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Seven Important Skills Every Supply Chain Leader Needs

The supply chain has become one of the most critical functions in an organization. Its dynamic nature and the high impact it has on the business makes it challenging to manage. Thus it is necessary for the success of the business to have a strong and well-informed leader at the helm.

However, good leadership skills and information savviness alone are not enough to handle the supply chain function and manage the team. There are other necessary capabilities apart from business know-how and general leadership skills that a supply chain leader needs to lead the function efficiently and effectively.

What are the most important skills that every supply chain leader should have?

While there are many skills a supply chain leader should have, tome impact the business more than the others. These skills are non-negotiable and a must-have. They are:

  1. Strong Analytical Skills: Supply chain is all numbers and analysis. To lead the function effectively, it is extremely essential for the leader to be comfortable with numbers, handling large amounts of data, analytics, and the various analytical models that are used for decision making. A lack of these skills or discomfort with analytics can be fatal for not only the function but the organization as well.
  1. Technology Know-How:  Since the past couple of years, supply chains have been adopting new technologies, digitalizing, and automating processes. In such a scenario, it becomes crucial for the leaders to understand and be open to adopting new and advanced technologies to manage the function. In fact, they not only need to understand, but they also need to lead the adoption of technology for their organizations.

A report by Gartner titled “Gartner Top 8 Supply Chain Technology Trends for 2020” says, “It is important for supply chain technology leaders to adopt a mindset that accepts and embraces long-term perpetual change”. Supply chain leaders should be able to identify what technology will work best for their organizations and be the champions for change. If supply chain leaders possess such a mindset, it becomes easier for them to convince the management to adopt new technologies as and when an upgrade is required and to lead the team through the change.

  1. Strategic Thinking and Operational Mindset: Supply chain is a function that involves both strategy-making and operations. To be able to make good strategies, the people leading this function need to have an understanding of business and the environment the business operates in. And, to make sure the supply chain functions smoothly, they should have knowledge of how things work on the ground.

In short, a supply chain leader should be able to think strategically and execute the plans operationally with equal efficiency. If either of the skills is missing, it becomes difficult for the supply chain to function smoothly and create value.

  1. Negotiation Skills: Leading a supply chain function means endless negotiations with internal stakeholders and external business partners. They need to know how to put forth their viewpoints and get a buy-in from the other parties involved. To be able to do this efficiently, they need to have a good grasp of the market dynamics, rates and pricing of services, and the latest industry trends.
  1. Quick Decision Making: Supply chain is a fast-paced function. In the supply chain, it is common to come across situations that require quick and on the spot decisions. At such times, the supply chain leader should be able to use the data and information on hand to make quick but informed decisions and follow through with them. He should also be able to train his core team to do so. A lack of this skill can lead to further disruption of operations and delays in completing the task. If this happens often, it can make the supply chain inefficient.
  1. People and Relationship Management: Today’s supply chain is usually not limited to one geography or location. They are spread across the globe. A global supply chain has many participants in the form of internal teams spread across regions, vendors, business partners, and business associates from different parts of the globe. Each team or partner has its own way of working, cultural mindset, and knowledge.

They should also know how to bridge the gap in knowledge of the function and technical understanding to make sure none of the team members feel left behind and are able to cope with the dynamic function. To do so, they need to have an understanding of different cultures, regional peculiarities, emphatic attitude, soft skills, and people management skills.

  1. Statutory and Legal Knowledge: Supply chains have to comply with a lot of taxes, duties, labor-management laws, and export-import formalities. Even a little slip up in any complying with a statutory or legal requirement can result in large fines. This is why, along with functional expertise, supply chain leaders need to have at least a basic understanding of laws and regulations of the regions they operate in. This also ensures that they can get the best solutions for such matters from their local teams.

Along with these skills, supply chain leaders also need trusted partners to make sure their supply chains are running smoothly. That’s where we – BlueGrace Logistics come in. Our team has expertise in analyzing supply chains and helping our business clients find the right solutions to improve their supply, make it more effective, and create value.

To know more about how we can work with your supply chain leaders and teams to take your supply chain to the next level, get in touch with us today!

Tender Rejections: Coping And Minimizing

Tender rejections cost shippers time and money, not to mention unending frustration. With capacity tightening, specifically for certain load types, tender rejection rates are on the rise, and shippers are under extra pressure to get freight where it’s going on time. Since tender rejection can raise load prices by nearly 15%, it’s in every shippers’ best interest to get to the bottom of rejected tender.

Common Causes for Tender Rejection

There are some common causes for tender rejection, but the following list certainly doesn’t account for every reason a load might be rejected.

  • Long distance to potential backhauls creating a lot of deadhead miles
  • Short lead times
  • An exceptionally competitive truck market
  • Tight capacity in specific trucking segments

Minimizing Tender Rejections

You can’t eliminate the possibility of tender rejections altogether, but there are some ways that you can reduce the number of shipments rejected by carriers.

Clarify RFPs

Occasionally, tender rejection may occur if a request for proposal isn’t clear enough. Ensure your internal processes give carriers all the information they need to understand the scope of your haul.

Choose Your Carriers Wisely

If the rate a carrier offers seems too good to be true, it probably is. A carrier may quote in order to gain business, but if their quote comes out below what the service costs to perform, they may reject the load.

A carrier audit is a great way to check in on tender rejection rates and determine if these rejections are making doing business with certain carriers in your repertoire too costly.

Increase Your Lead Time

If at all possible, try to stretch out lead times to at least a couple days. Give carriers time to fit you into their schedule ahead of time so that they can be assured business.

Diversify

Consider forming relationships with carriers of all sizes and specs operating in your lanes. When you’ve got a long list of potential carriers for a load, you don’t have to hire a carrier who says they can probably fit you in. Spreading your business around helps small carriers thrive, and you may find a great new partnership.

Opt for Multi-Lane Carriers

Carriers may reject a load that comes with too high a connection cost. Any load that’s going to require a driver to schlep a lot of extra miles is one that’s not very appealing.

When you choose a carrier who operates in multiple lanes, especially lanes that connect to your load’s destination, the carrier can keep their costs down by turning another load in short order and therefore are less likely to reject a load.

Build Great Carrier Relationships

While you can’t mitigate every reason for tender rejection by building relationships with carriers, it can certainly go a long way towards getting your load out on the first try.

This is one of the big benefits of working with a 3PL to broker your loads. Freight brokers have already developed great connections with the carriers they engage. When faced with two similar loads at similar rates, a carrier is likely to opt for the load commissioned by the party with whom they have the best relationship.

One way to mitigate the impact of tender rejections is to use a 3PL. It’s a lot less trouble for you if a  freight broker acts as intermediary when a load is rejected, and they have extra incentive to keep costs low while seeking an alternate carrier in order to keep your business. Need help assessing your carriers or adjusting processes to avoid tender rejection? Call us at 800.MYSHIPPING or fill out the form below.

You Want To Be A Supplier For Whole Foods, Right?

While brick and mortar stores haven’t died out completely, the pandemic hasn’t done them any favors. Not being able to leave the house due to COVID-19, many consumers are realizing that it’s not only easier to shop online for their household consumables, but that it’s preferable to having to run out to the store when the pantry starts running low.

Whole Foods, for example, has done incredibly well, owing largely to its owner, Amazon. Much like Walmart, Target, and Apple, Whole Foods, and Amazon have seen some incredible growth in their grocery sector.

“During Amazon’s second quarter of 2020, the retail giant continued to see huge gains overall due to the impact of COVID-19, with online grocery sales alone reaching three times last year’s figures,” reads an article from SupermarketNews.

The second quarter, which ended on June 30, 2020, left Amazon with an overall net income at a staggering $5.2 billion, compared to the $2.6 billion during the same quarter last year. It should come as no surprise that net sales surged 40% from $63.4 billion in 2019 to $88.9 billion.

While the pandemic was at its full height and lockdowns were initiated, consumers took to their keyboards to go shopping.

Spending Money to Make Money

Of course, with higher than average sales comes higher than average operating costs. As Amazon conducted more business, it also had to increase its operating costs to keep pace with the influx of new orders.

Amazon created over 175,000 new jobs since March and are in the process of bringing 125,000 of these employees into regular, full-time positions

Jeff Bezos, founder and CEO, noted in a statement, “As expected, we spent over $4 billion on incremental COVID-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand — purchasing personal protective equipment, increasing cleaning of our facilities, following new safety process paths, adding new backup family care benefit, and paying a special thank you bonus of over $500 million to front-line employees and delivery partners. We’ve created over 175,000 new jobs since March and are in the process of bringing 125,000 of these employees into regular, full-time positions.”

Amazon’s Grocery Sales Continue to Grow. Rapidly

It’s hard to believe that Amazon originally started as a bookstore. Now it’s become a full-service virtual grocery store, which has been paying dividends for the once bookseller.

