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The Importance of Retail Compliance in Today’s Market

Logistics and supply chain management has become a very tight game, almost cutthroat in its harsh severity. Consumers want their product today, that means that retailers want it delivered, checked in, and on the shelf yesterday. With the ability to order just about anything a consumer could possibly want from the vast online marketplace, brick and mortar retailers have to run an even tighter ship than they have before if they have any hopes of competing. To that end, some retailers are upping the ante and doling out punishment for shippers who aren’t in compliance.

So what can you do to maintain retail compliance? What about improving your operations to make your company more efficient? We covered these and many more topics in a recent webinar including:

  • Weekly Product Planning
  • Proactively Managing Appointments
  • Planning Optimal Shipping Dates
  • Eliminate Reactive Shipping
  • Creating an Internal Scorecard
  • Learning to identify Real Issues and Actionable Items
  • Improving Communication and Cooperation among Multiple Departments
  • Daily Tracking Updates
  • Full Visibility on Actual Deliveries
  • Learning to Identify Preferred Carriers
  • Utilize Upgraded Carrier Service Levels

Here are some of the key highlights from our webinar that can really have an impact on your business. While this doesn’t cover everything, these elements are vital to running a successful business in today’s marketplace.

Visibility is a Must

One of the key points that the webinar focuses on is visibility. Keeping up with retail compliance is more than just making delivery deadlines. The amount of disruptive technologies and customer expectations hitting the field requires a level of visibility that was, until recently, unheard of.

Customers want to know where their product is during transit. They want to be able to track its progress, start to finish until the product is in their control. More than that, they want to know the status of the product itself during transit. While this might not matter quite so much for clothing and other domestic goods, it plays a huge role for sensitive goods such as electronics and food items.

Being caught out of compliance could result in more than just heavy fines, it could result in a total shutdown of business and operations, which is ruinous for smaller companies.

Earlier this year, the FDA passed the Food Safety Modernization (FSM) act which details the requirements for sanitation, cleanliness, and closely monitored temperature control. Being caught out of compliance could result in more than just heavy fines, it could result in a total shutdown of business and operations, which is ruinous for smaller companies. This is one of many reasons why visibility is so vital to companies in their day to day operations.

OTIF and MABD Requirements

Walmart, one of the biggest retailers in the United States, is just one of many companies that are tightening their expectations for their suppliers. Walmart’s On-Time In-Full (OTIF) policy has set a precedent that will actually fine shippers and suppliers if goods don’t arrive when they are supposed, whether that be early or late. This means that shippers and carriers need to work closely together to hit the designated delivery window.

Must Arrive By Date (MABD) and OTIF are crucial for the changing client expectations.

Must Arrive By Date (MABD) and OTIF are crucial for the changing client expectations. Given that Walmart is such a substantial customer for many suppliers in the United States, making deliveries on time and in full is the difference between making a tidy profit, or losing out on a major customer. Additionally, chargebacks could carry a heavy fine, especially for smaller companies. As it stands, Walmart will penalize shippers by 3 percent of the total PO for any late or incomplete shipments. It’s not just Walmart that’s stepping up the regulations either as more companies continue to tighten their delivery windows.

We covered the importance of having someone managing these new requirements as well as questions that need to be answered. Are shipping dates being planned into production times? If there’s a mistake resulting in a delayed shipment, will you be able to identify where the mistake happened? What plans are there in place to reduce potential chargebacks and improve vendor reliability?

Better Planning Means Better Compliance

Planning is a large part of logistics, and being able to enhance planning is another touchstone of what we covered in our Retail Compliance Webinar. For example, what do you do if a truck breaks down while en route to a delivery? Is your company able to catch it with enough time to make the deadline? What about finding carriers with an open capacity to move product? Is your company able to find space, even when capacity gets tight?

These are a few questions that logistics planners and decision makers need to be asking themselves on a regular basis. Reactive shipping, planning a shipment due to a shortcoming of the original agreement, is a risky practice. There’s a lot that can go wrong when you’re already trying to play catch up. Much like maintenance on a piece of machinery, waiting for something to break is always much worse than fixing something before the breakdown actually occurs.

While there are a considerable number of possibilities to consider when trying to be proactive rather than reactive, it’s becoming easier to be proactive with the advancements of visibility and supplemental technologies.

The supply chain is very much the same. It requires a good deal of forethought to keep it flowing smoothly. If, for example, you don’t have a dedicated carrier fleet, will you have the necessary capacity to keep freight moving in a timely fashion? While there are a considerable number of possibilities to consider when trying to be proactive rather than reactive, it’s becoming easier to be proactive with the advancements of visibility and supplemental technologies.

That level of planning is no longer a novelty or a nicety for customers. It’s becoming a requirement as well as a differentiator among suppliers. Companies who are playing it too conservatively will have a harder time meeting retail compliance than companies who are staying abreast of the changes as they occur.

Staying Compliant

Changes in transportation regulations, tightening capacity, new technology hitting the market, higher spot rates and higher levels of demand from customers and consumers. Any one of these can be hard to navigate by itself, but trying to deal with all of it at the same time can border on the impossible.

Ultimately, everything we covered in our webinar is about helping your company to stay compliant and perform better across the board. From internal operations to external executions. Everything is connected and we broke it down for you. Click HERE to watch our webinar about retail compliance and learn more about how you can be successful. Ready to speak to an expert? Fill out the form below or call us at 800.MYSHIPPING

How The New Tariffs Could Affect the Supply Chain

With three rounds of attempted trade negotiations come and gone, a trade war between the United States and China, representing the two largest economies in the world has begun. China’s Ministry of Commerce has made a declaration that they will fight back against the Trump administrations imposed retaliatory tariffs on imports to China. China is now joining the ranks of other major players in the global economy, Canada, Mexico, and the EU, who are fighting back against these tariffs.

The $200 billion in import products that are being considered span a wide array of household and consumer goods

The $200 billion in import products that are being considered span a wide array of household and consumer goods including, but not limited to, bicycles, sound systems, refrigerators, pocketbooks, vacuum cleaners, cosmetics, tools, and seafood. With a 10 percent duty markup, the tariff would highlight just how dependent the U.S. consumer economy has become on imports.

“In recent days, Vice Premier Hu Chunhua, who oversees foreign investment, has instructed local governments to gauge how the biggest round of U.S. tariffs to date—25% duties on $34 billion of Chinese goods imposed on Friday—is affecting American businesses operating in China, the officials said. In particular, authorities are looking for signs of U.S. companies potentially moving facilities out of China. That would be a blow to Beijing’s effort to attract foreign capital and keep people employed at a time of gathering economic gloom,” according to the Wall Street Journal.

“The idea behind the imposition of tariffs is to increase the cost of imported goods to the point where American manufacturers can compete more effectively, and punish other countries for unfair trade practices. But the reality is that the global economy is so intertwined that most U.S. manufacturers rely heavily on imported parts to support their own U.S. production,” according to Supply Chain Management Review.

Seeing as how many U.S. based manufacturers rely on parts that come from outside the country, we could see a stymie point in production that could create a heavy impact on manufacturers and shippers in the near future.

So how will this growing trade war affect global supply chains? Seeing as how many U.S. based manufacturers rely on parts that come from outside the country, we could see a stymie point in production that could create a heavy impact on manufacturers and shippers in the near future.

The Backlash from the Automotive Sector 

While the new jobs are a boon to the U.S. economy, it is not without consequence. “BMW said Monday that it would move production for some of its SUVs out of the U.S. as a result of new tariffs placed on the vehicles,”  according to The Post and Courier in South Carolina. “The German-based automobile manufacturer signed an agreement with its Chinese partner, Brilliance Automotive Group Holdings, to increase the number of vehicles produced in the country, according to the Charleston newspaper, with the total reaching 520,000 by 2019.” 

 Volvo might also be pulling jobs out of the United States as a means of offsetting these tariffs.  A necessary step as many of the vehicles the company produces in the U.S. and exports to other countries such as Europe and China. Volvo has recently put its plans to expand production in the United States, which would increase staffing from 1,200 to 4,000 on hold.  

A Slow Build for the U.S. Economy

There will undoubtedly be a good deal of fluctuation as U.S. and Chinese companies alike learn how to negotiate these new tariffs. Partner companies between the two countries are already negotiating terms for splitting the difference to help offset some of the lower point tariffs such as the 10 percent increase on Chinese seafood. However, the more substantial duties, such as the 25 percent markup on exported automobiles have some manufacturers looking to pull away.  

“Over time, tariffs reshape the economy. Newly protected industries draw workers and investment away from exporting industries whose inputs are now more expensive. That effect is compounded when exports are also targeted by foreign retaliatory tariffs. Heavily protected industries, like U.S. sugar farmers, don’t export much because prices abroad are much lower than at home. Protectionist countries like India and Brazil have lower imports and lower exports relative to GDP than open economies like South Korea and Chile,” Douglas A. Irwin, an economist, and trade historian at Dartmouth College notes. 

Exporters are going to have a hard time finding ways to mitigate the additional costs of the tariffs while still making a profit.  

Ultimately, the U.S. economy could see some potential benefit from these changes as it might level the playing field for U.S. manufacturers. In the end, however, those that will suffer the most boil down to the consumers buying the products affected by the tariffs, and the exporters. Exporters are going to have a hard time finding ways to mitigate the additional costs of the tariffs while still making a profit.  

How the Supply Chain Will React 

As the cost of raw materials goes up, many companies will have to reevaluate their opinions and suppliers to determine what the best course of action is.

