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Drones – Why You Want Them In Your Supply Chain.

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Drones are all over the media these days. Civilian drones have taken selfies to a whole new height, while Amazon has been working to get their drone delivery service off the ground. However, many companies are looking at the other ideas of using drones, especially when it comes to mapping out your supply chain.

An article recently released on Forbes website is showing the advancements being made to drone technology and why they could become an invaluable resource moving forward.

New Technology Makes Drones more Effective

One of the most pressing concerns about drone use is the limited range of operation. Even with the new battery technology, a drone typically has a flight time of about 25 minutes.

While this is great for taking a few aerial shots at a picnic, it’s not too helpful when it comes to large scale operations like mapping a supply chain.

Matternet, a company that specializes in drone logistics systems, partnered with Mercedes-Benz to co-develop a docking system that would allow a drone to take off from and reconnect to the roof of a vehicle. This would not only solve the matter of charging, it would also accommodate for packing and delivery all while increasing the range and payload utilization in the field.

This alone already ramps up the possibility for drone usage for last mile deliveries and improved logistics.

What Drones Could Mean for Your Supply Chain

First and foremost, drones are incredibly flexible as far as their uses go, even if you’re not looking to make quick deliveries.

“It’s increasingly clear that drones deserve consideration as part of your digital roadmap. Plus, ground and even ocean-going drones are developing fast, with problem-solving applications such as driver hour limitations, inaccessible or hazardous locations and massive materials handling chores, similar to what BASF is doing with autonomous vehicles in its mega-plant in Ludwigshafen, Germany,” says Forbes writer, Kevin O’Marah.

Companies Look into Fielding Drones

More and more companies are looking into fielding drones, and nearly a third of all supply chain professionals have said that drones have become very important to their supply chain roadmapping and strategy.

This is almost triple what the response was only two years ago, back in 2014.

More businesses are seeing the tremendous benefit and are lobbying to get regulatory approval for wider use. This is something which the FAA has been slow to agree to at first, but is starting to become more receptive to the idea as time goes on.

Proactive vs. Reactive

Much like the new digital platforms that are allowing businesses to be proactive about their supply chain issues, rather than merely reactive, it would be a mistake to ignore the benefits of drones and the advantages they can bring to your supply chain.

 

 

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How does Freight and Transportation Fit into your Budget?

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The 2017 budget season is heating up!

We all know how it goes. The heads of each department work on their annual budgets and turn them in to finance. Finance then returns with remarks like “the budget is too high, make it leaner.” How do you go about “trimming the fat” off of the transportation budget? Transportation is typically a 10-12% cost band on the general ledger for most manufacturers and distributors and once the 2017 budget is locked in, it doesn’t change.

MABD Affecting 2017

There will be challenges rolling into 2017 with freight carriers and big box retailers making their Must Arrive by Date programs or MABD rules more strict.

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

General Rate Increase with Less-Than-Truckload

At the beginning of every year the LTL carriers will begin to roll out general rate increases also known as GRIs.

Something to remember about LTL carrier GRI’s, is that the announced GRI isn’t necessarily indicative of the true impact to a shipper’s bottom line freight cost because the GRI is not a flat percentage rate increase across the board.

It is merely an aggregate combined average percentage increase across all lanes serviced by a carrier. Rates in some lanes may remain unchanged but some may increase by more than 4.9%.

A shipper could be seriously impacted by a general rate increase much higher than what’s announced by the carrier, so it’s imperative for shippers to check each lane for actual impact on costs.

Has your transportation and supply chain departments brought these items into consideration when rolling out transportation budgets?

Freight Cost Allocation

There is also the issue of past freight cost allocation. True freight cost allocation should show your most profitable ship to locations, customers, and products. Were you able to deploy sales people, advertising, and marketing budgets to the correct locations? Were customers, and product lines also accurate in relation to your budgeting for 2017 as well?

Transportation cost is much more than beating up LTL Carriers on price, sending out an annual RFP and picking carriers based on cost alone.

Don’t just remove a carrier and bring in a new one if you have a spat with the driver or if a shipment gets damaged. Make the decision based on the total of the carriers activity.

Consider a 3PL When Budgeting

Transportation costs affect all aspects of your organization and should be taken very seriously. When working on the 2017 budget, consider working with a third party logistics provider (3PL), as they will take the time to learn your business and see how these costs can affect everyone in your organization.

