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Fuel Efficiency: A Slow Move for the Trucking Industry

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Trucking Industry Feels Pressure from the EPA

With mounting pressure from the EPA for the trucking industry to make a change to their carbon dioxide emissions, one would think that they would be ready to make the shift away from fossil fuels, specifically diesel. Fossil fuels are not only notoriously expensive but also produce a horrendous amount of carbon dioxide which in turn gets released into the atmosphere. However, even with the mandates on the horizon, many asset-based trucking companies are hesitant to replace an entire fleet. Doing so, could be enough to nearly bankrupt smaller carriers or at least cause a substantial financial hit.

Fossil fuels are not only notoriously expensive but also produce a horrendous amount of carbon dioxide which in turn gets released into the atmosphere.

In a study conducted by the American Transportation Research Institute and the University of Michigan, over 100 fleet managers that responded to the survey said they’ll look for better efficiency in driving and training before they would consider turning to fossil fuels. The question is, if truckers are unwilling to switch to alternative fuels then what can be done to improve fuel economy while cutting back on carbon emissions. The answer? Quite a lot actually.

Improving Fuel Efficiency over Fuel Type

There’s no getting around the fact that trucks are necessary as they carry upwards of 70% of all goods across our country. With that said, fuel is perhaps one of the biggest costs for the transportation industry, and in many cases takes up approximately 24% of the operating expenses with the average mile per gallon a mere 6.5. So if these companies aren’t willing to move over to alternative fuels, then improving fuel economy will have to be the solution. Here are just a few of the solutions that have been found to increase fuel efficiency.

Fuel is perhaps one of the biggest costs for the transportation industry, and in many cases takes up approximately 24% of the operating expenses.

Aluminum Frames- This covers everything from wheels to truck frames themselves, but when you cut down on the weight, the truck itself will inevitably use less fuel. While the frames have been made out of aluminum for some decades now, some trucking companies, about 9 in 10, are also shifting over to aluminum wheel which also helps to cut down on the weight without sacrificing too much of the necessary tensile strength.

Automatic Monitoring- With the new found power of computer processing, truckers are getting a good bit of a technological overhaul. This runs the gamut of speed limiters which cut down on excessive fuel consumption to automatic tire pressure monitoring and inflation. Under inflated tires cut down on fuel efficiency, so having a system that automatically inflates the tires when they get too low on pressure can be a quick and rather uninvasive means of improving efficiency. As it stands, approximately 82% of trucking companies use speed limiters, 60% use tire pressure monitors, and 50% use automatic inflation systems.

As it stands, approximately 82% of trucking companies use speed limiters, 60% use tire pressure monitors, and 50% use automatic inflation systems.

Eco-Driving Training- Another method of fuel economy that is being employed is to train driver’s in Eco-Driving. Eco-driving is a school of thought that employs a variety of driving techniques such as gradual acceleration and braking as well as the optimal time to shift gears. Not only does this cut down on some of the wear and tear that occurs from everyday use but also serves to boost fuel efficiency. Eco-drive training is one of the slower systems to grow, with only about 50% utilization, but it also has one of the biggest potentials for growth. About 25% of trucking companies interviewed are considering implementing training within the next one to two years.

Eco-drive training is one of the slower systems to grow, with only about 50% utilization

These are only some of the methods that can be employed without the need to completely overhaul a fleet. There are still more options which help to cut down on wind resistance and allow the truck to move smoothly without so much need for acceleration.

Size Matters

Ultimately one of the biggest hang ups for fuel efficiency, comes down to the size of the company. Larger fleets will have an easier time phasing out older trucks and bringing in new trucks with hybrid or electric systems. However, the majority of the trucking industry is made up of small to mid-size companies, where such replacements aren’t always viable.

Larger fleets will have an easier time phasing out older trucks and bringing in new trucks with hybrid or electric systems.

Using alternative methods to boost fuel economy is essential to success. Not only with the EPA’s phase two fuel efficiency and emission stands that went into effect in August, but with the cost of fuel beginning to creep up again, truckers will have little other option in the future other than to striving towards improvement.

As it stands, the most effective means of boosting fuel efficiency, at least in the terms of a return on investment (as reported by companies surveyed) are, Aerodynamic treatments, such as skirts and wheel covers; Idle reduction Technology (IRT); and Automatic Transmissions all coming in at the top three. However, every improvement made will add to efficiency and cost reduction in the long haul.

