suspension and investigation of the new changes; They were ultimately shot down by the Surface Transportation Board (STB).

What Does this Mean for You?

The Uniform Straight Bill of Lading is something of a staple when it comes to land based shipping. If you are handling truck shipments, here are some of the more important changes that you need to know.

  • The Motor carrier responsible for cargo loss or damage is the one listed on the bill of of lading, rather than the one currently in possession of the bill during the time of loss.
  • According to the new terms and conditions, Carriers will no longer be responsible for loss, damage, or delays caused by Riots, Strikes, and any causes related to the five common exceptions. The burden of proof will now fall from the carrier to the shipper in these matters.
  • Prior to the changes, all claims were to be filed within nine months after delivery of the cargo, or in the event of failure to deliver, a reasonable amount of time after the delivery was supposed to have taken place. Under the new conditions, claims will have to be filed with nine months from the date of the bill of lading.
  • Previously, the limitation of liability could be applied if the cargo value was established by the shipper or was agreed upon, in writing, as the released value. Under the new language, a carrier can limit liability simply by publishing the limitation in its tariff.

It’s important to note, however, that these are only some of the changes being effected by the NMFTA’s new supplement. With the new bill of lading already in effect, make sure you understand the changes entirely to avoid possible future complications.


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Carrier Spotlight | A. Duie Pyle

Carrier Spotlight | A. Duie Pyle

A.DuiePyle 1

A. Duie Pyle is the Northeast’s premier transportation and logistics provider, offering solutions for LTL, Truckload, Custom Dedicated and Warehousing & Distribution. Through established partnerships our service coverage extends into the Southeast, Midwest, Canada and the Caribbean. A family-owned and operated business for more than 92 years, A. Duie Pyle provides a complete range of integrated transportation and distribution services supported by 22 transportation service centers, and 9 warehouses strategically located throughout the region.

A. Duie Pyle holds the highest “On-Time  Delivery” performance for a regional core carrier in their direct service footprint.


Regional LTL Solutions

  1. A. Duie Pyle’s extensive infrastructure provides all the flexibility shippers need to meet the expectations of your customers. They operate out of over 1,100 terminal doors, with more than 1,150 drivers to meet their service commitments throughout the Northeast.
  2. A. Duie Pyle also offers extended service coverage beyond their core area through our reliable partners, Southeastern Freight Lines, Dayton Freight Lines, Midland Transport and Concord Transportation. Our time-proven relationship with these carriers is supported by similar cultures, values and goals, which always puts the customer first to assure your products are delivered safely and on time. Our partnerships produce transit times that are more reliable than the multi-regional and national carriers.

Specialized Services

Regional Flexibility in the Northeast.


Predictability is the key to delivering on their promise. You can always count on their Northeast LTL solutions for service features that meet your specific needs. A. Duie Pyle provides a full range of specialized services, from high-performing Pyle Priority Service to their 24/7 Protect from Freezing Program. All service features are integrated throughout their growing network of LTL service centers.


More Measurements. More Predictability.

A. Duie Pyle knows that customers look for a service advantage in multiple areas of performance, from on-time pick-ups and morning deliveries, to exception-free freezable protection and preventable accidents. They measure more performance metrics with precision, and issue a Quality Process report to many of our customers on a monthly basis, and they can provide one for you by request.


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Can Visibility Be A Problem With 3PLs?


Dustin Snipes – Enterprise Sourcing Manager, BlueGrace Logistics 

“I lose control of my transportation with a 3PL.”

“I started with a 3PL and had a multitude of issues.”

“I do not see the value in a 3PL partnership.”

These are all quips heard when calling on potential new 3PL clients. When starting a 3PL partnership, the new customer gains visibility. A successful 3PL partnership gives clients visibility into their supply chain that they may not be ready to see and that may cause internal and external issues. 