 

 

 

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The Logistics of Natural or Manmade Disasters

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Transporting freight to areas affected by natural or manmade disasters is one of the toughest challenges in logistics. The recent floods in Louisiana are an example of the difficulties involved. Two interstates were closed causing 55,000 daily motorists, including truckers, to use Interstate 20.

This added over 200 miles to some of the trips.

There were trucks being dispatched with relief supplies and there were trucks passing through the affected regions with loads destined for Houston and San Antonio, TX. The detours and interstate delays caused many loads to miss their service deadlines.

Now Hurricane Matthew has it’s eye on the southeastern corridor. 

Hurricane Matthew will hammer parts of eastern Florida starting Thursday, and then spread up the coast of Georgia and the Carolinas Friday into the weekend. This will inevitably affect deliveries and pick ups, as terminals will possibly be closed due to mandatory evacuations throughout the coastline.

Disaster Recovery Procedures Established

Since the terrorist attacks on September 11, 2001 and the devastating flooding of Hurricane Katrina in 2005, much improvement has been made in the area of disaster recovery logistics.

We now have established frameworks are in place to handle almost any situation.

However, due to the nature of disasters and catastrophes, logistics experts must be adaptive. An example of the Strict Utilization of Established Frameworks is brought to mind with the story of a few “Good Samaritan” truck drivers who wanted to support the Hurricane Floyd relief effort. They arrived at inland shipping locations, volunteering to move the loads of supplies at no cost. After much confusion and hours of waiting, they were turned away as the contracted carriers transported the loads.

Some companies like Anheuser-Busch, take this opportunity for charity as well. They recently sent over 250,000 cans of water to the Louisiana flood victims.

FEMA Diverts Carrier Assets

During times of disaster, the Federal Emergency Management Agency (FEMA) works with contracted carriers to transport basic needs items like water, food and temporary shelter.

When the event happens, carriers supply resources to FEMA immediately because the response has to be swift in order to be effective. These FEMA contracts are very lucrative and assets must be provided as requested per the demanding federal contracts. Shippers could be left out in the cold when carrier assets are diverted to such an operation.

Specialized 3PLs Dedicated to Recovery

Major segments of the economy have standing agreements with 3PLs that specialize in business continuity and disaster recovery operations. When disaster hits, there is no time to build relationships and negotiate responsibilities. It has to be pre-planned and recorded in a binding contract or a memorandum of understanding.

When asked about his responsibilities, this small fleet owner who contracts with a specialized disaster relief 3PL said –

“I subcontract with a logistics provider who contracts directly with AT&T. The communication sector is vital to our national economy and national security, so when there is a disruption, we are called to transport fuel, generators, sanitation equipment, temporary shelters, food and anything else you can think of that is needed in a disaster response.”

In conclusion, logistics providers must have established procedures in place, prior to a disastrous event. Attempts to circumvent established procedures will not work in times of crisis.

Customer needs must be clearly defined.

Customer needs must be clearly defined for these situations and a framework of service providers identified. When such an event happens, the long hours of planning will pay off and result in the service being provided.

 

 

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Annual Freight Bid – You’re Doing it Wrong.

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Contributing Editor: Dustin Snipes – Enterprise Sourcing Manager

The annual freight bid goes out every year like clockwork.

The transportation manager for a business that ships, will usually send out a massive blast to third party logistics (3PL) providers and carriers. These providers are often given a spreadsheet that lists last years shipping lanes without the cost of the freight, cost of the order, or even the information on who provided the transportation. Essentially, they are receiving a blank spreadsheet.

The business was not built on a blank spreadsheet and neither should your transportation procurement method.

The best possible way to assess a transportation provider, is to meet face-to-face. The provider needs to see the operation and the current state of the program. The uniqueness of a business’ process and product cannot be captured in a column or row.

To better serve a shipper, the right questions need to be asked.

There are many questions that a provider should be asking a shipper? Let’s break them down into sections.

Provider Capability

  1. What ERP are you running? Is it integrated with your TMS?
  2. What is your current providers support structure for your account?
  3. What indirect cost avoidance measures did your current provider propose to you before onboarding your account? Did the cost avoidance measures happen?

Budget and Finance

  1. How are you allocating your freight costs today?
  2. What is your current provider’s fee structure?
  3. How much did you spend on chargebacks from Wal-Mart or other ‘Big Box Retailers’ last quarter?

Operations

  1. Are there any carriers you do not work with? Why?
  2. What is your current OTP%?
  3. What is your current claims % and who is handling the filing of these claims?

