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.
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.
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.
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.
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?
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.
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 firstname.lastname@example.org
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.
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.
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
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”
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.
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.
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!
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
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:
Introductory discovery call
Historical data review
Engineering reports of data
Potential transportation issues
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
Regarding the media, it’s hard to tell exactly where the world stands on a position. There are always two or more sides to the story, and it seems the freight industry isn’t any different. Transportation execs tout words like “recession” owing to dismal growth and plummeting freight volumes while millions of dollars are being poured into technology driven logistics startups. Even traditional logistics functions such as Less Than Truckload (LTL) are experiencing new levels of growth by building new terminals, expanding territory, and growing their customer base.
In fact, the rise of eCommerce lowered the entry costs for shippers and trading companies coming into the market place, while LTL carriers are quickly shaping up to be in a favorable position when it comes to freight.
While there are no rules other than regulation that could be carved in stone, we collected some advice and other helpful tidbits for shippers considering shipping LTL, based on a good old rule of thumbs to consider:
Common Issues with LTL
One of the most common issues is that LTL shipments are wrongly classified which, for shippers, can double the amount of originally quoted freight rates.
To avoid disappointments, it’s good to know that an LTL carrier’s transit times doesn’t count the day of pick-up, holidays, or weekends. For example, if a shipment is picked up on Friday, and the transit time is two days, then the shipment will be delivered on Tuesday.
Just as airplanes won’t wait if the passenger is late, the driver can’t wait if a shipment is not ready at time of pick up. Typically in these events, shipment must be rescheduled for the following day. While scheduling, also keep in mind that carriers require a two-hour window to schedule a pick up. Additionally, to ensure that the freight meets the on-time delivery standard to the customer, it must be shipped before 5:00 PM.
Be Aware of Any Accessorials
An LTL shipment can be anything from a household item to larger industrial equipment. If a lift-gate, a pallet-jack or other equipment is required, the customer must specify that in the special instructions and remember that special delivery can add a couple of days to the delivery date.
Last but not the least!
Drivers, fortunately with very few exceptions, will make every attempt to protect the customers items. However, accidents do happen. Although carriers have their own insurance against losses, shippers should acquire extra insurance to limit liability. The limits of liability vary carrier to carrier and more so, when FAK (Freight all Kinds) rates are applied. Other insurance options include purchasing your own coverage from companies like UPS.
Utilize these simple rules of thumb every time you ship freight, and minimize your surprises when it comes time to billing.
In business today there are plenty of “Managers.” In transportation we often cross paths with both the Purchasing Manager and the Transportation Manager. In organizations where they both exist, they can typically be at odds not even realize it. The Purchasing Manager is concerned with buying better (i.e. lower) costs in all areas of the business while the Transportation Manager is concerned with buying better in transportation alone.
Here is a realistic example of a conflict, in order of events:
The Purchasing Manager goes to market and procures a conveyer belt needed to fix a machine as soon as possible.
The Transportation Manager sees the order pop up in the ERP system and tenders the shipment to a low cost carrier, with an extended transit time and poor service record.
The shipment is supposed to picked up on a Monday, and gets picked up on a Wednesday.
The shipment is now in extended transit time.
By the time the conveyer belt is delivered and installed, the conveyer line has been down for two days and the business division is upset at the Purchasing Manager.
The Purchasing Manager blames the Transportation Manager and that is where we have our conflict.
Now let’s think about the concept of total landed cost.
This is the cost of goods sold + the transportation cost + the cost of lost production resulting from the conveyer line being down. That total landed cost is much more than the cost of a conveyer belt or even the cost of freight on a single shipment. Now both sides, Purchasing and Transportation, need to pay closer attention.
BlueGrace works in consultation with all aspects of our prospective clients to make sure everyones interests are in line, showing value to the entire organization from the Purchasing Manager to the Transportation Manager.
Think of how powerful it could be if your 3PL Partner provided you total landed costs of product groups. That would give your business the power to decide on the future of that product! This is what a true 3PL Partner should be helping you do. Please reach out today for more information.
We’re pretty sure you don’t need a reminder, but 2016 is just a few days away. Businesses are focused on getting all of their transportation and supply chain budgeting ready for the New Year. This can be a big issue for customers who don’t have a managed transportation program and lack the business intelligence needed to accurately forecast their freight spend.
Businesses can compute their freight spend with simple math if KPI’s (Key Performance Indicators) are in place, such as freight as a % of sale. An example of how this would be determined is shown below:
“A business forecasts freight is 10% of sell cost and forecasts to sell $10M, so they found the freight costs to be $1M.”