With any major jostling of exports and imports, there will be a rather substantial effect on the supply chain. As the cost of raw materials goes up, many companies will have to reevaluate their opinions and suppliers to determine what the best course of action is.   As tariffs were introduced on imported washing machines Marc Bitzer, the chief executive of Whirlpool Corp., celebrated his win over South Korean competitors LG Electronics and Samsung Electronics Co. “This is, without any doubt, a positive catalyst for Whirlpool,” he said on an investor conference call. 

Nearly six months later, the company’s share price is down 15%. One factor is a separate set of tariffs on steel and aluminum, imposed by the U.S. in March and later expanded, that helped drive up Whirlpool’s raw-materials costs. In the best case scenario, existing suppliers can negotiate with clients to help offset costs. Worst case means disruption and possible standstill for production should components and materials become cost prohibitive for manufacturers. Part of what has helped control the price of consumer goods is the low cost of Chinese labor. Without that, we could see a considerable rise in inflation on U.S. consumer goods at least until the market is able to rebalance itself.   

What Supply Chain Managers Need to Keep in Mind  

Purchasing and Sourcing managers will have their work cut out for them with the new tariffs in place, leaving them to scramble to find new sources where the tariffs don’t apply in order to help keep costs low. However, finding a new supplier is only the first step. There will still be the need for qualifying and completing a risk assessment before a new supplier can be brought on board. Additionally, the supplier must be vetted for product quality, capacity, delivery schedules, and other vital categories to make sure that they will be a reliable partner. Unfortunately, this can be a time-consuming process, but many companies already began sourcing new suppliers when the new tariffs were first announced.

Logistics channels will need to evaluate and contract with foreign trucking companies, freight forwarders, and identify export requirements from other countries before the supply chain can flow smoothly.

Negotiating transportation will be another matter altogether. Logistics channels will need to evaluate and contract with foreign trucking companies, freight forwarders, and identify export requirements from other countries before the supply chain can flow smoothly. This could mean completely altering ocean freight sailings and ports of call, as well as new air freight routes which could cause some delays in the production schedule during the early stages of these changes.  

Supply bases will also be profoundly affected as they take a considerable period of time, approximately 12-18 months, to be reestablished, especially when it involves complex parts such as circuitry. Unfortunately, some of these parts will be unable to be sourced from other countries which means that the base price of components will increase. With manufacturing costs on the rise, many companies will have to make the decision as to how far they can push their customers on the price point before they have to swallow the increase and take a hit to the bottom line.  

Many manufacturers will have to become more flexible in their approach to the supply chain to help offset eventual overages in inventory which will often occur as an attempt to prevent shortages.

Sales and Operations planning will need to make some considerable adjustments in the way they view their supply chain. Supplier schedules will inevitably change which will also change logistics needs. Inventory levels will also have to change as a result which could incur more shipping costs as production runs short on necessary components. This means that many manufacturers will have to become more flexible in their approach to the supply chain to help offset eventual overages in inventory which will often occur as an attempt to prevent shortages.  Of course, there’s also the consideration of what forms the “retaliation” will take as any number of them could result in higher costs and longer shipping times. China has already proposed closer inspections on U.S. imports as well as long delays through customs for more rigorous checks, which can significantly reduce the speed and efficiency of the supply chain.

Your focus should be on developing alternative and flexible supply chains that can be adjusted with speed. It’s time for all hands on deck to fight for your company’s survival.

“Supply chain professionals should take immediate action, if you haven’t already, to secure new suppliers and to do strategic planning using multiple “what-if” supply and cost scenarios.  Your focus should be on developing alternative and flexible supply chains that can be adjusted with speed. It’s time for all hands on deck to fight for your company’s survival,” Supply Chain management suggests.  

In short, this new trade war is going to force changes on many companies, and the supply chain will suffer. Those companies who have the agility to respond quickly will be the best off, but as relations between these global powers remain in limbo, the final result is yet to be determined.  

All Hands on Deck

BlueGrace helps our customers navigate through the constant changes the industry brings. No matter the situation, we are here to simplify your freight needs. If you have any questions about how a 3PL like BlueGrace can assist, contact us at 800.MYSHIPPING or fill out the form below to speak with a representative today!

The Search for a Supply Chain Solution

Supply chain management has always been an essential part of running a successful business, but now the rules of the game are changing. In order to stay ahead of these changes, the supply chain needs to become better organized, more flexible, and able to adapt to whatever is coming down the road.  

Compliance, for example, is becoming a big concern. Trucking companies are being hit with some heavy rules and regulations, such as the ELD and the HoS mandates, which can limit the efficiency of freight transportation. The EPA has passed new regulations regarding carbon emissions which also need to be contended with. Not the least of which is the change in demand and expectations of the customer. Everything is moving at a much more accelerated pace. Consumers aren’t content to wait for two weeks when they think they should have it in two days.  

Handing these changes appropriate does more than making your company more efficient. It raises your overall customer service experience which is vital to the day and age of social media where bad publicity and losing a customer to the competitor is just a tweet away. Legacy systems and the old-school methodology has gotten us this far, and it’s not going to cut it in today’s market. So what needs to change? 

Supply Chains: Out with the Old and In With the New 

Looking back at those legacy systems, they’ve worked for a considerable amount of time, so what’s wrong with them now? Ultimately, they’re clunky and slow to move. Companies need the ability to change and adopt new strategies quickly, be it a capacity shortage or a bottleneck in materials. Legacy systems support a certain rigidity which, back then, was fine. A customer could wait a little longer for a part, piece, or item to be delivered. Now trying to stick to the old ways runs the risk of hindering growth, costing more in both business and expenses, and could put the future of the company itself in jeopardy.  

Unfortunately, many of these changes in demand for the supply chain are coming at a time where IT budgets are being cut back. The end result is that more money is being spent on maintenance and upkeep rather than overhauling and innovating these systems. It’s not much better for new companies, however. Having to shell out a considerable investment in new systems and technology might prove too dear a price for a company that doesn’t necessarily have the extra capital to throw around.

Realistically, what we need is a new approach to this problem

Realistically, what we need is a new approach to this problem. A new way to push both innovation and differentiation from the competition. A scalable solution that can be moved up incrementally as a company is able to both adapt and afford these changes based on needs and goals for the supply chain.

Modern Flexibility 

Another interesting thing to note is that these changes are coming at a much faster pace than we’ve ever seen before, and they aren’t showing any signs of letting up or slowing down.  

Customer and consumer expectations are growing and changing. They want newer, better, and faster, and they want it delivered quickly in a way and location that is convenient for them. Couple that with the fact that new startups and companies are hitting the field daily, and it’s easy to see how a rigid supply chain could spell out disaster.  

Aside from looking to incorporate other systems or looking to a 3PL to help troubleshoot your supply chain, the only other alternative is to get left behind.  

Speaking of newer companies, many of them are already hip to these marketplace changes. They’re starting the game with a scalable and more agile approach to their supply chain which makes them a heavier competitor, despite being new to the game. While changing over to the latest versions of system software and new functionalities can help keep pace with the competition, it’s both, time consuming and expensive. Aside from looking to incorporate other systems or looking to a 3PL to help troubleshoot your supply chain, the only other alternative is to get left behind.  

Visibility is a Must 

Today’s supply chain is a global construction in the majority of cases. Crossing over borders and oceans creates a new level of difficulty that we haven’t seen in the past. Customs and regulations, translations and transportation issues, demurrages and delays, any and all of these events can severely slow the supply chain down and rack up some hefty surcharges in the process. This is one reason why enhanced visibility is an absolute must. It not only helps a company to mitigate risk but helps to reduce costs while raising profitability.  

Visibility, however, remains one of the more difficult bridges to cross for many companies.

Visibility, however, remains one of the more difficult bridges to cross for many companies. Much of a companies information is buried and when systems aren’t communicating, it makes true visibility seem all but impossible without dedicating substantial resources to it. However, a lack of real-time visibility means that almost every area of your business could be affected. Production costs, product design, customer satisfaction and compliance all rely on a high level of visibility. 

Finding the Right Solution 

Having the right solution in place for your supply chain can take many different forms, but all of them share a few key characteristics.  

Agility: The ability to change to new demands quickly is vital. The right solution should be able to highlight and identify weak spots within your organization and supply chain and help you to create a plan to fix it.  

Ease of Use: The solution shouldn’t create more problems. Having a system that is excessively complex or difficult can bog down the process while leaving existing issues unfixed. The right solution should cut the processing time down and help you get your freight on the road faster.  

Completeness and Connectivity: When it comes to shipping freight, your solution should be able to handle it all. Whether you need to manage full truckloads, LTLs, or a complete, multimodal transportation and logistics program.  

Cost and Efficiency: Simply put, having a solution in place is one thing, but being able to afford it is something else entirely. Finding the right solution should help to save your company money, not put it in the red.  

Fast, Flexible and Safe Deployment: A total systems overhaul can create some serious issues. Deploying a solution needs to be able to be performed quickly and seamless so as not to disrupt the day-to-day operations that keep your company running.  

How BlueGrace Can Help 

Of course, there are numerous systems and solutions out there that all promise to meet your needs when it comes to improving your supply chain. But not all of those solutions are created equal, and no one fits all. Also bear in mind, when the system fails or is unable to handle your requirements efficiently and professionally, your operations can come to a screeching halt.  