“Amazon’s second quarter was another highly unusual quarter,”says Brian Olsavsky, chief financial officer & senior vice president. “As I mentioned on our last earnings call, we began to see a significant increase in customer demand beginning in early March, and demand remained elevated throughout Q2. Strong early demand in groceries and consumable products continued into Q2, while demand increased during the quarter in our other major product categories like hardlines and soft lines.

Amazon, which owns more than 500 Whole Foods stores, said it increased grocery delivery capacity by more than 160% and tripled grocery pickup locations during the second quarter

It was only three years ago that Amazon bought out Whole Foods, which gave it the necessary oot in the door to begin selling groceries online. While this move garnered some criticism it turned out to be a smart move on Amazon’s part in the long run. “Amazon, which owns more than 500 Whole Foods stores, said it increased grocery delivery capacity by more than 160% and tripled grocery pickup locations during the second quarter,” says SupermarketNews.

“We’re reaching more customers with our grocery offerings,” said Olsavsky. “Online grocery sales tripled year-over-year.”

Getting in is the Easy Part

Obviously, being a supplier for a company like Whole Foods is ideal, especially when you can indirectly hitch your star to Amazon. However, becoming a supplier for Whole Foods is the relatively easy part. On the other hand, living up to their high standards and demands is where things get decidedly more difficult.

If you’re thinking of becoming a supplier for Whole Foods or want to understand better what it means to be a supplier and how have requirements and the business changed now that they are part of the Amazon juggernaut, read our Whole Foods white paper.

Experts Warn 2020 will be The Worst Hurricane Season In Years: Is Your Company Ready to Weather the Storm?

Every company has contingency plans for when things don’t go as expected. Whether it’s a backup supplier in the case of a material shortage; or a different carrier for when capacity gets tight. However, when the weather picks up, is your supply chain ready to weather the storm?

Major weather events pose a significant disruption for supply chains, and hurricanes are no exception.

Major weather events pose a significant disruption for supply chains, and hurricanes are no exception. High winds and torrential rains can make travel all but impossible. Flash flooding and road damage can make typical routes impassible. After the more severe storms, much of the carrier capacity is consumed by rebuilding and relief efforts. All in all, if you don’t have a solid plan, you could find your supply chain washed out.

To that end, we want to make sure that your supply chain is prepared. We believe that there is no such thing as being over-prepared, especially when it comes to hurricane season. We’ve created our 2020 Hurricane Preparedness Guide to help you make sure your supply chain is protected. But first, take a look at what’s expected this hurricane season.

2020 is set to be a Record-Breaking Year for Hurricanes

With the way the year has gone so far, is it really any surprise that 2020 is already breaking records for hurricanes? So far, the Atlantic Hurricane season is already in full swing, well ahead of the peak month which is typically September. Hurricane Isaias which caused significant damage on the east coast was the earliest ninth named storm on record. Now, the National Oceanic and Atmospheric Administration (NOAA) is predicting that even more records might be broken in the upcoming months with at least 10 more named storms.

The updated outlook released Thursday calls for a total of 19 to 25 named storms

“The updated outlook released Thursday calls for a total of 19 to 25 named storms (winds of 39 mph or greater), of which 7 to 11 are expected to become hurricanes (winds of 74 mph or greater), including three to six that could become major hurricanes (winds of 111 mph or greater). This update covers the entire hurricane season, which ends Nov. 30, and therefore includes the nine named storms to date,” reads a recent Washington Post article.

According to the National Weather Service Director, Louis Uccellini, 95 percent of hurricanes and major hurricanes, form between August and October. “In over two decades of issuing storm warnings and forecasts, NOAA has never predicted that as many as 25 named storms would form in a single season,” says the Post.

The Long List isn’t Quite Long Enough

Interestingly enough, the list of names that are assigned to storms is predetermined ahead of time by the World Meteorological Organization. As it stands, there are only 21 names left on the Atlantic list. Afterward, forecasters will have to resort to using characters from the Greek alphabet. This has happened only one other time, back in 2005, which was the most active hurricane season on record. 

NOAA’s Initial Predictions Might have been Too Optimistic

The initial prediction from NOAA, which was released in May, called for a 60 percent likelihood for an above-average level of hurricane activity. The prediction called for a 70 percent chance for 13 to 19 named storms, with six to 10 having the potential to become hurricanes. Of the predicted hurricanes, three to six could become major hurricanes with a Category 3 rating or higher.

The updated forecast now places the chance for an above-average season at 85 percent, 24 named storms, which include 12 total hurricanes, five of which will be major.

The season has the potential to be one of the busiest on record, NOAA said.

Battening Down the Hatches

A busy hurricane season in of itself has the potential to be devastating to businesses along the coast. Supply chains can very easily become disrupted as carriers are pulled away to haul for humanitarian aid for the places most heavily affected. Couple in the fact that storms will continue to hit in quick succession, leaving little time for roadways and other necessary infrastructure to be repaired and you have the perfect recipe for disaster.

For companies that manage extensive supply chains along the Atlantic coast, now is the time to begin preparing for the rough season ahead. Fortunately, we here at BlueGrace have a lot of first-hand experiences with Hurricanes, being based out of Tampa Florida. Working with shippers and carriers alike, we have our 2020 Hurricane Preparedness Guide down to a science. Don’t get caught unprepared, download our white paper today!

11.84 Billion Tons Of Freight Moved And Other Trucking Trends

With the global pandemic still in effect, freight capacity is fluctuating even more than usual. Over the past few months, we’ve seen a tightening of capacity for numerous reasons, not the least of all being several smaller carrier companies going bankrupt. Whenever there is a change in the overall availability of capacity, changes to both spot and contract rates are right behind it.

Understanding those rates can help your company make better decisions about how to move your freight

Understanding those rates can help your company make better decisions about how to move your freight, saving you both time and money, while keeping your operations flowing smoothly. But what is the difference between the two different rates, and which one should you be more focused on?

Understanding the Relationship between Spot Rates and Contract Rates

Freight rates are broken down into two different categories, contractual rates and spot rates. Contractual rates make up about 70 to 80 percent of overall market rates and are governed by the average spot rate at the time of bidding. Contract rates offer peace of mind for both parties. For carriers, there is guaranteed volume, while shippers have the peace of mind knowing that trucks will show up, on time, to move their freight, even when capacity gets tight.

However, there are situations in which shippers will opt for a spot rate instead.

However, there are situations in which shippers will opt for a spot rate instead. For inconsistent freight volumes, seasonal or one-off shipments, shippers might not benefit from a contracted carrier. However, spot rates are incredibly volatile and change with demand. While demand is low, shippers can often get a better rate, but run the risk of going over their shipping budget when the overall available capacity swings the other way.

Shippers Should Start Considering Contracts

When the Covid-19 outbreak first started, overall consumer spending dropped drastically. This led to a significant drop off in freight demand which, in turn, dropped spot rates and opened up capacity. While this was incredibly beneficial for shippers, carrier profitability comes under pressure. Couple this with the Trump administration’s trade war with China, and many smaller carriers couldn’t afford to keep their doors open. With fewer carriers, and continued pressure on underperformers, the available capacity will continue to drop. As the U.S. begins to open back up, and consumer spending picks up, this means that demand will see a sharp uptick.

“After six consecutive quarters of deflation, the market is rebounding, heading back towards an inflationary environment, the spot market will reach an inflationary environment by Q1 of 2021,” William B. Cassidy, of JOC.com

This means that spot rates will climb, rather quickly. So what does that mean for contract rates?

Like we mentioned above, spot rates affect contract rates, which means an increase in both. However, for shippers, bidding out a freight contract for a carrier might prove to be more beneficial in the long run due to the following:

  • Spot rates will continue to climb as reopening continues across the country and demand increases.
  • Shipers have likely already seen the floor for spot rates, meaning we’ve seen it at its lowest point so it has nowhere to go but up.
  • Shippers will begin to experience capacity issues. This perhaps the most important issue. Whenever there is a capacity crunch, carriers can cherry pick freight for the best rates which means you’re either paying a premium, or your freight ends up sitting on the loading dock. 

The secret to maintaining operations is to find the balance between contract rates and spot rates. As carrier operations begin to capitalize on the effects of continued increases of the spot market rates, it will be time for shippers to start looking for more carriers and fulfillment options to fill the void.

Want to Learn More?

Want to learn how to better manage your contract and spot rates? Curious about what the second half of 2020 holds for freight rates? You can watch this webinar, as well as all of our past sessions, as part of our free resource library, to learn more. Every month, we here at Bluegrace will have a new webinar on the topics that matter to you! Stop in for next months webinar and receive a free supply chain analysis for your business.

Understanding The Need For A Stronger Supply Chain

As much as we’d like to believe that our supply chains are both quick enough to react to major disruption and flexible enough to maneuver around major obstacles, the global pandemic has taught us that often isn’t the case. It is the single major weakness of most supply chains, an inability to react to a sudden and massive large-scale disruption, which can include pandemics (such as Covid-19) massive weather events, and a myriad of other setbacks. This lack of resiliency is most notable in supply chains for life sciences, health care, and food industries in particular.