That is just step one of the overall potential freight spend picture. Taking an additional step with a transportation and supply chain expert like BlueGrace Logistics could help reduce those freight costs by 10-15%, and reduce manual processes that increase OPEX (Operating Expense).
Let’s break down a scenario based on a conservative 5% savings on the $1M spend:
BlueGrace benchmarks this savings and reports status on it in quarterly business reviews.
The 5% savings totals $50k.
$50k is the salary of a new employee the business has just saved.
Now the business has the ability to redeploy that salary into other parts of the business, such as sales.
Any way that these profits are distributed will position a business to be more successful in the year ahead. With increased opportunities, you ultimately end up with higher sales numbers.
Bringing a 3PL into the fold while the market is ripe for hard cost freight savings allows businesses to make their company more profitable. Businesses can apply that savings to the sales force and focus more on what’s important: increasing sales in 2016. Opportunities for growth are now available whether it’s creating new sales roles, redeploying the savings into bonuses, or covering trade show fees. Any way that these profits are distributed will position a business to be more successful in the year ahead. With increased opportunities, you ultimately end up with higher sales numbers.
A transportation partner relationship should feel like a true partnership and extension of the business. If that’s not the case, reach out to us today! Our team at BlueGrace will be happy to assess your needs.
Did that title grab you at all? Here at BlueGrace Logistics, we have been running across more and more companies / prospects that do not have a true freight metric other than “best cost”. There are other key freight metrics that make it easy to find out if you are actually keeping your cost down annually and average wise.
Here are two examples:
Cost per pound: Take the cost of your shipments and then divide it by the weight. Seems simple right? You can do this easily in a spreadsheet.
Cost for freight as a percentage of sale: This is when a customer pays for the freight as a value add for vendors/customers buying their product. Take the cost of the freight and divide it by the cost of the sale. This is also done very easily in a spreadsheet.
Once the average of these metrics is taken, it will be easy to monitor carrier and partner performance weekly, monthly, and yearly. Reach out to BlueGrace Logistics today to learn more about these freight performance metrics.
Check out what employees have to say about BlueGrace’s biggest contest of the year!
TIM LARA // ENTERPRISE TRUCKLOAD COORDINATOR
“At first it’s about the money, you see that $1000 and start thinking of the ways you could spend it. Once crunch time hits it starts becoming more and more about everyone else, more and more about the company and how you want to do every-thing you can to see Bobby come out and hit that gong!” – Tim Lara
TAMMY VALENZUELA // SENIOR MANAGER, NATIONAL SALES
Don’t forget your value adds! Let our customers know that we don’t just want their shipment, we want their business. It’s easy to secure a shipment with promoting the lowest cost carrier, but we have so much more to offer. Secure long term business relationships with your customers by educating them on BG’s value adds. From BlueShip to live tracking, to 3rd party insurance and much more you’ll secure more business and get us closer to the $7.7 goal!
RYAN MCGUINNESS // FRANCHISE DEVELOPMENT MANAGER
Last year’s 7.5 contest was, without question, one of my favorite memories here at BlueGrace. It was a special time seeing so many people and departments come together for a common goal. There was a buzz and feel in the office that was unmatched. As you all may know, we are behind in this year’s goal of 7.7. At this point not only are we behind, but does anyone even care? Let’s change that!
Here at some tips to try to replicate or BEAT what we accomplished last year:
Get social! Talk about the contest on Twitter and Facebook. Engage and challenge your teammates and other departments. Talking about the contest helps create that buzz.
Do you know what it takes? Do you know the numbers we need to hit? Print them out and display them on your desk, by your monitor, or wherever you will see it multiple times per day. Just don’t use tape (you’re welcome Mike).
Do one just more thing than usual. Ask for that extra shipment, ask to help out, ask for an upcharge, and just ask! Doing just one more thing per customer interaction or around the office goes a long way and the right people notice. Last year’s 7.5 contest paved the way for so many people that you now see as leaders at BlueGrace. That could be you.
Since last year our office has grown so much and so has the level of talent I see every day. BlueGrace has a history of laughing in the face of ridiculous goals and just getting things done. Embrace the chaos, pur-sue this outrageous goal, be passionate, and most importantly be happy and have fun along the way!
