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How Technology Can Enhance Your Supply Chain In Four Ways

Supply chain disruptions are just a part of doing business. Seasonal events such as holiday shopping, black swan weather events, geopolitical tensions, and, in the case of 2020, a global pandemic. Anyone of these disruptions can cause a slow down in your supply chain and any combination of them can bring it to a screeching halt. Especially when that disruption has the ability to affect the entire world.

Nearly 75% of U.S. companies reported supply chain disruptions due to coronavirus-related issues.

According to a March survey conducted by the Institute for Supply Chain Management, nearly 75% of U.S. companies reported supply chain disruptions due to coronavirus-related issues. Before COVID-19 broke loose, most industries haven’t really felt the need to test their supply chain resiliency, or at least not to the extent that it is being tested now. Today, supply chain resiliency has taken on a new meaning and now includes aspects such as geographical diversification, visibility, and surplus capacity. These new considerations extend from raw materials to finished goods. 

What organizations needed from the outset of the pandemic, and will continue to need for the foreseeable future, is a reliable means of predicting COVID-19 cases as well as their current supply levels, product burn rates, and possible obstacles to sourcing materials.

As most companies haven’t found a reliable means to practice divination we’ve found that, with the right technology and data, this is possible.

As most companies haven’t found a reliable means to practice divination we’ve found that, with the right technology and data, this is possible. Here are four ways technology can help your organization build a stronger, more proactive supply chain. 

1.   Drive Comprehensive Supply Chain Visibility

Growth in global trade over recent decades has given rise to ever-increasing levels of complexity in supply chains. Few organizations likely evaluate the total network of manufacturers, distributors, and other logistics professionals who are all accountable for ensuring that the journey from raw material to delivered finished goods runs smoothly.

Yet 68% of product disruptions are a result of poor demand signaling. Global pandemic notwithstanding, the overall health and success of a supply chain rely on the ability to access accurate data with transparency into the whole of the supply chain. 

The health care supply chain is a perfect example. Early 2020 saw the initial outbreak of the Coronavirus and a drastic spike in demand. This was coupled with export bans from countries that supply more than 80 percent of the raw materials that are used to create personal protective equipment which created widespread shortages. In many hotspots around the world, supplies went from two-week worth of PPE supplies in February to only a few days’ worth by March.

Real-time data on the total supply chain enables organizations to accurately identify the intersection of demand and supply

Real-time data on the total supply chain enables organizations to accurately identify the intersection of demand and supply, secure product more effectively and sustainably, and better ascertain the potential risks with suppliers. Using a trusted supply-chain analytics platform delivers the reliable and precise data needed for organizations to identify areas of product vulnerability and introduce safeguards, whether it be a small disruption or something on the scale we’re seeing with COVID.

2.   Properly Managing a Complex Supplier Network

Within any multifaceted organization lies the beating heart of a complex supply network which consists of thousands of vendors working across multiple sites and regions that provide supplies and supporting operations. For example, an integrated health care system master vendor list can include upward of 6,000 distinct organizations, suppliers, vendors, and manufacturers.

Given the complexity, it is understandable that many organizations lack the ability to manage thousands of suppliers and their associated contacts

Given the complexity, it is understandable that many organizations lack the ability to manage thousands of suppliers and their associated contacts, proactively track services performed, and manage timely invoicing and payments.

To better manage the sheer multitude of vendors and reduce the overall risk of shortages and disruptions, organizations need a holistic strategy that typically includes the enlistment of a 3PL partner. Third-party logistics service providers can offer a procurement platform that leverages real-time data to more accurately manage vendor contracts, provide service verifications, automate invoicing and payments, manage overall supply chain costs, and improve the efficiency of the supply chain as a whole.

3.   Pinpoint and Engage Diverse Supply Chain Partners

Supplier diversity is a facet of the supply chain that has often taken a back seat to overall operations. However, as many organizations have had to learn the hard way, diversification is crucial to mitigating disruption.

While large companies are great for churning out products at a steady rate, small community businesses can help to fill in the gaps of your supply chain

While large companies are great for churning out products at a steady rate, small community businesses can help to fill in the gaps of your supply chain. Due to their size and agility, these companies can turn out projects with quick deadlines, as well as provide value-added services and products on a regular basis. For the healthcare industry, supplier diversity is essential, as it improves inclusiveness and equity, builds trust between patients and providers, and improves health outcomes for patients.

