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Urban Density, Changes in Technology and Last Mile Delivery: What Can Cities Do?

 

With the rise of e-commerce and technological improvements in transportation, like autonomous vehicles and increasing urban density, we are witnessing a historic transformation in our cities. Future trends in freight movement is a “hot topic” in policy and supply chain circles.

With so many changes ahead,  a key question emerges: Can cities cope?

Daimler recently made headlines with the launch of its “all-electric Fuso ecanter truck” in New York City. The vehicle will be rolled out in other US, European and Japanese cities in the next two years, with UPS as the first commercial partner with the truck. Toyota released a hydrogen-fuelled semi-trailer that currently hauls cargo between the ports of Los Angeles and Long Beach without producing tailpipe emissions. This pilot is part of a longer-range plan by the Port of LA to reduce emissions. Urban planners in Dallas are examining the possibilities for the “hyperloop” in their city, “a futuristic mode of travel that would use levitating pods to shuttle people and goods across hundreds of miles in minutes.” With so many changes ahead,  a key question emerges: Can cities cope? What can cities do to stay on top of change?

Here are five “takeaways” on the topic.

1.   Understanding the Nature of Change is Key

Many predict that the U.S. economy will double in size over the next 30 years. The nation’s population is expected to rise from 326 million in 2017 to 390 million in 2045. More and more, Americans will live in congested urban or suburban sprawls called “megaregions.” Less than 10% of the country’s population will live in rural areas by 2040. This is a stark contrast to the 16% of Americans who lived in the countryside in 2010 and 23% in 1980.

This trend means more “everything”.

The surge in population and economic growth brings with it escalating freight activity. Freight movement across all modes are projected to grow by approximately 42 percent by 2040.This trend means more “everything”. More pressure on roads and transit lines by commuters, more parcels delivered, particularly with the meteoric rise of e-commerce.

One special concern is “the last mile.” The last mile is the final step in the delivery process. The last leg of the delivery process is when an item (or person) moves from distribution facility (or transit point) to end user (home). The length of the distance can vary from a couple of city blocks to 100 miles. This video from the Ryerson City Building Institute clearly shows the effects of the “last mile” on commuters – in this case, in the Greater Toronto Area.

Some of the challenges involved with the last mile are:

  • increased traffic congestion and traffic accidents
  • Noise, intrusion, the loss of open spaces to transport infrastructure projects
  • Environmental and social (public health) impact from local pollutant emissions
  • Illegal parking and resting, idling vehicles
  • Problems experienced by vehicle operators when operating in urban areas
  • Parking and loading/unloading problems including finding road space for unloading; fines, and handling
  • Parcel Theft

2. Cities Must Take Notice

Cities have long been concerned with capacity thresholds for commuting and predicting traffic flow. The new topic of “last mile” in the supply chain must now receive greater notice. We are moving away from discussion on “smart commuting” alone. While still important, traditional topics like carpooling and promoting public transit are giving way to issues such as digitalization and automation (think ride-hailing and autonomous shuttles).

3. Business Concerns Must Factor Into Urban Logistics (alongside Sustainability and Livability Goals)

Furthermore, it must be recognized that economic activity in urban areas depends on the movement and delivery of goods through freight carriers. City and traffic planners must be made aware that urban settings can be inhospitable places for freight deliverers. There must be more public and private sector coordination in freight planning. “Cities can shape markets to focus private sector attention and invest on the needs of cities and the people who live in them by mobilizing infrastructure, talent, and other assets to support the right kinds of AV-based solutions,” was one of the conclusions in “Taming the Autonomous Vehicle: A Primer for Cities (Bloomberg Philanthropies and the Aspen Institute) .

Business goals must be incorporated into the dialogue alongside the goals of community sustainability and livability

How freight distribution processes can be integrated into metropolitan transport, land use, and infrastructure planning is a balancing act.  Business goals must be incorporated into the dialogue alongside the goals of community sustainability and livability. An efficient and future-forward freight system will support and attract new industry for the respective area.