KARI BOLLIN //TL ACCOUNT EXECUTIVE
I think it is important to reach company goals because it shows that we are all in this together. We all may have dif-ferent roles and responsibilities but in the end we all are here or should be here to be successful and want to be part of something bigger than what we can accomplish by ourselves. Reaching this company goal will embrace all 8 of our Core Values and I am excited to see how everyone shines!
DAVE INZERILLO // DIRECTOR ENTERPRISE DEVELOPMENT
A good way to make sure we all hit our overall goal is to make sure you set small goals along the way that are in line with the overall goal. Know what you have to do daily and be able to make adjustments to those goals as things can change. Make sure you utilize all the resources you have including your colleges. We can achieve more when we work together, and most of all, Work hard. Don’t leave anything on the table.
RAGAN GREEN // CARRIER & ENTERPRISE SOLUTIONS COORDINATOR
What motivates me is positive collaborative effort: unique skill sets communicat-ing and pushing in the same direction- such as our 7.7 goal. The Monday morning meetings are such a great way to set intention and bring focus. It may be aRagan Green // Carrier & Enterprise Solutions Coordinator
good idea to have teams briefly meet half way thru the week to bring attention back to the goal by “shouting out” any steps made towards it. Listening to each other’s input and positive collaboration is where it’s at.
STACEY ROSE // ENTERPRISE ARCHITECT
When I was asked to share my thoughts for a 7.7 column, I was given several topics to choose from including the importance of goals, motivating others, and the excitement surrounding the contest itself. As I thought about each topic and what I wanted to write about, I realized every topic was related to the next and my mind kept going back to our eight Core Values. It’s all right there. Ok, Stacy, what the hell do the Core Values have to do with Lao-Tzu’s quote about leadership and the 7.7 contest you ask? To me, our eight Core Values can be simplified into one statement: “Be a Leader”. One does not have to be given a “leadership” title to be a leader, nor does one have to explicitly be given the responsibility of leading others to be a leader. We all can be a leader in many aspects of our lives inside and outside of the company walls if we approach it with the right tools and more importantly the right attitude. If we all embrace the empowerment we have been allowed to be leaders in our daily work lives, we can-not help but be successful. We’ve already proven it. The Core Values are the tools — the “how”. Striving for goals, motivating yourself and others, contest excitement, positivity — they all tie back to the Core Values. It’s all right there.
JOE CUBERO // NATIONAL SALES MANAGER
It is VERY important to me to reach 7.7 simply being that I am competitive by na-ture and I love a challenge. This is a pretty lofty goal that has been set, but that’s what BlueGrace is all about. Whenever a goal of this magnitude is set it makes everyone in the company to take everything to the next level. Being that Culture is huge part of BG, there is a vibe in the air to WANT to succeed. 50% of hitting this goal is Attitude. Once we believe as a company we can achieve it, all that’s left to do is go and make it happen.
MELISSA BAUKNIGHT // CORPORATE RECRUITER
I started at BlueGrace 2 weeks before we reached 7.5 last year. Though I knew nothing about the contest, I knew about to experience something groundbreaking. You could feel the excitement all over the floor in EVERY department. It was an aggressive goal last year and it’s an aggressive goal this year. Only now, we have more employees to help us get there. Focus and dedication is the key. Let’s keep the momentum and hype up. #SevenPointSeven!
Do you know the most common answer I get when I ask a BlueGrace franchise owner about their performance goals?
You probably wouldn’t believe it, but we have some very competitive personalities in our channel. Almost every franchisee’s response is to “outperform the rest of the franchisees and be the #1 franchise in the company”.
We were interested to see what BlueGrace Indianapolis Central franchise owner, Pete Foradas was doing to grow his franchise with being so successful in just one year of becoming an owner.
Exactly one year ago, Pete Foradas grabbed a bull by the horns and decided he wanted to become a franchise owner. He inquired about BlueGrace Logistics, and it turned into the perfect fit. Foradas has been very successful in growing BlueGrace’s brand. He is a sales machine, and in these last few weeks he is doubling his numbers. We first asked him what is his most successful technique for selling and this is what he said:
a. Create a game plan for every day of the week. I block out time for prospecting door to door in a specific territory. I make a goal for how many doors I want to hit, how many leads I should generate, how many appointments I should set, deals I should close, and activations I should record.
b. Persistency is one key to success; the other is spending time in the right places. I try to focus on leads that fit “inside that box” which statistically yield a higher rate of return.
c. Finding common ground within a meeting is imperative. Associating with clients and relating to their organization creates an environment conducive to productivity. Creating a partnership is key. Finding common ground and creating trust is crucial to long term, residual income.
