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What is Transportation Management Workflow and How Does It Work?

Transportation Management Workflow may be defined as a supply chain workflow that connects and links the various parties involved along the chain from, for example, the seller’s warehouse to the buyer’s warehouse. A professional and effective logistics services provider needs to have an efficient transportation management workflow which follows a logical sequence and has the most effective operational procedures. 

One of the primary requirements would be to operate an effective TMS or Transportation Management System. 

One of the primary requirements would be to operate an effective TMS or Transportation Management System.  The TMS used should be capable of handling various aspects of transport management including needs assessment, effective analysis, integration and management in addition to providing you visibility on inbound products, receiving, storing and distribution. An effective TMS will provide comprehensive data analysis on the current shipping costs and processes which offers you an opportunity to compare your costs and processes versus what is available in the market. 

These analyses can help you optimize your supply chain process and also provide overall cost reduction. Your TMS must also be capable of handling pick and pack operations, product consolidation, replenishment and also final distribution and delivery to the receiver. 

A well designed and effective TMS is of paramount importance in:
  • Reducing freight costs
  • Automating the routing and other internal processes
  • Consolidation
  • Freight audit
  • Improving visibility
  • Tracking costs and delivery

Using your transportation management workflow, you can analyze important business metrics such as class and weight breaks, shipment density heat maps, cost/ton and cost/mile metrics, carrier utilization reports, DC optimization results, on-time performance. 

An effective transportation management workflow will also be able to make recommendations on ways of reducing costs, identifying and controlling the costs per client which will also uncover inefficiencies, if any, in your business model. For example, you may be using antiquated routing methods with your current service providers that need some modernization in order to provide you with a more cost-efficient transportation management program. By conducting engineering reviews into your customer’s data, you will be able to identify inefficiencies within the existing strategy and adopt a more dynamic carrier routing which can result in significant cost savings and reduction in transit time. 

The transportation management workflow must always be evolving as trade is dynamic and there must be constant workflow audits along the various silos within the supply chain.

Tracking and tracing is an essential and vital part of the transportation management workflow

Tracking and tracing is an essential and vital part of the transportation management workflow and the TMS used should be suitably equipped to handle this vital component in the flow. 

While everyone likes to handle their own business especially if you are in the transportation business, sometimes it may just be more cost effective to outsource the transportation portion of the whole supply chain workflow. One needs to do extensive and thorough data analysis of all current costs within the transportation and logistics silos. Such analysis will allow you the opportunity to find ways to save money for your customers but also provide efficiency in operations. An efficient way to reduce costs would also be to negotiate accessorial charges because the various carriers may have different container sizes and types that they use for the transportation.  

You can also use the TMS to plan warehouse spatial planning as your business may need to accommodate various sizes and weights of cargoes arriving in LTL or FTL modes. Using the TMS effectively will also assist in reducing the truck loading and turn around times which in turn will reduce the warehouse overheads in terms of staff overtime, etc. It may also be used to consolidate the booking processes which in turn will result in a consolidated billing process,  reducing the overall time spent doing this activity manually by auditing, reviewing, paying and collecting each invoice. 

History is the best teacher

History is the best teacher they say and in line with this, one also needs to pay special attention to historical freight data. You can analyze the performance levels of the various carriers used, achieve cost savings, and have an edge when it comes to future rate negotiations. 

Conclusion

When effectively used TMS can assist customers to gain efficiencies in improving their service offerings while also allowing them to create scalability in their business processes. Customers, especially shippers, are always looking for ways to improve service delivery and efficiency while limiting the costs. By efficiently managing the transportation management workflow, shippers can address costly challenges like rate fluctuations, hidden charges, track and trace, visibility, etc. From both a functional and cost perspective, effective management of the transportation management workflow provides value to the customer. 

BlueGrace’s Proprietary Technology

Our 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. To see a demo and speak to one of our BlueShip experts, fill out the form below or call us at 800.MY.SHIPPING.

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A Growing Need for 3PLs

It’s been a rough ride for over-the-road freight transportation over the past few years. Higher levels of government regulations have created a strain for drivers including the Hours of Service and the Electronic Logging Device mandates. These both came at a time that trucking companies were struggling with the pre-existing issue with a severe shortage of drivers. With the median age of drivers approaching retirement age, the condition will likely get worse before it gets better. Additionally, there have been huge fluctuations in both spot rates and demand over the years which have left carriers in a rather precarious situation.  