3PLs can help to solve this problem by linking you to a network of dedicated and reliable service providers, such as carriers

The challenge, however, is finding and vetting quality service providers, which is often difficult for larger companies, regardless of industry. 3PLs can help to solve this problem by linking you to a network of dedicated and reliable service providers, such as carriers, from their pool of trusted professionals, which allows your company to build a stronger supply network while reducing operations spending.

4.   Using Technology to Create a Disaster Preparedness Plan

The pandemic has caused a surge in demand across a wide variety of industries, as consumers have increased web orders across all e-commerce shopping platforms, a trend that will only continue to grow as we approach the holiday season and continue to see a resurgence in the spread of COVID-19 around the world. However, demand surges aren’t just limited to the pandemic, but can be triggered by black swan weather events such as hurricanes and winter weather.

These surges cause a significant jump in spot rates, which can throw your transportation budget completely out of balance.

These surges cause a significant jump in spot rates, which can throw your transportation budget completely out of balance. Not only do these spot rate jumps take months to return to pre-disaster levels, but the overall capacity shortage created by the demand hike can disrupt and delay the flow of your supply chain.

The technology systems that come with the right 3PL partner can not only help you improve your disaster response, but also help you find capacity when you need it most.

Strengthening Your Supply Chain with BlueGrace

With a technology-enabled supply chain, organizations can better allocate critical products and supplies while saving money, time, and―in some cases―lives.

Since 2009, our passion for logistics has helped shippers connect with carriers and keep our customers’ supply chains moving. We are dedicated to developing cutting edge, best in class technology that helps to drive savings, visibility, and efficiency into your operations. Contact us today to learn more about how BlueGrace can help your business not only survive these trying times, but thrive.

Preparing for 2020’s “Shipageddon”

2020 has been different from the norm in just about every single way imaginable, so it should come as no surprise that freight is going off the rails. This year we’re seeing big box retailers like Target and Walmart opening their Black Friday deals decidedly earlier than usual. Amazon, of course, has been leading the way in e-commerce sales for the better part of the year as quarantine and lock down restrictions forced many shoppers to go online, rather than in-store.

As we approach the holiday season, it is expected for cargo freight demand to rise to accommodate holiday shoppers.

As we approach the holiday season, it is expected for cargo freight demand to rise to accommodate holiday shoppers. This year, however, we’re also seeing a historic rise in import volumes measured in TEU (twenty foot equivalent unit) especially on lanes from Asia to the Pacific Coast. Containers and container spaces on ships are sold out and there is now a shortage of available containers in Asia for goods coming to the US. This leads to higher rates, longer lead times, congestion at the ports and higher rates for trucking and rail out of major port markets, especially Southern CA.

“To give you a sense of the demand right now, we are turning away  — each week  — more cargo than we are carrying,” revealed Matson CEO Matt Cox, referring to the scramble for slots on his company’s two China-U.S. services.

Holiday Cargo is Still Moving

When you have a massive amount of freight coming in by sea, it then has to be transferred over to land based carriers. Higher port congestion will create delays, bottlenecks, and an overall lag in the supply chain process. Again, this isn’t anything new for the holiday season. However, more holiday cargo is still being shipped and container and ocean freight space is still being oversold or cancelled. This situation could lead to the perfect storm scenario being dubbed “Shipageddon” in which freight doesn’t make it across the Pacific on time. Cox didn’t say anything to assuage such fears.


“What typically happens is that sort of by the end of October, most of what is going to make its way into the holiday-season shopping cycle will have arrived. That’s not what we’re seeing,” he warned.

“We’re seeing significant congestion in Asia. Although I’m not talking about Matson, we’re seeing cargo that wants to get on a ship that’s being rolled [pushed back to a subsequent sailing]. And we’re seeing the other international ocean carriers put in additional extra loaders [ships not in the normal service rotation]. This is not a typical season. There’s such demand for cargo. Many of our customers can’t keep up with the demand and cargo is back-ordered. For all of those reasons, we’re expecting to see the season extended. To when is the big question.”

Land Freight is About to be Buried

As we mentioned early, what arrives by sea must be shipped by land, be it to a retailer or a distribution center. With this massive uptick in ocean freight, we’re going to see a massive surge in truck freight for both the full truckload (FTL) and the less-than-truckload (LTL) sectors.