4. A Variety of Solutions Will Likely Be the Answer

Some of the most popular solutions include advances in technology. Transportation technology growth is very exciting, much of it spurred by seeking solutions to urban density, commuting and freight patterns.  Other solutions are more “old-fashioned” or even a return to basics. Mixing traditional and emerging technologies is the way ahead:

  • Use of electric vehicles (EV) –“sustainable mobility”
  • Autonomous vehicles and drones
  • Human-powered delivery vehicles – Cargo-bikes, pedal trucks, and pushcarts
  • Amazon lockers in commercial venues (drop-off points)
  • Vehicle access restrictions based on time and/or size/weight /emission factor/fuel type of vehicle and bus lanes
  • Curbside pickups
  • Load consolidation or co-loading
  • Truck platooning
  • Night-time deliveries, relying on “quiet equipment” and driver training
  • “On-Road Integrated Optimisation and Navigation,” or route optimization, such as introduced by UPS as a big data solution to analyze parcel operators’ daily multi-stops
  • Innovative 3PL solutions like BlueGrace’s proprietary technology, “designed to put the power of easy supply chain management and optimization back in your hands”.

A BlueGrace Case Study In Action

Recently, an e-commerce furniture business in Portland, Oregon found it had outgrown its 3PL’s manual logistic capacity, due to heavy e-commerce volumes. When this company looked to BlueGrace for ways to improve its supply chain, it was discovered that they would benefit from opening another warehouse in the Northeastern area of the US. An alternative distribution solution lowered freight costs and decreased transit days.

For the last mile to be facilitated, there must be easier access to customers and shorter distance between the hub and home.

The idea of re-examining distribution is part of a larger process of change. For instance Amazon, FedEx and UPS are creating/investing in nationwide networks of distribution and fulfillment centers. “Warehouses like these are becoming a way of life for many urbanites,” reports the Wall Street Journal. This trend is already bringing new life to formerly “sleepy towns” like Tracy, California and Kenosha, Wisconsin. For the last mile to be facilitated, there must be easier access to customers and shorter distance between the hub and home.

Make your Last Mile work. Talk with a BlueGrace Logistics expert today!

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ELDs Are Coming Fast! Some Facts & Predictions – Infographic

Countdown to the ELD Mandate – December 16th 2017

It is time to plan for the ELD Mandate as a freight shipper, if you haven’t already. When the electronic logging device mandate takes place, many shippers will be caught off guard with shipments taking longer than expected due to the restrictions put in place on drivers.

We thought it would be beneficial to show some fast facts and predictions about ELDs that we originally published in 2016. What do you think about the new requirements? Are you ready? If you have any questions feel free to contact your BlueGrace Representative today.

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

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Is WalMart’s OTIF Initiative Placing Impossible Pressure On Carriers?

Carriers already face many challenges in the transportation industry. It includes a multitude of rules and regulations that they must follow or else they could be fined. Or, even worse, drivers could lose their CDLs.

Now on top of all of their rules and regulations, WalMart is making it even tougher for carriers by imposing their OTIF program on them. Carriers can expect, heavy financial penalties for making late deliveries, for having missing freight, and for even delivering freight early.

OTIF – On Time In Full

WalMart is known for trying to squeeze profits in every area they can, even when it comes to receiving freight and their ‘OTIF’ or On Time In Full program is their way to crack down on carriers to become more efficient at delivering loads and properly packaged freight on time. This initiative should provide WalMart with an extra $1 billion in revenue by simply getting items to the shelves faster.

WalMart has already warned retailers that disputes will not be tolerated.

WalMart’s logistic center that includes over 150 distribution centers will greatly be impacted by their aggressive program that not only fines drivers for being late, but for being early and improperly packaged as well. If the carriers want to dispute a fine, that won’t work. WalMart has already warned retailers that disputes will not be tolerated. This unforgiving campaign already began in August with a previous goal with a 4-day delivery window and hitting OTIF regulations 90 percent of the time. Now by February  Wal-Mart wants to see deliveries on time and in full 95% of the time or carriers can face the penalties.

Since this program began in August, some carriers have already been invoiced for penalties. For example, if items arrived late or missing carriers receive a fine of 3% of their value. Items that arrive early are fined because they create overstocks. WalMart expects this initiative help them compete with major retailers like Amazon because let’s be honest, people are happier with stocked shelves and when people are happier, they spend more. With more revenue flowing WalMart will continue to squeeze and pinch pennies in the freight industry regardless of the unfair pressure that it puts on them.