For example, the client had a carrier relationship before the 3PL came on board and the customer service rep would receive quotes from the carrier websites and book the shipment. When the invoice arrived, the accounting department did not have a proper system setup to make sure the quoted cost is also the invoice cost. Somewhere along the way there was a re-weigh or re-class and the invoice cost was 20% more than the quoted cost. The bill did not seem uncharacteristically high to accounting, so they processed the payment to the carrier accordingly.

There are a multitude of issues with this type of arrangement:

  1. There is not a quote cost to invoice cost verification system.
  2. This example is just one bill. What if the shipper is doing 50 bills a week? The cost can become exponential.
  3. Why was there a re-weigh? Is the business using a certified scale? If every pallet was weighed on a certified scale the shipment was not be subject to re-weigh costs and re-weigh fees.
  4. Why was there a re-class? Is the client up to date with the NMFTA? The class codes can sometimes change on a weekly basis and the shipper may not be aware!
  5. The shipper is responsible for freight bill pay and audit. If the client is busy shipping more than 50 bills a week and receiving stacks of paper invoices, one could see why these extra fees are just being approved and paid.
  6. What is the main KPI? Freight cost as a % of PO cost, so if a $100 shipment turns into a $200 shipment the profitability on that order just got reduced by 50%.

These are some of the issues found on just one shipment.

A good 3PL is going to pull up the mattress and shed some light to the bugs that have been hiding in your transportation program. As a shipper, know that the probability of issues being hidden are extremely high if they are not utilizing a 3PL. Let a 3PL handle your freight program and spend more time focused on your profits.

Do not be afraid of visibility – It is worse to not have any.

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Must Arrive By Date (MABD) Compliance and How it Affects YOU


We’ve talked about it before | Walmart Compliance Regulations

Suppliers are under tighter compliance regulations to get the right products to the right stores or distribution centers by a certain time or they pay a fee. Walmart suppliers now face paying a fee of 3% of the cost of goods of all non-compliant deliveries.

These regulations for Walmart were implemented back in January of this year, but other retailers such as Target and Home Depot have been charging these fees for some time.

Manufacturers and suppliers that work with large retailers like Walmart, Target and Home Depot 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).

A third party logistics provider, or 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 MABD will impact the suppliers products.

The MABD Window

The MABD Window includes the day the merchandise is due to the distribution center or other facility, plus the three previous days. It’s not just the arrival date that counts, it is also the contents and the number of items. If less than 90 percent of merchandise cases are received within the MABD delivery window, the supplier must pay 3% of the cost of goods.

Basically, retailers like Walmart and Target are no longer acting as warehouses, with too much inventory in back stock rooms or in trailers behind stores.

With these regulations, you can see that a smaller manufacturer might have an issue in managing the stresses of logistics. If the supplier is currently using the “cheapest” route to get products from point A to point B, their goods may be affected and the transportation model may need to change to not conflict with the MABD.

This is where a 3PL with a proven track record would come in and provide a customized transportation plan.

Ship Truckload or Less-Than-Truckload?

Manufacturers and Suppliers who ship Full Truckload have a much easier time complying with the rules because their trucks deliver to one destination. Unlike Less-Than-Truckload (LTL), which has their freight combined on a truck with several customers and several deliveries and has more opportunities for delays; especially if the goods are being delivered by a cheaper mode like rail.

A third party logistics provider could assist in an LTL shipper’s evaluation of their supply chain.

The entire supply chain would be evaluated. A 3PL could help the supplier consider using a more efficient carrier or find ways of improving the proper lead times and shipping the full order.

A Way to Avoid Fees

If at least 90 percent of the merchandise complies with the MABD window in a month, then the supplier is not subject to fees. That means one order in a month might arrive late or only contain 85 percent of the ordered merchandise for that purchase order. However, if that is the only out of compliance purchase order, then the supplier likely has a 90 percent or better compliance average for the entire month.