In addition to ocean freight space being well overbooked, there are other drivers for this potential shipping doomsday scenario.

Inventory Restocking Freight: While the holidays mean more toys, seasonal, and giftable merchandise, there are still the standard everyday items that stores need to carry for consumers. As we get closer to the holidays, retailers are hitting stockouts and empty shelves faster than ever. To complicate matters, investment bank Evercore ISI released a survey finding that shows 90 percent of respondents said their inventory levels were either “too low” or “a little too low” which suggests that the capacity shortage will continue, if not worsen, for sometime.

Higher than Average Holiday Spending: This year will also mark a potential rise in holiday spending that could range anywhere from a 1.9 percent increase in consumer spending to a 3.5 percent increase, pending the release of an effective pandemic relief bill and the release of a successful COVID-19 vaccine, according to RetailDive.

Holiday Shopping is starting Earlier and Lasting Longer: As we mentioned earlier, major retailers have begun their Black Friday deals well in advance of the typical holiday. Walmart has announced their “deals for days” holidays sales campaign, in which holiday sales will go on for the entire month of November. Target, and Amazon have also responded similarly, and it can be expected to continue right into the Holidays.

Last Mile Delivery is At Capacity: Major carriers such as UPS, FedEx, and the USPS, have had massive seasonal hiring events to try and bring in enough personnel to accommodate the influx in demand. Even with the staggering amount of seasonal workers to process, pack, and ship incoming packages, these carriers are warning consumers to shop now and ship earlier if they want to have their items arrive before the holidays. 

What Does this Mean for Shippers?

For shippers based in the United States, it’s about to be a bumpy ride. Capacity rates are going to be at a premium and even then, might not be available. To make matters worse, there is no way of telling just how long this is going to last, or how much worse it will get. It is important that shippers begin preparing immediately for what will be one of the busiest holiday seasons in memory.

Fortunately, you don’t have to do it alone. We here at BlueGrace are also making preparations for the holiday season and are ready to help you connect with carriers to ensure your freight gets to where it needs to be. Find out more about what BlueGrace can do for you and your supply chain today!

Will Q4 of 2020 Change the Way We Look at Bid Season?

If it were a normal year, the fourth quarter would bring a steady increase in trucking rates. However, 2020 has been anything but normal, so what does that mean for Q4?

Given that everything this year has been so drastically different from what we would expect, 2020 has been guided at best by short term predictions. It was predicted that Q2 would have lower rates due to lockdown, and while they were low, they still exceeded predictions. During Q3 we saw a surge in trucking rates, likely triggered by the e-commerce boom, and it’s expected to continue throughout the year. All signs are pointing to a prolonged trucking rally, despite the pandemic and political uncertainty in the U.S.

Ultimately, we’re in for something completely different for the fourth quarter than we’ve ever seen before.

Ultimately, we’re in for something completely different for the fourth quarter than we’ve ever seen before. All historical data is essentially being tossed out the window as 2020 has been unprecedented in so many ways. With bid season fast approaching for shippers, understanding what Q4 has in store will have a tremendous impact on how you go about your bidding process for 2021. 

High Q3 Rates Will Lead to Even Higher Rates in Q4

The pandemic has caused a shift in consumer spending due to social distancing measures and the lockdown period across the United States which has caused a spike in trucking demand. Despite the economic strains and widespread job loss that was experienced by many consumers, retail sales haven’t weakened. Instead of eliminating non essential spending, consumers have shifted their purchasing habits away from services and over to material goods, especially through e-commerce platforms.  

This means that retailers have been seeing peak volumes well in advance of the holiday spending season, causing them to struggle to keep stocks replenished. The demand has been reducing inventory levels, while sales remain strong (and continue to grow) leaving no buffer period before sales really start to climb in November and December as consumers begin their holiday shopping.

These two factors combined can result in elevated truckload spot rates and capacity shortages through the end of 2020 and potentially continue well into 2021.

With reduced inventory, a rise in demand for consumer products such as retail and grocery, and the continued recovery of industrial production will continue to push growth in truckload demand. However, challenges in the U.S. with the dwindling pool of truck drivers will continue to result in capacity shortages throughout several industries. These two factors combined can result in elevated truckload spot rates and capacity shortages through the end of 2020 and potentially continue well into 2021.