Let’s Talk More About the Unfair Pressure Placed By OTIF

OTIF will be expensive for carriers not only because of the fines, but to implement. Bigger carriers can add new factory processes to help with the packing and loading of freight, but smaller carriers may not be able to handle those costs. Plus, smaller carriers, who are just emerging into the market sometimes start off by trying to simply break even on deliveries until they can build a good reputation for themselves. If they incur the cost of fines they might go under.

This program will force carriers to become responsible for making deliveries on time even when they face factors that they can’t control.

What happens if a carrier realizes they will make the delivery a day early? Do they face the costs of the early delivery fee or do they face the costs of having to find somewhere to park overnight and to pay for meals not to mention the hours being out of business? Also, an extra day on the road away from families can put a lot of demoralizing stress on truckers. This program will force carriers to become responsible for making deliveries on time even when they face factors that they can’t control. For example, inclement weather could force drivers off the road, or they could get stuck in major traffic jams.

In order to make deliveries on time, some carriers may feel pressured to drive past the daily limit of 11 hours, which is extremely dangerous and illegal. Driving is exhausting and driving tired is the equivalent of driving drunk. Paper logs can easily be forged for now, but in December once the ELD mandate goes into effect records will be harder to forge, so drivers won’t even have the option to push themselves to make a delivery in time.

At the end of the day, WalMart will do whatever they can to improve their bottom line, even if it imposes impossible stress, extra operational costs and fines on carriers, who will have to completely rethink their operations in order to make deliveries on time, in full.

Do You Need Help With OTIF Issues?

A 3PL, such as BlueGrace, can help your business overcome the challenges of OTIF and other supply chain issues. If you have questions about OTIF or just how to simplify your current transportation program, feel free to contact us via phone at 800.MY.SHIPPING or using the form below and we will be happy to assist.

 

 

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Walmart OTIF Policy – What are the Challenges and Concerns?

Walmart’s new addendum to their Must Arrive By Date (MABD) provision is making some suppliers more than a little nervous. OTIF (On Time In Full) rule will begin to punish suppliers for late deliveries with a 3 percent charge back if they are not made in a timely fashion. While this extension of the MABD fits with Walmart’s ever growing expectations, it could create some significant challenges for the supply chain, particularly when fresh produce is involved as it narrows the delivery window from MABD significantly.

It could create some significant challenges for the supply chain, particularly when fresh produce is involved

While MABD isn’t anything new as other major retailers such as Target and Home Depot have been using the threat of the 3 percent charge back as a means of encouraging more timely deliveries from shippers, OTIF significantly narrows the grace period a shipper would have to make the delivery.  

“Walmart is going to require its suppliers (shippers) to meet a two-day shipping window instead of its previous four-day window, as well as up its required compliance rate from 90 percent to 95 percent,” says Logistics Management.

Tightening Expectations

Under the MABD guidelines, suppliers had a four-day window to ensure that product was delivered to it’s intended destination. Under the OITF policy, that window will narrow significantly, only allowing a one day window for produce and perishables and a two-day window for other general goods. Suppliers will be hit with the 3 percent chargeback penalty if goods arrive late, incomplete, or even early. Additionally, if Walmart decides the supplier is, in any way, responsible for a variance in the delivery, they’ll receive a chargeback, end of story.

Under the OITF policy, that window will narrow significantly.

Good For The Customers But Tough For The Suppliers

Walmart’s plan does make a lot of sense when you consider they are working with JIT (Just in Time) principles. They don’t want excessive inventory sitting in stockrooms or in trailers behind the store, and they expect their suppliers to help make that a reality.

They don’t want excessive inventory sitting in stockrooms or in trailers behind the store

“The impetus for these types of changes over the years, according to Walmart, is part of an effort to ‘streamline its supply chain and cut costs,’ adding that ‘stores are no longer acting as warehouses, with too much inventory in back stock rooms or in trailers behind stores. Walmart wants merchandise to arrive in stores just in time to restock shelves and serve customers,’ ” Logistics Management adds.  