Evaluating a partner in a mutually beneficial business relationship

Do not prep the potential provider to ask you these types of questions. See if they come in only speaking about cost.

The always popular “We will save you 10% on your rates” is something that uneducated sellers like to tell uneducated buyers.

A well-managed transportation provider should truly help you optimize your supply chain and be an outsourced extension of your business. They should not only report on your issues, but alert you when an issue arises, and offer you solutions to fix it then, and moving forward.

 

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Carrier Spotlight | Old Dominion Freight Lines

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OD Freight Line fits many of our Core Values. Their ability to Pursue Outrageous Goals for over 82 years, is a huge reason why we continue to work closely with them to provide our customers with complete shipping needs.

One of BlueGrace Logistics Core carriers, Old Dominion Freight line, has 226 shipping service centers, 32 transfer points, and more than 18,000 employees. OD Freight Line provides service to six major geographical regions and thousands of direct shipping points in the lower 48 States.

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OD’s single-source operation helps you manage your domestic freight shipping needs with confidence and provides complete nationwide coverage across all regions of the United States.

Their Super Regional Service allows businesses to ship both inter and intra-regionally with the most competitive transit times and pricing available.

In 1934, Earl and Lillian Congdon founded Old Dominion Freight Line in Richmond, Virginia, with one truck and a commitment to keep their promises to customers. Since then, OD has turned into a global transportation leader. Today, Earl Jr. and his son, David Congdon, carry on the family tradition of doing whatever it takes to help the world keep promises.

Recently, Old Dominion was recognized with the following acknowledgements for company leadership in the industry:

  • Inbound Logistics magazine recognized Old Dominion as a 2016 Top 100 Trucker and named the company to its 75 Green Supply Chain Partners (G75) list for the sixth consecutive year.
  • For the seventh consecutive year, Logistics Management honored OD with its Quest for Quality Award.
  • SupplyChainBrain named ODFL in its 2016 “100 Great Supply Chain Partners” listing.
  • NASSTRAC honored the company as 2016 Multi-Regional LTL Carrier of the Year for the fourth consecutive year.
  • Forbes Magazine named Old Dominion one of America’s Best Employers in 2015
  • Fortune named CEO David Congdon to its 2015 Businessperson of the Year list.
  • The ATA Transportation Security Council awarded OD with its 2015 Excellence in Claims and Loss Prevention Award for the third consecutive year.
  • Mastio & Company ranked Old Dominion as No. 1 National LTL carrier for the sixth consecutive year.
  • 2015 SmartWay Excellence Award winner.
  • Commercial Carrier Journal ranked OD No. 10 on the 2015 Top 250 Carriers list.
  • Forbes Magazine named Old Dominion as one of America’s 100 Most Trustworthy Companies for three consecutive years.

Carrier Relationships

BlueGrace Logistics is always focusing on how to make each shipment, with each carrier, cost efficient. Working with carriers like Old Dominion Freight Lines is one of the many reasons we are successful in providing cost efficient and custom transportation plans for our shippers!

 

 

 

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How Expedited Freight Can Influence Purchasing Decisions

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Steve Daniels: Account Executive at BlueGrace Logistics

Expedited Shipping Options & the MABD

In a previous blog post we detailed how BlueGrace Logistics was able to resolve a long standing Must Arrive By Date (MADB) dilemma that was negatively impacting a health and beauty products company whose business model was increasingly moving towards “big box” retailers.

While big box retailers mandate MABDs to ensure their shelves are always stocked with products consumers want, many companies who sell products out of their own brick and mortar stores or through online eCommerce sites, are often losing potential customers and revenue by not offering expedited shipping options to customers who have their own Must Arrive By Dates in mind for purchases.

Fast Growing Automotive Industry

In 2015, the US automotive industry had a record 5.7% increase in sales growth over 2014. With this increase in sales comes additional demand for parts, to service these newly bought vehicles.

Many dealerships and local service shops find themselves having to order parts from manufacturers outside of their local areas to complete repairs and get vehicles back on the road as quickly as possible. The price of an item is just one factor consumers consider when deciding where to order an item from. Others, such as those in the automotive industry, are increasingly basing their purchase decisions on how quickly they can get a product delivered.

For smaller parcel sized items a business will often utilize the overnight or next day air options available from USPS, FedEx or UPS. Many businesses and consumers aren’t aware that expedited shipping options are available for larger sized items requiring freight shipping and often they aren’t able to receive reliable or economical shipping rates from their transportation partners.