Despite the difficulties, there is good news on the horizon. Spot market rates, according to DAT and Truckstop.com, have risen upwards of 20 to 35 percent and contract rates have climbed by an average of 8 percent, year-over-year.  

This is good news for carriers, but managing the influx of work could require some extra help from intermediaries and 3PLs. Already, the conversations are beginning about solutions for the generational workforce as well as the adaptation to the increasing levels of disruptive technology hitting the markets.  

Higher Brokerage Margins 

Last year, 3PLs made due with fairly low margins, about 10 to 15 percent for freight transactions. Mostly as a result of vying for the top spot as a low-cost option for shippers who were looking for a truck on the cheap without using a service in the first place.  

Now, in 2018, with capacity tightening, shippers are making a return to 3PLs which will cause third party margins to increase to as much as 15 to 20 percent.

Because of the availability of capacity in 2016 and the first half of 2017, most shippers were able to obtain reasonable rates with carriers, which means that 3PLs had to provide an array of other services to set themselves apart from the competition. Now, in 2018, with capacity tightening, shippers are making a return to 3PLs which will cause third party margins to increase to as much as 15 to 20 percent. Carriers are hoping this will result in a sustainable relationship with 3PLs.

A Spike in Demand is on the Horizon 

Freight demand was unusually high between January and February, with a slight slow down through March. Given that these volumes are much higher than they were over the same period from last year, it’s another sign pointing towards the growing health of the transportation industry.  

If shippers want to keep up with demand, they’re going to have to change the way they do business.  

While this is undoubtedly a good start to the year, produce season, April through July, has kicked off, which means an even bigger spike in demand as produce season will give way to other peak consumer seasons including the Holiday season. Considering that all of this is outside the continual rapid growth of eCommerce markets, 2018 is going to be a busy year, to say the least. If shippers want to keep up with demand, they’re going to have to change the way they do business.  

Sensing the growing demand, many trucking companies are beginning to double up on their orders for new trucks. “Trucking companies ordered 35,600 trucks in May, more than double the orders from the same month a year ago, according to preliminary figures by ACT Research. That leaves manufacturers with an order backlog of more than 200,000 trucks, or 8.4 months of production,” according to an article from WSJ.  

“This is an astonishing rate of order placement,” said Kenny Vieth, president of the Columbus, Ind.-based ACT. “What’s facilitating it is that truckers are absolutely crushing it on freight rates and profitability right now.”  

Shippers might Start Looking to 3PLs for Visibility 

According to a report released by TIA working with Project44 and 10-4 Systems, 3PLs can, in fact, offer the level of visibility that shippers are looking for despite contrary beliefs.  

“Significant advances in visibility technologies have created a wide range of perceptions and expectations among shippers, including some that are inaccurate. 3PLs in this report identified a complicated web of factors that affect those perceptions and expectations, such as the demands of data aggregation, the need for more education, and the accelerated pace of change that affects 3PL and shipper alike,” the report says.  

Over the past year, the importance and need for visibility have only increased as suppliers are dealing with ever-increasing customer expectations and delivery standards

The TIA hopes that their report will highlight 3PLs that have a product or service offering that will provide the necessary information to shippers regarding their freight. With each passing year, the number of shippers that use 3PL services to keep them updated on their freight during the transportation cycle is increasing. Over the past year, the importance and need for visibility have only increased as suppliers are dealing with ever-increasing customer expectations and delivery standards. Walmarts OTIF (On Time: In Full) policy is a perfect example of this, which can punish shippers for not adhering to a strict delivery schedule.  

Data and Tech will Pave the Way 

It’s more than just the growth of demand that is making 3PLs a tempting partner for shippers. With the influx of big data, analytics, blockchain technologies, and so many more innovations, attempting to keep pace can be difficult. As demand grows and capacity tightens, shippers and carriers alike need to be smarter about how they operate if they want to stay competitive in today’s marketplace. 

As the industry continues to change, it’s likely that we’ll only see 3PLs continue to grow in popularity.

A Better Way of Doing Business

At BlueGrace, we take your current freight data and get an inside look at what your team may be missing. Our carrier procurement strategists will help you meet tight deadlines, optimize your freight expense, and ultimately, find peace of mind. Fill out the form below to find out more about how partnering with BlueGrace can create more visibility and opportunities to simplify, overall helping you find a better way to do business.