Compliance for shippers and suppliers is a going to be much tougher

While this is a sound decision from the retailer standpoint, compliance for shippers and suppliers is going to be much tougher, especially when you consider the nature of the produce industry.

“We predict in advance when the crop is going to come off, but weather can change that. Are we going to be held accountable for that? That’s going to cause a problem,” says one Walmart produce supplier.

Walmart produce executive, Bruce Peterson of Peterson Insights Inc says “The fresh produce industry is different and there should be ‘at least some degree of tolerance.’ From his more than 20 years of experience as the top produce executive at Walmart, he noted that almost all of the violations of the OTIF policy are at the beginning or the end of a season when weather and timing do play an out-sized role.”

The fresh produce industry is different and there should be ‘at least some degree of tolerance.’

The Blame Game

Obviously, no one wants to take the financial hit for falling out of grounds on compliance. So the question being asked is if there is a violation, who’s at fault, the supplier or the carrier?

Who’s at fault, the supplier or the carrier?

Take a look at the industry wide issue of assessing a fee or a fine on someone involved in the logistics of the supply chain. Holding the supplier of the transportation financially responsible is problematic when factoring in the risk-reward nature of the total transaction.

For example — A supplier could have a load of product with a value of tens of thousands of dollars. A trucker may only be getting $3,000 for the delivery of that load. Assessing the trucker a fee, which could easily be 30 percent of his take, for a delivery out of compliance seems unreasonable.

It doesn’t seem right to punish a good shipper in the off chance that they’ve had a late delivery due to weather or some other unforeseen circumstance. Rather, if there’s a serious problem with the shippers, then it’s time to find a better shipper.

The Solution

Proper lead time is crucial for suppliers and manufacturers that work with larger retailers like Walmart. One way to increase your chances of success is to partner with a third party logistics provider (3PL).

The new OITF mandate is going to have an impact on supplier ratings,

The new OITF mandate is going to have an impact on supplier ratings, so finding a 3PL who is both consistent and reliable is critical for navigating these new changes successfully. A good 3PL partner can examine your supply chain from start to finish and help to strengthen weak spots that might create issues in the future, reducing the chances of chargebacks and other issues that might be caused by OITF.

A good 3PL partner can examine your supply chain from start to finish and help to strengthen weak spots

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

 

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BlueGrace Awarded Top 100 3PL By Inbound Logistics

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

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

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

Top 100 Selection Methodology

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

Distilling the Top 100 is never an easy task

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

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

A Look Ahead

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

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

About Inbound Logistics

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

 

 

 

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

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

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

The Peak (Season) Concern

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

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

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

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

The Possible Storm Among the Cloud

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

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

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

But just how vulnerable is the cloud?

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

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

Is Walmart being reasonable with their concerns

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

 

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Understanding and Managing Your Hazardous Materials Supply Chain (hazmat)

Shipping Hazardous Materials

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

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

Our relationship with our carriers is different.

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

How BlueGrace is Different

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

Business Intelligence and Transparency

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

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

Download Case Study

Use a Proven 3PL for Your Hazmat

 

 

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Shedding Some Light on Dimensional Pricing

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

So what is dimensional pricing?

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

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

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

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

Understanding What this Means For Your Business

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

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

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

LTL Shippers Might Get Hit Harder Than Most

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

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

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

How BlueGrace Can Help

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

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

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

 

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CSA Report Card: Room for Improvement

Compliance, Safety & Accountability

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

CSA scoring method has some pretty glaring flaws

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

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

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

Recommendations for the SMS

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

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

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

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

Statistically Principled Approach

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

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

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

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

Quality of Data

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

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

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

What Does this Mean for the Industry

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

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

we look forward to working with FMCSA to strengthen the program

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

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

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

 

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What Happens If Freight Economy Rises?

 

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

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

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

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

Fixing a Growing Problem

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

The shortage in drivers is becoming a serious issue.

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

Many trucking companies are taking steps to recruit more women

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

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

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

Women in Trucking

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

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

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

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

Is the Trucker the Only One at Risk?

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

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

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

 

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Do you have the right TMS for your business?

 

Transportation Management Systems on the Rise

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

Transportation management is essential for domestic and global shippers.