Expedited LTL Transit

The transit of a standard LTL shipment is typically estimated as the shipment being picked up and be taken to a terminal where it will be cross-docked. During this process the shipment will be loaded and unloaded from freight trucks multiple times, depending on the distance, before it arrives at the final destination. While many LTL carriers offer guaranteed shipping services, some shipments need to arrive sooner than LTL shipping can provide. Depending on the size of a shipment there are multiple expedited shipping options available for freight sized orders.

By cutting out the cross-docking in LTL shipments, expedited services are able to cover a lot more ground or air, in a much shorter time than a standard LTL carrier could.

Cargo Vans and Air Freight

Cargo vans and air freight can be utilized for shipments that would ordinarily take up a few pallet space on a LTL truck, and for orders that require a full truckload, a team of drivers can be booked so that your freight can theoretically move non-stop without breaking regulations imposed by the United States Department of Transportation.

30 Minute Guaranteed Price And Capacity

BlueGrace can easily handle any expedited freight shipment request. With a network of over 1,100 carriers and 10,000 pieces of equipment available we can meet demanding pick-up and delivery times on weekends, nights and holidays, including 2 day cross country service. BlueGrace is also one of the few providers that is able to offer guaranteed pricing and availability within 30 minutes of your request.

GPS Tracking Of Your Freight

We also offer GPS Tracking of your expedited shipment. This data is updated every 2 hours for 1 Day Point shipments, every 4 hours for 2+ Day point shipments. Either way your Expedited Freight is tracked for visibility and security.

For any questions, please contact your BlueGrace Logistics Rep today! If your request is after 5PM EST or weekends, please email expedite@mybluegrace.com

 

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Join the Winning Team at BlueGrace Logistics

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We Bleed Blue

BlueGrace Logistics is has already exceeded its earlier goal of hiring 100 new employees at our corporate office in 2016. Now with our recent $255 million private equity investment, we are making huge strides toward the top of the 3PL industry. Our Core Values are a huge part of the hiring process and we strive to find individuals who fit that model.

BG Core Values

  1. Be Passionate about Excellence
  2. Be Caring of Others
  3. Pursue Outrageous Goals
  4. Simplify the Complex
  5. Embrace Chaos
  6. Perform with Agility, Speed & Precision
  7. Own Your Results, Be Humble
  8. Be Happy, Have Fun

Teamwork Makes the Dream Work

At BlueGrace, we strive for innovation and excel by collaborating as a TEAM. Candidates call it fun, positive and refreshing; we call it the BlueGrace Experience. Our open floor plan, live Twitter feed, buzzing employee stations, and the occasional gong ring create a motivating and engaging atmosphere. At BlueGrace, we pride ourselves in providing our employees with opportunities for growth and success. If you Work Hard and Pursue Outrageous Goals – apply at BlueGrace Logistics TODAY!

Want to Join our Team?

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Our talent is scouted by a team of experienced recruiters seeking motivated individuals who want to grow with the nation’s fastest growing logistics service providers. From sales, accounting, technology, business, marketing and everything in between, we recruit talent from all walks of life. Every career move is considered a risk, but at BlueGrace it’s an opportunity. Join the BlueGrace team and be challenged, be creative and reveal your true potential!

 

Break Free From Your Job, START A CAREER WITH BLUEGRACE TODAY!

For more information on what it is like to work at BlueGrace, check out our profile on Glassdoor.com.

What It Is Like To Work At BlueGrace? See More –#BGHires On Twitter

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How We Reduced Freight Costs by 14% for Healthy Living Company

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A company that specializes in healthy, protein rich treats was able to see a 14% reduction in a transportation costs by partnering with BlueGrace Logistics. This organization was growing at a rapid speed which lead to a long list of transportation issues that needed to be alleviated and managed more efficiently.

Opportunities For Cost Savings

Their transportation problems range from costly carrier invoices and freight re-classing to no carrier management and lack of warehouse space to hold orders. We saw several opportunities to cut their costs and improve their bottom line. Our first order of business was to break down their issues into sections and tackle them one at a time…

Does your Health & Wellness organization ship product to retail? If so, this Case Study will reveal how BlueGrace is able to transform your current transportation program for maximum cost savings.

New BlueGrace Heathy Living Product Case Study - 14% Reduction In Costs
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5 Things to Consider When Selecting a TMS

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A Transportation Management System (TMS) can offer huge benefits for manufacturers, distribution companies, and anyone who ships freight. The benefits go way beyond lowering the cost of shipping freight by helping to reduce costs throughout the entire transportation process.