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BlueGrace Logistics At SAPPHIRENOW 2018

As a leader in your company, are you getting the supply chain business intelligence and data you need? If not there is a way to get that much needed data and even cut costs in the process with a 3PL (Third Party Logistics) integration with SAP.

BlueGrace Logistics has exhibited at SAP SAPPHIRE for the last 3 years and spoken with executives from all types of industries. Many of the people told us it was either very difficult or incredibly time consuming to get the vital data they need from the supply chain and transportation departments within their organizations. As a 3PL, it is our responsibility to arm the executive suite with the data and business intelligence needed to make better business decisions regarding supply chain and freight.

With our proprietary freight data analysis, we set ourselves apart from other transportation management providers. Our systems take your current freight data and enable our team to get an inside look at what your team may be missing. Opportunities to simplify and save are not hidden anymore.

What Types Of Services Does BlueGrace Offer?

  • Specialized reporting, business intelligence, customer engineering, and analytics
  • Dedicated operations, project management, and customer service support
  • SAP/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 Booth #927

BlueGrace Logistics will be joining other leading technology providers in Orlando at the Orange County Convention Center June 5-7 for the SAPPHIRE NOW 2018 trade show. At this show, BlueGrace will be discussing how we integrate your freight with SAP to simplify your businesses transportation systems.


FREE BONUS FOR ALL SAPPHIRE NOW ATTENDEES!

Not only can we integrate your freight into SAP, we can use that data to optimize your entire supply chain. The first 25 registered attendees to Booth #927 are eligible for a Free Supply Chain Analysis and Optimization Study, using your current data. We will be able to review our results at the show with you and your team.

YOUR FREE ANALYSIS INCLUDES:

  • Daily/Weekly Consolidation Report
  • Cost per: lb/mile/
  • Cost per SKU, PO
  • Freight cost as a percentage of goods
  • Center of Gravity study
  • Carrier spend breakdown
  • Mode Spend Breakdown
  • Cross Distribution Analysis

Fill Out The Form Below To Let Us Know You Will Be Attending and Receive Your FREE Supply Chain Analysis and Optimization Study At The Show!

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The Importance of Customer Care in The Age of Automation and AI 

We’re approaching a new age. Not just in technology, but in our mentality towards that technology. Self-driving cars are no longer just a concept but are in the pre-production testing phase. Robots are less novelty and more integral to many aspects of our lives and our jobs. Simply put, we’re approaching a new age that might see a lot less need for human interaction.   

Though they may be intuitive and programmable, robots aren’t capable of handling every aspect of a job.

Many industries, not just the freight and logistics sector, have voiced some concerns about the integration of robots in the workforce. Truck drivers might take a back seat to an automated rig, at least for the highway stretches. Logistics planners might sit on the sideline while an AI constructs the hypotheticals and maps out the best route from A to B. When you consider it like that, it seems as though there might be a good reason to panic about the encroaching robotic workforce. Though they may be intuitive and programmable, robots aren’t capable of handling every aspect of a job. In fact, there are a few areas where they fall drastically short of the mark.   

Human Core Capabilities  

Despite what Isaac Asimov had to say about the matter, there are three areas in which robots simply can’t hold a candle to a human counterpart. These “core capabilities” are creativity, community and empathy. Robots aren’t designed to feel human emotion. They can’t understand when a customer is frustrated by a missing or damaged piece of freight.

Sharing Economy 

People will change their view of asset ownership, something that has been more or less hardwired into previous generations. For those that own assets, they want to get the most out of them. For those that don’t, they want to be able to access them instantly, without the need to ever own them. To make this easier to understand, consider Uber for a moment. The vehicle owner can take their asset and use it to make some extra money by giving rides. The users simply have to tap a few buttons on their phone, and a ride is summoned, ready to take them to their destination without the need to own a vehicle themselves. This is a perfect example of the Sharing Economy.  

Empathetic Businesses 

With automation growing, we’ll see a shift in the sharing economy into the empathy economy. This empathy economy will be more focused on matching humans or businesses with a need for empathetic services to those who are willing to offer them, according to the World Economic Forum 

True empathy isn’t easy, but it’s the most powerful expression of humanity. In a world full of robots, empathy can only become more valuable

“It’s cliché to say that empathy is in short supply today because every generation probably has the same sentiment. The good news is that automation will force humans to be more human and the empathy economy will create opportunities for humans to monetize a unique capability. True empathy isn’t easy, but it’s the most powerful expression of humanity. In a world full of robots, empathy can only become more valuable,” says WEForum.

