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Response to a Fool

A recent discussion on Linkedin regarding 3PL’s in the transportation market included a number of foolish comments made by a clearly disgruntled freight carrier sales rep. Below are the highlights from his misinformed, one dimensional, price hoarding rant, followed by my b*#!@ slap…

  • “Most shippers of any regular frequency have become fairly saavy during the “great recession”. Most accounts I call on are turning away 3PLs because they don’t provide a value added. Even in the case of a small shipper (5-10 LTL shipments per month), I regularly see the difference in the 3PL price and the direct-to-carrier price to be under $10.00 on an average pallet sized shipment…”
  • “A few 3PLs are great partners for both the customer and the carrier. Most are not. They regularly call the carrier with no idea of what is going on with a shipment THEY scheduled or the customer cannot get an answer on a shipment, claim, pickup, etc…”
  • “I have worked in one of the largest markets in the country and in one of the smallest and the song remains the same, an 800 number, a computer and assorted tariffs from multiple carriers do not a logistics provider make.”
  • “…what I do know about most 3PLs is: 1) They depress freight rates which directly impacts the livelihood and opportunity of carrier associates. 3PLs don’t create freight, they create lower profitability on the freight that exists. 2) They will undercut their carrier “partners” without hesitation yet howl in indignation if a carrier dare “back solicit” a customer. 3) Frequently mislead or directly lie to a customer about how the customer-3PL-customer relationship is defined from a legal perspective. 4) No carrier does business with a 3PL because they want to. Why would they? It invariably results in the carrier moving the same freight at a decreased O/R.”

I’m also going to disagree with you on a number of fronts. There may be a number of 3PL’s who operate as such but you clearly underestimate the value in which a 3PL brings to a carrier. It’s obvious as to why you would have such bias. A good 3PL partnership does not hurt the carrier, it hurts the rep. The historic mentality of a carrier rep is to sell on price, price, price.

Of course, a carrier will make less direct profit on a shipment when the revenue is less. What you are overlooking is that the carrier has significantly less overhead on that shipment. The revenue may be less, but the profit % will be higher. The carrier is not paying a sales rep salary, car, commission, expenses, insurance, cell phone, etc. on that shipment. They are not paying the rent, electric bill, office supplies, phone service, etc. for sales to secure that shipment. With a 3PL using EDI and TMS, the carrier is not paying the administrative expense of tracking, uploading W&I or POD’s or communicating this with customers via phone or email. I could go on and on. This is a statistical reality and of course I would expect this to be overlooked by a sales rep losing out on commissions and thinking this is just a matter or price v. price.

Also way understated is the value of the 3PL. You are right that a carrier would not deal with a 3PL if it didn’t have to. But they have to – because a good 3PL can and does provide value that the carrier cannot. The carrier cannot provide a single source for data management, data warehousing, a single source for tracking, shipping documents, addresses, product information, carrier procurement and rate negotiating, unbiased carrier scorecards, etc. some of the best carriers, partners like SEFL or Con-way, can only provide the services that SEFL or Con-Way provide. Even YRC, who has some of the better technology, is leagues behind what a good 3PL can do. Customers cannot pay the hundreds of thousands of $ to purchase a TMS and even if they did and attempt to manage their own transportation, they are doing so at the expense of their core competencies.

A carrier and especially a carrier rep can only provide “Freight” Services, and as we all can see, this discussion group is for freight as well as LOGISTICS and SUPPLY CHAIN – two things which go way beyond the scope of what any one direct carrier can offer.

-Nick Klingensmith, Director of Sales and Personnel Development
Twitter: TheBGexperience

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The Blurry Line Between LTL and Small Parcel

Often the line between the use or difference of UPS and freight services may seem a bit blurry.  Most would agree it’s easier to ship a few boxes via UPS Small Parcel versus LTL (less-than-truckload) via a third party logistics solutions provider…. And at times, it may be the best option.  Although with a bit of information you may learn the benefits of using an LTL provider. 

Here are a few thoughts to consider before shipping:

  • How many boxes are shipping to the same location?
  • If you have a few boxes shipping to the same location it may be advantageous to use an LTL provider.  Why? Well, you can assure that all of the boxes will reach the destination at the same time. 
  • Most people believe LTL providers only move palletized material – WRONG. You do not have to put them on a pallet. However doing so may offer a sense of comfort and confidence knowing that they will arrive together. The average cost of a pallet is under $5.00.
  • What are the dimensions and specs? How long or heavy is the box? A UPS Small Parcel provider is equipped to carry smaller, lighter boxes.  Therefore when the boxes reach certain dimensions or weight the transportation provider will charge additional fees.  These fees can be avoided if shipping with an LTL Freight carrier – and the package may qualify as a “minimum” charge depending on the distance.

There are many other factors to consider when choosing to ship through UPS Small Parcel versus LTL services provider.  Hopefully these helpful tips have provided you with more resources to help your decision making a smoother process and also save your wallet!

If you have any questions, please contact a member of our team at BlueGrace Logistics to help with your shipping needs!
800-MY-SHIPPING
Twitter: @myBlueGrace

– Vanessa Castillo, Sales Manager
Follow me @Vanessa_BGmngr

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News: What S&Ps downgrade really means for the US economy

After listening to President Obama’s speech today, it helped to answer some of the questions regarding the recent downgrade of our nation’s credit rating. For those that don’t know, Standards & Poor (S&P) downgraded the credit rating of the United States from AAA to AA. As Obama stated, this is not a doubt in the ability of our country to pay our debt, but a doubt in our political system’s ability to act. The President made some great points, many that focused on the fact that we didn’t need a rating agency to tell us that our country needs a balanced, long-term approach to policies.