BlueGrace offers a different approach to upgrading the supply chain that is both innovative as well as easy to integrate. When you’re looking to keep freight moving, BlueGrace is there to help. With our TLC approach, we take the time to make sure that your supply chain is flowing smoothly and you’re turning your operation into the best, most efficient business it can be. To speak to one of our experts and find out more about BlueGrace and how we can help provide you with the solution to your supply chain needs, fill out the form below or contact us at 800.MYSHIPPING

Produce Season and How It Affects Capacity

 

Food items are something that will always be in demand. Consumers expect fresh produce and other food products year around. As such, FTR Transportation Intelligence expects 154.5 million truckloads of food and kindred products this year, up 5% from 2017. Moreover, truckloads of food are expected to rise by an additional 8% to 166.9 million by 2020. This, in turn, results in an increased demand for refrigerated and dry vans. 

However, regulatory requirements including the recent Food Safety Modernization Act, which includes new rules covering shippers, receivers, loaders and carriers that transport food is having an impact on the industry. One part of the act on food transportation spells out requirements on issues, including adequate temperature controls for trucks, food contamination prevention, and vehicle cleanliness.  

Additionally, individual food, beverage, and perishable suppliers are feeling the heat from rising transportation prices.

Additionally, individual food, beverage, and perishable suppliers are feeling the heat from rising transportation prices. During their most recent earnings calls, Kellogg Co. noted that freight is causing its most “acute” cost pressures, while General Mills Inc. issued a full-year profit warning due to increasing costs associated with the shortage of truck drivers. While Kellogg is looking towards its supply chain to achieve cost savings, other food companies such as Hormel Foods and Smithfield Foods, have started to build out their own private trucking fleets. 

Produce Season Is a Busy Time 

While holidays have a substantial effect on freight capacity, produce season can cause one of the biggest crunches of the year. This year, produce season is kicking off with a bang, which might cause some strain on both carriers and shippers. “US wholesalers and shippers stocking shelves with produce are grappling with steep truck rates up as high as 30 percent from last year — as prices out of California and Mexico surge with the produce season kicking into high gear after Memorial Day,” according to the Journal of Commerce 

 “Refrigerated truck rates have followed the same industry-wide trend: spot market prices are up about 20 percent to 30 percent on a year-over-year basis. Load-to-truck ratios are elevated because there aren’t enough trucks capable of handling the demand, which gives the truckers leverage to prioritize shippers paying a higher rate.” 

Truckers Feeling the Weight of The ELD 

The Electronic Logging Device (ELD) mandate, which was passed last December, is starting to put some extra pressure on carriers. The mandate has effectively lowered productivity while increasing the transit times, as carriers have to contend with the mandatory rest period. According to the Cass Freight Index, shipments have risen upwards of 12 percent over the last month, meaning more trucks are needed to handle the same freight volume. This, of course, needs to happen before a carrier can consider taking on new freight.  

Fortunately for the produce season, the Federal Motor Carrier Safety Administration (FMCSA) has made certain allowances for agricultural carriers. So long as the carrier is operating within 150 air-miles of the loading site, be it a farm, silo, or processing facility, they won’t have to start the clock. Leaving the radius would cause to the clock to resume, but the added flexibility is essential for agricultural businesses to survive the produce season.  

Supply and Demand: A Double-Digit Rate Spike  

Even with the added flexibility softening the blow from the ELD, market conditions remain largely unchanged. The rise in capacity demand for the season is resulting in some hefty transportation fees. According to data from the USDA, national refrigerated spot rates were up 28 percent (25 percent not counting diesel costs) over the same week last year. These rates are being seen fairly consistently, ranging from 22 to 29 percent on the U.S. west coast. “At one point this year, I paid $12,000 for a truck. Last year for the same load and same route, it would’ve cost me $9,000 [33 percent hike],” said Peter Pelosi, director of transportation for A&J Produce Corp. 

Kurt Schuster of Texas’s Val Verde Vegetable Company told KRGV, “They tripled or even quadrupled. What would normally be a $2,000 ride turned into an $11,000 ride? One of the main drivers was actually in the big freeze that hit the U.S., but these freight rates aren’t helping at all.” 

Roadcheck Week Had Carriers Scrambling 

To further add to the complication, the month of June is when the Commercial Vehicle Safety Alliance conducts it’s Roadcheck Week. While it’s only a period of 72 hours, most carriers are scrambling to make sure their ducks are in a row. The focus for this year’s road check: Hours of Service Violations. “The Commercial Vehicle Safety Alliance’s (CVSA) International Roadcheck takes place June 5-7, 2018. Over that 72-hour period, commercial motor vehicle inspectors in jurisdictions throughout North America conducted inspections of commercial motor vehicles and drivers.

Thirty-two percent of drivers who were placed out of service during last year’s three-day International Roadcheck were removed from our roadways due to violations related to hours-of-service regulation.

This year’s focus was on hours-of-service compliance,” says the CVSA brief. “The top reason drivers were placed out of service during 2017 International Roadcheck was for hours-of-service violations,” said CVSA President Capt. Christopher Turner of the Kansas Highway Patrol. “Thirty-two percent of drivers who were placed out of service during last year’s three-day International Roadcheck were removed from our roadways due to violations related to hours-of-service regulations. It’s definitely an area that we needed to call attention to this year,” the CVSA added.  

Work Smarter Not Harder  

If the capacity crunch and rate hike proves anything, it’s the fact that shippers and carriers alike are going to have to work smarter if they want to operate at peak efficiency. The ELD mandate is slowing road freight down considerably.  

A transportation management system can help make the most of a ripe transportation season while avoiding the pitfalls that come with higher transportation costs and reduced capacity.

This is one of the big reasons that shippers and carriers are looking to 3PLs to help bridge the gap. A transportation management system can help make the most of a ripe transportation season while avoiding the pitfalls that come with higher transportation costs and reduced capacity.  BlueGrace partners with an extensive list of carriers, providing you with the resources needed to ease the affects of the tight capacity crunch.  If you would like more information on how BlueGrace can help  simplify your supply chain and reduce transportation costs, fill out the form below to speak to one of our experts today! 

The Supply Chain Manager of The Digital Age

 

The supply chain has long been held as the lifeline for any company’s operations. It is the flow of goods and materials necessary for the company to continue to function and operate at peak efficiency. Because of that, supply chain managers understandably need the most accurate information in real-time about what’s happening within the chain. Armed with up to date data, a manager can make decisions about how to proceed in the event of problems, delays, and overall operations.  

Legacy systems that have sustained the supply chain for the past several decades are no longer valid.

However, in the face of new and disruptive technologies, the legacy systems that have sustained the supply chain for the past several decades are no longer valid. They lack the ability to provide the necessary end-to-end visibility required for high speed, lean operations. But it’s not just the tech that’s getting outmoded. Soon the position of supply chain manager might be a thing of the past as well.

“New digital technologies that have the potential to take over supply chain management entirely are disrupting traditional ways of working. Within 5-10 years, the supply chain function may be obsolete, replaced by a smoothly running, self-regulating utility that optimally manages end-to-end workflows and requires very little human intervention,” according to the Harvard Business Review.

“With a digital foundation in place, companies can capture, analyze, integrate, easily access, and interpret high quality, real-time data — data that fuels process automation, predictive analytics, artificial intelligence, and robotics, the technologies that will soon take over supply chain management,” HBR adds.  

Making the Shift 

Some companies are already experimenting with different ways to make the shift into an automated supply chain. Robotics and artificial intelligence (AI) are already being used to digitize and automate the more labor heavy and repetitive tasks within the supply chain. While this applies to warehouse and distribution center mechanics, such as order picking and selecting, it also applies to front-of-the-house tasks such as purchasing, invoicing, accounts payable, and various facets of customer service.   

The use of predictive analytics is giving companies better insight into upcoming demand which is vital for shoring up in times of demand volatility, as well as making better use of in-house assets, and cutting costs for customer service functions without sacrificing quality.   

Intelligent Design Leads to Smarter Operations  

One of the big aspects of this technological shift is sensor data. The data collected can better monitor machine use and maintenance which can reduce downtime by providing real-time alerts on upcoming maintenance reducing the chances for machine breakdowns.   

Blockchain technology is also growing in both popularity and utilization as a means to radically optimize how different parties collaborate and communicate within supply chain networks. Instantaneous and complete data chains can provide users, end-to-end, with complete visibility of the entire supply chain process from initial components and raw materials to completed products slated for delivery.  

Transportation procurement should also be digitized in order to keep the pace.

Transportation Management Systems (TMS) will also be playing a role in the supply chain shift. Given the newfound agility of the digitized supply chain, it makes sense that transportation procurement should also be digitized in order to keep the pace. Many companies are looking more to 3PLs and intermediaries to find capacity and book freight, trusting in their systems to reduce the time and effort previously required to perform this task.  

As we mentioned before, robotics are seeing a heavier implantation rate for warehouse and fulfillment center operations. Rio Tinto, a global mining consortium, has been exploring automated metal mining operations for the past several years. This would make use of driverless trains, automated trucks, cameras, lasers, and tracking sensors, all of which would allow the supply chain to be managed remotely while improving safety and the need for personnel in remote locations.  

Less Personnel: More Control 

One of the concepts set forth by Rio Tinto and other companies who are taking the automated approach to supply chain management is the “digital control tower.” This is, in essence, a virtual decision center which is equipped to provide necessary end-to-end visibility in real time across the global supply chain. For smaller companies, these control towers have become the command center for operations. For those working in these control towers, it is their job to keep their thumb on the pulse of their supply chain, monitoring the influx of data 24/7 for any inventory shortages, bottlenecks, or literally anything else that could disrupt their supply chain operations.  

