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

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

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

The Reluctance to Shift

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

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

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

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

Rails Starting to See Growth

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

Tightening of truckload capacity is a BIG concern

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

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

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

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

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

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

 

 

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Supply Chain: Nervous Over NAFTA

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

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

Sudden Changes Can Hurt the Industry

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

The industry has anxiety over change.

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

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

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

The Ripple Effect: Automotives

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

Renegotiating NAFTA would more likely kill jobs

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

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

Automakers would simply offer vehicles with fewer features

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

Not All Doom and Gloom

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

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

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

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

 

 

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OTIF – The New MABD for Walmart Suppliers

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

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

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

OTIF > MABD

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

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

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

The MABD Window vs. OTIF Window

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

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

Variability is the No. 1 killer of the supply chain

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

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

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

FTL and LTL Guideline Breakdown

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

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

For less-than-full truckload (LTL):

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

What does this mean for YOU?

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

Suppliers scorecards will inevitably be affected

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

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

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

 

 

 

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BlueGrace Awarded Top 100 3PL By Inbound Logistics

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

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

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

Top 100 Selection Methodology

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

Distilling the Top 100 is never an easy task

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

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

A Look Ahead

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

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

About Inbound Logistics

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

 

 

 

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

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

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

The Peak (Season) Concern

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

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

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

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

The Possible Storm Among the Cloud

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

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

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

But just how vulnerable is the cloud?

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

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

Is Walmart being reasonable with their concerns

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

 

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Understanding and Managing Your Hazardous Materials Supply Chain (hazmat)

Shipping Hazardous Materials

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

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

Our relationship with our carriers is different.

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

How BlueGrace is Different

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

Business Intelligence and Transparency

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

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

Download Case Study

Use a Proven 3PL for Your Hazmat

 

 

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Shedding Some Light on Dimensional Pricing

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

So what is dimensional pricing?

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

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

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

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

Understanding What this Means For Your Business

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

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

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

LTL Shippers Might Get Hit Harder Than Most

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

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

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

How BlueGrace Can Help

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

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

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

 

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CSA Report Card: Room for Improvement

Compliance, Safety & Accountability

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

CSA scoring method has some pretty glaring flaws

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

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

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

Recommendations for the SMS

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

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

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

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

Statistically Principled Approach

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

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

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

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

Quality of Data

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

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

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

What Does this Mean for the Industry

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

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

we look forward to working with FMCSA to strengthen the program

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

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

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

 

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What Happens If Freight Economy Rises?

 

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

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

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

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

Fixing a Growing Problem

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

The shortage in drivers is becoming a serious issue.

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

Many trucking companies are taking steps to recruit more women

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

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

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

Women in Trucking

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

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

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

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

Is the Trucker the Only One at Risk?

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

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

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

 

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All Hands on Deck for 2017 Backpacks of Hope

Back to School Can Stir Up Many Emotions

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

Fresh Start for Kids Each Year

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

The average cost of school supplies exceeds $600

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

It’s All About the Kids

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

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

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

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

Metropolitan Ministries

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

A backpack carries more than just school supplies.

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

See What BlueGrace has to Say about Backpacks Of Hope

Caring for All Others | It’s What We Do

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

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

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

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

Do you want to help?

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

Metropolitan Ministries – Outreach Center

Tampa, Florida
2301 North Tampa Street
Tampa, FL 33602

813.209.1200

Chicago Children’s Advocacy Center

1240 S. Damen Ave.
Chicago, IL 60608
312.492.3700

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Do you have the right TMS for your business?

 

Transportation Management Systems on the Rise

Whether you’re shipping domestically or internationally, keeping everything running smoothly can be a big job to say the least. It requires a careful orchestration of a potentially vast number of moving parts. The smoother these parts operate in conjunction with one another, the better your operation will be. For that reason, transportation management is essential for domestic and global shippers.

Transportation management is essential for domestic and global shippers.

If we consider the way things have been done in the past in comparison to the new technological advancements that are being developed at an ever-increasing pace, the old school, manual system just isn’t going to cut it any more. Phone calls, faxes, emails, and spreadsheets might have been enough to keep a trucking company running a few decades ago, but now companies who can’t keep pace with the time and technology, will run the risk of being outmoded and left behind.

Companies who can’t keep pace with the time and technology, will run the risk of being outmoded and left behind.

Advancements in Technology

Transportation management technology has come quite some way from what it once was. The myriad of options available for both shippers and 3PLs to choose from for planning and executing systems is massive compared to that of the past. Not only are there more options to choose from, but the speed, cost, and modes that these management systems can be obtained, implemented, and used have also improved.

American Shipper TMS Benchmark

Transportation management systems (TMS) will vary from company to company, depending on what the shippers needs are. A recent benchmark report from American shipper highlights some of the key developments in TMS, including how shippers see the market, the technology they currently use, how they connect with other carriers, and how new transportation technology interacts with the inventory variance created by omnichannel marketing. In short, the nature of shipping and transportation is changing, and shippers will need a different approach to adapt to this market evolution.

When you consider that omnichannel retailing is on the rise, this will make things more difficult for trucking companies as it will require increased flexibility in their supply chain. In fact, only 20 percent of shippers and 30 percent of 3PLs feel that their TMS system can support an omnichannel strategy.

Only 20 percent of shippers and 30 percent of 3PLs feel that their TMS system can support an omnichannel strategy.

The report also highlighted some of the challenges involved with TMS. One of the biggest challenges, according to the respondents revolves around connectivity to outside partners and compatibility with other systems. While having a good TMS is useful, it doesn’t make too much of a difference if it’s only capable of working “in house.”