The Standard & Poor’s rating agency has actually caused a stir among those who feel the downgrade was unnecessary and inconsistent. The other top two agencies maintained AAA and Warren Buffett even said he would give the US an AAAA if there was a rating. S&P’s determination also led them to downgrade the credit ratings of agencies linked to long-term US debt, such as Fannie Mae and Freddie Mac. This has caused markets to fluctuate, but is it something that should worry us all long-term? If similar situations from other countries are any indication, we shouldn’t have too much to worry about. As the President said, “Markets will rise and fall, but this is the United States of America. We will always be a AAA economy.”

What this all really comes back to is the need for Washington to cooperate and form the balanced, long-term proposals necessary to maintain our country as a superpower. The lack of political will to work towards achieving these proposals needs to stop. Combining spending cuts with tax reforms and adjustments to healthcare programs is a necessity for the future of the US. As we look back at those soldiers who lost their lives this past weekend, we need to honor their memory. They served our country as a team and we all need to work together to ensure our generation, and future generations, can enjoy the freedoms we do today.

– Ben Dundas, Web Analyst
Follow me @ben37dBG

Today’s Transportation & Logistics News:
Survey Shows Driver Shortage Limiting Hauling Capacity, Growth Potential
Partisan Finger-pointing Draws Credit Downgrade Warnings While Oil Prices Tumble
OOIL Sees ‘Disappointing’ 2011 Outlook
Trucking Industry Hiring Slowed in July
Obama Finalizing Truck Fuel Efficiency Rules

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News: “Bandaids” or Duct Tape?

News has come out that the FAA shutdown has temporarily come to an end, as Congress has continued to work together to pass a temporary extension until September 16th. It is great to see that both sides are finally starting to work together towards making sure the country continues to operate. This goes to show that while there are large differences between the sides, getting Americans back to work and the loss of money for the government lights a fire.

The real question now is how long it will last. With so many important pieces of legislation being proposed to Congress, will they be able to form enough bipartisan committees and get enough support to continue these strides? I find it very hard to believe. The transportation reauthorization has been proposed “500 times by 500 different people” and no one seems to like anyone’s proposals. Word is already coming out that there may be some large differences in the approval of a gas tax extension.

It is great that they are passing some legislation, but I have started to notice that there are a lot of “bandaids” being placed on important subjects. While I appreciate the agreement to increase the debt ceiling, it seemed like just another small fix. The same is noticed with the FAA agreement, while the transportation reauthorization and gas tax could be next. It is time for Washington to take real action on these important topics. They can’t all wait until 2013, after all of the elections take place and politicians aren’t afraid of losing their seat. It’s time to start getting long-term programs finalized and build for our future. Forget bandaids, it’s time to start using duct tape. It will hold a lot longer than a bandaid! Let’s see some real ACTION!

– Ben Dundas, Web Analyst
Follow me @ben37dBG

Today’s Transportation & Logistics News:
Gas tax may be next Tea Party target
FAA shutdown to end with deal, Harry Reid says
The gas tax is likely safe for now. And that’s the problem
Survey Shows Driver Shortage Limiting Hauling Capacity, Growth Potential
Will U.S. manufacturing step up?
Trucking Hiring Slowed in July

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News: Bicyclists Beware

On my way to work each day, I am reminded of how appreciative I am for my life and the family and friends I have had throughout. The reason for this is because back on February 13th, I left my apartment complex and drove past the scene of a local bicyclist dying on the side of the road. He died before an ambulance or authorities even arrived. A white painted bicycle with flowers that is still present commemorates Robert Niedbalec and the mission for safer roads.

The reason I bring this daily routine and story up, is to stress the importance of investing in safer roads for bicyclists and pedestrians. This includes building and/or extending bicycle lanes, adding better sidewalks with more defined crosswalks and even widening roads as a whole. Without these improvements, there will be many more scenes like the one I witnessed across the US.

With the transportation bill reauthorization being discussed in Washington on a consistent basis, it is important that you realize a few things. The most recent proposal from John Mica did not include funding for bicycle and pedestrian programs, as part of his drive to consolidate federal transportation bureaucracy. Congressman Mica is a fraternity brother of mine that I have had the joy to spend some time with at various events. While I share his love for our fraternity, I have to disagree with his charge to eliminate this funding.

Transportation funding has a large impact on making roads safer for those without vehicles. Just because the roads are mainly used by motorcycles, cars and trucks does not mean that bicyclists and pedestrians aren’t also using them to get from point A to point B. These are also the people at the highest risk of dying should a motorist lose control. While I agree that we need to be more fiscally responsible as a country, it is important that we are not cutting things that affect the lives of Americans, especially those that actually put their lives at risk!

– Ben Dundas, Web Analyst
Follow me @ben37dBG

ATA Says FMCSA Strategic Plan Doesn’t Go Far Enough
Will The Federal Gasoline Tax Be Grover Norquist’s Next Hostage?
Ocean cargo capacity exceeds demand
Obama Targets Trade, Infrastructure to Boost Economy
LaHood Blasts Congress for FAA Impasse

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News: Share your Concerns!