Companies will need to find the balance between automated production and workers, with the softness of human emotion and customer service. Customer service specialists and the “white glove” treatment of customers will be the true differentiator between competitors in the field. The stronger the empathetic match between company and potential customer, the more likely it is that they will become a regular client.   

The Human Element 

In many regards, we look for other people to not only help us with our problems but also to understand what we’re going through. Humans will always be the best in understanding emotions. We understand how frustrating it can be to be put on hold or left with questions and seemingly no answers. It’s that human connection that is vital for businesses.  

While many businesses understand this, that’s not to say that they won’t automate at least some of their customer service elements. Well, augment might be a better word 

They all do that in the name of efficiency. However, it will be important for them and us as customers, to keep the human connection alive and well. Amazon’s Grab-and-Go is a perfect example of this. The concept is that customers don’t need to go through checkout or interact with a cashier. Simply grab the items they want and have Amazon automatically track and charge the “purchases.” While this drastically removes much of the human element, the Amazon Grab-and-Go stores are also staffed with human workers who can help answer any questions and guide customers through the process. In other words, there will always be a need for human interaction in any business environment. Human-based customer service is and will continue to be the cornerstone for building a strong business.  

Treat customers as people and not just another line in the profit margin and your business is golden.  

While data services are certainly a must, they are also becoming the norm in the logistics and freight industry. Real-time data and high-end visibility used to be a selling point, now it’s simply an expectation. Customers want to know where their products are and when they can expect them to arrive. They want a simple and easy to use system that gives them the comfort and security of knowing that they have made the right choices for optimizing their supply chain. Nonetheless, despite all the efforts and advancement of different technologies, it will be the mutual understanding created by the human empathy that will solve problems. Treat customers as people and not just another line in the profit margin and your business is golden.  

Working with a 3PL like BlueGrace

BlueGrace provides scalability for growing companies to achieve their goals without labor or technology investments. With a fully built-out national network and global partners, BlueGrace makes it easier than ever to reach your markets in an efficient and cost-effective manner. Their expertise and processes provide clients with the bandwidth to operate efficiently and drive direct cost reduction, backed by procurement and dedicated management. For more information on how we can help you analyze your current freight issues and simplify your supply chain, feel free to contact us using the form below:

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Surviving the Digital Race: What to Watch for in 2018

As we enter into a brand-new year, it’s time to start looking ahead to what 2018 will hold. The past few years have been considerable, in terms of both changes and technological advancements, with the freight industry seeing some of the most drastic changes. Mergers and acquisitions have challenged the playing field by taking smaller players off the board and strengthening the position of others. As for technology, the freight industry has undergone a veritable renaissance. Data analysis and predictive modeling are just the beginning of the industry’s new bag of tricks.

In 2018, it’s going to come down to the 3PLs and freight forwarders to help bridge the gap in supply chains – for both shippers and carriers.

That being said, shippers and carriers will still need help making it through. While 2017 was certainly better than 2016, it’s still going to be a slog to get back to the post-recession era. In 2018, it’s going to come down to the 3PLs and freight forwarders to help bridge the gap in supply chains – for both shippers and carriers. This change won’t take place overnight of course, but the gradual change will build up to a complete revision of the industry. “The next few years will see an evolution of the sector rather than a big-bang revolution. Undoubtedly, there will be change and those companies who cannot adjust to the new environment will drop out of the market. However, for most of the largest providers at least, the new technologies offer another way of differentiating their products and services; of driving down costs and of creating efficiencies in their networks,” according to Transportation Intelligence.   

It’s the technology that will pave the way for the future, and if 3PLs want to stay viable, they’ll have to adapt. They’ll need to be able to provide higher levels of service such as big data analysis and real-time visibility, all at competitive prices.