The Chinese market is massive, for one thing, and most companies can’t afford to withdraw completely, otherwise, they might lose any competitive edge they might have had.

After COVID broke loose around the world, the current administration issued a call for companies that have offshored their production to Asia, (China, in particular) to bring it back stateside. However, for many companies, this proves to be challenging and counterproductive. The Chinese market is massive, for one thing, and most companies can’t afford to withdraw completely, otherwise, they might lose any competitive edge they might have had. Additionally, because the Chinese market is now either the dominant, if not sole source, for thousands of different items, reducing the dependence on those goods will take a significant amount of both time and money.

Reshoring wouldn’t necessarily mean resiliency either. The meat shortage in the United States is a perfect example of this. The industry’s supply chain is entirely domestic. In an attempt to reduce costs, many companies focused on consolidating manufacturing activities, which means a smaller number of slaughter and processing plants are now producing much of the beef and pork products consumed in the United States. This created a vulnerability as shutting down one plant, even for a few weeks, creates a major impact throughout the country. Farmers, who get paid to raise the feedstock, are now stuck with taking a potentially devastating loss on their products while the rest of the country faces months of meat shortages.

Remap instead of Retreat

Instead of retreating outright from the forign market, the best approach to building resilience into the supply chain is by conducting an internal audit. More specifically it’s the process of mapping out the layers of suppliers, manufacturing plants, distributors, and the other various elements of the logistics network and then implementing a stress test to evaluate the ability to recover from the disruption of any of the various links. Understanding where various bottlenecks will occur means being able to create mitigation strategies which can include increasing manufacturing capabilities, adding more suppliers to the roster, or building up buffer stock.

The added advantage to mapping and stress testing the supply chain is that companies using this method can find unexpected weaknesses or high risks throughout the organization. The more complex the produced good is, the higher the risk of utter disruption.

“Work that one of us (David) did with the Ford Motor Company found unexpected high risk associated with small suppliers, including many local suppliers. One part it identified that fell into this category was a low-cost sensor widely used in its vehicles: If the supply of it were disrupted, the carmaker would need to shut down its manufacturing operations. Because the total amount spent on this item was low, Ford’s procurement group had not paid much attention to it,” reads a recent article from HBR.

Stress Testing on a Policy Level

Essential industries, such as pharmaceuticals and health care, need to have a level of government involvement to ensure that supply chains are resilient enough to continue operating, even during the worst-case scenario. Consider the mask and hospital supply shortage when the pandemic first started to hit the United States. While panic buying created part of the problem, the supply chain itself faltered and eventually failed under the crushing demand.

If such a test can be conducted for banks, it can similarly be conducted for all life-critical supply chains.

There is a precedent for such involvement, however. Back in 2008, during the recession, the U.S. government and the European Union conducted a stress test for banks to guarantee that the major financial institutions that prop up the entire financial system, could survive a major crisis. If such a test can be conducted for banks, it can similarly be conducted for all life-critical supply chains.

The Long Road to Resiliency

Creating supply chain resilience for essential products and services here in the United States could very well require domestic manufacturing. But that’s neither an easy nor cheap fix. Take the pharmaceutical industry, for example. Of the drugs sold in Europe, more than 80% of the required chemical components are manufactured in China and India. Because chemical production is a significant environmental hazard, it would require the development of clean technology and manufacturing processes to create a domestic supply chain. This process could take upwards of 10 years and would require a hefty financial investment. Could it be done? Absolutely. But not easy, and not cheap.

However, until companies have a full comprehension of the vulnerabilities throughout their supply chain, these kinds of decisions can’t be made. The pandemic has created an excellent opportunity and, perhaps more importantly, a motive to put in the necessary time, energy, and resources. Only then can they protect their supply chain from a potential devastating disruption that may be lurking on the horizon.

Do you have supply chain questions that you need answered? Do you need help bolstering your current supply chain to handle these new and disruptive global situations? Feel free to contact one of our logistics experts today and lets talk more about it today.

Detention and Dwell Times: The Menaces of Supply Chain Efficiency

Prolonged dwell times have been an age-old inefficiency that the trucking industry has been trying to curb. Longer dwell times affect the drivers, carriers and shippers alike. An estimated detention time or dwell time can cost trucking companies $3 billion per year as per the Federal Motor Carrier Safety Administration.

The total time spent at a facility by a driver is called dwell time while detention is the gap between the allocated time to start loading/unloading and the actual time of loading/unloading. Longer detention at customers’ premises has largely impacted drivers’ available hours-of-service. Ideally, shippers and receivers are allowed a 2-hour window to load or unload a truck. Any time spent outside the allotted time calls for detention charges. Detention is thus used to offset the cost of a truck being detained at a shipper or receiver’s premises.

Dwell time in unprecedented times – A challenge

The month of March saw an unprecedented rise in panic-buying, which resulted in a tremendous spike in demand. The truckers continued to ply on the highways, making essentials available throughout regions. With increased demand, came the perils of heightened dwell times and detention times. The added safety protocols, social distancing, precautionary SOPs to be followed at the shipper and consignee facilities and the shortage of manpower had considerably impacted the driver detention times. On the other hand, transit times may have improved, owing to less traffic congestion during the lockdown period.

Improvement in the check-in process, ensuring social distancing, enhancing driver safety and the use of technology to manage appointments and improve collaboration between all parties have been the key drivers of change.

Improvement in the check-in process, ensuring social distancing, enhancing driver safety and the use of technology to manage appointments and improve collaboration between all parties have been the key drivers of change. While the world adapts to the new normal in supply chains, it is of utmost importance that more sustainable solutions are innovated and implemented.

Detention: Causes and Impact

Inefficiencies at the facility such as the lack of manpower to load and unload consignments, the unwillingness of the shippers or consignors to invest in manpower to accommodate increased freight movement and the inability at the individual level are the main reasons for increased detention durations. Additionally, mismanagement of appointment times such as goods not being ready for dispatch while the vehicle arrives at the premises lead to unwanted delays. Another common reason is the overbooking of appointments – when more trucks are booked than what the loading location can handle. All of the above contribute to increased detention times, which in turn amounts to losses for truck drivers. On average, truck drivers spend two and a half hours waiting at the shipper or receiver premises to load or unload goods. These hours are not considered as working hours, thus, leaving them unpaid.

We need to understand that most of the drivers are paid on a per-mile basis, therefore, every moment lost in delays is a direct loss of income for drivers.

We need to understand that most of the drivers are paid on a per-mile basis, therefore, every moment lost in delays is a direct loss of income for drivers. On the other hand, for LTL carriers, waiting at a certain facility for longer durations can mean skipping the delivery altogether.

As per a  2018 report published by the Department of Transportation Officer of the Inspector General (OIG) that sought to understand the correlation between driver detention times, crash risks and costs incurred, it was found that detention time may impact annual earnings for truck drivers by $1,281 to $1,534 per year in the negative. Shippers of essential goods have experienced longer detention times at facilities lately. For example, the recent crisis of toilet paper around the nation had trucks lining up at facilities for hours before being loaded with goods. Detention fees paid by shippers to carriers can only offset the loss up to an extent but that money fails to cover the driver wages lost by not driving. Primarily, the carrier efficiency and a driver’s payable hours-of-service are at stake, but the effects of longer detention times invariably trickle down to every stakeholder across the supply chain.

Is there a long term solution – that can increase efficiency, while ensuring optimum asset utilization and prioritizing driver safety in times of crisis?

Longer dwell times and increased detention times are not a byproduct of the current economic crisis alone. They have lingered in the industry for quite some time now and only technology can help provide long term solutions to enhance supply chain visibility. In a recent statement by Collins White, the president of Alabama Motor Express, he stated, “It has become progressively worse since 2018. We have bought software that automatically tracks when the truck goes over the allotted two hours of dwell time and automatically bills the customer.” Better technology that tracks the movement of trucks with a precise estimation of time spent at shipper or receiver facilities will help us give a clearer picture of the spots where the detention is taking place. Identifying these spots will further enable a better understanding of bottlenecks, allow correct allocation of resources and change practices to streamline the flow wherever necessary.

On the other hand, the tried and tested drop-trailer business model may have worked for some quite well. In the drop trailer method, a driver leaves a trailer at the facility for a stipulated time period until another vehicle picks it up. This doesn’t time-bound the shippers and they can load trailers at their convenience. Given the current situation of restricted labor availability, this method comes as an interim respite but cannot be considered as an all-round solution to the problem.

Investing in data-enabled technology is necessary to be able to make any supply chain more robust and induce complete visibility.

Investing in data-enabled technology is necessary to be able to make any supply chain more robust and induce complete visibility. Location Intelligence (LI) is set to make location data more accessible to participants in a supply chain. The use of LI is a promising trend as it uses geographical relationships to decipher complex data that can provide fleets with critical insights of accurate detention time calculations. It can provide accurate information such as time of arrival and departure of a truck at a site. They can also monitor a driver’s fuel stop time or break times which can further help enhance asset utilization. Insights into trends pertaining to a particular time of a day or week can translate to better prediction of transit times and estimated time of deliveries. All of these are elemental in aiding data-enabled business decisions through optimized route planning with reduced dwell times that boost overall productivity and enhance supply chain performance.