Transportation Management Systems help companies move freight from origin to destination efficiently, reliably, and cost effectively. A TMS serves as the logistics hub for route planning, load optimization, freight audit and payment, order visibility, carrier management and much more.

But is every TMS the same?

Not every TMS is the same. Here is what you need to know before selecting a TMS for your business.

1. Upfront costs can be high

In most cases, your business will need to budget accordingly and prepare for a costly bill. At BlueGrace Logistics we offer our TMS to our customers as part of our business partnership package. Having a powerful and user-friendly TMS is a benefit to both our customers and to our staff.

2. It takes time

A full implementation and integration for a TMS can take several months and there will have to be upgrades every few months to ensure efficiency. It is true that integrating a TMS with other systems can take time, but at BlueGrace our in-house IT team works directly with yours to integrate almost any ERP system into our BlueShip product.

3. IT Staff

Will your IT staff be able to integrate the software into your ERP system? If you find that your staff will not be able to handle the work load for implementations and upgrades, you can partner with our IT staff at BlueGrace Logistics; we can help manage the upgrades and integrations.

4. Ongoing Management

Who will be using the system and how many people do you have on staff dedicated to transportation that would be logging into the system on a daily basis? We would recommend having a specialist dedicated to this system that is able to provide direct reports to your organization. Your team at BlueGrace will also be available to work closely with your team daily to answer questions, correct issues and instruct them how to maximize the system.

5. Key Performance Indicators (KPIs)

You will need to decide what exactly you will be using the TMS software for. Will your freight bills be invoiced into the TMS via EDI’s or API’s from freight carriers? Will the system manage accruals and freight cost allocation? If you answered yes, these variables would need multiple licenses and different departments working in the software during the implementation and attribute to the ongoing success of the software.

This all becomes before transportation procurement, negotiating with carriers, getting the carriers to EDI tracking, and invoicing into your TMS. Your new team at BlueGrace will discuss all these options before any integration takes place. We will work together to determine what KPIs matter most and report on them so we both know which KPIs are being hit and which may be a miss.

This whole process can be and will be overwhelming to most.

Partnering with a transportation management provider that has the dedicated resources as far as IT, transportation procurement, dedicated support, project management, finance, and operations is often a better option.

So, do the hard and soft costs outweigh the benefit of implementing a TMS software platform for your business exclusively?

Take the time to discuss with BlueGrace your needs before you shop for a new TMS. You will find that we offer all of the tools of a standard TMS. We combine that with the ability to integrate the TMS, monitor KPIs, handle disputes and provide customer support for all your shipments.

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BlueGrace Annual Football Kickoff Event

 

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BlueGrace Tampa

“Who’s ready for some football??”

The answer to that question is BlueGrace Logistics. The countdown for the next season begins immediately after the SuperBowl, and we’ve waited 6 long months to begin talking smack to each other each week. There’s a buzz in the air throughout the office as the season kickoff approaches, and everyone is getting their game face on for the company-wide football pool.

Each year BlueGrace hosts an annual “Back to Football” kickoff bash at the office. Employees are encouraged to represent their team pride by wearing jerseys, t-shirts, hats and any other gear to promote their favorite teams.

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BlueGrace Chicago

Each office across the country celebrates this event, some uniting to support their local teams and others representing a melting pot of teams from their hometowns.

While team support varies by office location and even an employee’s desk, we all have one thing in common: a love for food. A feast of pizza and wings is brought in from local restaurants, and each employee is invited to participate in our “Best Tailgate Dish” competition. The aroma of dips and crockpot dishes fills the air letting everyone know football season is upon us.

Team Pride Extends to the Desk Space

Each department is also encouraged to decorate their space to celebrate the event. In our Tampa office this year, our BG Freight division turned their department into a football field, while our Customer Support team hosted a tailgate complete with a grill and corn-hole. Our Chicago office decorated their entire office to support the Chicago Bears, including goal posts to kick a football through. Team pride and our love of football was represented from Boston all the way to our LA office.

When September rolls around each year it means one thing: it’s “Back to Football” & the holiday season is right around the corner. We may root for different teams, but we are all united in our love for the game and all it represents.

 

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Electronic Logging Devices:  Making time more valuable

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There has been much speculation on the upcoming electronic logging device (ELD) mandate that is to be implemented in December 2017.  The discussion often heard is not about the benefit to safety even though that was how it was sold to Congress.  The American Trucking Association (ATA) lobbied the Federal Motor Carrier Safety Administration (FMCSA) for ELDs based on the promise of safer highways.