The control towers serve as the front line for a supply chain, allowing planners to quickly adapt, change, or reroute the supply chain to correct any of these potential issues before it becomes an actual problem. This works not only for retail companies but for industrial companies as well. “One manufacturer’s complex network moves more than a million parts and components per day. The control tower flags potential supply issues as they arise, calculates the effects of the problem, and either automatically corrects the issue using pre-determined actions or flags it for the escalation team,” says HBR.  “Similarly, a steel company built a customized scenario-planning tool into its control tower platform that increases supply chain responsiveness and resilience. The tool simulates how major, unexpected equipment breakdowns — so-called “big hits” — will affect the business and points to the best risk mitigation actions,” they added.  

Is This the End of the Supply Chain Manager? 

As more and more things turn towards automation, there is always the concern that human positions will be replaced and outmoded. This has, typically speaking, only affected the lower end of the spectrum, those positions that perform the menial and repetitive tasks. However, as the supply chain itself is becoming more and more automated, will we see a need for supply chain managers in the future or will they too be replaced by AI and computers?  

Rather than simply managing people to do the repetitive work, they’ll have to manage the data flows.

 Ultimately, the answer is no. Much like any position that could be replaced by a robot or a computer algorithm, there will always be a need for some human intervention. For supply chain professionals, this will mean focusing on different skill sets in the future. Rather than simply managing people to do the repetitive work, they’ll have to manage the data flows. Analyzing and interpreting the data to make the best possible decision when handling a potential issue. This skill will require learning how to make the most of digital tools, analyze and validate data sets, and make an effective forecast from the data provided.  

It will be the companies and the specialist who can adopt and adapt to the new technologies that will come out on top.

Companies will have to change their approach from the tried and true to the new order. Supply chain management, as we’ve known it from the past is on it’s way out. It will be the companies and the specialist who can adopt and adapt to the new technologies that will come out on top.  

As manufacturing and decision making become more automated, transportation will also be a vital area of focus for companies. Both the supply chain and transportation are in the process of evolving into something completely different from what we’ve seen in the past. Companies will have to adapt, and quickly, to these changes if they want to keep their supply chain flowing smoothly. While the digitization can help with that to some extent, there are some areas in which it will fall short.

A Vital Asset 

Third-party logistics providers will become vital in this disruptive era, helping companies navigate the shifts and changes within transportation logistics as they occur. BlueGrace not only provides clients with the bandwidth to create transparency, operate efficiently, and drive direct cost reductions, but our proprietary transportation management system, BlueShip, is free!  For more information on how we can help give you the visibility you need and adapt to the future, feel free to contact us using the form below: 

 

Bricks and Mortar: 5 Real Applications of AI To Improve Bottom Line

Many applications of Artificial Intelligence (AI) for brick and mortar retail seem far off, or too futuristic. We picked 5 of the more accessible applications of AI that could help improve your bottom line this year.

1. User accounts

Brick and mortar stores have often felt disadvantaged when it comes to AI compared to e-commerce retailers. Stores simply do not have the same depth of customer behavior tracking data that Amazon does, for example. However, many AI applications for e-commerce could transfer to physical stores.

With store user accounts, retail brands better synchronize offline and online retail.

The mingling of brick and mortar with online shopping occurs in many ways – such as relying upon location-based services or the use of a universal cart that can be used whether you are shopping on a mobile, desktop or voice-powered device. Omnichannel commerce covers many forms of customer experience – the many touch points a customer has with a retailer. Brick and mortar retail can rely on online data when shoppers set up a user account at the store, or from using click and collect or delivery services. With store user accounts, retail brands better synchronize offline and online retail. This reduces the “separateness between these channels [that] poses a threat to operational efficiencies and adds friction to customers hoping to shop in a seamless and consistent fashion.”

2.Recurring billing

A shift towards recurring orders and subscription shopping services is taking place. Retailers can immediately think of ways to encourage clients to consider their habitual, recurring purchases (laundry soap for instance) and plan for them. In that way, habitual orders can be delivered “on repeat.”

Smaller companies might consider subscription programs to expand customer reach and deepen relationships.

Smaller companies might consider subscription programs to expand customer reach and deepen relationships. With subscriptions, member incentives increase visitors to physical locations (Special offers). An example of a “masterful combination of a subscription program and a sophisticated store network”, is Sephora. Cosmetics are especially suitable as sampling products. Those interested want to try out new products – plus they are small and easy to ship. “Sephora’s PLAY! program offers subscribers access to new products through home deliveries while also encouraging them to shop at their local stores to build up points they can redeem for exclusive prizes and experiences.”

3. Style assistants

AI Style assistants in stores are not too far off, as well as other forms of augmented reality, like voice-activated assistants. Expect changes in the store environment, such as is already happening at Zara. “At Zara’s new flagship store in London, shoppers can swipe garments along a floor-to-ceiling mirror to see a hologram-style image of what they’d look like as part of a full outfit. Robot arms get garments into shoppers’ hands at online-order collection points. iPad-wielding assistants also help customers in the store order their sizes online, so they can pick them up later.”

4. What’s Old is New Again

What is AI really anyway? Retail AI is simply mimicking the original experience of a country store (when an associate would help you, care about you, and talk with you) (personalization), with empathy (care for the customer) and manners.

The bulk of retail revenue continues to be derived from brick and mortar stores. The tactile nature of shoppers’ needs is one of the most important factors of this and why physical retail remains. AI can improve empathy, or sensitivity and understanding of a customers’ point of view – and needs – to scale. As observed by many, “It’s no longer about segmenting customers based on general characteristics such as gender or age. Knowing a consumer’s attitudes and sentiments towards things, favorite day of the week they like to shop, the associate they like to deal with, the price points that they buy at, etc., will help retailers better target their consumers and deliver a great experience.”

Using AI options can begin today, even in the way we remember the original needs of the customer.

5. Logistics & Inventory Management

AI addresses out of stock product head on. With AI solutions, a notification that an item is out of stock, running low or out of place in the store is sent out right away to an in-store associate. Currently, Home Depot’s website offers “a vast array of local store data, such as stock levels down to the number of SKUs carried in a store. If you need 10 items of a specific SKU, you want to know a store has that many before you go. It’s no good if we only have two,’” explains Dave Abbott, the retailer’s vice president of integrated media.

Also, data-driven insights on the logistics end, such as offered by BlueGrace, increase operational efficiency

Also, data-driven insights on the logistics end, such as offered by BlueGrace, increase operational efficiency. Using BlueGrace proprietary technology connects retailers with AI possibilities. After companies undergo a review with a BlueGrace specialist, they are presented with new opportunities for cost savings, such as opportunities to implement predictive analytic technology with certain partners that will factor in weather and inventory levels. This will help direct trucks to different stores as part of an overall supply chain improvement. BlueGrace’s enhanced shipment visibility and business intelligence pave the way for AI initiatives.

For more information on how BlueGrace can help you create visibility and operational efficiency, feel free to fill out the form below or contact us at 800-MY-SHIPPING.

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.

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.

Lucrative Futures For Logistics Specialists

While Supply Chain Manager doesn’t typically make the top ten list of answers to “what do you want to be when you grow up” there is something to be said for positions in the logistics industry. Especially the salary. And when it comes to deciding on a career path, a heavy paycheck can go a long way towards attracting new talent.

According to the APICS’s premier annual survey, there is a very bright future for people working in the supply chain industry with both increases in pay as well as high levels of job satisfaction across the profession.

The survey revealed that in 2017, the average salary for supply chain professionals was $85,210. 90 percent of those surveyed said their raises were at least 3 percent. What’s more is that nearly all of the respondents said they were very happy with their professions and likely to stay with the supply chain industry.

“The data revealed in this report show that supply chain careers represent a fulfilling, dynamic and rewarding long-term career choice for professionals,” said APICS CEO Abe Eshkenazi, CSCP, CPA, CAE.

We foresee that this success will continue as supply chain professionals continue to become a more integral part of the overall business strategy.

“We’re excited to see that our members are well-compensated and continuing to advance in their careers. We foresee that this success will continue as supply chain professionals continue to become a more integral part of the overall business strategy,” Eshkenazi added.

The Path to Success: Education

Education plays a vital role in the salaries of supply chain professionals.

One of the biggest takeaways from the survey is that education plays a vital role in the salaries of supply chain professionals. According to the survey, even so much as one certification could lead to a 19 percent increase in pay over peers without any certifications. Beyond that, having 2 or 3 certifications means a pay increase of 39 percent and 50 percent, respectively.

Those respondents who had earned an APICS certification reported a median salary that was 27 percent higher than those without any certifications. Additionally the education, unsurprisingly, play a part in continuing the career. Even with the same level of tenure, the results of the survey show that more education in the field results in better pay and more chances for advancement.

A Need For Talent 

The pay alone makes the supply chain industry an appealing field for those who are deciding on their career path. Given the high levels of job satisfaction, an average of 8.4 out of 10 according to survey responses, it’s likely that we’ll see even more graduates coming out with degrees related to logistics and supply chain management.  

The industry needs new talents, given the rate that the supply chain is growing and changing.  

Which is a very good thing, as the industry needs new talents, given the rate that the supply chain is growing and changing. While tenure is still essential, experience trumps many other attributes regardless of the industry, there’s still a noticeable difference in pay for those with a degree in supply chain matters. Graduates with less than one year of experience are seeing a slightly higher level of pay than those with 1-3 years of experience. While this might be a move to help entice new people into the industry, it’s still an interesting side note.  