Resolving Issues

The hardest thing is to resolve issues. It’s better to stay ahead of the game and track compliance and with Walmart’s “Retail Link.” 3PLs and suppliers will need to keep focused eyes on the MABD compliance reports.


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The Uncertain Road to Autonomous Trucks

Autonomous Trucks

If you spend any time reading technology related content, you’d think that we’re ready to see flying cars in a few months.  The talk of autonomous vehicles dominates the automotive sector and most recently the trucking industry.  Trucking companies have been wanting this technology for years, but didn’t know it.  They’ve complained about rising labor costs, driver shortages and excess regulations. The autonomous vehicle engineers have nearly solved these problems.

Should the Freight Industry Adopt the Idea of Autonomous Trucks in the Future – Here are some of the benefits:

  • Trucks can run 24 hours a day – no hours of service regulations
  • Half of the trucks will be removed from roads as they can now operate 24/7
  • Maximum fuel economy – no stopping for sleep or food
  • Longer transit times will be cut in half
  • No labor costs for driving the truck – this will offset the higher prices of the vehicles

Will Autonomous Vehicles Become a Reality Sooner than Later?

The topic of autonomous vehicles has only been mainstream recently, however the ongoing work has been quietly advancing for quite a few years.  It’s been, and will continue to be an incremental process to full autonomy.  This incremental process has been happening before our eyes and we didn’t even know it.  Below are some of those incremental steps toward full autonomy.

  • Predictive cruise control
  • Collision prevention assist
  • Active blind spot assist
  • Active parking assist
  • Lane departure assist
  • Pedestrian recognition systems
  • Cross-Wind and roll-over stabilization

There is enough data available now for a vehicle to drive itself


Standard cruise control has been around for years, but the safety assist systems are comparatively new and are only found in late model vehicles.  There’s enough data available now for a vehicle to drive itself.  Cameras and radar are present so everything relevant to the safe operation can be picked up by the sensors.  Then, an advanced computing system calculates and initiates corrective actions.  These corrective actions are performed much faster than a human can react.  The final piece is to remove the driver and connect these systems to the steering mechanism and fully into the driveline.

So When Could This Actually Happen?

It’s hard to say because the general public will take a lot of convincing before they will accept and trust this technology.  The transition will be extremely challenging as it should be – there are many unanswered questions in regards to the programming.  Philosophers have been tapped to determine what the most ethical decision would be when the vehicle has to react to a situation where there aren’t any good choices.

Here are some thoughts on how autonomous trucks may be implemented:

  • Fully autonomous trucks will most likely operate on “smart highways.”
  • They will be upgraded interstates
  • They will incorporate sensors that communicate with the trucks
  • The U.S. government will have to invest heavily into our infrastructure to make this work.
  • With $19 trillion in debt, it’s doubtful they can do this.
  • Lag in government spending will slow the implementation.
  • Privately funded smart highways will be approved and built.

The implementation of autonomous trucks seems very likely despite the remaining obstacles.

The projected increase in efficiency will demand that this massive effort succeed.  The increased efficiency will lead to a myriad of positive results to include a reduction of trucks – therefore a reduction in fossil fuel consumption and greenhouse gases.


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A Modern Day Shipper Needs to Partner with a Progressive 3PL


Technology Demands and the Freight and Logistics Industry

Quantum leaps in technology have brought our world more change since the first days of the internet. Technology is all around us, in our hands, in our cars, in our homes and we have the ability to communicate with someone or search for something within seconds by a device that can slide into our back pockets. Even with all this technology, many of the companies in the multi-billion dollar transport industry are still operating in the 1980s. Fax machines, filing cabinets, pen and paper coupled with hours of daily telephone conversations are the norm for many trucking and freight brokerage firms as they conduct business each day.

It is no surprise that these companies are not keeping up with industry demands and are being outflanked by new, lean technology companies.

These tech companies can do the same thing cheaper, better and faster – the holy grail of business self-actualization that most experts think impossible. The trucking sector took in $650 billion in total revenue in 2013, which originally caught the eye of some of these technologists from outside the industry.  These tech gurus identified vulnerabilities within the trucking industry and weaknesses to exploit.