As the nation grapples with the ongoing economic crisis, a sudden surge in demand followed by flattening of the curve, the unpredictable rise of freight volumes and its correlation with increasing or decreasing dwell and detention times remain a cause of concern. What must not be forgotten is that these problems of detention and dwell times pose the opportunity for a permanent change towards creating a symbiotic relationship between carriers and shippers. There is an immense potential for cost savings and enhanced operational efficiency that will invariably impact the driver community’s way of life on the road.

Are Chinese Citrus Imports a Major Threat to Florida’s Agricultural Community?

The recent federal decision to authorize the import of certain citrus fruits from China has garnered significant attention since its announcement in April.  More so in an ongoing pandemic situation across the world, this came as a major shock to the indigenous farmers and authorities in Florida. While there have been neutral remarks by California industry representatives who do not foresee any formidable impact on the fresh produce markets owing to the smaller volumes of import, Florida seems to differ on the opinion.

What’s the USDA decision regarding citrus imports?

Towards mid-April, the U.S. Department of Agriculture authorized the import of five commercial citrus fruits from China. Chinese pomelos, Nanfeng tangerines, Ponkan tangerines, sweet oranges, and Wenzhou tangerines are the five varieties of citrus fruits that can now be imported into the U.S following systematic plant pest screening. The decision comes after the federal scientists reinstate that these five varieties can be safely imported given the farmers, packers, and shippers use a systematic approach to minimize pest risks.

Following the announcement US Senators Marco Rubio and Rick Scott penned a letter to Sonny Perdue, the USDA Secretary to reconsider his decision

Following the announcement US Senators Marco Rubio and Rick Scott penned a letter to Sonny Perdue, the USDA Secretary to reconsider his decision of importing these varieties that may be detrimental to the current scenario of Citrus trade in Florida. The impacts could be manifold pertaining to the safety of these produces in the aftermath of a pandemic.

Why are these five fruits such a cause of concern?

The four main things to know here are:

  1. The dwindling Citrus Industry of Florida.

Firstly, the sorry state of Florida’s Citrus industry over the past decade has been a major concern for the agricultural community as well as industry experts. The reasons for such a downward spiral are hurricanes, unfair pricing of imports, and citrus greening. Mike Sparks, executive vice president and CEO of Florida Citrus Mutual, stated,

We need to take another look at this decision. Add to the fact it will hurt growers by flooding domestic markets with Chinese citrus and it really is a double whammy.

At a time when the indigenous growers are facing a steep challenge with the ongoing economic crisis, this move seems to come as a severe blow to the agricultural community in Florida.

  1. Citrus Greening

Citrus Greening or Huanglongbing, HLB, a disease that originated in China and entered the U.S. through imported citrus is a serious cause of concern. The disease primarily affects the growth of the plants and produces asymmetrical and stunted fruits with thick yellowing peel and a bitter taste. Citrus Greening has been majorly responsible for the dwindling citrus fruit production in the US and many other countries around the world.

  1. Potential invasive pest and disease threats.

Especially in the aftermath of the pandemic engrossing the world, there is a potential invasive threat of pests and diseases. While Florida industry representative Dan Richey finds the agreement of the country to import Chines citrus fruits close to lunacy, he emphasized the likely threats new imports could introduce to the nation. He stated

I am much more concerned with the invasive pest and disease risk, not only with the fruit but with pallets the fruit is shipped on. We are required to use heat-treated pallets to ensure no wood-boring insects are hitchhiking in the pallets. Again, the Chinese cannot be trusted to adhere to this rule and who knows what may arrive in these pallets and on our shores?

  1. Adherence to the Systematic Approach of Imports

Lastly, the USDA supported the decision based on the prerogative that if a systematic approach is adhered to in importing these fruits, then there is absolutely no cause of concern. But the question is who is to guarantee that such a systematic approach is being strictly followed?

This systematic approach demands that the growers, packers and shippers implement a methodical approach that minimizes the risk of pests. Limiting imports to commercial shipments alone, registering production sites & packaging plants, certifying the safety of the imports and that they are devoid of any pests or infections, regular inspection and sanitization of the production sites and proper disposal of waste. While these seem the best practices that must be followed to ensure safe consumption, Richey remarked, “If we think for one minute that China will hold their grower/packers to the standards required of a systems approach, we are fools.”

While the apparent impact of the imports on the market is believed to be small, the threat of introducing invasive varieties to the region is real and the subsequent adverse impact on the agricultural community cannot be overlooked. The decision seems to be ill-timed and irresponsible given what the industry has faced in the last decade as well as on account of the ongoing economic crisis.

How the Three M’s Can Help You Cut Down on Supply Chain Cost

As the global supply chain settles into the COVID19 technology driven and customer-centric decade, there’s no time to pause and reflect on what has happened. Now, more than ever is a time for action. You need to pick up the pace and ensure that your processes are leaner, faster, and you are equipped to meet your customer’s expectations. Understanding the nuances of your supply chain and how to improve upon it is the best way to achieve maximum savings, optimize efficiency, and manage customer expectations.

We’ve come up with a concept called the Three M’s, three key areas that you can explore and break down in order to realize the full potential of your company that can help you to get the biggest, fastest savings in your supply chain, today.

They are: Measure; Manage; and Maximize.

Measure

The first of the three M’s is the measure, and it’s all about understanding your supply chain and how it functions. To measure your supply chain is to create an overview of your operations and within that, to develop an understanding of your key processes and where your company’s strengths and weaknesses lie.

Understanding how to create an overview of your supply chain is the very first step in measuring what your company is doing right now and what your current process looks like.

“Understanding how to create an overview of your supply chain is the very first step in measuring what your company is doing right now and what your current process looks like. Either creating an overview or even having an external analysis done by a third party will help you gain visibility and understanding why you’re doing things the way that you do and then taking that information and turning it into actionable information that your company can then use to make better business decisions,” suggests Amanda Staffon, our Senior Business Development representative.

Measuring can help you to:

  • Analyze the need for process improvements.
  • Understand where cargo can be consolidated to increase cost savings.
  • Measure carrier cost structures to maximize efficiencies and lower costs.
  • Better financial efficiency of your end to end supply chain network.
  • Enhanced control over shipment scheduling.

Manage

Manage is all about the internal conversation within your organization. It’s about understanding why key stakeholders which should include, vendors, purchasing, customer service, sales, are making the decisions that they do and how those decisions affect your supply chain. Manage is also about understanding the flow of goods, money, and information throughout your organization.

The data and analytics gathered during the measure phase is instrumental to a proper understanding of your operations

The data and analytics gathered during the measure phase is instrumental to a proper understanding of your operations and can create the insight necessary to understand why these decisions are being made and how you can improve upon them.

There are four key advantages to the management phase:

  • Visibility across the entire supply chain from sourcing raw materials to the delivery of finished goods
  • Modeling future supply chain scenarios as your company grows/changes to ensure speed to market while maximizing cost structures.
  • Complete insight into the production, partner, and supplier performance to ensure responsiveness to customer needs.
  • A Global perspective to keep updated on the latest developments and optimize processes across North America.

Maximize

The last of the three M’s is Maximize, and all about making the most possible good from every factor and decision within your organization. For example, technology helps to maximize efficiency and, in turn, increase profitability.

A well-managed supply chain provides companies with the ability to execute best practices

The other two steps are crucial to maximize as they help you to understand the layout of the organization and what steps you need to take in order to see the most benefits, whether that be further developing strengths, optimizing a specific aspect of your operation, or outsourcing aspects that your company isn’t particularly strong in.

A well-managed supply chain provides companies with the ability to execute best practices in the following areas:

  • Demand Planning
  • Procurement
  • Logistics
  • Inventory Management
  • Information Systems
  • Compliance
  • Distribution
  • Risk Management and Contingency Plans

Putting it into Action

Of course, the first step in this process is often the most daunting. During the uncertainty, dedicating resources (time, energy, money) to anything that doesn’t have an immediately apparent return can be terrifying. However, taking that first step is most important as it lays the path towards improvement and growth in the future.

We encourage you to listen to our free Webinar about the Three M’s to get a more in-depth understanding of the process as well as to take advantage of our free supply chain analysis to see how BlueGrace can help you to improve and optimize your operations.

What’s New in AgTech 2020

Investors are turning to AgTech in recent years, and it’s no mystery why. While much of the tech boom of the past couple decades has focused on saving time or money and entertainment, AgTech embodies higher ideals. The global population is predicted to grow to 9.8 billion by the year 2050, an increase that exceeds today’s food production capacity, so this technology is critical not only to moving humanity forward and reducing emissions, but to our survival.