A Growing Need for TMS

Another startling discovery made by the report is that 40 percent of the respondents aren’t using a TMS or a 3PL to manage their logistics. However, given the coming shift in the market, there is a considerable uptick, 55 percent, in the amount of trucking companies who are beginning to utilize management systems when compared to last year. This is becoming increasingly important as trucking companies begin to shift gears for omnichannel demands which require higher data volumes and increased workload for transportation departments.

40 percent of the study’s respondents, aren’t using a TMS or a 3PL to manage their logistics.

An Industry Leading TMS Is Available For Free

While it’s encouraging to see that the number of companies who are open to using a TMS is on the rise, it’s still worrisome that there are many who don’t. TMS systems are not only improving in ease and speed of implementation, but the cost is also dropping. In fact, there’s even a free transportation management system that’s available to shippers. That’s right, free.

Whether you’re a one-time shipper or ship 7-days a week, the cost is zero to you!

Our proprietary transportation management system, BlueShip, is free! Whether you’re a one-time shipper or ship 7-days a week, the cost is zero to you! Whereas other 3PLs charge anywhere from $3-10K for the use of their TMS. Our system is cloud based, which offers ease of implementation and utilization from system to system and partner to partner. We’re always fine-tuning our system to offer you the best in both reporting and live tracking.

BlueShip Is Free For All BlueGrace Customers

 

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The Future of Same Day Delivery

 

A study commissioned by Intel has given us a glimpse into the economic impact of automated vehicles in the future. The report estimates that by 2050, automated vehicles and the self-driving market will add 7 trillion dollars annually, to the global economy.

By 2050, automated vehicles and the self-driving market will add 7 trillion dollars annually

“With interest from both seasoned and startup automakers, the autonomous vehicle (AV) market is expected to grow exponentially in the coming decades. A new study conducted by research firm Strategy Analytics and commissioned by Intel predicts that driverless vehicles will constitute a $7 trillion economic value by 2050, with $4 trillion from consumer use and another $3 trillion from business use,” says a recent article from Futurism.

The growth of automated vehicles will take place gradually

Futurism goes on to say that such a massive change won’t just happen overnight. The growth of automated vehicles will take place gradually, reaching upwards of $800 billion by 2035.

Trucking Takes the Lion’s Share

While the possibilities for self-driving vehicles are nearly endless, it will be the trucking industry that will see the highest rate of utilization. It’s estimated that the driver shortage rate will continue to climb in both the U.K. as well as the U.S. to a combined total of 300,000 drivers. Many trucking companies will be looking to automated vehicles as a possible solution to the industry-wide talent shortage.

The driver shortage rate will continue to climb in both the U.K. as well as the U.S.

“Transportation companies in many major international markets report that they expect significant shortages over the next several decades for long-haul drivers due to an aging workforce and the lack of qualified new applicants.” In the U.K., the Road Haulage Association estimates that it was short 60,000 lorry drivers in 2016 and that will grow to 100,000 in 2017.

In the U.S., the ATA projects that by 2025, the trucking industry will face an acute shortage of over 200,000 qualified drivers.

Trucking associations in Australia, Canada, Germany, and the United Kingdom all project that aging workforces and lack of new qualified applicants will intensify driver shortages in these countries in the next 10 to 15 years.

Japan Automobile Manufacturers Association projects that driver shortages will intensify over the next five to 10 years. Driver shortages are intensifying in Brazil and South Africa.  In India, 10 percent of the national truck fleet is currently unused because of a lack of drivers. The [cumulative] shortfall will lead to the need for 17 million more drivers over the next decade,” according to the study conducted by Strategy Analytics.

Driver shortages will intensify over the next five to 10 years.

Additionally, there’s also the consideration that brick and mortar stores are falling to the wayside. As more consumers turn to the internet for their shopping needs, the need for a more adaptive logistics is also on the rise. Retailers gone e-tailers will have to find more efficient means to deliver goods directly to customers making automated vehicles less of luxury and more of necessity.

The Realization of Same Day Delivery

Amazon continues to push the envelope for delivery speeds with the ultimate goal of achieving same day deliveries. Driverless vehicles, specially customized for LTL and parcel carrier services, will operate out of a fixed distribution center allowing them to carry high-volume, high-frequency items that are regularly ordered by consumers. Working within the fixed range of a DC has the possibility to shorten the average delivery time to just a few minutes.

Carry high-volume, high-frequency items that are regularly ordered by consumers

If we combine this localized supply chain with other venues such as drone delivery, same day delivery for a wider array of parcels, packages, and general consumer goods become a reality. Factor in that automated vehicles and drones won’t be subjected to the same HoS regulations as a human driver, shipping companies can see a higher level of efficiency through extended service hours at a much lower cost.

Shipping companies can see a higher level of efficiency through extended service hours at a much lower cost.

Of course, as the demand for automated vehicles continues to rise, there will also be a rise in the concern over displaced drivers. However, while it might seem like drivers would be phased out entirely with automated vehicles, there will still be a need for human involvement. This is what Strategy Analytics has to say about driver displacement:

“Drivers in these industries are likely to be displaced in significant numbers. However, it will also create opportunities for transportation companies to utilize the “freed” time of drivers to evolve and enhance their role and impact to the organization.

Drivers will become customer service professionals who can sell and market services and related goods and offerings

“In high-touch and high-turnover routes, drivers will become customer service professionals who can sell and market services and related goods and offerings. Drivers will also transition to become supply chain experts by extending inventory management and order processing. What is clear is that proactive transportation companies should explore these opportunities and plan for the re-training and balancing of their workforces.”