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Carrier Spotlight: Kuehne & Nagel

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BlueGrace Logistics is excited to add a new international provider to our carrier network. Kuehne and Nagel, one of the top freight forwarders in the world, will be providing us with an additional international option going forward.

Kuehne and Nagel have office locations all over the world as well as warehouses in the U.S. for imports and exports, giving us more control over the inland.

This carrier allows us the flexibility to use our own domestic LTL rates coupled with their international rates, which will in return, provide our customers with the lowest possible cost options. We are pleased to be working with such a reputable, industry leading company, with the infrastructure to support any international shipments that BlueGrace will produce in the future.

About Kuehne and Nagel

Kuehne + Nagel is financially strong, stable and independent. Our global logistics network, cutting-edge IT systems, in-house expertise and excellent customer service is proof of our dedication to be the market leader. These attributes have placed us at the forefront of our industry, and positioned us to continue increasing the scope of our customer solutions and services.

Since 1890, when the business was founded in Bremen, Germany, by August Kuehne and Friedrich Nagel, Kuehne + Nagel has grown into one of the world’s leading logistics providers.

Today, the Kuehne + Nagel Group has more than 1,200 offices in over 100 countries, with approximately 68,000 employees.

Our key business activities and market position are built on the company’s truly world class capabilities:

Seafreight:

  • Number 1 global seafreight forwarder
  • Sustained year-on-year double digit growth in managed freight
  • Solid partnerships with an extensive range of preferred ocean carriers

Airfreight:

  • Number 2 global air cargo forwarder
  • Leader in innovative cargo management concepts
  • Global Cargo iQ Phase 2 certification

Contract Logistics & Integrated Logistics:

  • Number 2 global contract logistics provider
  • Worldwide network of warehouse and distribution facilities
  • Number 1 global lead logistics provider

Overland:

  • European Top 3 provider
  • Pan-European overland transportation capabilities, including dedicated and individual delivery services
  • Close partnerships with best-in-class carriers

 

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How Can Expedited Shipping Be A Game Changer For Your Business?

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Quick, Fast and In a Hurry

With the holidays quickly approaching, you can bet that manufacturers will be paying close attention to the Must Arrive By Date (MABD), set by big box retailers like WalMart and Target. While big box retailers mandate Must Arrive By Dates to ensure their shelves are always stocked with products consumers want, many companies who sell products directly are often are losing potential customers and revenue by not offering expedited shipping options to customers who have their own Must Arrive By Dates in mind for freight sized purchases.

What Is Expedited Freight?

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

Let’s explain more about how Expedited Freight works in comparison to standard LTL Options.

The transit of a standard LTL shipment is typically estimated as the shipment being picked up from the shipper that has to 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.

New Expedited Options For Your Business

Depending on the size of a shipment there are multiple expedited shipping options available for freight sized orders. By cutting out the cross-docking necessary in LTL shipments, expedited services are able to cover quite a bit more ground, or air, in a much shorter time than a standard LTL carrier could.

Cargo vans, straight trucks with lift gates, and air freight can be utilized for shipments that would ordinarily take up a few pallet spaces on a LTL truck. 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. 

Expedited Freight = Time Sensitive Freight

It doesn’t matter if it’s July or if its a few weeks before Black Friday, as a shipper, you have the ability to expedite your freight. Whether you need to get your pallet of a custom equipment repair parts to the factory that is currently down or you need to get your trade show displays to a convention center by Friday, expedited shipping may be the best route for you. Some of our current customers are from industries like: Auto Parts, Promotional Displays, Industrial EquipmentTrade Show Management,  Airplane Parts, Computer Servers & Equipment, Maintenance Repair, AV Equipment, Restaurant Equipment and Medical Suppliers.

What Qualifies for Expedited Shipping

  1. Shipments that need to be picked up after 5 p.m. and delivered before 8 a.m.
  2. Shipments that need to move 1000 miles in 24 hours.
  3. Shipments that are loose and fragile, can’t be cross-docked with LTL carriers.
  4. Shipments that require faster transit than what LTL can offer. (Express LTL is one step away from Expedited)

How Does BlueGrace Put Expedited Shipping to Work for YOU?

BlueGrace can easily handle any expedited freight shipment request. We offer 30-minute quotes on price and capacity directly, from over 300 pre-screened, local expedite carriers nationwide. With over 10,000 pieces of equipment from Sprinter vans and semis, to domestic air, we can handle any type of freight. Each shipment it tracked by Macropoint, so you always know where your freight is located.