As of 2:04 PM, the White House reported that President Obama has signed the debt ceiling bill into law. This is great news and will hopefully help to create bipartisan cooperation on the next few important steps towards rebuilding our budget of revenues and expenses. Even with this great step, many of us in the industry are still concerned with future legislation that has a large impact on the industry.

The American Transportation Research Institute is calling all industry stakeholders to complete a survey on your top concerns this year. With their call I will emphasize mine. It is important for all those with a stake in our industry to express our concerns with our colleagues, our industry leaders and our leaders in Washington. We need to be vocal as an industry to ensure that the US continues to invest in our infrastructure and our industry.

I hope that you can share my concern with the upcoming bill to help reinvest in the transportation infrastructure of the US. With a continued focus on repair and development, we can ensure that the roads are safe for truck drivers, car drivers, motorcyclists, bicyclists and even pedestrians. Restrictions are continuing to get tougher on drivers and more expensive on trucking companies. The lives saved from simple road repair or widening would be a great contributor towards lessening deaths on the roads and highways.

If you have any stake in the industry, complete the survey at www.atri-online.org. Be heard!

– Ben Dundas, Web Analyst
Follow me @ben37dBG

Today’s Top Transportation News:
Debt Ceiling Deal Reached To Avert Default (LATEST UPDATES)
What does the debt ceiling deal mean for transportation?
US Steel Imports Fell in June
Diesel Prices Fall First Time in Four Weeks
NAFTA Surface Trade Rises 15.7 Percent

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News: Debt Deal is Just the Beginning

With all of the current changes going on in the industry, government and economy in general, I felt it was fitting to change up the blog. This will now be an opinion blog, with a focus on current events and news that affects the transportation industry. For those that still want them, top news articles will still be included. Here goes!

Last night while I was watching Shark Week on the Discovery Channel, I saw on Twitter that the debt deal was being agreed upon. It brought some great relief that I could enjoy all of Shark Week worry free. However, even with the deal finally being made, I realized that this is just the first step in a several month process to help finance the government, its agencies and projects. There are several important bills, authorizations and votes that need to be decided upon. Some have already gone unresolved and put thousands of people out of work. The focus on a debt deal overshadowed many of these important topics, especially those that largely affect our industry.

The first is the FAA reauthorization that went unresolved during the debt negotiations. Due to this, the FAA began a partial shutdown, over 4,000 federal employees were furloughed and $2.5 billion in airport improvement work stalled. This partial shutdown also caused the FAA to lose about $200 million in airline taxes each week.

The second is a transportation bill that has been reworked over and over again by different politicians all thinking they have the best plan. These plans have included the options for a simple extension, a massive increase in spending by the Obama administration to improve infrastructure and massive cuts in spending including bicycle and pedestrian project funding.

The third is the gas tax that expires on September 30 and could drastically change things in the industry if not reauthorized. While no one in Washington is suggesting an increase, many are worried that it may be targeted for a cut. Many advocates for transportation and improving infrastructure are actually hoping for an increase to help fund projects.

So with Washington finally coming to an agreement on a debt deal, I say good job and get back to work for the next two months. When October 1st comes around and the rest of these issues are resolved, you can take a break then. For the rest of us, let it be known that you want this resolved. Get on Twitter, Facebook and Google+ to discuss it. Contact your representatives. Let yourself be heard on this!

– Ben Dundas, Web Analyst
Follow me @ben37dBG

Debt deal is done. Now what?

Debt Deal Could Mean More Painful Cuts for Transportation

Obama and Leaders Reach Debt Deal

Paul Krugman And Ron Paul Agree: Debt Ceiling Deal Sucks

Group Fears Fuel Rules Will Drain Road Funds

Agriculture Groups Urge Free Trade Approval

US Manufacturing Falls to Two-Year Low

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15 Minutes

About a week ago I was outside trying to replace the handle to the door to my Lanai. It had been broken for several weeks and should have been a 15 minute job. It took me the better part of two weeks. I had to go to Home Depot and buy a new one. I had to remove the old one which took tools that I did not have. I had to find a way to break off a centimeter’s worth of metal, again, without the right tools. It was 96 degrees and the mosquitoes which have taken up residence were laying siege. Nearing the end of this project, and after working out in the bug infested heat for the better part of an hour while my dog and cat looked on in amusement, I thought about all of the other house projects that I have as a single home owner.  I thought about the broken handle to the patio door, the lights that needed changing in my 12 foot high ceilings, the screens that needed replacing, the broken garbage disposal – and all of the fun stuff I was going to have to put on hold while I became Mr. Fix-It. Wiping the sweat from my brow I said to myself, “Damn, I have GOT to get better at this stuff.”

Then I said, “No I don’t. I need to get better at MY job.” I am the Director of Sales & Personnel Development at BlueGrace Logistics. I oversee the Hiring & Recruiting, the Training & Development, and the National Sales Departments. I wear many other hats but at the end of the day, it’s my job to increase profits for the company and further the development of our employees. I need to get better at that job so that I can simply pay someone else to help with those items around the house.

The 15 minutes I spend doing my job are exponentially more valuable than the 15 minutes I spend screwing something up around the house. I need to focus on my core competency so that I can be successful in all aspects of my life. Focusing on my core competencies allows me to impact the careers and lives of our 90+ employees, our hundreds of vendors and our countless customers. Focusing on my core competencies will allow me the means to have the work around my house performed professionally instead of the shoddy band-aids I am going to put on it. This will allow me to spend my down time reenergizing and enjoying my personal interests. To make all this happen, I only have to do what it is that I do and do it well.