“I have so much to learn from all of the talented executives and franchise owners in our system. I’ve yet to spend the time with others around the country to observe the “best practices” of some of our finest franchisees. I think it’s a fair to say that I’m one of the younger owners in our system, and one thing I need other business owners in the market place to recognize, is that I am a young professional”. – says Foradas.
Foradas loves being a franchise owner because he enjoys the freedom, and his ability to call the shots. He knows that he is in business for himself, so calling the shots and giving it all he’s got, helps him know he is getting the job done. We next asked him what his secret is to running a successful franchise:
“Consistency and Accountability. I’ve found that being predictable is a good thing. It means you’re consistent. Whether it’s consistently good or bad, just be consistent. Your customer wants to feel there’s a process in place, and so do your employees. Consistency provides a sense of control and trust. From an accountability standpoint, I hold myself responsible for everything that happens under my watch. Whether the carrier allows freight to sit on their dock for 2 weeks without notifying anyone, or I recommend a service that saves my client time and money, I hold myself accountable. I let the people around me know that I made an error, but I also make sure they know when I went above and beyond for them. I schedule 30-60-90 day business reviews. If you have BDMs (Business Development Managers), assign them to the account after 90 days. Allow your sales reps to sell and your BDMs to manage. A BDM would be compensated on growth of existing accounts and retention” – says Foradas.
Foradas knows sales is the most important aspect of our industry and he feels there’s too much competition to rely on your current book of business to get you to retirement. He believes that he tells a pretty good story of who we are and what we do, and how we position ourselves in the market. So he believes in relating to the business of others and asking as many questions as possible. He uses handouts to illustrate our product and services during meetings. Foradas associates his success with hard work, “hard work means knocking on more doors, and knocking on more doors means more leads, more leads means that I have more phone calls to make, and more phones calls means more appointments, and more appointments means more sales, more sales means more money. It’s really that simple,” says Foradas.
“Securing the business of your customers is the key. It isn’t a daily sale for me. I secure my business in the initial meetings by setting the expectation of what it will be like to work with BGL and Pete Foradas. I remind them of the road bumps that we’ll face together as partners and I try to create value outside of the transaction” – says Foradas.
Foradas said that becoming a franchise owner has made him grow and mature in ways he never knew possible. He may not be thrilled about Indiana, but financially it’s great. He really had to learn how to act as an accountant and pay attention to his finances, which he rarely had to do, because once someone cut him a check, whatever was in the bank was what he had to spend, so overall it’s impacted the way he looks at his dollar, or how it’s spent. It’s changed the way he looks at businesses as far as liability, insurance and protecting his own assets by who he goes into business with.
“I understand jumping into business ventures is risky, I make sure I do my due diligence and make sure it is a good fit. It correlates with how I make friends, how I handle my personal relationships with my significant others and my family members. Just taking into consideration all those variables, and applying what I have learned through business into my day to day life”.
Having a strategy is everything, so Foradas looks to hire Sales and Truckload employees, and nearly double his revenue in the next year.
Randy Vlasic, Franchise Owner of BlueGrace ORD is a funny dude. We certainly get a kick out of his random calls, Tweets or phone calls. Last week, we were in for a surprise. As we were connecting with our network on Twitter, we saw that Randy posted an image of his Napkin Presentation. He met with a client earlier that day and connected with them on an entirely different level. This was an instance where the client relationship reigned in the moment. Had he broken out a PowerPoint or even a video, he probably wouldn’t have had the same impact as he did with this drawing. What we can learn from Randy’s napkin presentation:
I. Don’t rely on technology to engage with your customers: Face-to-Face Meetings are always the best. It’s important to recognize an opportunity to get in front of your customer. Technology can feel impersonal if it’s all you rely on. Can’t visit? Pick up the phone and have a chat.
II. Have a good time discussing business. According to Randy, THEY LAUGHED THE ENTIRE TIME. If you truly love what you do then this will come naturally. Don’t let the conversation run dry. Remember Core Value #1: Be Happy & Have Fun. Your customers will notice.
III. Don’t Force Creativity you don’t need to have excellent drawing skills (just ask Randy). But getting your message across in a way that is digestible and engaging is important. Be prepared, but don’t rehearse your entire conversation.
Going into the napkin presentation, he already knew what lanes he was proposing to run, prepared for it and going into it with rounded rates.