But some very forward thinking 3PLs pivoted as they saw the technologists from outside the industry riding the tech wave that was threatening to wipe them out.  It remains to be unseen if the traditional 3PLs can head off the technologist’s steadfast march toward their domination of logistics.

The 3PLs that are succeeding are the ones that are adept and have embraced the technology platform.

Some of the industry leading 3PLs created exceptional online tools that helped leverage technology in their favor before these new start-ups came in to set up shop.  Now, these leading 3PLs can display available loads, negotiate rates, tender loads, track loads, collect paper work through these online systems and begin the billing process as soon as the load delivers.

The missing piece is still matching empty trucks to available loads in a more efficient way.

There is ample room for improvement in this challenge.  There are hundreds of thousands of loads being shipped each day, but the process of connecting the dots is very inefficient.  Companies like Uber and Lyft, who have seemingly perfected the matchmaking process in the ride-sharing community, could easily make the shift to the trucking industry.  It is the same concept- Uber matches empty car seats to people needing car seats.  They could easily match empty trailers to shippers needing empty trailers if 3PLs do not continue to service their shippers as efficiently as possible.

A modern day shipper needs to partner with a progressive 3PL

A modern day shipper needs to partner with a progressive 3PL that utilizes the latest technology platforms in order to run a successful, efficient logistics program. These companies have proven their worth within the logistics community by their continued exceptional service.  They have also proven their resiliency by adapting to advances in technology and staving off outside start-ups trying to break new ground.



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Carrier Spotlight | Estes


With “On-Time, As Promised” delivery and over 85 years of regional experience, it is a no surprise that Estes is one of the core carriers that BlueGrace Logistics works with.

Combined with strategically placed terminals and a national network, Estes provides its shippers with extensive coverage, a modern and well-maintained fleet, cutting-edge technology, an extremely low claims ratio and an industry-wide reputation for excellence.

Their Guaranteed Service can be booked directly in BlueShip. Just look for the “Guaranteed Standard Service” option next to lanes serviced by Estes.

Estes BlueShip


 Estes Regional Services Feature:

  1. In-depth coverage with nearly 750 million one and two day points
  2. Six strategic service regions in the U.S. with thousands of knowledgeable employees at each hub
  3. Multiple Estes terminals in each region to efficiently support heavy shipment volumes
  4. Technologically advanced loading and delivery systems
  5. Superior transit times
  6. A comprehensive, direct service territory including Alaska and Hawaii
  7. Over 99% claims free

Need to Expedite Your Freight after it’s shipped? Estes offers an In-Transit Upgrade.

Freight Moves Fast.


Time Critical  When it comes to providing time-critical services, Estes has one of the highest success rates for on-time, as-promised delivery.

Expedited – Given their comprehensive network, some shipments other carriers consider expedited are standard, next-day deliveries for Estes.

Time/Date Definite – If you have freight that must be delivered on a specific date and/or within a short time frame, Estes has a solution. They can travel around the world on the next flight out or across the country using their asset-based ground services. You tell them the time, and they’ll get the job done.


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How Electronic Logging Devices (ELD) Are Going To Affect Consumer Goods Manufacturers


ELD_ Trucking


According to a new survey of 257 carriers and owner-operators by DAT Solutions, most drivers spend three to four hours waiting to get loaded or unloaded.  54% of the carriers surveyed stated that they wait between three to five hours every time they arrive at a shipper’s dock.  A whopping 9% said that they wait more than five hours on average.  There has been very little consideration for the wasted time of the driver and the cost of a $200,000 truck and refrigerated trailer sitting at the dock for hours, but that will soon change.

54% of the carriers surveyed stated that they wait between three to five hours every time they arrive at a shipper’s dock.