Why would a manufacturer of medical devices not outsource their transportation so that they can focus on their core competency? Wouldn’t a manufacturer of network equipment rather be #1 in network equipment than in shipping? Why would a distributor of PVC piping spend tens of thousands on an order management system when they could simply use our state-of-the-art Transportation Management System (TMS) at no cost?

The truth that I have found is that companies either are ignoring shipping as a necessary evil of what they do and are allowing a minimum wage employee to make million dollar decisions, daily; or are foolishly investing boat loads of money to have people handle their freight internally when they should really be investing their time, money and expertise into what it is that they are already great at. Allow a 3PL to handle your logistics simply because I am going to do it better than you are and significantly less expensive than it will cost you directly both in rates and soft costs. You spend your 15 minutes doing what it is that you do best.

– Nick Klingensmith, Director of Sales & Personnel Development

Follow me on Twitter: @theBGExperience

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Quality vs. Quantity… or Both?

A common comparison is quality and quantity. In this case, let’s compare low prices versus great service. It’s rare to find the two values together. Every day there are advertisements geared towards price sensitive consumers. One major example is, Walmart, “Save money, live better.” Then there is Sweetbay, focusing mainly on their “fresh” produce with billboards like, “Low prices taste better.” A focus on price point makes sense for such places due to the fact that people are going to buy food and other necessities; it’s inevitable. Why not get your Doritos for less? They taste the same no matter what store you get them from. A focus on experience is the marketing strategy at Publix, “Where shopping is a pleasure.” They do not focus on price as much… although there is plenty of room for savings (BOGOs). Each of these grocers are successful establishments.

I use this example because everyone purchases groceries, it doesn’t stop. People eat. They also need deodorant and laundry detergent. Similarly, businesses will always need to move their products. Will the decision to ship be solely based on price? Or, is it more important that the service received during the shipping process is more than satisfactory? Isn’t quality worth the extra cost? If trucks are Doritos, then service may not be as important to you. However, what if they run out of Doritos? At BlueGrace, we focus on strong customer service and tailoring our services to fit your company’s needs specifically. Price is certainly important and that’s why we offer very competitive rates.

OK, so is it quality over quantity, low prices over great service… or vice versa? You can have it all. The BlueGrace team will do what we can to assist your business and its shipping needs. The aim is to reach for the best prices AND provide the best service. Understanding our customers allows us to better meet their needs and help their business grow!

– Ariel Saiani, Sales Rep
Follow me @ArielSaiani_BG

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John Howard | UFC Fighter | Doomsday

Found and Delivered

Tom Hanks starred in Cast Away as an executive at FedEx who is stranded on a deserted island. He survives alone for years and when finally rescued, he makes sure an unopened package is delivered.  What a great example of product placement. In reality the product in this case is service.   How bold is the idea that FedEx could deliver a package under these circumstances? Well duh…it’s a movie! 

BlueGrace has no trucks, planes or ships of its own. What we do have is access to the best carriers in the logistics industry. Not only do we work with FedEx, but we also partner 100s of other carriers. 

John Howard | UFC Fighter | DoomsdayNow while BlueGrace hasn’t produced its own box office hit like Cast Away (yet), we have found ways to utilize product placement.  Recently BlueGrace began sponsoring some UFC fighters like Ben “Smooth” Henderson, Thiago “Pit Bull” Alves, Junior “Cigano” Dos Santos, Vagner “Ceara” Rocha, and John “Doomsday” Howard. We think these fighters portray our culture of character, determination and dependability and are proud to be associated with them. It is pretty exciting seeing our logo on shirts, shorts and even buzzed in the haircut of John “Doomsday” Howard. What’s next? Maybe you will see us soon as a logo on a driver’s uniform or car in an upcoming NASCAR race. Our Speed of Blue motto would be right at home on the track.  Until then check us out this Saturday 6pm/9pm PTET at UFC 132 as BlueGrace sponsored Chris “The Crippler” Leben and Carlos “Natural Born Killer” Condit enter the octagon against their opponents in Vegas.

Lastly next time you ship something, remember to take insurance. You cannot always count on your package being found and delivered 4 years later.

– Ariel Saiani, Sales Rep
Follow me @ArielSaiani_BG

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Truck vs. Rail, Betting Against Warren…Buffett

warren buffet | rail shipping | truck shippingI put the last name Buffett out there, detached from the remainder of the title for good reason; it’s a very special last name.  Buffett is arguably the greatest investor the world has ever seen. I’m not the guy who’d like to bet the future of rail isn’t brighter than trucking in the first place but I must admit, I’m among the masses that would have a really tough time trying to take an opposite stance against Buffett’s gamble. With the sustained and unprecedented success of Berkshire Hathaway, one may even want to reconsider calling any decision he makes a “gamble”. As a note of interest, $1 invested in Berkshire Hathaway in 1965 is now worth $400,863, the S&P a mere $6,840. 

When Warren Buffett bought out BNSF at a premium, he sent the world a very strong message, one of conviction.  It is considered his biggest investment ever. He told the world he’s bullish on the growth of rail, not just due to an economic recovery, but also as a means of replacing some of tonnage that now moves on trucks. He’s a believer that freight will be moving from the highway to the railway. Some of his reasoning:

  • Fuel prices continue to soar and the volatility is expected infinitely
  • Rail moves a ton of cargo 500 miles on 1 gallon of diesel; a truck is well over 3 times that and climbing.
  • 1 railcar can hold 100 tons, it takes 5 trucks/trailers to move the same
  • Rail is already built out completely, no more tracks are being added while highways are crumbling and need constant improvements.
  • With the fuel savings one must note the “green effect”. The carbon emissions that are being eliminated make the rails extremely attractive.