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

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

Advancements in Technology

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

American Shipper TMS Benchmark

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

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

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

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

A Growing Need for TMS

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

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

An Industry Leading TMS Is Available For Free

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

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

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

BlueShip Is Free For All BlueGrace Customers

 

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The Future of Same Day Delivery

 

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

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

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

The growth of automated vehicles will take place gradually

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

Trucking Takes the Lion’s Share

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

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

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

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

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

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

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

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

The Realization of Same Day Delivery

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

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

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

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

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

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

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

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

 

 

 

 

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

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

An Eating of Words

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

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

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

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

The Evolution of Amazon

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

Which then grew into:

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

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

Amazon Brand Logistics

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

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

The Whole Foods Overlay

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

Amazon has purchased their very own best customer

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

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

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

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

Grocery Chain Logistics

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

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

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

 

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

 

 

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Do You Have The Right Technology To Dissect Big Data?

 

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

Dealing with one issue means that another takes its place.

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

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

The Keys to the Data Stream

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

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

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

Which data is useful and which data isn’t.

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

Having the Right System in Place

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

It’s all about having the right system in place

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

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

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

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

BlueGrace Proprietary TMS – BlueShip®

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

BlueShip Is Free For All BlueGrace Customers

 

 

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

 

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

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

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

What obstacles will forwarders have to overcome?

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

Critical Pain Points for Forwarders

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

Changing Customer Expectations

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

Shippers need to push their supply chain in a new direction

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

Visibility of cargo movements and ease and timeliness in booking freight

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

Changing Transportation

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

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

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

Opportunities For Growth

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

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

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

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

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

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

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

 

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

 

 

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

Changing the Game: Amazon

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

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

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

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

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

Hot on the Heels

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

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

Trucking in Trouble

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

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

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

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

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

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

 

 

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Drones – Why You Want Them In Your Supply Chain.

 

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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BlueGrace Logistics – Why We Are Attending ConExpo 2017

This week, the transportation management team from BlueGrace will be exhibiting at the Con-Expo show in Booth #B9500 in the Bronze Lot at Con-Expo in Las Vegas, Nevada. The big question is “What is a Logistics company doing at a tradeshow for construction companies?” At BlueGrace we have a firm belief that we can make EVERY business better and have proved this again and again by providing transportation management services for companies in all types of industries. No matter what the industry, we look to become your outsourced transportation department. A single provider for your freight that is more of a partner than a vendor.

BlueGrace will be exhibiting at the Con-Expo show in Booth #B9500 in the Bronze Lot at Con-Expo in Las Vegas Nevada

What Services Do We Provide

A few of the services we provide to the construction industry are:

  • Specialized reporting, business intelligence, customer engineering, and analytics
  • Dedicated operations, project management, and customer service support
  • ERP integration
  • TMS solutions
  • Freight Bill Pay and Audit
  • Claims Management
  • Freight Cost Allocation, GL-Coding, and Customized Invoicing
  • Indirect Cost Avoidance Measures

Let’s Talk More At The Show

We look forward to discussing the freight needs of the construction industry while at Con-Expo. If you stop by our booth or we stop by yours, here are a few things we would like to discuss:

  • Why did you decide to visit Con-Expo?
  • Based on your business model, would any BlueGrace customers benefit from your services?
  • Can you or your vendors benefit from any of our services?
  • What all do you have planned for the week and what do you want to take away from the show?

BlueGrace is excited to be a part of this massive show that only happens once, every 3 years! Please add us to your agenda for the week and we look forward to this week’s show!

Download one of our construction industry case studies below

This Hardware Supplier saved 13% of their yearly freight spend which added up to $260,000 annually.

Hardware Suppliers In The Construction Industry Case Study

 

Learn how BlueGrace helped this replacement parts provider keep transportation spend below 7% of their total budget.

The Logistics Behind the Construction Equipment Replacement Parts

 

Reverse logistics can be a challenge for even the most seasoned transportation team. Read how BlueGrace helped them integrate and simplify.

BlueGrace Reverse Logistics In The Construction Industry Case Study

 

 

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How Do Construction Suppliers Overcome Logistics Challenges?