The Need For More Trucks And Rates Will Increase

When the electronic logging device (ELD) mandate is implemented in December 2017, strict adherence to federally mandated hours of service regulations will turn these dock delays into service failures.  A conversation with a small fleet owner demonstrated the disruptive nature of the ELD mandate.  He said, “97% of all trucking companies have 20 trucks or less.  We haven’t fully implemented this technology yet, but when we do, you’ll likely see a need for more trucks and rates will increase to make up for the decreased capacity.” The refrigerated sector, which is most often delayed by shippers and receivers, may start experiencing extended transit times because the unnecessary detention will no longer be hidden in paper log books.  The days of sitting at a dock all day, then driving all night to the destination are soon ending.

The days of sitting at a dock all day, then driving all night to the destination are soon ending.

Once a driver wakes up and moves their truck, the hours of service clock starts ticking and cannot be stopped.  Creative paper log books have hidden the inefficiency of shippers and receivers for years, but after ELD implementation, these delays will balloon into increased transportation costs for the shipper.  Delays at the dock will impact a carrier’s transit times and load schedule.  If the first delivery of the week is delayed, the rest of the scheduled loads will be negatively impacted – leading to lost revenue.

Produce and Live Animal Transport has Added Complexities

The transportation of produce has added complexities.  Bumper crops, specific harvest seasons and spoilage prevention all add difficulty to the already over-regulated business of trucking.  The addition of mandatory ELDs will most likely lead to a capacity crunch at best and a substantial driver shortage at worst.  Rates will probably increase because the demand to transport produce, which has a very limited shelf life, will be met with a decreased supply of available trucks and hours to drive.

Currently, bee and livestock transporters have successfully petitioned the Federal Motor Carrier Safety Administration (FMCSA) for hours of service exemptions.  The business of transporting live animals has special considerations that are usually overlooked when sweeping regulations are implemented.  Regulations have been temporarily suspended in times of disaster and national emergency.  Weight limits have been suspended during hurricane clean up as logging and waste trucks move the cleared debris.  Fuel transporters have seen their hours of service regulations suspended in times of extreme cold or supply disruptions.  Once the ELD mandate is fully implemented, the “just-in-time” nature of produce transport and other time sensitive commodities, may experience disruptions of their own.



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The High Tech and Electronics Supply Chain – Maturing and Innovating


What is the product lifecycle of high tech products and electronics? The lifecycle can be debated based on the type of electronic product, but overall the lifecycle is becoming increasingly shorter and that’s one of the unique supply chain concerns that high tech and electronics companies face. Did you know that for many electronic devices, an estimated 50% of the profit comes in the first six months of their lifecycle? As a result, high tech supply chains need to be flexible and data visibility is a must.

How much they are spending in logistics is key to staying on top in this highly competitive industry

High tech companies such as Apple and HP need to know how to keep their products moving quickly and if necessary, to change them quickly. In addition, they also need to know where their resources are coming from and how much they are spending in logistics. How much they are spending in logistics is key to staying on top in this highly competitive industry. Not only does one need to have visibility across its entire supply chain, it also needs to manage logistics data and costs, all the way down to the modes of transportation to use.

Traditionally, product launches utilize air freight because of the speed it offers. In fact, we can thank Apple’s Steve Jobs for the air freight trend. In the late 1990s, most computer manufacturers transported products by sea, a far cheaper option than air freight. To ensure that the company’s iMacs would be available at Christmas the following year, Jobs paid $50 million to buy up all the available holiday air freight space. As a result, that historic move handicapped rivals such as Compaq that later wanted to book air transport.

High Tech Companies Utilizing Other Modes Such As Rail Freight

More and more high tech companies are utilizing other modes such as rail freight. HP was one of the first businesses to take advantage of the rail network connecting China to Europe. As of 2014, half of its laptops are produced in Chongqing, China and located 2,000 miles inland. Because it has become cheaper to produce and sell its laptops, HP no longer requires air transport and instead will stack up to 50 containers on a train destined for the German city Duisburg.