On that dire note, let’s talk about what’s new in AgTech this year.

Tech-Savvy Farm Equipment

Farm equipment today isn’t your grandpa’s tractor, and it’s getting cooler by the day.

Drones are being developed to collect crop data, spread pesticides, selectively irrigate dry sections of fields to conserve water while improving yields, and even plant crops with utmost precision. Autonomous robots like the TerraSentia are being used to track plant health and field conditions. Custom farming is being carried out by autonomous vehicles (driverless tractors), as developed by up-and-coming AgTech company Sabanto. Wearable devices for animals are being developed and refined to monitor health, potentially heading off illness or other issues.

Data-Driven Farming and Land Management

As is the case in other industries, data and analytics are playing a big role in AgTech. Some data collection is being facilitated by specially developed devices as are mentioned above, but other data is gathered through networking.

Great data makes way for great analytics, helping to drive the ag industry

Great data makes way for great analytics, helping to drive the ag industry, from the fields to the boardroom, towards smarter, leaner, more productive operations.

Supply Chain Improvements

To get in line with recent years’ connectivity improvements in other industries, much of the agriculture industry is moving to more connected format. IoT sensors are being used to help track food through the supply chain, creating better accountability and understanding from fields to retail shelves. Companies like Intelliconn, with their VeriGrain data management program, are creating food supply chain game-changers.

Through networking, farmers and other supply chain players in the agriculture business are finding ways to communicate faster and better

Through networking, farmers and other supply chain players in the agriculture business are finding ways to communicate faster and better. When pricing, product information, and other pertinent data becomes readily available, everyone involved can make better decisions.

AgTech isn’t necessarily a new revelation. Farmers and ranchers have been looking to new tech to improve their operations for centuries, but the food supply chain is evolving faster than ever.

AgTech isn’t necessarily a new revelation. Farmers and ranchers have been looking to new tech to improve their operations for centuries, but the food supply chain is evolving faster than ever. Wondering how you can keep up? Call us at 800.MYSHIPPING or fill out the form below to set up a consultation with one of our supply chain experts who can help you springboard your agricultural logistics operation into 2020 and beyond.

Transporting Perishable Goods? Some Important Factors to Consider.

Transporting perishable goods and fresh produce is fraught with higher risks than most surface transportation, there is a risk of spoilage, loss of freshness and quality.

Perishable goods require a specialized service provider with intimate knowledge of refrigerated trailers, or reefers. It enables the movement of goods like fruits, vegetables, seafood, some medicine and other pharma products, dairy and bakery products, meat, and flowers and plants. Refrigerated trucking helps connect farmers, bakers, meat production plants, pharma companies with markets and ensures end customers even at remote locations get fresh and quality products.

While North America has a static network for refrigerated transportation, its demand significantly increases out of regions with active harvests, commonly referred to as “Produce Season”

While North America has a static network for refrigerated transportation, its demand significantly increases out of regions with active harvests, commonly referred to as “Produce Season”. Given that the season is now in full swing, let’s take a look at what factors should be considered by both shippers and transportation partners while facilitating the movement of fresh produce and perishable goods.

What important factors should shippers keep in mind while transporting fresh produce?

Each fresh produce or perishable product has a specific shipping requirement, like the mode of transportation, type of container, temperature settings, and the transit time it can tolerate.

If even one of the transport requirements of perishables is not met, the goods can become unfit for consumption or further processing.

If even one of the transport requirements of perishables is not met, the goods can become unfit for consumption or further processing. To ensure that this does not happen, here are a few points that shippers must keep in mind while transporting their fresh produce:

Complete Product Knowledge: This is non-negotiable. For safe and smooth transport of their perishable products or fresh produce, it is necessary for shippers to clearly define these expectations to their warehousing and transportation partners.  Some important things that shippers and their teams should share about the fresh/perishable product they deal in are:

  • Packaging requirements of the product.
  • The best method and transport mode to ship it.
  • What is the temperature requirement – are there OptiSet or Intelliset temperature settings available
  • The temperature needs of the product while in transit and what is proper protocol if an issue arises in transit.
  • Tolerable transit time for the product to aide in the recovery of delay
  • Food safety requirements unique to your product
  • The documents/formalities required in both the importing and exporting state/country.

Conduct a Market Study: It’s important to find the right market for fresh produce, especially for those products that spoil easily.  It’s financially beneficial for the shipper if this product reaches the market quickly and in good condition. It’s also beneficial for the buyers as they get better quality and fresh products. So, before you decide on a specific market, conduct a study to find out:

  1. When and where your product is going to be in peak demand, consider local growing seasons you will be competing with.
  2. The rate at which you can deliver and distribute in the given market
  3. The transit time to various markets and how fast can you replenish.
  4. Outlets or Wholesale partners in the event of a quality rejection
  5. Any specific customs formalities/documents required by the importing state for this product

Once you have this information ready, you can pick the best possible combination of market, rate, and transport requirements.

Choose the Right Transporter: If fresh produce is not managed correctly during transit, the quality and shelf life can be negatively affected. Thus, the choice of the transportation provider can make a huge difference in how your product is shipped. So, when you’re searching for a transportation partner, you must check the following:

  1. The track record of the transportation provider in moving perishable goods.
  2. Do they have the requisite experience, and references?
  3. Is the equipment well-maintained, cleaned, and serviced regularly?
  4. Are the drivers trained to manage the special equipment and carry perishable or fresh produce?
  5. Do they have tie-ups with service centers en route, in case the equipment or vehicle needs emergency servicing?
  6. Can they replace the container or the carrier in case of a breakdown?
  7. What is the transit time being offered and do they have the ability to expedite?
  8. Does the provider have ample capacity to be flexible in a fluid situation?

In the event you can use a multimodal approach to ship your cargo, carry out this exercise for all the providers. Also look for opportunities to consolidate where transportation providers have multiple service lines.

Provide Clear Instructions: Once you’ve selected the transporter(s), it is important to communicate instructions specific to your product clearly to them. Make sure they know how the product is to be handled, the temperature to be maintained throughout the transit, and if it is an LTL shipment, then which products/goods can it not be carried with or kept close to. In the case of multimodal transportation, provide a set of instructions to each transportation partner and make sure each provider knows who to hand over the cargo and onward shipping instructions to.

Communication with the Buyer: It’s often observed that while the goods reach the destination safely, they get spoiled at the buyer’s facility for lack of proper instructions on how to manage/store the goods. Hence, it is necessary to make sure that proper instructions have also been communicated to the buyer.

Get Adequate Insurance Coverage: Transporting perishables and fresh produce is expensive. There is also a risk of spoilage on the way. This is why insurance is critical in such cases. Before you put your cargo in transit, make sure you have the right insurance coverage for the cargo. This will ensure that you have financial support in case the cargo does not reach the destination in the best condition.

What Important Factors Should the Transporters Keep in Mind When Transporting Fresh Produce?

The transportation provider is responsible for the perishable products while the goods are in transit. Hence, it is necessary for transportation providers to also have a checklist for perishable goods and fresh produce. Here are some important points that they should keep in mind when accepting fresh produce goods for transportation:

  1. Communicate Clearly with the Shipper: Transporting perishable goods is time sensitive. Make sure you share the correct information regarding transit time, the route to be taken, contingency plans, and documentation requirements, with the shipper at the time of inquiry. This not only helps the shipper make an informed decision, but also helps your business avoid unnecessary risks.
  2. Get All Required Details from the Shipper: The transportation provider should double-check if the shipper has supplied all the required information or not. In case any crucial detail regarding the product is missing, they should proactively ask for it from the shipper prior to departing in order to avoid delays in transit
  3. Discuss Packaging Requirements: Check with the shipper how the goods will be packed and labeled. In case there are any specific requirements for packaging and labeling at your end, communicate the same to the shipper. It is important to get the packaging and labeling right in case of perishable goods as they need to be handled with care and can spoil easily.
  4. Understand Handling and Temperature Instructions: For perishable goods, the transportation provider needs to understand how the goods are to be handled and what temperature is to be maintained while the goods are in transit. Also, check if there are any specific guidelines on how the temperature is to be managed while the cargo is being loaded/unloaded.
  5. Assist the Shipper with Documentation: Fresh produce and perishable goods often have more documentation needs than regular cargo. Sometimes shippers, especially those new to the trade, are not aware of the cross-border documentation. In such cases, it becomes the transportation providers’ duty to make sure the shipper completes all documentation requirements in the right format. This not only helps complete the shipment formalities but also helps the trucker while crossing the state borders.
  6. Service the Reefers Before Allotting: The transportation provider should make sure the reefer is properly serviced, cleaned, and checked before it is allotted to the shipper. They should also monitor the temperature throughout the transit and report any discrepancies to the shipper.
  7. Train Your Drivers to Handle Perishable Goods: For transporting perishable cargo safely, it is essential to have experienced and trained drivers on board. The driver should understand the handling instructions of the fresh produce and be able to manage temperature settings of the reefer container.
  8. Update the Shipper Timely: Share regular status updates with the shipper while the goods are in transit. In case there are any issues with the container or temperature monitor, inform the shipper immediately, and seek alternative solutions.
  9. Deliver On-Time: It’s a good practice for logistics and trucking service providers to deliver goods on time. In the case of perishable goods and fresh produce, on-time delivery is crucial as even a slight delay in transit can affect the quality of goods, spoil them or make them unfit for consumption. Hence, it is necessary to make sure that the entire team handling the cargo understands the importance of on-time delivery!