To add to the logistic nightmare, consumers now have an inherent expectation for fast shipping from e-commerce sites as well as a wider availability of pickup options which means that retailers are pressured to offer competitive shipping times or else lose out on sales to companies like Amazon.

Even with the current unemployment rate, the housing market is growing and consumer spending remains high.

The United States continues a strong economic climate despite, or perhaps in spite of, the uncertainties 2020 has given us; from social unrest due to the presidential election, to the ongoing struggle with COVID-19. The stock market is high and there is a growing optimism for an economic upswing ahead. Even with the current unemployment rate, the housing market is growing and consumer spending remains high. However, the economy could still be vulnerable, especially if the stock market is responding primarily to low interest rates and has an underlying weakness to its overall stability.

What can shippers do to manage current market volatility?

If we’ve learned anything from 2020 is that historical data is all but useless, as everything is different from the years we’ve seen prior. With bidding season on the horizon for 2021, it’s important to make sure that your organization has a clear direction on how to manage its bids to avoid redlining your freight budget.

An important place to start for your business in 2021 is with your routing guide procedure. Take another look at this document, make sure it’s up to date. Make sure you adjust for current rates and that it contains all your current requirements. It might be necessary to rebid for the short-term when the truck capacity is tight. Perform detailed research on market conditions and decide how long this customized “mini-bid contract” will last. As always, utilize freight forecasting and reporting to help manage your spot bids and awards.

How BlueGrace Can Help You Get the Most Out of Your Bid Season

In this year, more than ever, we need to think outside the box. In a constrained and uncertain market, this creates challenges for shippers. Last year, when demand was low and supply was outpacing demand, shippers had easy RFP cycles with carriers and brokers undercutting each other for rates. Programs like our Low Volume Aggregation program are attractive in the current market and can help shippers make sustainable bids for the upcoming year that will help them thrive during the uncertainties ahead.

Read more about our LVAP program here, or contact us using the for below to see how we can help your company succeed.

How Can A 3PL Help My Organization Grow?

Now, more than ever before, businesses are being tested. Between the political climate of a tense presidential election year, the global pandemic, and natural disasters, many organizations have been finding it difficult to keep their doors open, let alone grow. However, there are a few paths forward that can lead to a company’s growth and financial well-being. One of those paths that is being chosen more frequently by companies in various industries is to partner with a third-party logistics provider. 3PLs offer a vast wealth of knowledge and experience in improving and streamlining operations and bringing new technology to the table. Combined, 3PLs have the potential to help companies overcome the logistics obstacles that block the way to overall growth.

Supply chain operations are often ignored so long as they’re operating within industry standards and customers remain relatively happy with the service these operations provide.

Business growth is often hindered by the limitations of supply chains and the silo of logistics operations. Supply chain operations are often ignored so long as they’re operating within industry standards and customers remain relatively happy with the service these operations provide. The issue with this is that there is little room amongst the status quo for improvement and growth, or to unlock potential savings. Logistics operations, even logistics operations done well, sometimes lack a view of the ‘big picture’, partially because of the way that these operations are often pushed into their own box to maintain operations.

Oftentimes, supply chains are viewed as a separate entity from the rest of the organization. However, the supply chain and the logistics and transportation operations that make it function directly relate to the overall success of the business. When the C-Suite looks to the supply chain as a partner in growth, collaborates to find solutions that both cut costs and creates opportunities for expansion, they may find that partnerships with third-party logistics providers are a viable option to achieve the desired growth.

To help shippers better understand how 3PLs can help their organization grow, we’ve put together a comprehensive white paper that breaks down the various assets a 3PL can bring to the table.

3PLs and Technology

New technology is always something of a double-edged sword for companies. On the one hand, new technology is costly and the setup can be disruptive to business flow and production. On the other hand, however, new technology is often the key to growth and higher levels of efficiency and customer service.

As 3PLs often develop their own proprietary software systems, there is none more qualified to help get it integrated into your current systems to augment and strengthen what you’re currently using.

Third-party logistics providers offer a huge advantage in terms of technology. Not only is the logistics solution tried and tested, but it often comes at a lower cost than buying a new ERP outright. As 3PLs often develop their own proprietary software systems, there is none more qualified to help get it integrated into your current systems to augment and strengthen what you’re currently using.