Expedited Freight Only Works With An Expedited Quote

BlueGrace is also one of the few providers that is able to offer guaranteed pricing and availability within 30 minutes of your request.

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For any questions, please contact your BlueGrace Logistics Rep today! If you call after 5PM EST or weekends, please email expedite@mybluegrace.com or you can download our Expedited PDF by Clicking Here.

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BlueGrace Transforms into BOOGrace 2016

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The costumes are creative.

Halloween at BlueGrace Logistics has always been one of the most anticipated culture events, and this year was no exception. Our employees were beyond creative with their costumes this year. From Beer-Fit Barbie and Ryan Lochte to the cast of Scooby Doo and Mr. Robot, BlueGracers went all out.

The decorations are spooky.

The BOOGrace transformation begins the first week of October with a few spider webs and gradually grows into something that mirrors a haunted house. In previous years, BOOGrace has been decked out with fake bodies, graves, flying ghosts and asylyms throughout. This year we opened it up to kids and families and decided on a “scary movie” theme that allowed for all ages of trick-or-treaters. Certain departments were designated as ‘Kid Friendly’ with Wizard of Oz and the Nightmare Before Christmas decor and others were not so kid friendly with evil clowns and deadly sharks.

BlueGrace Transforms Into BOOGrace16

 

 

Culture is something we have written about before. This is a part of the company we spend a lot of time and resources on and keeping our employees happy is part of our appeal.

“BOOGrace is basically one big, employee appreciation day,” said Courtney Smith, Culture and Engagement Manager of BlueGrace Logistics.

It’s easy to see why BlueGrace is so successful. The employees love what they do because they work in a place they love. They work hard because they’re allowed to enjoy being at work, making every day simply unpredictable! BOOGrace 2016 was a huge success, as it has been in previous years and we are already looking forward to BOOGrace 2017.

“This year was crazy, simply because of the amount of new hires we have. Half of our Tampa office hasn’t ever participated in a “Corporate Halloween” quite like BOOGrace before,” said Whitney McKay, Marketing & Brand Manager of BlueGrace Logistics.

BOOGrace16 Video Contest

New for 2016, Culture decided to host a video contest to be judged based on creativity. The winner hasn’t been determined yet, but to see more images and video from the BlueGrace employees themselves, check out #BooGraceVideo on Twitter.

 

BOOGrace16 Costume Winners

 

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Individual Costume Winners:

1st place: Reese Weathers

2nd place: Andrew Rivers

3rd place: Tiffany Earwood

Wildcard Costume Winners:

1st place: Gail Rizzo

2nd place: TIE: Sarah Sweeney & Whitney McKay

Executive:

Bobby Harris-Ryan Locte

BG Psycho Winner:

David Daniels

Group Costume:

Scooby Doo

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Debate This: Vehicle-to-Vehicle Communications Systems

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We saw the success of the automated fleet as it made its debut journey through Eastern Europe. The idea that something the size of a tractor trailer can link up and draft off another tractor trailer in near perfect unison seems like something out of science fiction. However, the technology is not only here, but is undergoing approval for use in not only the logistics sector, but also for non-commercial use as well. The V2V or vehicle to vehicle communications systems is currently being debated on with a final decision to be issued from the White House this coming January.

“The National Highway Traffic Safety Administration (NHTSA) submitted a draft proposal to require V2V technology in all cars and light trucks to the White House at the beginning of this year,” said Transportation Secretary Anthony Foxx, who is optimistic that the rule would be released before the next administration takes over in January.

A Frequency Issue

One of the biggest opponents for the V2V systems is the band spectrum which the system will be using according to a recent article from Bloomberg. There is a growing concern as telecommunication companies are attempting to skirt around the Department of Transportation’s issuance of the V2V rule which would allow automotive manufacturers to start making plans to use the spectrum.

The DOT and the Federal Communications Commission are working together to test spectrum-sharing tools. However, the 5.9 gigahertz spectrum band at the center of the industry fight should remain dedicated for use by connected cars until there is a proven and safe method of sharing it,” Foxx said.

About More than Just Communication

While the vehicle-to-vehicle communication system is all well and good, there’s a bigger prize at the end of the line, the driverless car. This has some pretty big implications not just for the consumer sector, but would prove to be a massive boon for the logistics industry as a whole. Imagine if the roads were free of traffic jams and snarls caused by inattentive or unskilled drivers. Not only would this cut down on the amount of accidents, but also traffic flow as a whole would be greatly improved. This improvement would come as an increase in fuel efficiency and productivity overall for trucks on the road, allowing for better forecasting and productivity for logistics decisions makers.