The MABD and Your Construction Supply Company

Construction suppliers who provide hardware and tools are under tighter compliance regulations to get the right products to the right stores or distribution centers by a certain time, or they pay a fee. Walmart suppliers now face paying a fee of 3% of the cost of goods of all deliveries after the Must Arrive By Date (MABD).

These regulations for Walmart were implemented back in early 2016, but other retailers such as Target and Home Depot have been charging these fees for some time.

Walmart suppliers now face paying a fee of 3% of the cost of goods of all non-compliant deliveries.

Your construction supply company succeeds or fails based on the constant delivery of your products. Even more so now with the MABD mandate. The timely and effective delivery of your products, is a major priority for you, your retailers and your market. How do the logistics aspects of hardware and building materials differ from other industries?

How do the logistics aspects of hardware and building materials differ from other industries?

The truth is they don’t, with the exception of specific project dates and deadlines that could be missed.

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

Out with the Old

Doing things the old way, is not always the best way. Once employees get comfortable in their schedule and day to day routine it  becomes difficult to change those habits and behaviors. BlueGrace Logistics has seen and learned how to explain and implement these changes. In the case study you will learn about a Hardware distributor that was drowning in manual processes and letting inefficiencies become the norm.  

Once employees get comfortable in their schedule and day to day routine, it becomes difficult to change those habits and behaviors.

How We Reduced Costs & Removed Manual Processes for Hardware Supplier

A large big box hardware supplier, based in the Midwest, was utilizing a single national carrier model. There was no GRI mitigation, or freight bill auditing. The manual task of booking shipments was taking up much of the customer support team’s day. The accounting team had no way to tell if the invoiced amount of the shipment was the same as the quoted amount of the shipment. The ways of the past were starting to catch up as volume increased and this supplier had to make a change.

This Hardware Supplier saved 13% of their yearly freight spend which added up to $260,000 annually.

Hardware Suppliers In The Construction Industry Case Study

What About Other Construction Freight?

As a successful third-party logistics (3PL), BlueGrace handles the freight for all types of construction supply businesses. This freight can be heavy, oversized loads, such as cranes and dump trucks to replacement parts and pallets of construction materials. Our first step in any relationship is what sets us apart and brings the most value to your freight and logistics team. Your current freight data is analyzed and then processed with our proprietary engineering software.

Your current freight data is analyzed and then processed with our proprietary engineering software.

This process gives your logistics team a brand new overview of your freight. From there, your team has access to the entire BlueGrace toolbox of solutions, including ERP integrations to our flagship quoting and product, BlueShip. All of these tools come with a team of logistics experts at your disposal and a constant goal to make your freight program more successful.

Would you like to talk with BlueGrace today? Feel free to call our Enterprise Group at 800.MY.SHIPPING or come see us at the CONEXPO in Las Vegas March 7-11 Booth #B9500.

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2016 BlueGrace National Conference | Recap

BlueGrace Logistics recently hosted their 2016 National Conference right here in Tampa, Florida. This was the company’s 6th installment and biggest conference yet with action-packed keynote speakers like Cameron Herold, Bobby Harris, Afterburner, Inc, and Travis Mills. The location was a huge hit as well, as it was the first time the entire company came back to where it all began.

Welcome to Tampa | Meet & Greet Mixer

The 2016 National Conference kicked off with an opening reception Sunday night at the Tampa Marriott Waterside, where employees, franchisees, regional and branch offices could gather and meet new people and see old friends. For some it was their first time interacting in person, since many of the franchises and locations had been acquired in 2016. Putting faces to the names was the goal of this event and it would spark conversations that lasted the entire 3 days.

Putting faces to the names was the goal of this event and it would spark conversations that lasted the entire 3 days

“This was a great opportunity for our our offices out on the west coast and mid west to meet our employees from the east coast,” said Adam Blankenship, Executive Vice President of Operations at BlueGrace Logistics.

Monday Morning | Day 1

Monday morning started bright and early with an employee breakfast and an official kick-off message from BlueGrace Logistics CEO & President, Bobby Harris. His message touched on how BlueGrace performed in 2016 and what BlueGrace is projecting for 2017. He covered every single angle of the current status of the business and really brought his message home when he announced a huge rebranding for the company. The rebranding consists of a new logo, tagline, website redesign, and much more.