Compliance Regulation and e-waste

Modes of transportation are certainly important; however technology companies are also facing compliance regulations as countries around the world grapple with how to control the growing problem of e-waste. For many such firms the responsibility for what happens to their products at end of life will rest with them and as such, they must observe regulations regarding material collection, recovery, recycling and destruction/disposal. Many Third Party Logistics (3PL) providers assist companies with these requirements, utilizing their large carrier networks to ship and track the e-waste while the manufacturers can focus on getting new products out into the consumers hands.

Risk Management Processes

Lastly, risk management processes are vital for technology companies. Many of these companies have manufacturing facilities in emerging countries where political risks are high as well as in other countries in which natural disasters are prevalent. The 2011 floods in Thailand severely impacted the global supply of hard disks and resulted in inventory shortages for PC manufacturers.

No two supply chains are the same however, for the high tech and electronics supply chain the need for flexibility is vital for it to continue to provide innovative products quickly and in the most cost effective way. The manufacturers need to also adhere to a growing number of compliance regulations and monitor for any potential risks that may impact its supply chain anywhere in the world. The supply chain and freight data collected by the high tech products and electronics manufacturers will be the deciding piece of the puzzle to help keep them profitable.



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When Fitness Equipment Sales Move Online, Freight Becomes A Priority

Fitness Equipment

Anything can be purchased online. E-commerce and third party dealer websites such as Amazon can ship you a pair of running shoes, a squat rack and your protein shakes. What does this mean for brick and mortar stores?

Less Than Truckload (LTL) carriers and Parcel providers are seeing an increase in operational stress as fitness equipment manufacturers are moving a majority of their business online

Brick & Mortar Stores See Decline

More brick & mortar stores are closing every year. Sports Authority is closing its doors simply because people want to shop online and use fitness apps from their mobile devices. While the consumers are enjoying the ease of online shopping, the common Less Than Truckload (LTL) carriers and Parcel providers are seeing an increase in operational stress as fitness equipment manufacturers are moving a majority of their business online to survive technological advancements. The cost of shipping is cutting profit margins as the bulk of sporting goods manufacturers are selling on online and then drop-shipping from a third party warehouse.

How Can a 3PL Benefit Fitness Equipment Manufacturers & Distributors?

A Third Party Logistics (3PL) provider can better optimize a fitness equipment manufacturers supply chain:

  1. Dynamic Routing – A 3PL will allow for the shipper to place an order in their TMS (Transportation Management System) and their shipment will be dynamically routed based on the best value provider and transit time. 
  2. Tracking – When a shipper partners with a 3PL, the shipper will gain access to the TMS, where they can track their freight by the BOL (Bill-of-Lading), Purchase and Sales Order Numbers. 
  3. Freight Bill Pay & Audit – Partnering with a 3PL that has an in-house auditing team to audit and consolidate carriers invoices for the shipper, is a huge benefit. This service is not exclusive to every 3PL.
  4. Business Intelligence & Customer Engineering – Some 3PL’s will ask the shipper for past data to identify trends and future opportunities for cutting costs and moving shipments more efficiently. 
  5. Enterprise Offering – When a 3PL partners with a larger customer that ships maybe more than $500k annually in domestic LTL, the customer may receive extra services at no cost to the shipper. For example, advanced 3PLs will conduct an on-site business consultation and identify key performance indicators to better optimize their supply chain. The 3PL may also work on integrating the shippers existing software with their TMS. 

3PLs Have the Tools & Expertise 

Whether a business is local and ships custom fitness apparel to a loyal group of consumers or is recognized worldwide and ships millions of dollars in fitness equipment through an online store, an experienced 3PL has the tools and expertise to manage an evolving supply chain.

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Why Auto Industry Growth Increases Logistics Technology Requirements


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


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?

International pt2_6.10.16

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.


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?


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.


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



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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





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