If you’re looking for a reliable partner to transport your fresh produce and perishable goods, get in touch with our team today! We not only take responsibility for delivering your goods on time but also ensure that you get access to an online platform powered with advanced technology to plan and monitor your shipments more effectively!

Vertical Farming: The Next Level of Produce

The overall Consumer Price Index (CPI) has seen a nominal increase of 0.1 percent for the 12 month period ending May 2020, according to the U.S. Bureau of Labor Statistics. While this is an average across all measured goods and services, food is showing something completely different. According to the CPI, the total food index has increased by 4.0 percent while the food at home index has jumped up by 4.8 percent.

Month-over-month, there has been an increase in the cost of food, most notably a 3.7 percent increase for meats, poultry, fish, and eggs. Beef, in particular, has seen a massive up jump at 10.8 percent, the largest monthly increase ever.

Month-over-month, there has been an increase in the cost of food, most notably a 3.7 percent increase for meats, poultry, fish, and eggs. Beef, in particular, has seen a massive up jump at 10.8 percent, the largest monthly increase ever. This created an obvious concern for increasing prices in consumers and retailers alike, both of which are bracing themselves for further price increases as food production struggles with a myriad of issues, ranging from plant closures to the loss of farm labor.

While we can attribute at least some of the CPI increases due to more people dusting off their cookbooks during the quarantine period, there are other issues to consider as well. Arable land is subject to both inconsistent weather conditions as well as natural disasters. For example, an unexpected frost can wipe out an entire crop causing a significant delay in production and output. While that’s not great for farmers, it can also create shortages in the food market at both the consumer and commercial level. However, that might be an issue of the past before too much longer as indoor, vertical farms begin to take root.

Growing UP with the Fifth Season

For the uninitiated, vertical farming (as we are discussing) is the concept of growing consumables in a stacked and modular fashion which drastically increases crop yield per acre than traditional farming.

Vertical farming is actually a rather old idea. Indigenous peoples used vertically layered growing techniques like the rice terraces of East Asia. The term vertical farming was coined by American geologist Gilbert Ellis Bailey in 1915. In 1999, Dickson Despommier, a professor at New York’s Columbia University, popularized the modern idea of vertical farming, building upon the idea together with his students,”

Not only is the indoor farming movement growing, it’s thriving.

“It is the inefficiencies across the supply chain from farm to truck to packer to supermarket and foodservice that has fueled the burgeoning indoor farming industry, which in 2017 accounted for $106.6 billion and expected to reach $171.12 billion by 2026 growing at a CAGR of 5.4 percent during this period, according to the Worldwide Indoor Farming Market Report,” according to a recent article from Forbes.

Fifth Season is an indoor farming company, based just outside of Pittsburgh Pennsylvania, combines vertical farming concepts with proprietary robotics and artificial intelligence.

While neither indoor nor vertical farming is anything new, after all greenhouses have been around since the 1800s, Fifth Season is taking vertical farming to a whole new level. Fifth Season is an indoor farming company, based just outside of Pittsburgh Pennsylvania, combines vertical farming concepts with proprietary robotics and artificial intelligence. CEO and co-founder of Fifth Season, Austin Webb, is looking to disrupt the nation’s produce market by creating a completely new category of “hyper-local” fresh produce. Currently, two of Fifth Seasons’ biggest clients are the Giant Eagle supermarket chain and Whole Foods.

At 25,000 sq.-ft growing space, Webb’s company is seeing double the yield of traditional vertical farms, almost 500,000 lbs of produce in the first full year of operation. What’s even more impressive is the produce is grown using 95 percent less water and 97 percent less land than conventional farming. All of which is grown without the need for pesticides and has an average shelf life that lasts for weeks instead of a few days that is normal for shipped produce.

A New Future for Farming Supply Chain

Unfortunately for produce, the supply chain just isn’t nearly efficient enough for large scale distribution. Produce is typically harvested, then loaded onto a truck to be shipped for packing or processing. From there it’s loaded onto another truck before it reaches its final destination. That leads to a higher risk of spoilage and shrink.  Fifth Seasons use of machine learning, AI, and computer vision gives them the ability to track and trace down to an individual tray within their farm. Webb says this gives his company and its customers a whole new level of transparency that wasn’t previously available. The technology creates information from “seed, to harvest, to package, to a doorstep, to a table (or store shelf).”

This is about more than just fresh vegetables, however. This level of vertical farming has some interesting implications for the supply chain as a whole.

This is about more than just fresh vegetables, however. This level of vertical farming has some interesting implications for the supply chain as a whole. For starters, it drastically cuts down on the total mileage that fresh produces need to travel which, in turn, lowers overall food costs and transportation costs for customers. Moreover, hyper localization of production could lead to an interesting shift in logistics and food production in general.

A Cool Move for BlueGrace

Produce, like many perishables, requires the use of refrigerated trucks to keep goods fresh as they travel across the country. With vertical farms like Fifth Season boasting such a prodigious level of production, the need for reefer units will be that much greater. That is why we are proud to announce our newest acquisition, Anthym Logistics which has significantly bolstered our refrigerated truckload capacity for our customers. To learn more about Anthym and BlueGrace or to see how we can help your operations, visit us here.

Call us at 800.MYSHIPPING or fill out the form below to set up a consultation with one of our supply chain experts who can help you springboard your agricultural logistics operation into 2020 and beyond.

Is Your Supply Chain Ready For Weather Disruptions?

To a large extent, Supply Chain and uncertainty go hand in hand. Driver delays, transportation failure, strikes, hike in fuel prices, carrier capacity shortage, vendor hold-ups, thefts, and fires at warehouses are all common issues in the supply chain ecosystem. Most supply chain leaders are not only aware of them but also have alternate plans or solutions ready to tackle these issues as and when they arise.

However as supply chains become increasingly global in nature, businesses not only have to contend with minor uncertainties but also have to manage larger global disruptions that may threaten their very existence. These disruptions are like black swan events which no one can forecast or plan for in advance. They arrive on the horizon suddenly and upset the status quo, often requiring a rearrangement of how the business functions and manages its supply chain in the future.

What Global Disruptions does the Supply Chain need to be aware of?

Globalization has added a layer of complexity to business operations. Now businesses have to keep an eye on what’s happening around the world and be able to identify possible threats to their business in all the countries that they operate in or source raw materials from.

Natural Disasters:

Natural disasters are the most common global disruptors. Wildfires, earthquakes, hurricanes, storms, and floods can interrupt regular operations for a long time in the country that they happen in. It can take years to rebuild factories and get them operating at optimum capacity. For example, according to reports, the 2011 earthquake and Tsunami in Japan had caused grave damage to infrastructure and manufacturing facilities in the country. Given the wide scope of Japanese companies’ operations, the impact of the earthquake and Tsunami was felt by their business partners around the world.

Political and Trade Relations:

Cordial political and trade relations amongst the governments of the originating country and the nations that the organization wants to do business are a must for smooth operations. If there’s any change in the relationship either political or trade, it can become difficult for the business to carry out its business activities without disruptions. A recent case in point is the ongoing trade war between China and the US. This has not only soured relations between the two nations but has also created a tumultuous situation for other nations involved in international trade with the two countries.

Similarly, an unfavorable change in foreign trade policies – without the threat of a trade war – due to political fallout or change in the growth strategy can make it hard for foreign businesses to sustain long term in the country.

Economic Factors:

Another factor that can derail supply chains across the globe is an economic recession. If any of the major economies of the world like the US, China, Germany, India, France, and the UK experience an economic downturn it is bound to impact the nations that it does business with. A major economic failure can also lead to a global recession like the 2008 global recession which led to many businesses closing shop or limiting their reach to certain geographies only.

Cyber Threats:

Since digitalization and technology have become an integral part of the supply chain, another threat that can cause great damage to not only the business but also customers are cyber attacks. These attacks on technology and systems can impact a business’s reliability, trustworthiness, and endanger the trade and even personal data.

Unlike the regular supply chain disturbances, these threats are unforeseeable and due to their unpredictable nature, not easily manageable. Each event – even if it is of the same kind – requires a specialized and unique response.

The better prepared a supply chain is to respond to a sudden event, the more likelihood of it overcoming the challenge and sustaining its operations. Hence, now more than ever it has become critical for supply chains across the globe to assess themselves against invisible threats and prepare to deal with black swan events as and when they occur.

What can you do to make your supply chain ready to weather disruptions?