He went in completely prepared to give one of the best presentations. With freight spend in mind, and showing how to save time and money– he calculated about $130K in savings! The Napkin Presentation is a great way to show value and it breaks the ice when you’re drawing elementary like pictures for an adult conversation, people laughed at how bad the drawings were, but they LOVED the detail they were given about their business.
The Napkin Presentation helps build credibility for the customer. You’re directly showing them what they’re spending and what they could potentially save with a powerful partner like BlueGrace instead versus the competition.
Randy’s strategy is adding BG in the mix and showing their current situation with their existing process and provider, cost savings we could provide, and consolidation.
Good interaction with the customer gives them something to hold on to and to see. If you keep your customer laughing all through the presentation, you know you’re driving the conversation. Here’s an example of how you can showcase your own hand-drawn-Napkin Presentation:
1. Start with an unhappy face stick figure and give him a name. List the process of using all the carriers, companies and loads. (Randy drew all trucks, 5 different companies and 5 loads)
2. Show the business owner emailing all the load tenders to the carrier. Show the carrier responding “yes or no.” and somehow show the back and forth conundrum when a company has to decide what provider to go with.
3. Show what the business has to do to manage their own loads with 4 labeled plates (ie: audit invoicing, tracking and tracing, importing and consolidation, etc.) This process is time consuming so your customers will relate.
4. Show your customers the benefits of working with BlueGrace and start with a happy stick figure. Label your benefits in no more than two plates like he did in the above example (ie: “Consolidation” and “Import”). Whatever the benefits are for fitting the situation but keep it simple.
“My customers laugh the whole time. I want to give my customers something to remember.”
Teach your customers about what other companies don’t want them to know. Give them a reason to laugh and have a good time. Business meetings aren’t expected to be fun, but if you can lighten the mood it adds value to the customer relationship. The Napkin Presentation is more than just stick figures, you’re providing and entire proposal in front of a prospect without a stack of boring paperwork.
For more information on The Napkin Presentation fill out the form below to contact Randy Vlasic, Franchise Owner of BG ORD.
Every day shipments are booked for pickup with LTL carriers, and on occasion those carriers get overloaded and miss the pickup. A serious problem arises when that freight was time critical, such as a manufacturer waiting on freight from their vendors to finish a product. In cases like this, we have seen plants shut down until the freight arrives.
One way to help prevent this situation from occurring is a guaranteed shipment. By placing a day guaranteed on your shipment, the LTL carrier will be responsible if the freight misses that guarantee. They are much more inclined to pick up freight with guarantees attached to avoid paying the freight charges.
In case a carrier does miss the pickup on a time sensitive shipment, an expedited shipment may be required. A dedicated carrier is called in to move the freight. This carrier picks up the freight and drives straight through until it arrives at the specified delivery location. Shipping costs for Expedited Freight can become expensive, as you are paying for a dedicated truck. However, when you compare the costs of expedited shipping versus the cost of shutting down the manufacturing plant, it may be a bargain.
Freight traveling cross country may require an air rate. When the freight is sitting in Laredo, TX and needs to be in Boston, MA by 10 AM the next day, the freight must be sent by air. This can be very expensive as airline space is very limited.
BlueGrace Logistics are the experts in expedited situations and the phrase our LTL representatives typically hear is “you just saved my job!” The worst feeling in the world as a customer is knowing that your job may be on line if the freight does not arrive. When you have a hotel opening in New York on Saturday and the drapes are still in Alabama on Thursday morning, that sinking feeling in your stomach will not go away until the freight arrives. On Friday morning when the customer calls to say “Thank you! You saved my job!” there is a feeling of significant relief for them – which is the best feeling for our company.
BlueGrace Logistics and all Carrier Partners WILL BE CLOSED ON MONDAY, SEPTEMBER 2, 2013. We will resume business the following day on Tuesday, September 3rd. We’d like to wish you all a great, relaxing Labor Day Weekend.
Need help before the holiday rush? Call your dedicated rep or reach one of our logistics experts at 800.MY.SHIPPING or get an Quick & Easy Freight Quote Online.
With Trucking providing competitive rates and shipments more manageable than ever, why would anyone look to an option with limitations such as intermodal shipping? Naturally one would think there is a more efficient option nowadays than using the old Transcontinental Railroad for transporting goods.
Multiple rail providers have increased availability and competitive pricing
Not estimated rates – Pricing is locked in
With the pros, come the cons of Intermodal
Freight cannot be time sensitive
Only full loads- cannot move “LTL” – moves as a 53 ft container
Must book with 24 hours’ notice
MAX weight – 43,500 lbs
How about an example of how Intermodal is great for long distance project moves?