There’s a myriad of other reasons BNSF was purchased for a total of $44 billion, but what the purchase said is that transportation may be undergoing radical changes. The part of rail that has made it less than attractive for logisticians is the lack of traceability and flexibility. It has always been supported by inferior technology and has been less easy to deal with considering the equipment needed to handle railcars. The advantages that are now benefiting rail over truck are undoubtedly going to make investments in rail resources a sure thing. These are investments that will push rail into new areas such as LTL (less-than-truckload) and new commodities that weren’t as prevalent in the past. Technology will be pacing this expected surge of growth in rail. 

The ATA believes truck and rail is only competitive in about 8% of tonnage, maybe so, but not stating the future expectancies is one that I feel shows a tremendous opportunity to provide a valuable forecast. Virtually every economist and analyst will agree that rail will grow quicker than truck over the next few years, recovery or not. In my opinion, I simply cannot see why the buzz isn’t greater, added resources for rail are a sure thing and there’s little doubt in my mind that they will take freight off the highway when the resources are developed, refined and put in place. My bet is that Warren Buffett didn’t make the biggest investment of his life for a mediocre return, I’m betting strongly that he’s right on track! 

Bobby Harris, President and CEO

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Who is really in control of your Supply Chain?

In light of the seemingly endless reports of economic instability and companies digging their heels in with a wait and see approach to the future, many have put a emphasis on cost cuts and control.  From eliminating entire departments within an infrastructure to canceling the annual Christmas party, the impact of these changes can be felt on many different levels.  I have worked with clients during this time to drill down into the fine details of their business and help develop a solution that will prevent reducing their workforce or eliminating company functions that could inhibit the degradation of a company’s culture. 

A common area for improvement has been the inbound supply chain and routing process.  It is surprising how many companies either ignore the inbound component of their business or place all of the responsibility in the hands of their vendors.  It is common practice for vendors to utilize “shipping and handling” as a profit center to their customers.  In the most extreme cases the client felt they had a better deal than the competition in terms of the cost of the raw material, but failed to realize that the vendor was actually selling their product at a loss just to make a profit off the freight charges.

Another opportunity for additional control has been routing the inbound through a specialized team within our organization to set up checks and balances as well as follow proper routing procedures that have been set by the client.  There are many occasions where the vendor has requested expedited delivery at the expense of their customer in order to meet one of their own deadlines or contract agreements.  Would you allow any outside party to have access to your credit card or bank account without complete control over each transaction?  Freight is commonly one of the most impactful costs that most businesses must control and having a new set of eyes develop a customized solution will benefit the company, employees and culture.

– Jason Lockard, Director of Enterprise Sales
Follow me @BGJLockard

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What is EDI and how does it work?

What is EDI and how does it work?  This question is asked to me every day.  I am not an expert in the technology field, but I do understand the terminology and the basic functions of the EDI cycle since I have been involved in setting up all of our carriers/partners so that they can communicate with our BlueShip™  system via EDI.  I came across this short paragraph that will provide you with some understanding of the EDI cycle in the transportation industry.  Furthermore, I have listed the technical definitions for each of the EDI codes.  

The typical cycle for Transportation is as follows:

A vendor sends a Motor Carrier Shipping Information document (EDI 204) to the cartage firm to specify that there is a shipment to be picked up. The cartage firm sends a Response Load Tender (EDI 990) to the vendor, specifying if they will pick up the shipment. When the shipment is picked up, the cartage firm may send back the status of the shipment to either the vendor or the ultimate receiver in the form of a Motor Carrier Shipment Status Message (EDI 214). The triggering of this document being sent can be pre-arranged (the parties will make an agreement of when the status is sent) or either the shipper or the ultimate receiver can request a status by sending a Motor Carrier Shipment Status Inquiry (EDI 213). Once the shipment is completed, the cartage firm sends the Motor Carrier Freight Details and Invoice (EDI 210) to the vendor to pay.

 EDI 204 – Motor Carrier Shipping Information-EDI 204 is used to tender a shipment to a carrier and/or forward the shipment details to a carrier, consignee or third party. It provides the carrier (and/or third party) with a detailed Bill of Lading rating and scheduling information pertinent to the shipment. Its basic use is to be an initial shipment tender between shipper and carrier. It can be used as a Load Tender (telling the carrier when to pick up the goods) or a Bill of Lading (specifying to the carrier what exactly is to be picked up.  The usual procedure is to send EDI 204 to the carrier. The carrier will respond with an EDI 990 (Response to Load Tender), which specifies that the carrier will pick up the goods.

 EDI 990 – Response to Load Tender-This transaction is sent by the motor carrier in response to a shipper sending the carrier a Load Tender (EDI 204 – Motor Carrier Shipping Information document with the Load Tender option).  The document will contain the carrier’s acceptance, conditional acceptance or a decline, if they decline to accept the load tender. It can also contain the reason for the conditional acceptance or the decline of the load tender.