 

 

 

 

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Amazon’s Logistics Just Got A Whole (Foods) Lot Bigger

As companies go, there are few that have the prowess to grow and advance quite like Amazon. With a unique talent for turning a company-based product into a full-fledged service for customers, i.e. Amazon Cloud; the e-commerce giant continues to make a colossal shadow for other companies to try and follow. So what’s the newest thing to peek out of Amazon’s growing bag of tricks? How about buying out the organic grocery chain: Whole Foods.

An Eating of Words

Looking back through history, there have been a number of times where a CEO of a company simply brushed off their competition. A recent article from Stratechery has an amusing little anecdote to highlight just such an occasion.

“Back in 2006, when the iPhone was a mere rumor, Palm CEO Ed Colligan was asked if he was worried: ‘We’ve learned and struggled for a few years here figuring out how to make a decent phone,’ he said. ‘PC guys are not going to just figure this out. They’re not going to just walk in.’ What if Steve Jobs’ company did bring an iPod phone to market? Well, it would probably use WiFi technology and could be distributed through the Apple stores and not the carriers like Verizon or Cingular, Colligan theorized.”

Oddly enough, the CEO of Whole Foods, John Mackey, said something very similar pertaining to Amazon’s ability to fine tune their logistics capabilities to groceries only two years ago. So what changed that has now put the entirety of Whole Foods under Amazon’s control?

It’s because they misunderstood their competitions motives and goals.

The Evolution of Amazon

When Amazon first started back in 1997, their mission statement was simple: “Amazon.com’s objective is to be the leading online retailer of information-based products and services, with an initial focus on books.”

Which then grew into:

“Our vision is to be earth’s most customer centric-company; to build a place where people can come to find and discover anything they might want to buy online.”

While their initial mission statement seemed rather unambitious, what their current goal is now is certainly a lot grander. So what does that have to do with them buying Whole Foods, other than it gives them another product to offer online? Simple. A chance, to flex their logistics muscles.

Amazon Brand Logistics

Given the massive size and scope of Amazon’s delivery radius, it only makes sense that they would develop a logistics network. After all, that’s pretty much how their cloud computing service started, as an in-house function which eventually became sophisticated enough to market out to their competitors. While having a logistics network is all well and good, being able to deliver groceries and other perishables in a timely manner is something entirely different. Fortunately, Amazon’s logistics capabilities have grown to the point that they are now ranked the second largest logistics company in the world. Not only do they have the assets in place to handle groceries, but with Whole Foods under their wing, Amazon has set the stage to be the household provider of… well… everything.

Amazon has set the stage to be the household provider of… well… everything.

The Whole Foods Overlay

So how effectively can Amazon get into grocery logistics? Books and home goods don’t have an expiration date the way that groceries do, so making the switch seems like a colossal undertaking, right? Well, not exactly. The truth behind the trick is that Amazon isn’t necessarily buying a food retail outlet, but rather they have purchased their very own best customer. In much the same way that Amazon built their web service as “in house” Amazon Fresh will be similar. Turning their logistics structure into supplying Whole Foods will create the architecture necessary to branch out into other markets including restaurants.

Amazon has purchased their very own best customer

“In the long run, physical grocery stores will be only one of the Amazon Grocery Services’ customers: obviously a home delivery service will be another, and it will be far more efficient than a company like Instacart trying to layer on top of Whole Foods’ current integrated model,” says Ben Thompson from Stratechery.

“I suspect Amazon’s ambitions stretch further, though: Amazon Grocery Services will be well-placed to start supplying restaurants too, gaining Amazon access to another big cut of economic activity. It is the AWS model, which is to say it is the Amazon model, but like AWS, the key to profitability is having a first-and-best customer able to utilize the massive investment necessary to build the service out in the first place,” he added.

At the end of the day, we have to realize that Amazon is simply a service provider.

At the end of the day, we have to realize that Amazon is simply a service provider. Even their grocery services are simply another service offering that is built on and therefore protected by the scale of it. Purchasing Whole Foods has given Amazon a wide enough landing pad to pull off grocery chain logistics because of the size of their primary customer.

Grocery Chain Logistics

Are you a company that ships products to grocery chains? Do you find yourself with costly carrier invoices or freight reclassification? BlueGrace recently partnered with a company that specializes in creating healthy, protein-rich treats and was having these exact issues, and many more.

After partnering with BlueGrace, they saw a 14% reduction in transportation costs, an annual savings of $225,000

We saw several opportunities to cut their costs and improve their bottom line. Find out how this company was able to find over 14% reduction in transportation costs, an annual savings of $225,000, when they allowed BlueGrace to optimize their supply chain.

 

How a Grocery shipper saw a 14% reduction in transportation costs

 

 

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Filling the Gap: Ways to Improve the Shortage of Truck Drivers

 

With the median age for truck drivers pushing retirement and a severe shortage of drivers, to begin with, the U.S. Department of Transportation is putting forth two proposals. According to a recent press release from the Federal Motor Carrier Safety Administration, these proposals will make it easier for qualified applicants to earn their commercial driver’s license.

The first proposal is simple.

Any qualified veterans or active duty personnel can have the knowledge test waived. This allows veterans and returning soldiers to have an easier time finding work as truck drivers and bus operators and will make it easier for them to transition into civilian life.

This allows veterans and returning soldiers to have an easier time finding work

The second proposal calls for simplifying the process.

Simplifying the process to obtain a CDL will not only make it easier for drivers to find work but will also lower costs for both state driver’s licensing agencies as well for the applicant.