That is, of course, if the NHTSA, the DoT, and the White House can all come to a consensus this Janurary.

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A Change of Plans: Reevaluating A Company Supply Chain

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Sales and Operations Planning (S&OP)

Both are critical to running a successful business, however trying to favor one over the other can prove to be disastrous. More often than not, companies are losing out on considerable profits, or paying out tremendous expenses such as last minute shipping charges due to a lack of cohesion between sales and operations planning.

A number of manufacturing companies are operating off a general set of rules for supply and demand, leaving both sales and production teams frustrated when they aren’t reaching their target goals.

While these generalizations might have cut it in the past, companies are going to have to change their operations if they want to succeed and thrive in the future.

The Creation of Internal Conflict

Supply Chain Management Review, an online industry news source recently reviewed this issue as it’s occurring in a number of companies, not only manufacturing, but service firms as well. With decision makers from both sides of the companies calling shots without conferring with the other side, there are a number of mistakes being made.

“A different type of demand–supply mismatch plagued a computer hardware maker. It relied on ocean shipping for units made in China because that was $15–$20 per unit cheaper than air freight. But while the units sailed across the ocean, the commercial team frequently changed their forecast for the mix of units that would sell over the next few weeks. The company routinely had to scramble at the last minute to ship via air (at great expense) in order to match the right supply to changes in demand forecasts.”

The article goes on to list a number of different causes for these problems, the core of which, comes down to poor information. Often times different cells within the operation are operating with different sets of data, both of which are skewed, leading to complications down the line.

Learning the Best Practice

Perhaps the biggest facilitator for change is the growing expectations from clients. With higher demand for more products with shorter delivery times, manufacturers will need to get their act together. Failure to do so could mean losing out on profits or even losing clients altogether.

“Running merely good S&OP may no longer be acceptable, because customers have higher expectations for product availability and fast delivery. The spread of new digital channels, on top of existing physical channels, has made it more complicated to know where inventory sits and what it will cost to deliver to customers. Also, the supply chain has grown more complex as suppliers operate a more far-flung network of suppliers, third-party logistics providers and inventory partners. Coordinating all that activity can be a stiff challenge.”

Changing the Game

In addition to finding better ways to communicate within the business, other business are branching out in different ways and are successful in doing so.

Apple is a perfect example of this. Originally, all Apple products were made and manufactured in the U.S. which was all well and good when they started. However, it didn’t take long for Apple to realize that manufacturing could be done cheaper out of house.

Not only could parts be procured at a lower cost but everything from assembling to warehousing could be done at a better rate. Some would simply cite lower labor costs as the main reasoning for this strategy, and to that end, gives Apple some flak for not bringing jobs back stateside. However, there’s more than one side to that issue.

“It’s also about, you don’t have as many mid-level manufacturing engineers available in the U.S. anymore, just because as an economy we don’t have as many of those types of jobs. That’s not the type of education that we focus on anymore, and there’s a ton of that over there,” said Evan Niu in an interview with the Motley Fool.

“Including the lower-cost labor, they have more people that are within the specific skill sets that they need to ramp up the manufacturing. I think a long time ago they said you could fit every single manufacturing engineer within, they would need a baseball stadium; in the country, that’s just how many there are now. Over in China, Foxconn can get hundreds of thousands of engineers within a couple hours if they need them to make some change, or tweak some processor. There’s a lot of sides to the story why they do it like that,” he added.

The manufacturing industry is accelerating and evolving rapidly, creating a challenge as businesses will need to be able to adapt and overcome, altering their business structure to meet the ever changing demand. — The real question is, will companies be able to adapt to quickly enough to meet these new expectations?

 

 

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Mosaic VP Joins Leadership Team at BlueGrace

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Sean Butler Announced as New Chief Human Resource Officer

BlueGrace Logistics announced today that Sean Butler, former Vice President of Human Resources at Mosaic, has joined the company.

Butler was named the new Chief Human Resource Officer just last week and will be leading the human resource strategy and talent acquisition efforts as BlueGrace embarks on the hiring for several hundred more positions over the next few months.

“I am thrilled at the opportunity to start a new adventure with a unique organization like BlueGrace. The pace at which this company is expanding its footprint is incredible, and I am glad to be joining the team during this exciting period of growth,” said Sean Butler, Chief Human Resource Officer at BlueGrace Logistics.