 EDI 213 – Motor Carrier Shipment Status Inquiry-This transaction is used to request the status of a shipment from a motor carrier on a single shipment or a set of shipments.  It may be sent to the carrier by the shipper or the ultimate receiver of the goods. This document is an ad-hoc request for the status. If the carrier and the shipper and/or receiver have a set schedule for responses (in the form of an EDI 214 Motor Carrier Shipment Status Message), then this document is never sent.

 EDI 214 – Motor Carrier Shipment Status Message-This transaction is used to pass information relating to the status of an assigned, loaded-en-route, or delivered shipment. It is sent from the carrier to either the shipper or the ultimate receiver. It may be sent as a response to an EDI 213 (Motor Carrier Shipment Status Inquiry) or at regularly scheduled intervals. The carrier may also send it if there is a change in the shipment status (e.g. the truck is delayed in customs).

 EDI 210 – Motor Carrier Freight Details and Invoice-This transaction can be used as an Invoice to request payment for services rendered or as details pertaining to freight shipment charges. An Invoice will typically be sent for each shipment.  

*information/definitions taken from http://www.logistics-edi.com/

Mike Sumnick, Director of Operations 
Follow me @msumnickBG

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Handle with Care

Handle with CareI have heard of many customers having problems with either damage to their goods or concealed damage within the packaging. We have to understand that in today’s industry, capacity is getting tighter and tighter and carriers are fitting as much freight into their trucks as they can. That being said, our customers have to understand that the products that we are shipping must be packaged sufficiently to avoid damages at all costs and be in compliance with applicable regulations. This can cost some big and others small but for certain, it can greatly reduce risks of damage.  

Notating on the Bill of Lading the phrase “handle with care” or putting the proper stickers/markings on the packaging will ensure that your freight is delivered in perfect condition. Spending the extra money on proper packaging can be well worth it in the end! Using interior packaging to protect fragile components and securing freight to pallets using plastic film and/or strapping can help ensure that your freight will get to its destination safely and without damage when subjected to the normal rigors of the environment. Nesting freight can help to increase the density of shipments, which may reduce costs if the rates are dependent upon the density of the package as tendered for shipment.  The old adage is still true in today’s freight world.

Spend now, save later!

– Dustin Snipes, Account Manager
Follow me @DSnipesNole_BG

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The 12 Days of Christmas

  •  On the 1st day of Shipping, my 3PL suggested to me, a full list of each commodity:

Capacity in freight shipping has increased dramatically in a short amount of time and the holiday season will be no different. Shippers, consignees, and freight carriers are all running skeleton crews especially as Christmas approaches. Take the time to plan ahead! Minimize mistakes by being thorough in your packing lists and especially in listing the contents of your shipments on your BOL (Description, Dimensions, Quantity, Packaging, NMFC and Class).

  • On the 2nd day of Shipping, my 3PL suggested to me, 2 Bills of Lading:

Keep accurate records of what you’re shipping! Keep this information indefinitely by utilizing a 3PL who offers a Transportation Management System (TMS) and store this information electronically.

  • On the 3rd day of Shipping, my 3PL suggested to me, 3 Competitive Quotes:

Quote with multiple carriers for not only cost, but also availability and transit time! There will be fewer drivers and less people on the docks of freight carriers as well as your consignee. Allow for extra transit time to ensure your products get to where they need to be. Save yourself the headache of comparing multiple direct carriers by working with a 3PL who can provide a TMS, which calculates multiple quotes and transit times from multiple common LTL carriers.

  • On the 4th day of Shipping, my 3PL suggested to me, 4pm Pick-up:

Especially as Christmas approaches, there may be less drivers working and less ability to pick up freight. If you want to kick your warehouse guys early for the day, be sure to allow for a minimum 2 hour pick up window and perhaps more. If your warehouse usually closes at 5pm, schedule your pick up for an hour earlier but be prepared to wait! Delayed transit because of missed pick-ups during the holiday weeks are not abnormal!

  • On the 5th day of Shipping, my 3PL suggested to me, 5-Day Guarantee!!!

Guarantee your shipments! It costs marginally more to guarantee your delivery, whether it is a one-day point, two, three, four or five, and avoiding late deliveries easily offsets that cost. Your consignee’s are closing early, letting their warehouse employees off on vacation, and you can seriously injure your supply chain by failing to have product arrive on time. Ask your sales rep for Guaranteed, Air Freight and Expedited options!

  • On the 6th day of Shipping, my 3PL suggested to me, 6 days delayed invoicing:

Many people take vacation days this time of year, from the carriers, to your office, to your consignee. This can create for delayed invoicing and delayed payments. You don’t accept your customers A/P person being on vacation, as a reason for delayed payment, and neither does the carrier nor your 3PL. Stay ahead of the curve and don’t lose momentum in your cash flow. Use a 3PL who uploads images of shipping documents such as Proofs of Delivery (POD’s), Original BOL’s and Weight and Inspection Documents (W&I) so you can invoice faster! Ask to be invoiced electronically and pay via credit card or ACH. Expect the same from your customer!

  • On the 7th day of Shipping, my 3PL suggested to me, 7 different packages:

Are you shipping mixed packages with multiple classes? Carriers will default shipments of mixed packages that are not itemized to the highest freight class. Save yourself some of that holiday bonus by using a 3PL whose technology allows you to itemize multiple class shipments. Be sure to provide packing, count, description and weight on the BOL.