Those willing to take on the responsibility of a leadership role can expect even more jump in pay grade. Supervising a group of at least 50 individuals has reported a base salary that is 82 percent higher than those who do not manage. Even managing as few as 1 to 4 people will see a 13 percent increase.  

A Promising Future  

Given the levels of technological advancement that many industries are undergoing at this time, it’s important to consider the future of the supply chain industry as well as its longevity. Many jobs and careers are on the verge of becoming automated. While this does much for their respective industries, it does make deciding what career path to take a little more difficult. The supply chain and logistics sectors are prime examples of this technological revolution, with much of the industry being automated and digitized.  

There will always be a need for a human element within the industry, perhaps even more so with the deluge of automated processes being added on a near-daily basis.

Yet even with these changes being made, there will always be a need for a human element within the industry, perhaps even more so with the deluge of automated processes being added on a near-daily basis. Certified talent with a more up-to-date education will be vital for the industry which might be part of the reason why so many companies are upping the ante with higher pay, student loan assistance, and other incentives.  

Do You Want To Advance Your Career In Logistics?  

At BlueGrace, we’re growing at an impressive rate. We’re looking for logistics professionals in most of our offices across the country. If you would like to advance your current logistics career or start a new career in this fast growing industry, click the link below to access our list of available positions:

Careers

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!

Artificial Intelligence and the Future of Trucking

Freight is one of the most essential industries in the United States, and according to the US Freight Transportation Forecast publication conducted by the American Trucking Association (ATA), it’s going to continue growing over the next decade. The ATA forecast estimates that US freight will grow to 20.73 billion tons by 2028, a 36.6 percent increase over tonnage moved in 2017.  

Given the considerable amount of freight being moved, the freight industry has some considerable challenges to overcome to get the job done. New regulations (such as the ELD mandate) are putting a strain on trucking companies. Fuel prices and spot rates are prone to changing which can make finding reliable capacity, booking freight, and making a profit frustrating, even at the best of times. Increasing demand means a shortage in capacity, and many shipments are being left behind and delayed. There’s also a massive driver shortage in the United States, a problem that will get worse before it gets better.  

In order to mitigate the obstacles, logistics is going to have to get a whole lot smarter.

In order to mitigate the obstacles, logistics is going to have to get a whole lot smarter. While human intelligence certainly goes a long way towards planning, artificial intelligence is beginning to take up a role in the industry.  

The Growing AI Market 

AI has a number of applications that will be crucial to the trucking industry and Original Equipment Manufacturer (OEM). Increasing operational efficiency can help to reduce costs for OEMs and fleet operators. Predictive modeling is also made possible by AI, allowing for preemptive maintenance by combining data collected via the Internet of Things, sensors, external sources, and maintenance logs.   

“The possible increase in asset productivity (20%) and the reduction in overall maintenance costs (10%) can be observed,” according to a recent article from Market Research.  “Also, according to a publication by the National Highway Traffic Safety Administration (NHTSA), advanced driver assistance systems (ADAS) with vehicle-to-vehicle (V2V) communication have the potential to prevent 40% of reported crashes.”  

In addition to increased road safety, AI can also offset the potential increase in trucking costs and higher driver wages. Artificial Intelligence will also help OEMs and fleet operators stay in compliance with new regulations regarding vehicle and driver safety. This is spurring the growth of ADAS technologies and other initiatives created by OEMs, especially when it comes to automated vehicles. It’s estimated that the AI market within the transportation industry will grow from $1.21 billion in 2017 to $10.30 billion by 2030.   

However, despite the growth and development in the AI market, installation and infrastructure costs will likely be prohibitive to smaller companies. Even a few ADAS features like blind spot detection, telematics, and lane assist can drastically increase the cost of a commercial vehicle. Adding AI systems to vehicles will also require a heavy infrastructure cost as well, further complicating implementation and adoption.  

Various AI Functions for Trucking 

Artificial Intelligence in the trucking industry presents a wide array of opportunities and potential, especially when combined with automated trucking.  

“AI constitutes various machine learning technologies such as deep learning, computer vision, natural language processing (NLP), and context awareness. Some of the recent applications of these technologies in the transportation industry are semi-autonomous and autonomous vehicles, truck platooning, and human-machine interface (HMI) applications,” Market Research says. 

Deep learning is one of the most promising AI developments.

Deep learning is one of the most promising AI developments. As an advanced form of AI, it analyzes a myriad of different data sources including images, sound, and text, and then compiles that data through a synthetic neural network. The result is the ability to identify and generalize patterns and strengthens the decision-making capabilities for safe operation of autonomous vehicles.  

Computer vision is another potential application for AI in trucking. Computer vision utilizes a high-resolution camera and increases the HMI (human machine interaction) capabilities of driver and vehicle. The camera interprets various data inputs such as lane departure, traffic signs, and signals, and is also able to detect driver drowsiness. Ideally, this version of AI will help to bridge the gap between semi-autonomous and fully autonomous vehicles.  

The Future of AI in the Trucking Industry 

AI will be instrumental in the future of trucking. Not only can it collect and monitor data, but as it observes patterns, it will be able to make predictions based on those patterns. These predictions will enhance onboard AI capabilities assisting in both driver and navigation functions as well as back-end functions like data monitoring and preemptive maintenance. Onboard AI will also increase connectivity and communication between other trucks on the road, improving platooning and other joint lane management systems.  

The strength of AI in the trucking industry will be dependent on the amount of data it has to work with.

The strength of AI in the trucking industry will be dependent on the amount of data it has to work with. The more data, the smarter the AI. Building up a database from scratch, however, can be a costly and time-consuming endeavor, one that might be impossible for some companies to achieve in a reasonable time frame.

Integrating AI systems with a transportation management system can help to reduce both costs and implementation time, however.

Integrating AI systems with a transportation management system can help to reduce both costs and implementation time, however. Working in tandem, the AI can help to increase driver safety while a TMS can optimize the overall efficiency of the supply chain, allowing for a smoother and more profitable operation.  

Using a 3PL to Prepare for the Future

While there is near limitless potential for artificial intelligence in the future of the trucking industry, it’s still a ways off from where it needs to be for rapid and easy implementation. The same is also true for automated trucking. However, there are readily available steps you can take to improve your operations without having to break the bank. We at BlueGrace specialize in true Transportation Management, without the need for a heavy investment in labor or technology. For more information on how we can help you harness the full potential of your logistics, fill out the form below:

A Bright Future for Intelligent Logistics

The transportation and logistics industries are perhaps one of the most vital industries in the United States, if not the entire world. On average, trucks haul approximately 70 percent of all consumer goods across the country, and that number is only expected to grow as the global economy continues to grow and change. However, while it is the most vital of all industries, it has also remained the most stagnant, with very little about the industry changing over the past several decades.

The potential for these digital changes is immense, allowing companies to work smarter by lowering operation costs while boosting efficiency.

Yet, we’re beginning to see what can be described as an age of enlightenment for the transportation industry, a digital renaissance. Something in which logistics planners and trucking fleet owners alike are beginning to dive into. These changes are covering everything from ridesharing, “smart” logistics, and even automated vehicles. The potential for these digital changes is immense, allowing companies to work smarter by lowering operation costs while boosting efficiency. Even going so far as increase environmental sustainability as truckers, planners, and shippers all learn to connect on a broader level.

The Growing Web of Interconnection 

In short, the digital age is built on the concept that just about anything is possible, including a sort of omniscience that is vital to running a highly efficient supply chain.  

One of the biggest advantages of this digital age is how interconnected everything is. The Internet of Things (IoT) is providing more data and more accessibility to that data than ever before. New software systems are able to track where freight is during every stage of its transportation and the condition of it during its trip. 3PLs and other intermediaries are developing digital platforms that can connect a shipper to a carrier with a few clicks, rather than an exhaustive list of phone calls, emails, and faxes. Customs documents can be uploaded and transmitted to mobile devices,  less demurrage and detention fees when a paper document gets lost in translation. In short, the digital age is built on the concept that just about anything is possible, including a sort of omniscience that is vital to running a highly efficient supply chain.  

Building On the Infrastructure 

Digitization within the transportation industry also has another, less obvious benefit. It gives developing countries easier access to the global market. As these countries haven’t built up their logistics capabilities to that of the U.S. or the E.U. attempting to break ground on this front is often both cost and time prohibitive. Having access to a digital platform allows them to “leapfrog” directly into digital and mobile solutions for logistics.  

“According to the All India Motor Transport Congress, there are close to 12 million trucks in India. The road freight volume in India is forecast to be 2,211.24 billion freight tonne-kilometer, growing at 4.7 percent,” according to a recent article from YourStory.com 

Market research from Novonous, ‘Logistics Market in India 2015-2020’ shows that India is a prime example of a country that can benefit from new, digitized logistics platforms. The report shows that the logistics sector for India approximately $300 billion, and expected to grow by 12.17 percent by 2020. Factor in that 90 percent of trucks in India are operated by single truck owners, and you can see the potential for connectivity and digital platforms.  

The Growth of E-commerce and Digitization 

E-commerce, of course, is at the heart of much of this digital growth as many consumers begin to veer towards a digital shopping cart, rather than brick and mortar stores. As E-commerce companies such as Amazon, Alibaba, and Flipkart begin to grow and attract more customers, the potential for higher logistics costs also increase. As it stands, India spends about 13 percent of its total GDP on logistics, versus China at 18 percent and the U.S at 8.5 percent. Even a drop of 4 percent in logistics spending could save India upwards of $50 billion.   