While there is no fixed roadmap on how to deal with these kinds of threats, there are a few steps that businesses can take to safeguard their interests and bounce back with minimum possible damage.

  1. Imagine the unimaginable: Organizations now need to think ahead and plan for events that may or may not happen. It is critical to simulate scenarios that can disrupt your business and find solutions to overcome them before these scenarios play out in the real world. Create a contingency plan for what-ifs: for example – what would you do if an earthquake struck your manufacturing facility or if one of your vendors had to temporarily close down business because his unit was in the eye of the storm? Do you have an alternative option? If not, then that’s where you start your planning.
  1. Find substitute suppliers: We have often highlighted the importance of having multiple trusted vendors on board. There’s no better time than now to reiterate this point. Find vendors in different regions when the business and the world is functioning in normal conditions. Try out a few transactions with them and work on building a relationship with them. Access to vendors in different regions can help keep the business running  even if there’s some disturbance in one region or country. This will enable you to keep your supply chain functioning.
  1. Build alternative service providers and business partners: It’s not just the suppliers that you need to keep your supply chain up and running. Along with a roaster of trusted suppliers you also need to build a repository of other service providers and business partners such as transporters, shipping lines, warehousing facilities in all the regions where your business operates. This is critical because if you have to shift your business from one sector to another due to some contingency, you will know who to hire and partner with.
  1. Identify the pain points of your supply chain: No business or supply chain is perfect. Some have a strong inventory management system but a poor relation with transporters. Others have a rigorous forecasting procedure in place but struggle with people management or may have customer issues. Any of these weak points have the capability to be further aggravated during an emergency. Hence, it is critical to know the pain points of your supply chain and work on finding viable solutions.
  1. Make data security a priority: In the current scenario where technology is a part of every function and system within an organization, data security has become critical. It’s not just your business data that is at risk, but also the information that your customers and vendors share while doing business with you that is in danger. Even a small breach of data can put your and your customers or business partners at risk. So make technology and systems audit an integral part of your organization.
  1. Learn from past disruptions: Maybe the earthquake in Japan did not impact your business or the hurricane Katrina did not affect your region, but it did cause damage to other businesses and regions. Observe what they did to get their business and supply chain up and running. Find out what were the difficulties they faced, learn from them, and find solutions for such situations that are viable for your business.
  1. Analyze, Analyse, and Analyse: We can’t emphasize the importance of carrying on an ongoing analysis of your supply chain. This is the only way where you can not only find out the risk to your business, but also identify threats and challenges, and work on solutions to mitigate them before they become unmanageable.

Will the analysis help in mitigating risks from black swan events? If you keep these threats in mind while conducting analysis, then it will help build awareness among your team and urge them to work on finding viable solutions.

If you need any assistance in starting your supply chain analysis journey, then get in touch with our team of experts today!

The Toilet Paper Shortage: Can’t We Just Ship More?

As the COVID-19 coronavirus began to spread across our country, and people began to absorb the full impact that it would have on our workplaces and culture, Americans reacted by heading to grocery stores and buying “essentials” in bulk. It is possible consumers had become conditioned by other natural disasters like hurricanes, tornadoes, polar vortexes and the like to expect large-scale disruptions to the traditional grocery store supply chain.

Within a couple of weeks, the news media became flooded with pictures of empty shelves and lines of people waiting for consumer package goods (CPG).  The most curious case, and the one that has caught social media by storm, is the fact that consumers are ripping the toilet paper off the shelves quicker than manufactures can supply it. When there is a shortage that means some will go without. Those waiting for their paycheck? They’re out of luck. The elderly who can’t get to the store on time? Also, out of luck. In the UK, the overbuying has led to products being rationed and price hikes. In Hong Kong, it led to armed robbery.  However, when looking at it from a supply chain perspective, the problem has a simple explanation, one that is under-reported in the media.  The true demand for toilet paper hasn’t really changed (consumers aren’t all of a sudden using more toilet paper per capita) but their collective buying behavior has caused a change in demand upstream.

The industry runs on extreme efficiency and mills work at full capacity.

Since majority of people are working from home, restaurants are closed and any public place with a restroom are closed as well, there is less of a need of “industrial” toilet paper and an increased demand for “commercial” toilet paper. The toilet paper industry is unique in that this paper is a high-volume product but low value. It also has a low value by density. It’s large in size but weighs little and costs little. This means transportation costs are a significant portion of its total value.  The industry runs on extreme efficiency and mills work at full capacity. Manufacturing schedules are based on demand having little fluctuation, but this only works if demand is steady. When demand changes this causes supply problems. According to Will Oremus, with 75% of workers now working from home people are buying more commercial toilet paper than ever before, causing a huge spike in demand for this particular category of toilet paper.

Conversely, once this coronavirus crisis ends, demand for residential toilet paper will subside quickly back to traditional levels.  Therefore, the average family will then be overstocked, and their purchases will pause for a period of time until their inventory is depleted.  At this point in time, when the CPG company replenishments arrive in stores, there will be a surplus since consumers are overstocked. 

Because there were no shortages in the raw materials used to produce this product, and demand skyrocketed, we are seeing what is called the “bullwhip effect” (seen below).  We find ourselves stuck in a situation where panic demand causes the system to produce drastically more product for which there will not be enough buyers once the inventory finally arrives to catch up.

We simply can’t just replace the toilet paper

It’s important to note that we simply can’t just replace the toilet paper that belongs on the shelves with the unused toilet paper in airports, restaurants and other closed down businesses. These are essentially two different products that come from two completely different markets (commercial and industrial). The industrial paper comes from a completely different mill than the commercial paper requiring different supply chains. In fact, people are using 40% more commercial toilet paper than usual at home than they would be at any “normal” day. If we were to redirect the industrial supply to consumer supply there would be a need to establish new relationships and contracts with suppliers, design new packaging and shipping and route new trucking routes, all of which normally take years to accomplish and extremely costly.

The customer must be convinced that excessive purchasing of toilet paper is unnecessary.”  

We are at an uncertain time right now but it’s important that our actions reflect facts and not fears. The short supply of toilet of paper doesn’t necessarily come from panic and fear; it is simply a function of the differences between the B2C and B2B supply chains for this single product. There is a spike in demand and people are temporarily buying more for their homes, therefore supply is working to keep up with demand.  The CEO of ThroughPut explains that “when there is no more that can be done on the production side, the customer must be convinced that excessive purchasing of toilet paper is unnecessary.”  

BlueGrace Logistics Joins U.S. EPA Smartway® Transport Partnership

BlueGrace Logistics today announced that it joined the SmartWay® Transport Partnership, an innovative collaboration between U.S. Environmental Protection Agency (EPA) and industry that provides a framework to assess the environmental and energy efficiency of goods movement supply chains.

BlueGrace Logistics will contribute to the Partnership’s ongoing savings of 279.7 million barrels of oil, $37.5 billion in fuel costs and 134 million tons of air pollutants.  This is equivalent to eliminating annual energy use in over 18.2 million homes. By joining SmartWay Transport Partnership, BlueGrace Logistics demonstrates its strong environmental leadership and corporate responsibility.

“Our customers rely on BlueGrace to provide reliable, cost-effective logistics solutions, and our carrier network seeks BlueGrace to develop business opportunities that meet their needs.”

Bobby Harris, Founder and CEO of BlueGrace Logistics, commented on this achievement by adding, “Today’s freight shipping clients are increasingly demanding accountability and transparency from the companies in their supply chain, including their transportation partners.  As one of the most progressive third-party logistics (3PL) companies in the United States, BlueGrace play a central role in the national supply chain. Our customers rely on BlueGrace to provide reliable, cost-effective logistics solutions, and our carrier network seeks BlueGrace to develop business opportunities that meet their needs. Our clients want us to help address growing demands to improve environmental performance and address environmental risk throughout their supply chain.  This SmartWay Transport Partnership with the EPA brings BlueGrace closer to reaching all of these goals.”

Developed jointly in early 2003 by EPA and Charter Partners represented by industry stakeholders, environmental groups, American Trucking Associations, and Business for Social Responsibility, this innovative program was launched in 2004. Partners rely upon SmartWay tools and approaches to track and reduce emissions and fuel use from goods movement. The Partnership currently has over 3,000 Partners including shipper, logistics companies, truck, rail, barge, and multimodal carriers.

About BlueGrace Logistics
Founded in 2009, BlueGrace Logistics is one of the largest third-party logistics (3PL) providers in the United States.  With over 600 employees and working with over 10,000 customers to provide successful shipping solutions, the company has achieved explosive growth in its 10-year operating history.  Backed by a $255 million investment by private equity firm Warburg Pincus, the company operates 12 locations nationwide, and its headquarters are in the sunny Tampa Bay area of Florida.

For information about the SmartWay Transport Partnership visit www.epa.gov/smartway.