  • On the 8th day of Shipping, my 3PL suggested to me, 8 PCF:

Are you shipping density items? Save yourself from incurring re-classification charges and understand density! Understand that density is calculated “as packaged” so it does include the pallet, crate, corrugated box, etc. BlueGrace Logistics has participated in the NMFTA and is fully trained to consult in this area. Be sure your 3PL can advise you on proper packing, classing, density, etc. 

  • On the 9th day of Shipping, my 3PL suggested to me, 9 POD’s:

Ensure proper delivery of your products by viewing the Proof of Delivery (POD) as soon as it is provided. The POD will indicate that the shipment has arrived in full and good order. Utilize a 3PL whose technology can provide digitally uploaded images of all of your shipping documents to provide complete accountability to your supply chain. 

  • On the 10th day of Shipping, my 3PL suggested to me, 10 minutes to inspect your freight:

Be sure that both you and your consignees take the extra 10 minutes to inspect your freight. Increased capacity and less manpower can account for more damages. Never sign clear for a shipment without inspecting it. It is very difficult to get any transportation provider to honor a claim for freight that was signed clear, even for concealed damage.  Ask your logistics provider about minimum packaging requirements.

  • On the 11th day of Shipping, my 3PL suggested to me, 11 liftgate deliveries:

Remember that liftgates, limited access, residential deliveries and other accessorial surcharges negate guarantees and can delay transit. Carriers, aside from R&L Carriers, do not all have liftgates on every truck, and may try to deliver without a liftgate if possible, even when a liftgate is requested. Remember that Notify and Appointment deliveries are not the same as guarantees and can delay transit. Speak to your consignee and know ahead of time if they require these services upon delivery.

  • On the 12th day of Shipping, my 3PL suggested to me, 12 days vacation!

Ok, not so much a suggestion as a reminder: your employees are taking vacation, so are your competitors, so are your customers, vendors, and LTL carriers. Docks are running skeleton crews this time of year. You have less people to ship your product, carriers have less people to sort it, load it, and deliver it, and your customers have less people to receive it. Be sure to communicate with your consignees about warehouse operations time and allow yourself plenty of time for delivery especially for your time-sensitive shipments!

Nick Klingensmith, Director of Sales Development
Follow me @theBGexperience

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Holidays Impact on Transportation

transportationEver heard of the “Holiday Rush”?  Sure you have but have you ever considered the impact it has on transportation providers?  Ever asked why you shop on cyber Monday and get free shipping but if you wait a week, you will have to pay for a premium shipping service to make delivery by Christmas?

Frustrating as it is for us, it is even more challenging for the companies hired to transport those goods.  They have to increase their work force three fold, find ways to dedicate more trucks to the same routes, and manage a flow of inquiries which quadruples through this short period of time.  Then, after the holidays are over, those same shipping companies must cut back on the resources as quickly as they brought them on to remain profitable.  

Now look at the company you own or work for, could you manage such an expansion and contraction in a thirty day period?  Yeah, most likely none of us could manage this type of activity.  What those transportation companies perform every year at this time is truly amazing.  So the next time you procrastinate and have to select an “Expedited” service to get that special someone their gift delivered by Christmas, remember even though it cost more, it is well worth it!  

Eric Chambers, Sr. Vice President of Sales and Marketing
Follow me @ebluegrace

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Thinking Lean

Last week I attended a webinar on Lean Supply Chain. One concept they discussed was Lead Time. In manufacturing this is generally thought of as the time between placing an order and receiving the product. But at BlueGrace this could take many forms. Lead time could be the time a quote comes in until it has been quoted. It could be any request from a customer or employee. It could be a request from management down the chain of command. It can be just about anything.

The lecturer used the following math formula:
LEAD TIME = VALUE + WASTE

Pretty simple stuff. Lead time equals the value placed on the object by the customer plus wasted time/movement etc. Waste has no value to the customer. Like any mathematical equation if lead time is constant and you increase waste what happens to value? It goes down. Conversely how do you increase value? By lowering waste.

Per the lecture the Ultimate Business Model looks like this:
Supply Lead Time + Manufacturing Lead Time + Outbound Logistics Lead Time  needs to be < Customers Lead Time (this is Built to Order)

Most companies fail at lead times and have to forecast (guess). Their model looks like this:
Supply Lead Time + Manufacturing Lead Time + Outbound Logistics Lead Time  > Customers Lead Time (This is called Inventory)

How does all of this apply to us? Honestly, I haven’t totally put my finger on that but my gut tells me this is important. Lets look at our process when handling a request from Bobby. For example, he told me to manage a particular area of the business.

The optimum design would be:
The time it takes for me to complete (This is Lead Time) = Value (this is the value Bobby places on the request) + Waste (this is me asking someone to get me a list, go through the list, wait for responses, meet to make decisions).

Nothing in the waste category adds ANY value to the customer (Bobby), he just wants it done. In this equation, if we reduce waste (remember, for this equation Bobby’s value is a constant) what happens to lead time? It goes down! The very cool thing about this type of equation is reducing waste does two very big things.

  1. It reduces lead time.
  2. It increases value!

I am about to start a course in Lean Six Sigma. Hopefully,  I will learn more about lean concepts and how it can apply to us but for now please consider this blog and think about the simple equation
LEAD TIME = VALUE + WASTE
This article is worth reading, A Lean Office Eliminates Waste and Saves Time.