Simplifying the process to obtain a CDL

“Taken together, these two proposals will help ease the entry for thousands of qualified individuals into career opportunities as professional truck and bus drivers – a critical occupation facing an acute labor shortage in our country,” said FMCSA Deputy Administrator Daphne Jefferson. “We could eliminate unnecessary burdens to both the applicants and the states, save time, reduce costs and, most importantly, ensure that states only issue commercial driver’s licenses to well-trained, highly qualified individuals.”

Earn a Learner’s Permit

Under the new proposal, states can issue a CDL learner’s permit, with a one-year expiration date, which goes beyond the current six-month limitation. The added time cuts down on excessive costs and paperwork incurred by DOT agencies. It also eliminates re-testing and other additional fees accrued from renewals.

It also eliminates re-testing and other additional fees

“At the core of both proposals is the safety of the motoring public. We will continue to demand that commercial truck and bus drivers, and their employers, adhere to the safety standards that exist to protect all drivers,” Jefferson added.

A Much Needed Boost

With truck driving being one of the most preeminent professions in the United States, having such a severe shortage of drivers has put a serious hurting on the trucking industry. With 75 percent of all freight in the United States is being transported and delivered via trucks, anything that can fill the hole in personnel will come as a boon to the industry.

Having such a severe shortage of drivers has put a serious hurting on the trucking industry

Will Self-Driving Trucks Eliminate the Need for Drivers?

There is another consideration for the trucking industry. Concern for the future of truck drivers has been growing as the technology continues to develop. Many are worried that as self-driving trucks take to the roads, there will be no need for drivers. With 1 percent of the total labor force in the United States is being made up of truck drivers, phasing all drivers out of the picture would result in unemployment rates rising. However, there are many who believe that this alarmist prediction is a bit premature. In fact, with the disruptive technology coming to bare, there’s a lot of new potentials out there for the future.

There are many who believe that this alarmist prediction is a bit premature

“When the personal computer came out in the ’80s, people freaked out over that. It created new jobs, new industries, and it redefined certain jobs,” says Cathy Morrow Roberson, head analyst for Logistics Trends and Insights in an article from Trucks.com. “I think the same thing is going to happen with the trucking industry. I think it’s going to get sexy enough for the younger generation to want to get involved.”

Without a doubt, there is a significant change coming to the trucking industry. However, as with almost every disruptive breakthrough, the changes will unlock new potentials for the industry, strengthening it as a whole.

 

 

 

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Do You Have The Right Technology To Dissect Big Data?

 

For what was once a stagnant industry for best practices, the freight industry is now being bombarded with new disruptive technology on a near constant basis. Dealing with one issue means that another takes its place. Begin to understand and utilize new technology, and it becomes quickly outmoded, or there’s another system to learn. Even the roster of companies is constantly changing, old players, leaving and new ones rushing in to fill the void.

Dealing with one issue means that another takes its place.

With such a constant back and forth, it would be all too easy to simply stick to what you know and call it a day, especially from a technological perspective. However, those old ways, comfortable though they may be, are a road to ruin. Companies who embrace innovation and new technology will part ways with companies that rely on “traditional” methods.

Additionally, these “pioneering spirits” for the industry are providing new options for customers that simply can’t be matched by the old school. The industry is evolving, which means shippers and carriers need to be on board or be left behind.

The Keys to the Data Stream

Big data is a term that gets thrown around a lot, especially now with the changes in industry technology. Now more than ever, the supply chain can provide more data and insight into the process than ever before. More ways of tracking data can show where weak points are within the supply chain. Whether it be driver, loading or unloading, traffic issues, road conditions or damaged shipments, everything is being monitored for efficiency. Whenever a change in address comes in from head office, it can be pushed to the driver or captain in real-time. The system automatically calculates and optimizes the ideal and cheapest new routing to the new destination.

More ways of tracking data can show where weak points are within the process

Part of adapting to the changes that are happening within the transportation industry is to know which data is useful and which data isn’t. While collecting data is all well and good, there is such a thing as too much data (TMD), which can be overwhelming when trying to decipher it all.

Which data is useful and which data isn’t.

“Collecting too much data is a problem, because it forces a company to spend valuable resources gathering and understanding data, much of which is likely to not be impactful from a bottom line or service level perspective. It also creates a secondary problem that’s just as harmful—the valuable data can be lost in the avalanche of meaningless information,” according to American Shipper.

Having the Right System in Place

So what can you do to protect yourself from data overload? Well, it’s all about having the right system in place to make sure you’re collecting only the data that you’ll need and weeding out all the rest. Having access to the right data at the right time can prevent problems before they start and, more often than not, many of the issues for transportation come from poor planning.

It’s all about having the right system in place

One of the most instrumental uses for new technology is a transportation management system (TMS) which can give companies an edge when planning their logistics. Not only does this allow for a better insight into customer experiences and needs, but it also provides the necessary information to correct an issue before it becomes a more serious problem. Additionally, a good TMS can also help bridge the gap between shippers and carriers, saving both time and money when it comes to transportation.

American Shipper recently released a report about combating the volatility of transportation and part of their suggestion is the use of TMS.

“Shippers are realizing daily that transportation management systems (TMSs) are both more necessary and more affordable than ever before. Even the simplest of transportation networks could benefit from optimization and automation of data entry functions. But these TMSs are also becoming more hyper-reliant on outside sources of data to reach their peak usefulness. So a shipper can’t just simply plug a TMS in and let the magic happen. It has to actively feed that TMS with useful, forward-looking, and reliable data.”

All of this to say that armed with the right data and a strong TMS, a shipper can take their business much further.