The visibility and scalability of a digital network will undoubtedly be vital for the growth of the global economy.

The visibility and scalability of a digital network will undoubtedly be vital for the growth of the global economy. Not only does it help to level the playing field for new players making the market more accessible, but it also helps veterans and legacy companies to operate more efficiently.  

Real-time visibility solutions can help tackle delays, productivity issues, accidents, diversion, theft, and damage.

“Mobile operators are uniquely poised to offer regional and global connectivity solutions for the logistics sector. These real-time visibility solutions can help tackle delays, productivity issues, accidents, diversion, theft, and damage,” says the Yourstory Team.   

“Governments can also improve the quality of logistics via measures like budgetary outlays, foreign direct investment regulations, clarity in classification of logistics players, tax structures, and requirements for open data sharing. This covers truck fleets and the warehousing sector,” they added.  

The logistics sector is heading towards a new digital era, that much is certain. Tech startups, along with forward-thinking incumbents, are bringing innovations and insights into the field and is shaking up the old ways of doing things. As this new era grows in years, it’s likely that we’ll be seeing the logistics and transportation industry in a wholly different light.  

Offering Intelligent Logistics To All Customers 

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 take your hard to understand and complicated data and turn it into easy to read and well calculated decisions data, feel free to contact us using the form below:

How To Label Your Freight Correctly, The First Time

While it sounds like a no-brainer, a lot of cargo damage happens due to incorrect labeling of the packages that are being transported. Labeling is an integral part of cargo packaging and is an essential aspect to ensure that your goods reach the correct destination at the required time. Correct and proper labeling including package handling instructions is critical to ensure that your goods are delivered safely and efficiently.

Labeling is also important to facilitate real-time tracking of your package as it moves through your trucker’s network and your country’s road network.

For example, if you are shipping liquid cargo or any other cargo that needs to be kept upright, it is important to label it correctly so the cargo handlers know which way to carry it. Similarly, if the cargo is hazardous, then it is important to label it appropriately. You should use the required hazardous labels so safety precautions can be taken. Not just for handling and safety, labeling is also important to facilitate real-time tracking of your package as it moves through your trucker’s network and your country’s road network.

Your cargo label should have a few mandatory components which are crucial to ensure prompt delivery.

  1. Clearly marked pick up or senders address. This is crucial because, in case of any returns or non-delivery, the cargo can be returned safely to the sender.
  2. Sender’s reference number. In order to identify the package, as the same sender could be sending various parcels to the same receiver but with different items.
  3. Clearly marked delivery address. This should have the full style address including the zip/postal code to ensure that it gets to the right area as there could be cities and streets with the same name in different parts of the country, but zip/postal codes are unique.
  4. Receiver’s reference number. The receiver may be receiving parcels from same, or various senders and they can identify the contents/order quickly with the reference number.
  5. If goods are hazardous, then the relevant hazardous labels must be affixed to the box.
  6. If the goods are Fragile, it must be labeled with Fragile stickers or tape.
  7. The label should have be clearly visible and have a big enough barcode for quick and reliable scanning.
  8. The label should be at least A5 size or larger to accommodate all the above information.

You have to ensure that only the relevant markings are present on the outside of the package

If there are markings on the label or box that are irrelevant to the shipment, that must be removed as it may cause confusion with regard to the delivery. The labels used must be hardy and be able to withstand the elements as in sun, rain, snow or any other conditions they may be exposed to during the journey although it is unlikely that the goods can get wet during road transport. If you have more than one item in a consignment to the same receiver, it would be good to affix the labels in the same place on each item as it makes it easier for the goods to be scanned and sorted.

There are standard labels for package handling instructions which clearly indicate the nature of the contents of the packages so that everyone in the transportation chain knows what handling methods to be used like whether the package is sensitive to heat or moisture or which side is up and where the loading hooks may be used etc.

The symbols on the labels are based on an international standard ISO R/780 (International Organization for Standardization).

Source: Transport Information Service

Do You Need Help With Understanding Your Freight?

Whether you are managing your own processes or you are using the logistics services of BlueGrace, proper preparation is one way to help prevent delays or additional charges. If you have questions about how you can better prevent freight issues, or just how to simplify your current transportation program, contact us via phone at 800.MY.SHIPPING or using the form below, we are here to help!

Why Is The Supply Chain Industry The Source of So Much Innovation? 

Trucking is arguably one of the most vital jobs in the United States. When you consider that 70 percent of the freight that moves through the country is transported by trucks, the trucking industry is the backbone that holds the U.S. upright. As important as trucking is, however, it would be nothing without a strong running supply chain. Manufacturers need a constant stream of materials and resources to produce goods and retailers and other companies need a constant stream of deliveries in order for their business to operate. 

“The U.S. supply chain economy is large and distinct. It represents the industries that sell to businesses and the government, as opposed to business-to-consumer (B2C) industries that sell for personal consumption,” the Harvard Business Review says. Much the same way that the trucking industry keeps many U.S. citizens employed, the U.S. supply chain industry accounts for 37 percent of all jobs in the country, employing approximately 44 million people. Interestingly enough, these jobs also pay significantly more than a number of professions and are largely responsible for bursts of innovation within the economy.   

“The intensity of Science, Technology, Engineering and Math (STEM) jobs, a proxy for innovation potential, is almost five times higher in the supply chain economy than in the B2C economy. Patenting is also highly concentrated in supply chain industries,” HBR adds. 

It’s the supply chain that links so many different industries and companies together.  

So what is it that makes the supply chain industry pay so well and be responsible for such innovation? It might just be the fact that it’s the supply chain that links so many different industries and companies together.  

The Importance of Supply Chain Services 

As we mentioned above, the trucking, manufacturing and retail industries rely heavily on supply chain services to function and survive in today’s economy. With a heavy focus on lean manufacturing, many companies simply can’t afford to have extra products or parts lying around – there needs to be a constant influx, giving these companies what they need precisely when they need it. But it doesn’t explain why it stands out from other sources of employment. To that, Mercedes Delgado, a research director and scientist of MIT and Karen Mills, senior fellow of Harvard Business School, have taken a look at the categorization of employment and made an interesting discovery when it comes to the supply chain. “Only 10% of employment in the economy is in manufacturing, and 90% is in services. It is commonly thought that most of those service jobs are low-wage occupations at restaurants or retail stores, while the manufacturing jobs have higher wages. But not all services are the same.” – Delgado and Mills stated in the recent HBR article. “With our new categorization, we can separate supply chain service jobs – which are higher-paying – from the Main Street service jobs that tend to be lower paying. These supply chain service jobs include many different labor occupations, from operation managers to computer programmers, to truck drivers. They comprise about 80% of supply chain employment, with an average annual wage of $63,000, and are growing rapidly,” they added.  

On average, these jobs pay about three times more and have 18x the STEM intensity over Main Street services, and the job market is growing fast.  

Through their work, they’ve also uncovered a subcategory of the supply chain industry which is traded services. These services are traded and sold across many different fields such as engineering, design, software publishing, logistics services and many others. This subcategory, in particular, showed some of the highest wages and STEM concentration of the entire economy. On average, these jobs pay about three times more and have 18x the STEM intensity over Main Street services, and the job market is growing fast.  

“Our supply chain economy framework leads to a more optimistic view of the economy. If we were to focus on supporting supply chain services, particularly those in traded industries, the result might be more innovation and more well-paying jobs in the United States.”  

How Does this New Category Affect Policy? 

While it might not seem like an important find, this new categorization is actually very important, especially when it relates to U.S. economic policies. For starters, there needs to be a heavier investment in skilled labor. While the supply chain industry has the majority of STEM workers already on the payroll, there is a shortage in America in general. This makes it hard for both sides to continue the level of growth and innovation. Many companies already have a hard time finding the necessary talent to keep them moving forward.

Supply chain industries are even more at risk since continuous innovation not only needs new talent but the ability to retain existing talent. 

Supply chain industries are even more at risk since continuous innovation not only needs new talent but the ability to retain existing talent. The second point from Delgado and Mills is that we need to support regional industry clusters. “Suppliers produce inputs for businesses, and therefore, they particularly benefit from being co-located with their buyers in industry clusters. Catalyzing and strengthening organizations that support regional clusters is one way to promote buyer-supplier collaboration.” 

Finally, it’s a matter of making sure that supply chain service providers have access to the necessary funds to continue their work. Many of the products and services that they create are things that can’t be patented which makes it difficult, if not impossible, to continue generating the necessary capital. Having government policies in place that would guarantee loans or credit support for suppliers would go a long way to ensuring stability and funding for these service providers to start and grow.  

 The supply chain is a very large industry within the United States and one with the potential for some dynamic growth. Supply chain service providers play a crucial role in not only ensuring that other industries are able to function but also provide the necessary access to these resources that will help this new category of the industry to grow and the American economy as a whole.

Are you part of the supply chain talent pool?

Are you eager to work with a company that helps simplify businesses across the USA? Do you feel a sense of accomplishment when you can cut costs for a customer? If so CLICK HERE to see all the positions available throughout the country at BlueGrace. We are constantly awarded a best place to work and love to see our employees succeed!