However, compliance enforcement and keeping everyone on a level playing field is most likely the goal of the ATA.

That is understandable as smaller companies and independent truckers have not voluntarily embraced ELDs and subsequently can move freight farther and faster.  But that is about to change in December 2017.

Pending Lawsuit to Stop ELDs

Before we predict the future of trucking and develop a course of action for shippers and logisticians alike, it would be clumsy to not mention the lawsuit that is standing in the way of implementation.  The Owner Operator Independent Drivers Association (OOIDA) filed a lawsuit that can be read about here and should be decided by the end of 2016.  OOIDA’s legal team has a history of challenging FMCSA overreach and winning – so stay tuned.  OOIDA’s president recommended to members that they wait on the court decision before they purchase an ELD.

The Law of Supply and Demand

Now, assuming the ELD implementation goes into effect next December, there will be an immediate demand for more trucks as the supply will be reduced.  How is the number of trucks reduced you wonder?  There will still be the same amount of trucks on the road the day after ELD implementation as the day before.

But the amount of hours available to wait on the shipper, receiver and drive will be strictly enforced.  There will be no more favors of putting in a few extra hours to get the load delivered a day early.

Some service times between a shipper and receiver may increase by an entire day if they were already borderline before mandatory ELDs.  Paper log books are easily manipulated and some shippers and 3PLs have standardized the faster service times by expecting everyone to do it.  A conversation with a 3PL agent sometimes sounds like this:  “You can’t get this shipment 800 miles to destination next day?  My other carriers do it all the time.”

Loading and Unloading Times Should Improve

The detention of trucks at shippers or consignees will have to improve.  Either the load/unload times will be expedited or heavy detention rates will be charged in order to compensate for the lost driving time.  Remember, every minute that a truck driver is on-duty will be more valuable because it will be precisely measured and regulated by ELDs.

In the past, some trucking companies have looked the other way as the dock delays cut into driving time.

Now, with strict compliance to hours of service regulations around the corner, trucking companies will no longer look the other way in order to save business, but will look to levy detention fees to shippers and receivers who unnecessarily borrow valuable driving time from a trucking company.

 

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The Busiest Time for Logistics – Holiday Season

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Holiday Logistics Ramp-Up

The busiest time of year for retail sales will soon be upon us. Logistics during the holiday season requires a significant amount of planning. If shippers are not currently prepared, they may already be too late. Product inventories are being increased as early as August of each year in preparation for the coming rush. For products arriving from overseas on container ships – early summer is when things heat up.

Nineteen percent of consumers begin their holiday shopping in October and 40% are holiday shopping during November. The average consumer plans to spend $804 for gifts and this number climbs steadily each year.

Large retailers are already moving products into warehouses and reviewing/finalizing contracts with large fleets. The sharp increase in the volume of retail products being moved in the next few months is staggering. It is “all hands on deck” for companies looking to capitalize during this strong, but brief uptick in the economy.

Where are my trucks?

Shipping around the holidays creates a significant amount of traffic, so it’s important to keep in mind the international holidays as well. Top of mind is Thanksgiving, Black Friday, Hanukkah, Kwanzaa and Christmas.

If your business depends on trucks to move your products to distribution centers or retail locations, I recommend that you keep constant communication with your transportation management team during the next few months. Often they are lured away from routine shipments to help support large retailers with their increased capacity needs during the holiday rush. It is a very lucrative time for carriers who are in high demand a few short weeks.

Amazon/UPS Drop the Ball in 2013

Remember the big Amazon/UPS debacle from 2013? Many packages did not make it to their destination as promised. Frankly, Amazon sold more products then projected and UPS and other carriers could not handle the excess. They have shipped more packages in subsequent years and have not had service failures as they did during Christmas of 2013. That is mainly because of Amazon deciding to take more of a lead in response to the increased demand and securing more truck capacity then in the past.

UPS and Fed-Ex contract heavily with outside carriers prior to the holidays for extra truck capacity. They both work with large trucking companies to gain line haul support in order to move thousands of extra loads from service center to service center. The trucking companies send a good portion of their fleet over to support the package carriers.

During this time, routine shippers may have trouble securing trucks for their normal operation.

That is why the constant communication between shippers and their carriers is imperative in understanding and reassuring capacity concerns.