BlueGrace Proprietary TMS – BlueShip®

The easiest way to get started utilizing your valuable shipping data is with a full featured TMS, such as BlueShip. BlueGrace’s proprietary technology is designed to put the power of easy supply chain management and optimization back in your hands. BlueShip® offers cutting-edge tools for strong reliability and quick performance. Our customers are especially impressed with the user experience, which is completely customizable and has real-time updates, giving them a single source tool for tracking, addressing, and product listing.

BlueShip Is Free For All BlueGrace Customers

 

 

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Automated Trucking is Poised to Play Huge Roll in Transportation Industry

Navigating the Transition to Driverless Trucking

Automated trucking is poised to play a huge roll in the transportation industry. Overall, the implications of driverless trucks have near limitless potential. Without the margin of human error, autonomous trucks are safer and more efficient. Working in tandem for one another, driverless trucks can capitalize on fuel efficiency while working around the clock bringing in more deliveries at a fraction of the labor cost.

Driverless trucks can capitalize on fuel efficiency while working around the clock

However, while the end goal of automated trucking in the freight industry has some incredible possibilities, it’s the transition to this point that has more than a few people worried. Given that driverless vehicles is something of a precedent, there’s a lot of obstacles to overcome before the idea becomes a reality.

The Un(der)employed 

Job loss is a very large possibility with automated trucking. As truck drivers make up 1% of the total U.S. labor force, the volume of displaced workers will be severe. Mitigating the job loss and the potential impact of unemployment rates will be a key element to the transition to automated trucking.

Truck drivers make up 1% of the total U.S. labor force

More often than not, whenever there is a potential for massive job displacement, the words to follow are “There are other jobs to be had.”  While this is true for some industries, it might not necessarily hold true for truck drivers. These, according to the International Transportation Forum’s report on the matter, are the possible obstacles to this “conventional wisdom.”

“The conventional argument is that displaced workers in any given industry will find alternative employment through the expansion of activity in new and existing industries. However, there are several reasons described below as to why this argument may not provide comfort for truck drivers and others in the high-automation scenarios.” 

  • The high costs associated with losing a job
  • The risk that this time is different, i.e. that a low employment future is possible, at least temporarily, because automation may occur in many sectors of the economy
  • The emerging economic context means that job losses may result in higher social costs than previously.

The cost of losing a job alone represents one of the biggest issues, both on a financial and physical scale. Displaced workers, on average, take a 20% drop in annual wages. Additionally, being displaced from a job is often a trigger for both anxiety and depression according to the ITF report.

The cost of losing a job alone represents one of the biggest issues

“The mental and physical impacts of job loss are estimated to have a greater combined impact on well-being than the financial costs from lost income. Helliwell and Huang (2014) estimate that such non-financial factors decrease the average person’s well-being two to seven times more than the does their lost income from losing their job.”

Infrastructure Challenges

In addition to the unemployment costs of automated trucking, there is some considerable concern about the infrastructure that will be required to support automated freight transportation.

“The infrastructure requirements for full automation of driving functions are not yet clear-cut (section “Towards driverless road freight”). The need for 5G mobile internet connectivity between vehicles along the full corridor is not yet certain. Further, specific applications such as platooning and remote control centre operations are also likely to have additional infrastructure requirements. For instance, platooning may require longer motorway entry and exit ramps than are currently in place (Janssen et al., 2015).”

A possible solution to this obstacle would be to roll out test corridors to slowly integrate autonomous trucks, which would significantly lower the upfront costs. However, as the technology grows in both sophistication and popularity, the overall costs will be both substantial and unmitigatable.

The Foreseeable Future

As it stands, the technology, policies, and regulations are not in place to fully support automated freight hauling. However, in the not-so-distant future, these questions and obstacles will need to be addressed in order for these driverless trucks to take the road. As with most disruptive technologies, it will be the transitional period that will be the hardest to accommodate.

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Adapting to the Growing Requirements of a Fast-Paced Supply Chain

 

With the constant fluctuations in the global market, the freight industry is changing. With new technology, shipping demands, and changes in global policies, freight forwarders will also have to change to keep the pace. Logistics Trends and Insights has released their 2017 survey on the Evolution of the Freight Forwarder, which asked respondents how the freight forwarder is changing.

With the constant fluctuations in the global market, the freight industry is changing

“Indeed, the market is not only undergoing a redefinition, but it also has literally been caught in the middle of global, political and economic changes. Shifts in political thought favoring protectionism or populism, along with continued concerns within the ocean and air freight markets, have led many forwarders to seek acquisitions, new services, and new geographies in order to stay afloat. While gross revenues and volumes for many forwarders grew in the past year or so, they came at a price with lower profits and in some cases, a financial loss,” the report says.

What obstacles will forwarders have to overcome?

As the market continues to shift, what obstacles will forwarders have to overcome to keep pace with the changes within the freight industry?

Critical Pain Points for Forwarders

The major obstacles for forwarders according to the respondents, can be broken down into four categories. Tight margins make up the bulk of forwarders woes with 42 percent marking that as their primary concern. Rates and uncertain global environment are almost tied at 23 and 22 percent respectively. The remaining 13 percent lists capacity as their top concern, something which has been troubling the industry as a whole over the past few years.

Changing Customer Expectations

Of course, it isn’t just the market that is changing, but also the expectations of customers. The average consumer wants their products sooner and at a lower cost. To adapt, shippers need to push their supply chain in a new direction which means that forwarders have to be able to respond in kind. So what are customer expectations for a freight forwarder?