The rebranding consists of a new logo, tagline, website redesign, and much more.

“This branding revamp has been in the works for a while, but the whole concept came about in a very organic way. Because of the amount of effort put into the logo change, we weren’t even sure it would happen, but now we couldn’t be happier with the final results and feedback.” said Bobby Harris, CEO, Founder & President of BlueGrace Logistics.

The excitement started early with the BlueGrace rebranding announcement and would continue non-stop for the remainder of the conference. The schedule would include prominent speakers and breakout sessions to help bring the entire company together and land on the same page with the 2017 goals.

Keynote Speakers | Day 1

Cameron Herold

After Harris wrapped up his presentation and a quick break, Cameron Herold, the “COO Whisperer” addressed the company with a powerful message. He touted high level leadership development qualities and generated a buzz with “Building a World Class Company”. As an experienced speaker and author, Cameron has an uncanny ability to draw the audience in and leave them inspired to simplify their daily tasks and and keep the company goals in line with their own.

“Cameron really delivered a solid message and left all the fluff out. He kept it real and talked about how to build a company with the people you want on your team.” said Vanessa Castillo, Vice President of BG Freight.

Breakout Sessions | Day 1

The remainder of Day One consisted of two tracks and one roundup for different employee types; Sales and Leadership. The first track was an eye-opening sales training for the BlueGrace sales teams from around the country. The focus was to learn how to sell under different circumstances and to many types of shipping customers. The sales team learned that by taking more time to listen and really understand the logistics pain points for each potential customer, they could utilize the entire BlueGrace “toolbox” and help solve their specific issues.

There was also a new leadership development track with an in-depth overview of each BlueGrace department.

There was also a new leadership development track with an in-depth overview of each BlueGrace department. Leadership from every department prepared specific messages to engage and empower employees. There were detailed discussions on employee engagement and human resources, explaining how the hyper-growth at BlueGrace would be managed, so every employee would be happy and healthy.

BlueGrace sales associates recieved a one-on-one presentation from Roadrunner Freight’s Grant Crawford.

In addition to the Sales track, the BlueGrace sales associates recieved a one-on-one presentation from Roadrunner Freight’s Grant Crawford. He had the entire sales staff’s attention as he discussed the new branding, capabilities and dedication of Roadrunner as a trusted carrier for the logistics industry. With a detailed presentation on 2016 numbers and 2017 predictions, Grant demonstrated Roadrunners track record for effective freight management and how all of the sales staff could benefit by using them for their current customers.

The remaining option available to the Sales staff was a carrier roundup. In a structured table to table roundup, the BlueGrace sales staff had the time to move from carrier to carrier and learn more about their services and programs. BlueGrace invited carriers to not only attend the conference, but to sit and talk with the sales staff to answer questions and provide direct answers about how their services can help customers achieve their freight objectives. At its conclusion, the feedback on the carrier roundup was very positive with many opportunities shared and discussed.

Monday Night Festivities | Slapshots on Ice at Amalie Arena

Being the Preferred Shipping Partner of the Tampa Bay Lightning NHL team has its perks! The Tampa Marriott Waterside is directly across the street from the Amalie Arena, the home of the Lightning, so BlueGrace jumped at the opportunity for an on-ice experience. Vendors, carriers and employees were invited to the Amalie Arena for a VIP Tampa Bay Lighting event. Amalie Arena was open to just the BlueGrace conference attendees which gave everyone the opportunity to take a couple slapshots on the NHL team’s ice.

Being the Preferred Shipping Partner of the Tampa Bay Lightning NHL team has its perks!

“We wanted to give all of our BG family a unique opportunity to go down onto the ice of a top ranked NHL team and take a slap shot, and they all loved it,” said Harris.

After everyone took their shots on the ice, the night concluded with hors d’oeuvres, drinks and an additional carrier reception in the Chase Club, a premier sporting event entertainment area within Amalie Arena. The carrier discussions continued until the early evening as Day 1 came to a close.

Tuesday Morning | Day 2

Afterburner, Inc.