Sean Butler comes to BlueGrace Logistics from Mosaic, where he served as the VP of Human Resources for over 18 years. While at Mosaic and Cargill, he managed HR for the worldwide operations for approximately 4200 employees.

“Sean is a perfect fit for BlueGrace, both culturally and professionally. His extensive background in HR will be instrumental in our employment development over the next phase of growth,” said Bobby Harris, CEO & President of BlueGrace Logistics. “We did a national search and were extremely excited to find the best person was here in Tampa,” continued Harris.

BlueGrace is projected to hire another 500 – 700 new employees in Tampa over the next couple of years, accelerating its national expansion plans and pursuing strategic acquisitions from the recent $255 million private equity investment.

While Butler has a vast amount of experience in human resources with major corporations like Mosaic and Cargill Fertilizer, Inc., he also enjoys serving on several boards throughout the Tampa Bay area.

Notably he serves as the Committee Chair of Compensation Committee for the Lowry Park Zoo and as the Workforce Solutions Committee Chair for Career Source Tampa Bay.

“I really enjoy being involved and supporting the community in which my family and I live,” said Butler.

 About BlueGrace Logistics:

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

 

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Empathy in the Workplace – Why BlueGrace is Successful!

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Empathy: The ability to understand and share the feelings of another.

Take a moment and think back to some of the jobs you’ve held in your life.

If you identify as a millennial, you’ve probably held several jobs since college. You maybe reach a point where you hit a ceiling, or you don’t enjoy the culture, disagree with management, etc. You may have worked for a company that doesn’t empathize with it’s people.

Typically the older generations have more tenure at companies and see long-term growth within. They ignore the issues with management or the mundane work culture, and “put in their time”.

So who is right and wrong in this scenario? Are the millennials wrong for wanting to be happy and pursue something different? Are the Gen X and older right for “embracing the suck”?

The feeling of being unimportant and undervalued is actually more common than you might think.

The End of an Era

The days of ‘hiring the resume’ are soon coming to an end. Highly successful start-ups are focusing on the person and not necessarily the resume, in the recruiting process.

A large issue is that companies are placing too much value on “hard skills” or the abilities of prospective employees that directly complement the nature of the position.

On paper, that sounds like what a company should do right?

There is no arguing that hard skills are important, as the company does depend on employees with strong knowledge that allows the organization to run smoothly. Putting a strong emphasis on the process has allowed companies to evolve and develop to the point they have today.

When Process Comes Before People

However, when process comes before people, when empathy and the true valuing of employees comes after the bottom line, it creates a large problem for retention.

No one wants to work a job where they don’t feel appreciated.

Prospective employees don’t want to sign up with a company where all their coworkers seem unhappy. It creates stagnation and lack of innovation, which can be the death of a business, or at least have a crushing effect on morale and productivity.

Building a Team

Much the same with playing sports, your team is only as good as your weakest player. Here’s where ideas like empathy and inclusion come into play.

Your smartest and most tenured manager may be loaded with hard skills but lack in the subtleties necessary to be an effective team player. This person could be ruthless when it comes to efficiency, which may lead to a singular mode of thinking, “My Way or the Highway” scenario.

While you might get a good jump in numbers for a time, that sort of thinking can be fragile, as it’s too rigid.

The logistics industry is constantly changing, and because of this, a good manager needs to be able to adapt and change tactics as necessary. They need the help of the team in order to stay ahead of the changes and make the process work consistently.

This is why empathy is so very important.

BlueGrace Logistics and Empathy

We’ve mentioned our Core Values before and we have highlighted our second as ‘Be Caring of Others’. This is probably one of the characteristics we focus on the most during the recruiting process.

Our team not only cares about each other, we care for our carriers, vendors, clients and partners. We work best with those who have compassion for others and truly show it.

The takeaway from this is simple. If you want a better business, you have to put your people first. Give them an environment where they cannot just survive, but thrive, and you’ll find your company will also reap the benefits.

To see all available positions at BlueGrace Logistics locations all over the US, visit careers.mybluegrace.com today.

 

 

 

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Fast Facts & Predictions About ELDs – Infographic

Countdown to the ELD Mandate

The time to plan for the ELD Mandate is now!

With the new ELD compliance creeping up on the trucking and logistics industry, we thought it would be beneficial to show some fast facts and predictions about ELDs. What do you think about the new requirements?

Click the image below for a larger version or download the PDF version here and feel free to share.

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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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