Shippers need to push their supply chain in a new direction

“Forwarders are indeed facing many challenges, but we must not forget the value they bring to the table. A new question for this year, we asked, “What do customers value most from a forwarder?” The majority of respondents, 33.7%, indicated trade expertise.

Visibility of cargo movements and ease and timeliness in booking freight

We found this interesting as it seems to play into the evolving definition of a forwarder as a facilitator, value-adder and a consultant. However, 45% of the responses were split among low rates, visibility of cargo movements and ease and timeliness in booking freight while 21.3% indicated additional thoughts including all of these choices, credibility, communication, and control, analysis, development of supply chain solutions.”

Changing Transportation

Another aspect of changing expectations from customers is that they want more ways to move their freight. As such, forwarders have to be able to provide multiple modes of transportation that best suit the customer’s needs. As a result, forwarders are seeing some changes in revenues based on modes of transportation.

Forwarders are seeing some changes in revenues based on modes of transportation.

Air transport is one of the biggest growing sectors of market gain shares for forwarders at 42.3 percent of the responses. Given the uncertainty of ocean shipping, it doesn’t come as much of a surprise that ocean freight has been on the decline for forwarders. Rail and trucking haven’t changed all that much. However, there has been a slight increase in rail use with 33 percent of responses indicating growth while only 14 percent have marked down that it was in decline.

Opportunities For Growth

Of course, the object of any successful business is to differentiate themselves from the competition. Niche markets are one strategy that some forwarders are going with, catering to specific needs of their customers, other forwarders might not be able to offer. However, 44.3 percent of the respondents said that their differentiation strategy would be to invest in new technology.

The object of any successful business is to differentiate themselves from the competition

“Indeed, technology is playing a major role in forwarders’ evolution. DB Schenker’s investment in UShip, DHL’s launch of its online freight marketplace CILLOX and even FedEx’s introduction of FedEx Fulfillment are all redefining the way items are fulfilled, booked and shipped.”

There is also the growing need for e-commerce fulfillment which will provide many opportunities for forwarders to attain desired growth in both fulfillment as well as cross-border services.

Overall, the need for freight forwarders will only continue to grow

Overall, the need for freight forwarders will only continue to grow, especially if they can continue to adapt to the growing requirements of a faster-paced supply chain as well as providing the necessary flexibility required for e-commerce fulfillment.

To request your copy of the white-paper, click here.

 

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The Real Threat for the Trucking Industry has Nothing to do with the ELD

 

 

The electronic logging mandate (ELD) has been something of a sore subject for the trucking industry as many companies worry about it cutting into their efficiency and, subsequently, profit margins. However, the real threat for the trucking industry has nothing to do with the ELD, but rather the growth of e-commerce.

Changing the Game: Amazon

Amazon has a gift when it comes for shaking up expectations. Same day delivery or even one to two hour deliveries for groceries in select cities is giving trucking companies a run for their money, quite literally in some cases. As the expectations for consumers shift towards instant delivery and omni channel shopping, trucking companies that lose sight of what’s really going on are risking being knocked out the game by e-commerce companies.

Last year alone, e-commerce sales reached $394.9 billion, a 15% growth from 2015.

Last year alone, e-commerce sales reached $394.9 billion, a 15% growth from 2015. The 2016 e-commerce sales volume accounted for 8.1% of all U.S. retail sales and is continuing to grow. As for Amazon, the e-commerce giant underwent a huge growth spurt, up to 27% in sales volume, netting a cool $2.4 billion in profit, well above the 2015 figure of $594 million.

Amazon is outpacing most trucking companies and completely reshaping the market landscape in their image.

This is, in part, due to the fact that Amazon carries just about any product a consumer could ever want, which makes for convenient one stop shopping. With their growing logistics and delivery capabilities, Amazon is outpacing most trucking companies and completely reshaping the market landscape in their image.

Hot on the Heels

Amazon and Wal-Mart are usually the frontline runners when it comes to e-commerce sales and headlines, but they aren’t the only ones in the game. Many brick and mortar stores are starting to tap into the potential of e-commerce and omni-channel sales in order to stay viable. Best Buy, for example, made some considerable investments to their online sales, increased their e-commerce volume by 17.5% which then boosted their online sales by 21% according to the Motley Fool.  Other companies such as Macy’s and Home Depot are also starting to boost their e-commerce capabilities, offering their customers new ways to shop and more convenient ways to pick up their goods.

Many brick and mortar stores are starting to tap into the potential of e-commerce and omni-channel sales.

Trucking in Trouble

If a disruptive change is a good thing for an industry, e-commerce is presenting a destructive change for the trucking industry. Consider Amazon’s unparalleled purchasing power, while the increase in e-commerce sales might seem like a good thing for the trucking, Amazon is able to pursue a low-cost model for trucking.

E-commerce is presenting a destructive change for the trucking industry

“First, core carriers and dedicated carriers appear to be used by Amazon only in cases where brokers cannot find cheaper capacity in the open market,” said John Larkin, managing director and head of transportation capital markets research for Stifel Capital Markets. “This is a new, less attractive version of what core carriers and dedicated fleets traditionally represented [and] we have heard that several carriers have backed away from this customer for this reason.”

“[The truckload market] is still tough; excess capacity continues to exist, prolonging a very competitive pricing environment,” Larkin adds. “Trucking companies are still having trouble finding drivers and, to boot, poor weather is troubling the first quarter,” according to a recent post from FleetOwner.

The logistics industry as a whole is undergoing a considerable culture shock.