Things to Bear in Mind When Planning for Holiday Uptick

  1. Be Proactive – Stay in constant contact with your 3PL. Have everyone on the same page and send out your forecasting to everyone who has a part in your success. “All Hands On Deck”
  2. Go Over Last Years Mistakes and Key Wins – Compile a list of previous years takeaways. Going over the things you could have done better is an effective way to avoid making the same mistakes this year.
  3. Be Flexible – As you may know one of our Core Values is to Embrace Chaos and we strongly encourage vendors, shippers, and carriers to do the same; especially during the holiday shipping season. By constantly communicating with your 3PL and handling your shipments early, you can avoid most last minute issues.
  4. Have a Plan B – Effective supply chain execution is the difference between getting products to customers on time. Make sure you have a Plan B and are able to execute it as soon as you notice any issues with Plan A!

Shippers – there is no need to fear.

There are still many solutions to get your products delivered to the destination during the busy holiday season. I recommend that you begin a business relationship with a 3PL if you have not already. You need to begin and foster this relationship as soon as possible because they too, will be called upon heavily during the holiday season.

3PLs have access to thousands of carriers across the country that can be called upon with short notice to transport your products to their destination.

Working with a 3PL anytime of the year will improve your bottom line, but if there is any time that we urge shippers to utilize the resources of a third party logistics provider – it’s the holiday season!

Is your business ready?

 

 

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Internet of Things: 2016 Status

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The IoT has come a long way within the logistics world, making both significant headway as well as changes within the logistics industry. Eft polled 600 supply chain decision makers to see what their standpoint on the IoT was, as well as any other thoughts they might of had. Of the respondents polled, many have plans to incorporate the IoT into their operations; while almost half already have an active IoT solution which means the majority of the respondents have or are planning to have the IoT as part of their inner logistics workings.

On the Roadmap

Respondents who have plans to implement the IoT have shown similar findings as those polled during 2014. While the IoT can offer a considerable amount of data, the three main areas of focus where:

  • Location
  • Temperature
  • Speed

While other variables such as Theft Prevention and Security have risen, some respondents have indicated that they are looking forward to having every statistic, showing that companies are taking a growing interest in not just the practical applications, but the potential application that the IoT can bring to their supply chain.

Additionally, the survey showed the different types of technology that companies are using to track and monitor their freight. While the IoT remains the most popular choice presently, other options such as GPS tracking, barcodes, and the much vaunted RFID aren’t far behind as companies are looking for higher levels of visibility in their supply chain.

Reasons for Implementation

There are a number of reasons companies are looking to step up their technology. Safety and compliance, access to real time freight data such as temperature and humidity levels (product integrity), as well as improving efficiency throughout their operations. However, the most important use of the IoT listed by the respondents is the customer. Having access to real time data and location for freight not only allows for more frequent updates regarding the location of their freight, but also offers companies the ability to provide better customer service through more information.

With the tumultuous nature of the freight industry, especially given the current policy changes, international regulations, and overall issues spanning from weak demand to overcapacity, strong customer service is becoming more important than ever, especially if companies want to attract and keep new clients.

Technology Growth Overall

In addition to the overall improvements to customer service and visibility made by incorporating the IoT many businesses have embraced a number of technological advancements. From 2014 to 2016 GPS and Satellite Tracking has increased 5%, data logging has increased by 14%, and IoT sensor and monitoring technology has increased to 19%. Conversely, RFID and barcode solutions have remained mostly constant, which would seem to indicate that companies are making a shift towards technologically advanced solutions.

One of the driving goals for the tech upgrades is to increase the visibility and efficiency of the supply chain. Given the complexities of land based logistics, it comes as no surprise that 80% of respondents dealing with land based freight are looking in increase visibility. About 50% of air shipments and only 33% of ocean freight carriers are looking for visibility improvements.

Implementation and Use of the IoT

Respondents were also asked how they planned to use the IoT within their business. Over half, 59% are currently using the IoT simply for real time monitoring and alarms, while 41% are looking to use the data to create predictive models and optimize their supply chain. With continued growth and development of the IoT, it’s very likely we’ll see a shift from monitoring and alarms over to prediction and optimization.

However, while there is a considerable amount of potential with the IoT, 61% of the respondents say they only utilize less than half of the information gathered. This is likely due to the lack of analytic capabilities necessary to process the sheer amount of data gathered by the IoT.

Return On Investment

Return on investment is important, especially when it comes to big ticket items like implementing new technology. The survey asked respondents what they felt the time frame on their return on investment would be.