Choosing the Right 3PL to Align with Your Business Strategy

Most shippers don’t spend much time worrying about who is driving the trucks carrying their goods, but choosing a 3PL with the right carrier network makes all the difference when your business is expanding. B2B and B2C networks are increasingly determined by where the customer is, rather than a companies’ geographical location. With more business moving to online, you need to be prepared to meet your customers where they are. 

When your customers need change, you want to be able to say “yes.” But logistics is a complicated business and when you are examining your choices, there are some factors to consider.

The first step is to understand your internal requirements – consider what your specific needs are before looking for a 3PL. Questions to ask include, what modes of transportation and what services you will need? What volumes do you plan to ship and where? Do you have specific security or visibility requirements? Are your shipments time-sensitive? The list goes on… Despite their expertise, 3PLs are only as useful as their knowledge of your business and customer requirements. 

The right 3PL will also have a network density that connects you with the right carrier, at the right location and with the right capacity and expertise.

Start with Carrier Partnerships

Whether you are shipping intra-warehouse or last-mile, it’s important that your 3PL  has the capabilities to make it happen. Two considerations are technology and partnerships.  

Shippers should look for a partner that allows them to quote, track and control invoicing for their LTL and FTL shipments, across a nationwide carrier network. Because your shipping partner is responsible for integrating different shipments, they are responsible for implementing technology that provides visibility to your shipment across their network of trucks and more. 

The right 3PL will also have a network density that connects you with the right carrier, at the right location and with the right capacity and expertise. With capacity being tight these days, partnering with the right 3PL will increases the chances that your time-critical shipments will be delivered on time and at a competitive price. That means, if you have warehousing and delivery needs in Houston, your 3PL  should have vehicles available to accommodate those needs, and quickly. 

Door to Door deliveries

Not all trucking companies handle door-to-door deliveries and some don’t have to. What matters is that your 3PL is partnered with carriers that offer fleet capabilities that meet your needs. For your urban customers, the trucking company might need to deploy a fleet of smaller trucks or even vans. If your requirements are FTL B2B shipments, you need a trucking company with that sort of capacity. For many shippers, their requirements fall in-between, or into the ‘all-of-the-above category.’ In those cases, your 3PL needs to have a range of carriers available to facilitate your business. 

Experience matters

Shippers should ask themselves if their 3PL understands their business and customer base. For example, a company shipping high-value electronics, will want to check with their 3PL about security protocols. Are trucks secured? Is there a system in place to alert management when drivers divert course? Proactive 3PLs will have systems in place so that your customers can rely on you in turn.  

Shipping disruption is an unfortunate reality in the business, ranging from weather disruptions to dock strikes. The right 3PL will have a plan in place to make sure that you are taken care of. 

Do the services match the requirements?

Some 3PLs specialize in specific modes of transportation, commodities, dealing with regulations and origin/destinations. Others are generalists. Make sure that you ask potential 3PLs if they have experience handling the cargo that your business will be shipping. The right partner for your business will be able to walk you through the different steps required, allowing all parties to agree on the correct protocols and procedures.  Reviewing a 3PLs Case Study library can help you better understand their expertise.

How many modes?

There are four common modes – ocean road, air, and rail. Many 3PLs will offer “intermodal” services, but if they don’t have the size and experience to properly manage that freight in-transit, they are essentially handing off responsibility to another party. 

To avoid this uncertainty, make sure your 3PL works with established rail and intermodal carriers. That way, you get the most options. Offering a variety of modes that let shippers choose slower transit times when possible, which lowers costs. On the flip side, if you need something shipped fast, having a 3PL with a dedicated expedite team will help to ensures that your shipment gets where it’s going, in the time it needs to be there.

How’s their customer service? 

This might seem too obvious to print, but it’s important to distinguish between friendly phone conversations and 3PLs that can get you the information you need when you need it. If there’s a disruption or other events along the shipment chain, you need a 3PL that can reach out proactively to help you make the necessary adjustments on your end. There will always be disruptions, but that doesn’t mean they need to put you on your back heels. 

Customer service is also about finding a 3PL that’s willing to take the time to help you set up the right solution. If your business is experiencing sudden growth, you might not have all the answers.

Is your 3PL BlueGrace?

At BlueGrace, our freight specialists work with you every step of the way to understand your requirements and set up a solution that’s tailored to your needs. 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. Our 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, contact us using the form below: 

Freight Damage: 8 Practical Ways to Avoid It 

Whether you are a shipper, receiver or trucker, freight damage affects all equally. Freight damage not only increases your cost and affects your revenue, but recurring or heavy damages can cause friction between supplier and end users. 

As a Freight Operator, you can take several measures to avoid freight damage and shipping claims. 

1. Understand your cargo

Understanding the nature of the cargo is of utmost importance so that you can use the correct type of transport for your cargo and the correct type of packaging. For example, if you are shipping drummed cargo you don’t need the same level of protection as you would if you shipped fragile or bottled cargo such as sauces, jams, etc. If you are shipping cargo that is more volumetric in nature than weight (example Cotton Bales) you need a truck with a bigger space capacity than weight capacity. 

2. Choosing the right packaging

This is a critical aspect of trying to avoid freight damage. Once you have understood the nature of your cargo, which may be fragile, heavy, sensitive to water, sensitive to heat, etc., you need to carefully assess the type of packaging required for your product. For example, if you are packing fragile cargo such as bottles, it is important to ensure that these cargoes are packed using durable packaging like corrugated cardboard which is then palletized on wooden pallets for easy and safe handling. 

Use quality pallets that will last longer than cheaper pallets. Cheaper pallets may give in a short term, and better quality pallets will allow for double stacking as required. Don’t take shortcuts or skimp on the proper packaging material as this short-term saving could result in a much bigger expense at a later stage in case of any claims. 

3. Label your goods correctly

While it sounds like a no-brainer, a lot of freight damage can be avoided by labeling the cargo correctly. For example, if you are shipping liquid cargo or any other cargo that needs to be kept upright, it is important to label it correctly so the cargo handlers know which way to carry it. Similarly, if the cargo is hazardous, then it is important to label it appropriately. You should use the required hazardous labels so safety precautions can be taken. 

4. Protecting your packaging 

Cargo such as clothing, shoes and other high-value retail goods are special targets for thieves and protecting your cargo is of utmost importance. Protecting your packaging is also essential against weather and dirt, especially if you use cardboard cartons. 

You can protect your cargo by sealing it with good quality tape (usually with your company branding on it), strapping it and shrink wrapping it.

5. Stow the goods correctly

Stowing of goods on the pallet or the truck is absolutely essential to avoid freight damage. Due care must be taken to stack goods in a uniform and stable manner so that weight is equally distributed across the pallet(s) and the truck. Your products must stay within the dimensions of the pallet such that it cannot get damaged during handling. 

If your cargo has a mixture of heavy and light goods (say boxes of canned food and boxes of marshmallows), ensure that the boxes of canned food are stowed at the bottom and the boxes of marshmallows are stowed on top of the canned food. 

6. Stow the truck correctly

A lot of freight damage happens when cargo shifts inside the truck during transit. Cargo moves inside the truck due to improper stowage inside the trailer.  Whether it is palletized cargo or non-palletized cargo, the cargo should be stowed inside the truck as tightly as possible to avoid movement. 

If in spite of your best efforts there is some space between the cargo, you should use suitable dunnage material like airbags (inflatable dunnage) to absorb sudden impacts and to prevent the load from shifting. In the case of fragile cargo, you can use cargo nets to secure it, so it doesn’t move during transit. 

7. Ship in bulk

Try to consolidate your goods and move as FTL (Full Truck Load) to avoid using LTL (Less than Truck Load) as much as possible. LTL moves multiple handling before the cargo gets to its final destination. However careful one is, multiple cargo handling has a possibility of damaging your cargo. 

8.Choose reliability over price

Choose the right supplier. Using a reliable freight partner is of utmost importance in the whole supply chain process. You should choose your reliable carrier based on a few factors such as their FMCSA score, the trucks that they use, the age of their fleet, their insurance and liability cover, their cargo handling safety record and their staff training methodology. While these may not guarantee the safety of your goods, it can give you a pretty good idea of your supplier. 

To summarize, 

Freight Suppliers

  1. Ensure the cargo is properly packaged before you accept to ship it 
  2. Ensure that the cargo is properly labeled and marked
  3. Ensure that all documentation for the cargo is correct 
  4. Ensure cargo is stowed properly and can handle the various weather and transit conditions while en route to its destination 

Freight Customers

  1. Ensure that you know how to properly pack and stack your goods, or use a qualified company to do this job for you 
  2. Check and recheck your cargo, its packaging, its labeling, stacking/packing and documentation before it leaves your warehouse 
  3. Ensure you have the correct receipt from your supplier when you are handing over your cargo
  4. Ensure you choose the right supplier for the movement of your goods 

Whether you are managing your own processes or you are using the logistics services of BlueGrace, proper preparation is one way to help prevent damage. 

By working closely with all suppliers involved in the movement of your goods, you can ensure that your cargo will reach its destination in time, within your budget, and in the condition that it left the origin. 

Do You Need Help With Understanding Your freight?

Whether you are managing your own processes or you are using the logistics services of BlueGrace, proper preparation is one way to help prevent damage. If you have questions about how you can better prevent freight damage, or just how to simplify your current transportation program, contact us via phone at 800.MY.SHIPPING or using the form below, we are here to help!