With the rapid growth and development of e-commerce sales, the logistics industry as a whole is undergoing a considerable culture shock. The tried and true method is rapidly vanishing as consumers demand faster deliveries from more locations. Distribution and warehousing centers are being to slow down and many are closing their doors for good. Unless the trucking industry is able to find a way to cope with these new changes, in addition to the hurdles they already have to clear, there could be a cataclysmic upheaval in the way we look at logistics.

 

 

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BlueGrace Logistics Hosts Open House Event

Photo Cred: Dosia White Photography

Since it’s inception in January of 2009, BlueGrace has provided transportation management services for companies that ship. From one-time-shippers to multi-million dollar accounts, BlueGrace works to make each customer’s business, better. Over the last 8 years, BlueGrace has opened its doors to vendors and customers alike, but never in this capacity.

Over the last 8 years, BlueGrace has opened its doors to vendors and customers alike, but never in this capacity.

On Friday, June 2, BlueGrace Logistics hosted an Open House and invited local vendors, partners, customers and potential customers to see both the recent building expansion and the rebranding efforts.

While BlueGrace is no stranger to a good time, this event proved to be one for the record books.

Nearly 350 people, including BlueGrace employees, enjoyed food provided by a Tampa favorite — Datz, uniquely crafted coffee by the Coffee Divas, music by Wild Out Entertainment, Tampa Bay Lightning alumni Bryan Bradley, Thunderbug and the Lightning Girls.

Being the preferred shipper of the Tampa Bay Lightning has its perks.

“Our partnership with the Lightning has provided us with some incredible opportunities for our employees, customers and vendors, and having Tampa Bay hockey legend Bryan Bradley draw up a hockey play on our white board, was probably one of the coolest things about the Open House,” said Adam White, Director of Marketing at BlueGrace Logistics.

Welcome to BlueGrace Logistics

Guests were welcomed into the new, state-of-the-art reception lobby that tripled in size since the buildout.

Photo Cred: Dosia White Photography & BlueGrace Employees Social Media Posts

“We didn’t just usher our guests to the party, we wanted to show them our growth with an exclusive tour of the newly expanded, 55,000 sq ft building,” said Whitney McKay, Marketing and Brand Manager at BlueGrace Logistics. “Our conference rooms, collaborative spaces, and breakrooms have unique names and we wanted to explain to our guests, what these rooms meant to us and our culture.” McKay, continued.

The tour started in the “OG” breakroom appropriately named “Comfortably Numb” where guests were offered to partake in a BlueGrace culture staple “Free Beer Friday”.

“Our leadership allows us to endulge after a long, hard week at work. Every Friday at 3 o’clock, our employees participate in ‘Free Beer Friday’ and are allowed to drink some beer at their desk to close out their work week,” said Beth Clark, Content Manager at BlueGrace Logistics. “This culture is something we needed to share with our guests to understand the machine that is BlueGrace.”

Humane Society of Tampa Bay Adoptables

Photo Cred: Dosia White Photography & BlueGrace Employees Social Media Posts

Groups of 10-15 guests were taken through the brief, yet extremely successful history of BlueGrace as they walked through the expansive office space. Halfway down the nearly eighth-of-a-mile long office building, they were greeted by the Humane Society of Tampa Bay and their adoptable animals.

BlueGrace Logistics Loves Animals and the Partnership with HSTB is always top-of-mind so they were a perfect addition to the Open House event.

Our Culture is Unmatched

Collaborative spaces, state-of-the-art training and conference rooms, and free beer isn’t all we offer our employees. The final stop on the tour for our guests — Paradise City.

The final stop on the tour for our guests — Paradise City.

“This breakroom is a space for our employees to take a break during the work day and either relax in an oversized bean bag, play a game of ping-pong or to shoot some corn-hole.” said McKay.

Photo Cred: Dosia White Photography & BlueGrace Employees Social Media Posts

When walking into the breakroom, Paradise City, guests were cheerfully greeted by some of the Tampa Bay Lightning Girls, TB Alumni Bryan Bradley, and their famed mascot, Thunderbug.

“You could feel the energy. The event was supposed to show our guests what it’s like to work at BlueGrace and to Celebrate our Growth; I feel like we nailed it.” said White.

Food, Fun and Entertainment

When planning an event, there are boxes that need to be checked, and food comes to the top of that list. Datz, a Tampa Bay staple, was the perfect business to partner with for this exclusive Open House event.

“If you haven’t eaten at Datz and you live in the Tampa Bay area, you are missing out.” said Clark.

The menu was filled with some of their best dishes, including their famous Mac N Cheese bun burgers. BlueGrace and Datz also worked together to create a signature drink for special guests, the Blueberry Mule.

“The Blueberry Mule was such a hit with everyone. They were so refreshing and the perfect addition to the event menu.” said Tracy Guida, Catering Manager at Datz Tampa.

The other amazing food and beverage vendors included the Coffee Divas Mobile Catering and one of BlueGrace’s very own Sarah Sweeney, Supervisor of Credit & Billing.

“Before BlueGrace, I was a pastry chef at Jackson’s and other local bakeries.” continued Sweeney. “I have sort of become the in-house baker and I love every second of it.”

While the food and drinks were definitely a hit, we can’t forget the musical tracks that kept the party going.

Photo Cred: Dosia White Photography

DJ Papi of Wild Out Entertainment came to us as a recommendation and he did not disappoint. Our playlist in the office on a normal day, was brought to life and he did a fabulous job.” said Clark.

A Huge Thank You to Our Guests

While we certainly love throwing a party, we couldn’t do any of this without you. BlueGrace Logistics believes that we can make any business better and by providing a unique and fun space for our employees and a culture that encourages them to provide unmatched service, we can do just that.