Tuesday kicked off with an exciting presentation from Afterburner, Inc. This group consists of retired military service members who served in leadership roles within elite units of the Armed Forces and consider themselves performance improvement experts. Their main focus was “Flawless Execution.” They fired up the crowd with examples of how they used a “debrief” to both prevent mistakes from happening and for learning from them after they do. The conference crowd left the room excited to utilize what they have learned to help all forms of business communication, from internal to customer interaction.

Day 2 presentations from BlueGrace management were a bit more in-depth. The IT department discussed many of the new tools being added to the BlueShip platform in 2017 that would enhance ease of use, increase the options for the customer and streamline the freight process even more. A round of applause came after IT committed to finishing development in 2017 for all new projects they discussed in their presentation. As the IT department tripled in size in 2016, the ability to add new options simplified billing to additional mode options has become a reality. BlueShip will continue to be on of the industries leading  TMS products in 2017 and beyond.

BlueShip will continue to be on of the industries leading  TMS products in 2017 and beyond.

Enterprise had the sales staff excited with their presentation on how BlueGrace engages with our larger customers. While discussing how to interact with types of customers by handing them off to the Enterprise team, they also discussed some of the reasons why BlueGrace is the best partner for these businesses. After receiving the current shipping data provided by a potential customer, Enterprise can run the numbers through our proprietary formulas and reporting systems to generate exciting and time/money saving opportunities.

Enterprise can run the numbers through our proprietary formulas and reporting systems to generate exciting and time/money saving opportunities.

From distribution models to preferred carriers and on-time delivery options, the Enterprise team at BlueGrace can move more product, more effectively for our customers. As the presentation explained, it does not end there. After the customer in engaged with BlueGrace the reporting and optimizing continues and the program will only get better through new time/money saving options being constantly updated and developed.

Tuesday Keynote Speakers | Day 2

Dave Ross

After the morning presentations, it was time for a keynote from Dave Ross, Managing Director of Global Transportation and Logistics at Stifel Nicolaus. As one of the top financial analysts in the logistics industry, David waspicked #1 by the Wall Street Journal’s Best on the Street Analysts Survey in the industrial transportation industry. His view of the logistics industry is deep and robust.

He was able to discuss with the BlueGrace team as well as the carriers, the impact of 2016 market situations and what the future holds for our industry.

He was able to discuss with the BlueGrace team as well as the carriers, the impact of 2016 market situations and what the future holds for our industry. The inner workings of the financial side of logistics was on full display as he presented what to expect in 2017 with a new president and coming industry regulations and changes.

Travis Mills > Never Give Up. Never Quit.

The final keynote speaker was recalibrated warrior and motivational speaker, Travis Mills. Despite losing portions of both arms and legs from an IED blast while on a deployment to Afghanistan, Travis continues to overcome life’s challenges, breaking physical barriers and defying odds.

Travis lives by his motto: “Never give up. Never quit.”  Travis infused his humor and military background to get the BlueGrace team thinking about what is really important in their lives. To focus on the things you can control and no matter where life takes you, stay on the good side, because if he can do it so can you. Travis stayed after for an hour signing his book and taking pictures with anyone who wanted one, he was a true inspiration the BlueGrace Logsitics team.

We can’t thank him enough for his service and sacrifice. Travis you are a true inspiration.

Tuesday Night Festivities | Gala Celebration at the Oxford Exchange

Originally built in 1891 as a stable for the Tampa Bay Hotel, 420 West Kennedy Boulevard has gone through several transformations in its long history. At this amazing Tampa location, BlueGrace put on an event that would not soon be forgotten. The entire location was rented out and and the fun loving conference attendees filed in.

The Oxford put on a great party with a cocktails, a sit down dinner with fine food and an great dance floor.

The Oxford put on a great party with a cocktails, a sit down dinner with fine food and a great dance floor. The live band came all the way from Jacksonville and played just the right music as the attendees danced the night away. It was an amazing end to the best BlueGrace National Conference yet. We would like to thank all of our attendees, employees, carriers and sponsors for making it an event to remember and look forward to an even better event in 2017!

We would like to thank all of our attendees, employees, carriers and sponsors for making it an event to remember and look forward to an even better event in 2017!

2016 BlueGrace Sales Conference Sponsors



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