Rising Costs and Lower Capacity in the Domestic Truckload Market

2018 is off to a strong start for the economy and manufacturing, but there is a shortage of available truckload capacity on the spot market. The Purchasing Managers Index has not dropped below 50 since August of 2016. This time frame almost exactly correlates with the last low point in the Dow Jones Industrial index. (October 2016, 18142.42) In August of 2016, the dry van spot market rate was roughly $1.65 per mile, today that number is $2.30 per mile. As already discussed, that number is coming along with a driver shortage and carriers not wanting to adhere to the ELD mandate.

More Freight, Less Capacity

Currently there are 5.5 available loads for every available truck in the United States. Carriers can pick and choose the freight they want, at the rate they want, going where they want.

On the heels of the new Tax Plan, businesses like Boeing, AT&T, AAON, AccuWeather, Southwest Airlines, American Airlines and many others have given out employee bonuses and increased charitable donations to show good faith in the plan. This leads many to believe economic growth is not slowing down in 2018 which then leads to more manufacturing and more freight shipments.

How Can BlueGrace Help?

Transportation Management providers like BlueGrace Logistics will consult with your business and provide a solution that can help insulate your company from the chaos in the spot market. Here’s how:

  • Current State Analysis, inefficacy identification
  • Future State Vision and growth plan
  • Benchmark Current Rates, identify lanes and current carrier mix
  • Load Planning and Consolidation Scope and Strategy
  • Network Optimization
  • Dedicated resources

BlueGrace can start this process with an initial consultation and discovery call. Do not let the constraint and capacity of 2018 ruin your budget before it even gets started. Fill out the form below to schedule your free assessment today!

An Optimistic Outlook for the LTL Market

The US less-than-truckload (LTL) market is undergoing a tremendous change. Improving economic conditions as well as manufacturing growth has helped increase demand for LTL shipments. As a result, Stifel analyst David Ross noted that the $35 billion LTL market combined for publicly traded carriers reported tonnage per day increased 4% year-over-year during the second quarter of this year.

Indeed, the overall US economy appears to have awakened after a sluggish start to the year. First quarter GDP rose only 1.4%, a disappointment for sure but second quarter growth certainly made up for it growing at a 3.1% clip thanks in part to strong consumer spending.

E-commerce

E-commerce is taking more of the consumer’s spend. According to the US Commerce Department, second quarter e-commerce as a percent of total retail sales increased to 8.9%, up from 7.4% in second quarter 2016. The rise in e-commerce has sparked new service solutions from LTL carriers particularly as “supply chains become shorter, turn times are quicker and there’s a drive for small, but more frequent shipments”, according to Mr. Ross.

Some truck carriers have introduced last mile delivery services for items such as exercise equipment, mattresses, and furniture.

E-commerce packages have been the primary domain of small parcel carriers FedEx, UPS, USPS and regional small parcel carriers. However, as more consumers become habitual to ordering larger, bulkier items, FedEx and UPS, in particular, have struggled because their small parcel facilities and networks are not designed for such items. As a result, some truck carriers such as JB Hunt, Estes and Werner have introduced last mile delivery services for items such as exercise equipment, mattresses, and furniture. XPO Logistics, the third largest LTL carrier per the Journal of Commerce’s 2017 ranking, has taken it a step further by also offering white glove services such as set up, install, recycle etc. and just recently announced plans to expand their last-mile hubs to 85 within a few years. In addition, it is introducing technology that will allow consumers manage retail home deliveries with advanced, online tools.

Technology

Many shippers are looking for more integrated services, faster delivery and fulfillment and increasingly detailed shipment tracking and information. Also, third-party technology start-ups and TMS providers, such as BlueGrace are offering real-time pricing, booking and tracking solution services targeting both the shipper as well as the LTL carrier who may have available capacity on a particular lane.

Pricing and Labor

Stifel’s quarterly overview of LTL trends indicates that fuel surcharges are returning back close to 2015 highs (but remain far below 2011-2014 levels). Carriers are aiming for 3%-5% rate increases, and while getting some push back, they’re not losing freight over any rate hikes. The pricing environment currently remains healthy but could prove a concern over capacity.

LTL carriers are finding it more difficult to hire the needed labor to meet the increasing demands.

Labor continues to be another concern. LTL carriers are finding it more difficult to hire the needed labor to meet the increasing demands. Those that are hired are demanding higher wages. As an example, YRC was able to get some concessions from the Teamsters to allow them to raise pay above the contract level in certain markets.

ELD

The federal-mandated regulatory requirement, ELD (Electronic Logging Device) is set to go into effect in December. ELD is an electronic hardware that is put on a commercial motor vehicle engine that records driving hours.

It is believed that ELD could benefit LTL carriers at the expense of TL carriers.

It is believed that ELD could benefit LTL carriers at the expense of TL carriers. As such, many industry analysts anticipate pricing to increase as well as tonnage while TL capacity is reduced. As the Vice Chairman and CEO of Old Dominion Freight Line stated earlier this year, “A 1% fallout in truckload could equate to a 10% increase in the LTL arena, with larger LTL shipments.”

Outlook

The Journal of Commerce’s annual LTL ranking showed that total revenue dipped 0.4% from $35.1 billion to $34.9 billion after falling 1% the previous year. However, with US industrial output, consumer confidence and an increase in fuel prices, the top LTL carriers will likely return to expansion and revenue growth for this year.

Guaranteed vs Expedited Shipping

Every day shipments are booked for pickup with LTL carriers, and on occasion those carriers get overloaded and miss the pickup. A serious problem arises when that freight was time critical, such as a manufacturer waiting on freight from their vendors to finish a product. In cases like this, we have seen plants shut down until the freight arrives.

One way to help prevent this situation from occurring is a guaranteed shipment. By placing a day guaranteed on your shipment, the LTL carrier will be responsible if the freight misses that guarantee. They are much more inclined to pick up freight with guarantees attached to avoid paying the freight charges.

In case a carrier does miss the pickup on a time sensitive shipment, an expedited shipment may be required.  A dedicated carrier is called in to move the freight. This carrier picks up the freight and drives straight through until it arrives at the specified delivery location. Shipping costs for Expedited Freight can become expensive, as you are paying for a dedicated truck. However, when you compare the costs of expedited shipping versus the cost of shutting down the manufacturing plant, it may be a bargain.

Freight traveling cross country may require an air rate. When the freight is sitting in Laredo, TX and needs to be in Boston, MA by 10 AM the next day, the freight must be sent by air. This can be very expensive as airline space is very limited.

BlueGrace Logistics are the experts in expedited situations and the phrase our LTL representatives typically hear is “you just saved my job!” The worst feeling in the world as a customer is knowing that your job may be on line if the freight does not arrive. When you have a hotel opening in New York on Saturday and the drapes are still in Alabama on Thursday morning, that sinking feeling in your stomach will not go away until the freight arrives. On Friday morning when the customer calls to say “Thank you! You saved my job!” there is a feeling of significant relief for them – which is the best feeling for our company.

Avoid the stress and don’t play with chance, setup your next time sensitive shipment with BlueGrace Guaranteed services.  In the event you need expedited help, BlueGrace can help you there too.

 

BlueGrace Logistics

Got Freight? Get a Quick and Easy Freight Quote
1-800-MY-SHIPPING

BlueGrace has your Truckloads covered like a Champ

BlueGrace has your Truckloads covered like a Champ
Now is the perfect time to ship full truckloads with BlueGrace® Logistics. As of July 18th, receive a $10 gift card to Fighterwarehouse for ANY shipment!

As we’re all aware, the ebb and flow of capacity, fluctuating demand and speed-to-market often poses unique challenges to shippers. A powerful way to combat this is by shipping full truckloads (TL).

Building complete loads not only promotes efficiency but supports our economy whether it’s thriving or tumultuous. By consolidating freight, you help cut your own cost because TL utilization is improved and you convert less-than-truckload shipments into less-expensive full truckloads. Why have two trucks half-full when you can have one carry the entire load?

Why ship full truckloads?

1. Faster transit times because there are no terminal stops along the route. Consolidation into full truckloads allows for direct delivery to the customer.
2. Lower costs because the price per pound drops significantly. Some companies have reduced their freight transportation costs by up to 35%!
3. Less propensity for damage claims due to decreased handling of your freight.
4. Increase and dedicated capacity for you within your core carrier bases. Choose from a shared carrier network that fits your distinct transportation needs.
5. Increased visibility into forecasting demand helps you plan ahead for more efficiently matched supply and demand.

Why use a 3PL to ship your TL?

Because full truckload shipping is generally more intricate, a 3PL’s involvement smooths out your supply chain management by considering the details of your shipment so you don’t have to. We relieve you from headaches caused by grappling over questions like:
-What is the size and shape of my freight? How will the packaging of this impact my shipping?
-What are the routes looking like where it’s being transported? Is there construction?
-How will the time of year affect my transportation? How do I plan around holidays?

Truckload logistics management is a very detailed process and utilizing powerhouses like BlueGrace® Logistics can help prepare you to make the optimal decision for your transportation needs. What this all translates into is greater volume in the system. The more volume, the better the opportunities to build full truckloads and deliver shipments more frequently.

You know the mighty punch that consolidation packs and what a 3PL can bring into the arena. Now that you know, the question becomes: why haven’t you started yet?

Now is the perfect time to ship full truckloads with BlueGrace® Logistics. As of July 18th, receive a $10 gift card to Fighterwarehouse for ANY shipment! Contact one our reliable freight experts to receive a free quote or start booking today!

BlueGrace® Logistics is a proud sponsor of Carlos Condit and many other MMA fighters.