Randy Collack, COO
Follow me @schmengieBG

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.22 Caliber Mind in a .357 World

Surely the title grabbed your attention! I am sure you asked what can this blog be about. I decided to write this blog about being flat out better than the next guy. In any business you can’t simply be better than the competition, you have to know them and what they do and be innovative enough to do it better. Businesses are reluctant to change because what they are doing is comfortable and they don’t know that there is a better option that allows their businesses to run smoother. My company prides ourselves in staying out in front of the competition and not being just another 3PL. In the freight and logistics world, you can’t simply offer better rates than your competition and expect to stay afloat.  This is the age of technology, efficiency and innovation. We are the first 3PL in the industry to release a Mobile Freight Optimizer app for the iPhone. We are one of the first to roll out Dock to Doc, software that allows businesses to see their Proof of Deliveries and weight inspections for all carriers in one system. This is one of the many things we do that allows businesses to run more efficiently. It helps accounting see that the freight delivered for all carriers so they can bill their customers faster. If there was a problem with a re-weigh it allows them to see that inspection with a click of a button rather than calling and e-mailing carriers and waiting on a response.

Many businesses in many industries are still taking knifes to gun fights. Many franchises are still arming themselves with .22 caliber business plans instead of using .357 innovation. This is the business era dependent upon lightning fast internet, cell phones, text messages, webex demonstrations and yes, state of the art Transportation Management Systems (TMS). People are learning to do more with less. Web-based applications allow businesses to be fluid and mobile. Businesses are learning to become more process driven and less labor dependent. To be competitive, to be successful, the trick is no longer to outgun your competition but rather to use a more effective weapon

– Dustin Snipes, Account Manager
Follow me @DSnipesNole_BG

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Go Green or Go Home!

green company | green initiativesAs we wade through the aftermath of the disaster in the Gulf, there is resurgence in discussions about how to protect the environment and whose responsibility it is to do so. Big businesses, once regarded as corporate giants with no identities, have long since taken on personas and play an integral role in our daily lives. Companies like McDonald’s, GE and FedEx spend a great deal of time, energy and money on how their image is perceived. People expect businesses to act as socially and environmentally responsible citizens. Going green sets a positive example for employees and prospective customers, and increases morale with a cleaner and healthier work environment. Leaders are coming to understand that being good to the environment can be good for the bottom line.

Many large corporations are doing their part to reduce their carbon footprint:

  • GE and Wal-Mart understand that people want more efficient, cleaner products.
  • FedEx Airport Operations in Oakland, California is almost entirely supported by solar power.
  • Bank of America is developing green technology (such as an eco-friendly credit card) and electronic banking
  • Other green companies include McDonald’s, Anheuser-Busch, Continental Airlines and DuPont.

The supply chain, an integral part of most businesses, is where going green can offer the most long-term benefits. By cutting down on consumption, going green allows increased efficiency, improved service, and lower operating costs. Businesses can cut down on packaging materials and condense their orders to have more concentrated shipments. The greatest impact going green in one’s supply chain will have is the overall reduction in waste.

A business who manufacturers and distributes goods could use 9 or more pieces of paper per order:

  • The purchase order
  • 3 printed copies of competitive quotes from freight carriers
  • 2 printed copies of the Bill of Lading (BOL)
  • Proof of Delivery (POD)
  • The customer invoice
  • The invoice from the freight carrier
  • A daily log of all outbound shipments

This list can get longer if they report inbound or third party “drop shipments” or if management requires other reporting or visibility. A recent article from Information Week discusses how although the financial outlay of a more efficient data system can be overwhelming to small business, there are a number of ways to green a company’s data center easily and cheaply, and the financial rewards can be significant.

By utilizing a non-asset based 3PL such as BlueGrace Logistics, a company can reap the benefits of a Transportation Management System (TMS) without any significant upfront cost. A leading edge TMS can be an effective data warehousing system and significantly reduce a company’s output of waste.

 A TMS can:

  • Produce and store quotes from multiple freight carriers
  • Produce and store copies of BOL’s
  • Store electronically uploaded POD’s
  • Store addresses and product information
  • Produce a daily log or other required reports.

In addition to a far cleaner, far greener, and far more efficient order management process, housing your shipping data can save your business a TON of money!

Nick Klingensmith, Director of Sales Development
Follow me @theBGexperience

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Industry Spotlight – George Steinbrenner

George Steinbrenner SpotlightOn July 13, 2010, longtime New York Yankees owner George Steinbrenner died at the age of 80. What most people do not know about the man, who helped a then struggling major league baseball team become one of the most successful teams in history, is that his career began in the shipping industry. 

Following in his grandfather’s footsteps, Steinbrenner joined his family’s business, the Kinsman Marine Transit Company, shortly after graduating from Purdue University.

Steinbrenner was quite a force in his business dealings, working successfully to revitalize his family’s struggling company. One thing I believe is key when running a business is knowing which commodities are practical for the times and knowing the best way to maximize its profitability. Steinbrenner realized that Kinsman’s true potential lay in the transportation in grain over ore.

Investing in the different facets of an industry is also something I believe to be beneficial in expanding any business. After securing a gross annual income of 100 million dollars, Steinbrenner saw the potential for profit by investing in shipbuilding, acquiring the American Shipbuilding Company in the early 1960’s. In an effort to maximize cost effectiveness, Steinbrenner relocated all operations to Tampa, Florida in 1984. 

Anyone who has followed baseball for the past 40 years can attest to Steinbrenner’s knack for building success. Although some of his methods proved controversial it is undeniable that George Steinbrenner is undoubtedly someone to emulate.

– Jon Cuello, Partner Invoicing

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