A customer of ours was in the midst of plans to relocate their warehouse from Chicago, Illinois to Houston, Texas and needed to ship over 40 full load shipments to their new location.
Seems easy enough, right? For a truckload representative, they think they just got the sale of month! Unfortunately for them, Intermodal priced each load $300 cheaper for than over the road. Instantly, shipping by rail presented a $12,000 difference in savings over the freight spend for 40 full truckloads. If pricing alone wasn’t enough, there were additional benefits that ended up making Intermodal the crucial choice.
During the move they loaded 3 containers per night, staggered the deliveries to by letting them go to the rail yard and sit when needed (rail yards give 1-2 days of free time, in comparison having to pay a driver to sit overnight or get detention on a delivery). In addition, one carrier was scheduling all the appointments which eliminated the confusion with multiple truckload drivers
For this customer, shipping Intermodal made the whole difference. Rail provided them with the flexibility to manage a successful move by saving over $10,000 in freight costs alone, by allowing them the capability to stage the delivery as needed so that the receiving warehouse would not be overloaded, and avoided a potential logistics nightmare with 40 different trucks from different carriers.
Next time you are looking to make a sizable, long distance shipment, make sure to check out any intermodal shipping options. Contact a rail shipping representative today. You can also request a rail freight shipping quote to see cost savings.
Every day thousands of shipments are processed by Less Than Truckload (LTL) carriers. Many national carriers are trusted by US businesses to ensure that their freight makes it to the final destination safely and in one piece. However, an issue that stands out with many customers is that they do not really understand when one of their shipments are damaged, of which damages can and will occur when you ship often, just how much the carrier is liable for a damaged shipment.
Here is an example of a logistics nightmare to avoid:
We had a customer book an ocean shipment from New Jersey to Hawaii. Any shipments that go to Hawaii are transported by an LTL carrier from the pick-up location to the port in Los Angeles where they are prepared for the steamship.
Freight was booked through the freight forwarder, an inland carrier was selected, and no cargo insurance was applied. The customer “packaged” the freight in a cardboard box on an undersized pallet. By the time the freight arrived in Los Angeles at the port the customer’s worst nightmare began – The cardboard box was ripped to shreds and the freight was damaged.
The paperwork process began with the LTL carrier first, “what is the value of the freight that has been damaged?” Answer was $52,319.00. Initial thoughts were that no one in their right mind would ship $52 K worth of material in a cardboard box, across the country, let alone to be put on a vessel and rocked on a boat for a week. So really, what’s the value? $52,319.00. Alright then – let’s get started with a battle that will be longer than your standard divorce.
Based on the LTL carrier’s rules for the class and limit per pound, the payout from the inland carrier was $1,123.00 and that is only if they agree they are at fault. After a three month process, including an inspection of the freight, it was determined the freight was not packaged properly. However, the carrier did agree to pay a portion equal to a third of the required amount. Essentially the customer would get $374.33 for a $52,319.00 piece of equipment (a loss of $51,944.67 for the equipment alone). This obviously went over real well with this customer, as the $374.33 didn’t even cover the freight cost.
This was not a satisfactory solution for the customer. The forwarder was then held accountable for the freight, but again under the limits of liability is only required to pay $1,123.00. After 11 months of negotiations going back and forth, the customer finally received the payout for the damaged freight in the amount of $1,123.00.
Several weeks after the first shipment was damaged the company asked for a rate to ship the same product over; since the freight was damaged and never made it, they had to ship the replacement. After being asked if they have had the replacement shipment will be professionally crated, they replied with “what do you mean – we bought a pallet and shrink wrapped it down, is this not sufficient? …Here we go again.
Moral of the Story – Carriers know that damages will occur and have built that cost into the shipment ahead of time. The carrier’s liability has been predetermined to cover the bare minimum of what damages have been projected to incur. In addition, customers themselves can put their own shipments at risk with no fault of the carriers by simply not having their shipments packaged properly.
The BlueGrace Difference: No Hassle Insurance.
BlueGrace Logistics can provide full coverage cargo insurance on every shipment regardless of how high the value is. Insure your products at a minimal cost to you for peace of mind that if the worst occurs you are fully protected. Keep it simple, values are based on purchase order or invoice amount of your product and not some complex or confusing rate table. Please reach out to your BlueGrace Sales Representative or call customer service today at 1-800-MY-SHIPPING for more information!