The majority answer, at 28%, said that their ROI would be seen within 12-18 months. More confident companies, 17%, said that they would see their ROI within 12 months or less. This leaves a number of companies not expecting to see their ROI until 24 months or longer.

However according to the 2014 findings, more often than not, this was due to execution and implementation issues, which means companies who were experiencing a longer than average ROI timeframe, are confident that they would see it within a reasonable time frame after getting their program back on track.

Plans to Expand

Perhaps one of the most vital bits of information gathered is that 87% of current IoT users have plans to expand on their IoT capabilities. With the high success rate for the ROI and the growing shift to predictive modeling, the continued growth and expansion of the IoT amongst companies world wide would only help to strengthen the data collecting capabilities, providing more sources to draw from. As companies continue to make the shift to advanced technology, it can be assumed that we will see a change in the way that freight and logistics are carried out, harnessing the power of data and analytics over the trial and error method of the past.

 

 

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

BlueGraceBlog_Private Equity9.7.16

The size of the private equity market is huge.

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

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

But what if we twisted the story?

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

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

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

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

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

Before The Investment:

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

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

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

After The Investment:

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

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

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

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

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

BlueGrace can vet and bring acquisition opportunities into shared services.

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

It doesn’t end with reporting.

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

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

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

It’s a partnership worth investing in.

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

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

 

 

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The Challenges of Exhibit and Trade Show Freight

tradeshow blog 8.31

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

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

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

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

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

3PLs – dependable and more economical than specialized logistic providers

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

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

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

 

 

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Tampa Manufacturing and Logistics – A Perfect Marriage.

blog-Tampa Manufacturing

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

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

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

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

Manufacturing Growth Perfect for 3PLs

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

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

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

E-Commerce Puts Pressure on Logistics

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

The Value of Business Intelligence

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

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

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

Job Opportunities for the Future Generations

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

Optimization and Forward Thinking Manufacturers

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

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Out with the Old: Changes to the Bill of Lading

bluegrace_billoflading

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

What Does this Mean for You?

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

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

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

 

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Carrier Spotlight | A. Duie Pyle

Carrier Spotlight | A. Duie Pyle

A.DuiePyle 1

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

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

Coverage

Regional LTL Solutions

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

Specialized Services

Regional Flexibility in the Northeast.

Coverage_Homepage

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

Performance

More Measurements. More Predictability.

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

 

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Backpacks of Hope – A Drive for Student Success

2016 Backpacks of Hope

Back To School = $$$

As every parent with a school-age child in their home knows, the phrase “Back to School” means one thing; school supply shopping. While this can be a fun, bonding experience with your child, it can also be a stressful one. The average spend on school supplies exceeds $600 and this expenditure can be a huge struggle for many families, BlueGrace Logistics wanted to help.

BlueGrace Expansion Leads to More Charity

Every year, BlueGrace partners with local charitable organizations to collect school supplies in a drive called “Backpacks of Hope.” With the expansion of the company into multiple locations around the country, including Chicago, Boston, and New Jersey, the drive was able to help many more children than in the past.

“We collected over 1500 items on a typical school supply list, including backpacks, notebooks, paper, folder, crayons, binders and much more,” said Courtney Smith, Manager of Culture & Engagement at BlueGrace Logistics.

School supplies were collected throughout the months of July and August. The drive culminated with a “Back to School” themed event on August 12th where employees were encouraged to dress in their best back-to-school clothes with all decades and trends welcomed and encouraged.

Metropolitan Ministries | Mother’s Of Hope | Perry Hall Elementary

BlueGrace’s corporate office, located in Tampa, FL, partnered with Metropolitan Ministries as they have in years past. While some offices, such as the location in South Jersey, graciously donated to the cause in Tampa, other offices in Chicago, Baltimore and Tallahassee partnered with local organizations in order to support their local schools.

Everything Collected

Collectively, BlueGrace as a company collected almost 150 backpacks, as well as hundreds of notebooks, folders, boxes of crayons, pencils and other needed supplies. The Chicago office was also able to collect just shy of $1,400 to assist families with additional needs, and the Tampa office was able to supply 5 students with school uniforms for the entire school year.

BlueGrace Logistics operates by 8 core values, the second being “Be Caring of Others.” Events such as these is BlueGrace’s way of caring for their communities, and they are excited to be able to make a larger impact across the country through the growth of all offices.

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Can Visibility Be A Problem With 3PLs?

Visibility

Dustin Snipes – Enterprise Sourcing Manager, BlueGrace Logistics 

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

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

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

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

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

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

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

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

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

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

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