As we move forward we’ll eventually see a shift, not just in the way companies perform logistics, but in how they think about logistics as well. Real-time shipping quotes are something of a bonus right now, a feature that shippers appreciate but aren’t demanding just yet. Within the next decade however, real-time quotes and total visibility will become the norm. The next generation of logistics planners will see these ‘smart-contracts’ as part of the everyday operations. It’s the technology that will pave the way for the future, and if 3PLs want to stay viable, they’ll have to adapt. They’ll need to be able to provide higher levels of service such as big data analysis and real-time visibility, all at competitive prices.

What to Watch for 

Big technology trends that started up in 2017 are expected to continue as the new year progresses, as they’ve given visibility to some of the long overdue changes within the industry. As it stands, technology is going to be the lynchpin for 3PLs and forwarders, leaving its mark on the industry as a whole.

Here are the biggest trends to keep an eye on as 2018 gets underway.

Visibility, in particular, is going to be essential for supply chain management in the future.

Digitization- The digitization of the supply chain is a significant move as it completely overhauls the way the industry has been run for the past several decades. Not only is it more efficient, but the amount of accessible information allows more insightful decisions at every step of the supply chain. With the increase in focus on digitization throughout 2018, many companies will realize that in order to survive they’ll have to join the digital ranks. Digitization incorporates many different strategies ranging from a focus on hiring to technology investment strategies. Visibility, in particular, is going to be essential for supply chain management in the future.

Adaptive Organizations and Capabilities– A strong supply chain relies on its flexibility above all else. It’s the ability to adapt and react to any changes or potential obstacles in the environment. “In terms of organizational structure, the largest difference between more and less mature supply chain organizations is typically a broader span of control that includes strong relationships with functions such as customer service and product development, in addition to traditional planning, sourcing, manufacturing and logistics. More significant differences emerge in the scope of responsibility for functional owners and how they partner internally and externally to manage end-to-end (E2E) business process flows such as design-to-launch, requisition-to-settlement, and order-to-cash,” says Supply Chain Management Review.

Automation- Drones and robotics are just the beginning of automation, but they will undoubtedly play a big role in the future. Warehousing and order selection is slowly being automated, but so are last mile deliveries, as drones and automated delivery robots are allowing packages to be delivered quickly in urban settings. Warehousing will see some of the biggest investments in robotics over the course of 2018. As pick-and-pack order selection tends to be the most time and labor-intensive process, a robotic workforce could provide a considerable ROI over time. A culmination of EFT’s 2017 Research and Reports data, as well as the 2018 Third Party Logistics Study report, says that roughly 70 percent of supply chain executives have plans to automate their warehouses.

Electronic transmission of data gives companies more insight to work with, and the amount of raw data that is generated by blockchain will certainly give companies plenty to work with in terms of increasing visibility and reliability

Blockchain Technology- Blockchain has slowly gained traction over 2017 and it’s expected that it will only continue to gain ground. Electronic transmission of data gives companies more insight to work with, and the amount of raw data that is generated by blockchain will certainly give companies plenty to work with in terms of increasing visibility and reliability. As it stands, many in the industry still don’t know enough about blockchain to make much of a comment, but that will change as time progresses and more companies begin to adopt and adapt to the new technology.

Supply Chain Management 

Ultimately, controlling the supply chain and managing it properly will be one of the most crucial service offerings for 3PLs. Management solutions in today’s marketplace will require forwarders to offer shippers access to a myriad of different carriers, routes and modes of transport, and instant pricing. Strong management will be heavily reliant on big data; data gathered via the IoT, blockchain and any other technology will need to be broken down into actionable data and analyzed into something that can be used, whether in predictive modeling or direct decision making.

For 3PLs that want to stay in the game and do better than just survive, it’ll be a matter of harnessing the power of digitalization and information technology. That information will need to be applied in the best possible way to suit the needs and desires of their customers.  

As the old adage goes, knowledge is power, and in today’s marketplace that certainly holds true. For 3PLs that want to stay in the game and do better than just survive, it’ll be a matter of harnessing the power of digitalization and information technology. That information will need to be applied in the best possible way to suit the needs and desires of their customers.  

How BlueGrace Can Help in 2018

When companies want superior supply chain management services and best-in-class technology, they turn to BlueGrace. Our proprietary technology is designed to put the power of easy supply chain management and optimization back in your hands. BlueGrace Logistics offers complete, customized transportation management solutions that provide clients with the bandwidth to create transparency, operate efficiently, and drive direct cost reductions. For more information on how we can help you analyze your current freight issues, feel free to contact us using the form below:

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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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