Adam Blankenship, BlueGrace CCO, Talks Logistics With WFLA 970

On January 10, 2019 Adam Blankenship, the Chief Commercial Officer for BlueGrace Logistics was invited to share his thoughts on logistics, leadership and what make our industry tick with host Ryan Gorman at WFLA 970 in Tampa, Florida. Adam was able to give an overview of what BlueGrace does for our customers everyday and how a 3PL helps shippers decrease their freight costs and streamline their supply chain.

Listen to the podcast below to find out more about BlueGrace, what we do, what we believe in and how we are hiring in 2019.

Listen to “CEO Spotlight – Blue Grace Logistics” on Spreaker.

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!

How To Determine LTL Freight Classes & Avoid Reclass Fees

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One of the most common complaints our LTL Account Executives hear is that our competitors repeatedly send them invoices for shipments that are double the amount of their original LTL freight quotes. When we start doing deeper research into their invoices through our free cost analysis we often find that our competitors are using the old bait and switch to get them to accept a LTL rate that is unbelievably low, only to come back after the shipment has been delivered and add on reclass fees to the final invoice.

It’s unfortunately one of the many shady tactics other logistics companies will use to gain your company’s business. BlueGrace has a zero tolerance for this practice, and we’ve developed technology and tools to help you prevent these unexpected fees. Our experts have put together a brief lesson below on the freight class system used by most LTL carriers and how using this system will help you avoid reclass fees when quoting and booking LTL freight shipments.

The Freight Class System

Almost all LTL freight carriers use the National Motor Freight Classification (NMFC) system to design their pricing structures for transporting LTL freight shipments. There are a total of 18 NMFC freight classes ranging from class 50, up to class 500. Shipments classed at class 50 would be the least expensive to ship, while shipments at class 500 would be the most expensive. This is where other logistics companies will try and take advantage of you. They’ll often give you a rate for a shipment at a lower freight class than the actual class of your shipment to give you the impression they’ve giving you a good rate, but once your shipment is in transit and gets inspected by a carrier you’ll receive an invoice after delivery with additional fees resulting from the reclass and inspection of your shipment.

Reclass fees can have a huge impact on your company’s profitability.

Does your company charge your customers for shipping based off your LTL quotes? Imagine that you’ve broken even on shipping a product to a customer, on the sale of the item you’re making $50, but you’ve just received a freight invoice that is $100 over the original LTL freight quote you were provided by your logistics company. You can’t go back to your customer and ruin that relationship so you have to absorb the cost of that reclass fee, now instead of making $50, you’ve lost $50.

To avoid this we recommend determining the freight class of your shipments yourself and utilizing our BlueGrace Freight Class Density Calculator to make the job easier. While some items such as automobile engines and flooring might have standard freight classes that don’t change, there’s thousands of other commodities that have their freight classes determined by the density of the shipment.

BlueGrace Freight Class Density Calculator

In the below screenshot you can see for yourself how simple using this system is to obtain your own freight classes! Using our Freight Class Density Calculator you would simply type in the dimensions of the pallet (length x width x height) and input the total weight to have our system provide you with an accurate freight class.

http://densitycalc.mybluegrace.com/

You would then take this freight class and input this into our Blueship system to obtain quotes, book your shipment and retrieve your BOL all on your own and within just a few minutes without having to put your faith and company’s profitability in the hands of another logistics’s company Account Executive. Not only will this save you time on quoting and booking shipments, but it’ll give you extra peace of mind knowing that you aren’t being taken advantage of.

If you’re ever in doubt about the correct freight class for a shipment don’t hesitate to reach out to our BlueGrace Team directly at 800.MY.SHIPPING or fill out the form below. 

BlueGrace Takes 1st Overall At 2018 SportsFest

At BlueGrace, Core Value #3 is “Pursue Outrageous Goals.” Working as a TEAM to pursue these goals is one of the most important dynamics of our company culture; from the way we come together to ensure our customers always have an excellent experience to way we band together to hold one of the largest pet food drives in the country to benefit our furry friends at Humane Society of Tampa Bay, our teamwork is evident. BlueGrace has been bringing our game faces to St. Pete Beach to compete at Corporate SportsFest for the past 8 years in a row, and the goal was always the same – to be #1 out of 200 companies. Core Value #3: Pursue Outrageous Goals.

SporstFest competitive events include volleyball, corn-hole, a surf ‘n turf relay race, dodgeball and tug of war. What may seem like a day of fun in the sun quickly proves to be a challenge reserved for the competitive heart – with the heat, sand and continuous rounds to compete in, there’s definitely no time for sun bathing! As always, our employees had one thing in mind: getting that #1 spot and showing everyone else what we’re made of. We put on our BlueGrace Gear, repped our #LetsDoThisSHIP hashtag, and brought our a-game to the beach!

1st Place Overall for 2018!

WE. DID. IT. Our outrageous employees beat 200 other companies and 4,000 other people at SportsFest 2018 and earned the #1 Company title at Corporate SportsFest this year! Can we get a WOOOO!? Congratulations to all BlueGrace employees who attended and competed in SportsFest 2018. With 200 Tampa Bay companies participating and over 4,000 competitors, SportsFest is always a wildly successful event that embodies team building, solid competition and fun. Exhausted, but ecstatic, our team returned home victorious and more engaged with both coworkers and customers. We’re extremely proud of our team and their drive to succeed! Congratulations to all of the other finalists that competed this year, and kudos to all that participated in Corporate SportsFest 2018!

Checkout our 2018 team video!

Want to join our team?

BlueGrace Logistics is hiring and we want you to join our team! From Sales and I.T. to Finance and Customer Support, we have a position for everyone! Visit http://mybluegrace.com/careers for more information

The Top 7 Questions You Should Ask About Your Freight

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Businesses that utilize freight are often making tactical, short term, economical decisions in their transportation department. Making short term decisions can be good temporarily but may be detrimental to the department they are supposed to serve. True growth can only be achieved by making strategic, long term decisions with good business partners. All good decisions start with great questions. Your 3PL partners should be asking you the right questions about your transportation goals and needs from the very beginning of the relationship.

The Top 7 Questions You Should Be Asking About Your Freight:

  • What is your main KPI (Key Performance Indicator) when it comes to transporting your goods?
  • What is your damage % and how is it currently handled ?
  • What is your general rate-increase mitigation strategy?
  • How has the deduction in fuel cost affected your spend year over year?
  • Have you considered integrating your ERP (Enterprise Resource Planning) system into a TMS (Transportation Management System)?
  • What is your freight cost as a % of sales normally?
  • What have your latest consolidation opportunities looked like as far as mode optimization?

Lets’ take a look at each question and why it should be important for your business transportation department:

1. What is your main KPI (Key Performance Indicator) when it comes to transporting your goods?

KPI’s help all sides of your transportation program. Deciding which indicators are most important for your particular type of freight puts your team and your 3PL on the same page so there is no questioning of the program’s success. From delivery times to damage %, KPI’s will produce real numbers that need to be met. BlueGrace is dedicated to meeting all agreed upon KPI’s.

2. What is your damage % and how is it currently handled ?

Because we track damage % as a KPI, we are up to date on what that number is at all times. How the damage is handled is another issue. BlueGrace is able to handle those claims and report on them as well, so it’s important ti ensure that is happening for your team.

3. What is your general rate-increase mitigation strategy?

Rates fluctuate and move from carrier to carrier. Staying on top of the increases can make or break the the costs of your transportation department. BlueGrace is known to have one of the best pricing teams in the logistics industry, so we are always looking for these types of increases. Our customers are notified as quickly as they are able to forecast and prepare for pricing changes.

4. How has the deduction in fuel costs affected your spend year over year?

Fuel costs can dramatically effect your transportation costs. You should be able to see variances year over year and changes in your overall costs. BlueGrace monitors fuel costs and provides reporting on any effects to your program.

5. Have you considered integrating your ERP system into a TMS (Transportation Management System)?

How many steps does your transportation department currently take to quote and schedule your shipments? If it’s becoming increasingly more difficult to manage the day to day in your transportation department, in might be time to integrate your systems. At BlueGrace we specialize in the integration of ERP systems through our BlueShip 3.0 TMS. By streamlining these manual processes, time is saved and visibility is greatly increased.

6. What is your freight cost as a % of sales normally?

This percentage should be determined and maintained through your partnership with your 3PL and fluctuations in % need to be monitored. At BlueGrace, we work with you to decrease the % of freight costs with automation, our carrier relationships, and enhanced support.

7. What do your consolidation opportunities look like as far as mode optimization?

Consolidation opportunities are everywhere if you have the data to determine them. The most commonly overlooked consolidation opportunity is intermodal. Rail has become an increasingly attractive mode to full truckload shippers with the only difference being longer transit times to the shipper and consignee. Do you have volume shipments with an LTL carrier that could be shipped partial truckload? BlueGrace has experience in data analysis and we can help when it is time to optimize.

These 7 questions are the first big step to optimizing your transportation department. If you need help with your current freight, or are not seeing the results from your current 3PL, feel free to contact us at 800.MY.SHIPPING and we will be glad to discuss all 7 questions and help you succeed!