Thank you to everyone who made it out to our headquarters office in Riverview, Florida. To our vendors, customers, employees, and partners — Thank you for all that you do!

Want to Work at BlueGrace Logistics?

Our shipments aren’t the only things going places! BlueGrace employees strive to excel at every opportunity. So we surround them with the kind of fun, positive, and creatively stimulating experiences that’ll further ignite their ambitions. If you Pursue Outrageous Goals and are Caring of All Others, apply for a career at BlueGrace Logistics.

APPLY HERE  – Today!

Open House Event Photos >> Courtesy of Dosia White Photography. 

 

 

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Last Mile Becoming the Front Line for Logistics

The growing strength of e-commerce has been putting a serious pressure on the transportation industry. As customer expectations are rapidly shifting towards the instant gratification of same day delivery, long haul trucking is shrinking by comparison. While some trucking companies are struggling to keep the pace with the changing market, others are shifting gears and switching their tactics. The game is changing for carriers and forwarders. It’s no longer about the journey but instead it’s all about the final mile.

It’s no longer about the journey but instead it’s all about the final mile.

So what exactly is the “last mile?” It’s pretty much just what it sounds like. Last mile deliveries are when the package makes the final leg of its journey straight to the customer’s preferred location. The caveat is that customer’s preferred location and item of choice are changing constantly. One day a customer might have a new keyboard delivered to their office, while the next day they might have some new workout equipment delivered to their home. In either instance, logistics providers, carriers, and freight forwarders need to find ways to get the package where it needs to go in the shortest amount of time possible.

Logistics providers, carriers, and freight forwarders need to find ways to get the package where it needs to go in the shortest amount of time possible.

The Short Stop Over the Long Haul

As the demands of e-commerce and last mile deliveries continue to grow, the trucking industry is at the precipice of change. The old way of distributing goods across the country by smaller fleets is fading.  Instead of simply bringing goods to a DC or warehouse, trucking companies are starting to favor the short haul, multi-stop nature of last mile deliveries in response to the growing need of e-commerce companies. The industry is growing rapidly. According to the Census Bureau  US E-Commerce Sales as Percent of Retail Sales is at a current level of 8.50%, up from 8.20% last quarter.

Instead of simply bringing goods to a DC or warehouse, trucking companies are starting to favor the short haul, multi-stop nature of last mile

Amazon alone is shaping up to control over 50% of the e-commerce market by 2021, with cause the demand for last mile deliveries to continue to grow exponentially. By switching modes of deliveries traditional long-haul companies are able to capture more of the e-commerce market share and for those that are perfecting their system, it’s making an incredible difference.

An Imperfect System

While last mile deliveries are certainly in vogue, they still leave something to be desired in terms of efficiency. For starters, the last mile isn’t something that has a set route or pattern. Instead, it’s constantly shifting and changing. While a package might be going to the same place, it could be coming from a different location, which can drastically alter the delivery time. Additionally, because the last mile of delivery is constantly changing, that also means that rates can vary rather drastically. This can create some difficulties when it comes to negotiations between both shippers and carriers alike.

Because the last mile of delivery is constantly changing, that also means that rates can vary rather drastically.

As if that wasn’t enough, there are other challenges that surround last mile deliveries. If a customer isn’t available at home to sign for a package, it could add to a backlog of deliveries. Package theft can increase shrink for shippers while lowering reliability ratings of carriers. Urban congestion and traffic can also cause some serious delays, making it that much harder to meet customer and consumer expectations alike. 

Alternative Methods of Delivery

While there are still some issues to work out, many delivery companies are working on finding alternative methods for completing the last mile. Drones have been in the headlines for quite some time as a viable means of delivering packages and Amazon has been getting closer to their goal of a drone delivery fleet.  Interestingly enough, the e-commerce giant has been taking a keen interest to geese of late. To better calibrate their drone systems to avoid collisions and other incidents, Amazon has been studying geese as a “non collaborative” control object or, simply put, something else to train their drones to avoid.

Amazon has been studying geese as a “non collaborative” control object or, simply put, something else to train their drones to avoid.

Aside from the drones, ground based delivery bots are also in the works, allowing deliveries to be made directly to a customer’s home via an autonomous system. These delivery bots are capable of navigating through residential areas via crosswalks and sidewalks. With deliveries made directly to a customer’s door step, it can expedite the last mile delivery process without necessarily cranking up the labor time.

However, there are other means of making the last mile that don’t rely on expensive assets like drones or delivery bots. Crowdsourcing apps are giving people looking to make a little extra money the chance to moonlight as a package handler.

“In 2015, venture capital investments in supply chain and logistics start-ups was more than four times higher than in 2014 ($1.2 billion versus $388 million),” said Andre Pharand, Andre Pharand, Accenture’s global management consulting lead for the postal and parcel industry. “Venture capital dollars invested in the same space in the first quarter of 2016 alone was $1.75 billion.Companies like UberRUSH for parcels, Postmates, Deliv and even Amazon Flex provide spot-market deliveries by independent drivers. The companies post delivery jobs on their apps to alert drivers to available gigs,” according to Supply Chain Dive.

Legacy Trucking Companies Beware

Legacy trucking companies who still think that e-commerce isn’t something to be concerned about are going to be in for a rude awakening. E-commerce is only continuing to grow and many brick and mortar are looking into omni-channel options in order to stay viable. Failing to adapt to this considerable disruption of the logistics industry will lead to considerable hardships in the future. Last mile deliveries are becoming the frontrunner for logistics focus as e-commerce continues to grow.

E-commerce is only continuing to grow and many brick and mortar are looking into omni-channel options

 

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