For example, we’ve discussed how integrating a TMS into your ERP system can be highly beneficial to your operations and help to streamline shipments while increasing overall visibility. This is just one of the many benefits that come from the technological aspect of working with a 3PL.

Is your organization looking for new technological solutions to manage your supply chain but you’re not sure which direction to take or is balking at the sticker price of a new, off the rack, software system?

3PLs can Improve Your Processes

Having an efficient process to the way you do business affects many different aspects of your overall success. Not only does your process determine and control costs, but it also affects the overall satisfaction of your customers.

3PLs are experts in logistics, that is their sole purpose. Their business model revolves around the concept of streamlining and simplifying their customer’s operations so that they, the customers, can be more efficient.

3PLs are experts in logistics, that is their sole purpose. Their business model revolves around the concept of streamlining and simplifying their customer’s operations so that they, the customers, can be more efficient. A third-party logistics provider can help improve processes in two ways: first, by reviewing current processes and making suggestions for changes that will lead to smoother-run operations, and second, by actually taking on those processes through outsourcing.

  • Process Improvements: 3PLs have seen the inner workings of countless organizations, identified potential improvements, and helped those organizations effect changes to improve efficiency and cut costs.
  • Outsourcing to 3PLs: 3PLs employ a host of veritable experts in these specific processes, which makes processes more efficient, more effective, more flexible depending on changing needs and less expensive overall.

Is your organization operating at peak efficiency? If not, does it have the capabilities in-house to identify and correct inefficiencies?

3PLs can Help Audit Your Operation

3PLs often offer supply chain audits, and with their deep industry knowledge, they frequently have great insights into improving operations and strategizing for and executing meaningful growth. The 3PL’s knowledge of industry best practices combined with their tendency to stay at the cutting edge of the industry make them extremely qualified to hand down advice. When these audits are performed on a regular basis, say bi-annually, logistics practices can be assessed by a qualified, unbiased third party. These assessments can help root out second nature practices at the company and are therefore not questioned but aren’t truly serving their purpose in the most efficient way possible.

Does your organization have an in-house auditing process that is geared to making necessary operational changes?

Want to Learn More?

Of course, this merely scratches the surface of what a third-party logistics provider can bring to the table. If you’re looking to make your organization grow, regardless of what events the rest of the world has in store, a 3PL can help you reach your goal. Want to know more about what a 3PL can do for you or answer the above questions? Download our whitepaper today to learn more.

What the Freight Industry Might Learn from COVID-19

When the pandemic began to spread, the world was simply not prepared. Businesses and governments had to scramble to move an unprecedented volume of critical supplies around the world faster than we’ve ever thought possible.

Lockdowns caused a massive surge in e-commerce, leaving small and large businesses alike struggling to keep pace with the demands. The healthcare industry was pressed even harder as the call for life-saving medical equipment, medicines, food, and PPE. All in all, it had the potential to be a disaster.

What kept everything together was the express delivery industry, which not only rose to the challenge but exceeded it in many ways.

What kept everything together was the express delivery industry, which not only rose to the challenge but exceeded it in many ways. However, that is not to say that everything ran smoothly, far from it in fact. Many uncoordinated efforts led to significant disruptions even though they were based on good intentions. 

  • Some governments quarantined cargo freight crews systematically, even if they showed no symptoms or did not come from a COVID-19 hotspot.
  • Some cities imposed neighborhood-specific curfews for no reason (starting in the early hours of the afternoon).
  • Border crossings closed to all traffic, including international trucking.
  • Drivers faced inconsistent health protocols.
  • Officers at border customs operations could not reach their post because of public transportation lockdowns, nor could they work from home thanks to paper-based clearance systems.

Intense industry lobbying has managed to reverse or change these measures to allow the movement of critical goods across borders. International organizations that understand how interwoven global supply chains operate have similarly issued guidelines in order to better align with government initiatives.

However, there are still barriers in place that continue to disrupt global supply chains.

Practical Policy Changes

One of the biggest lessons we’ve learned from the pandemic is about how to streamline an imperfect system, including protocols that make global cargo supply chains not only safer for workers but more predictable. The pandemic has also highlighted the need to modernize the border clearance process as well as the need for trade agreements to promote economic recovery around the world.

The pandemic has shown the world that in order to prepare for future, large-scale disruptions, governments, and international organizations need to join forces with the private sector.

The pandemic has shown the world that in order to prepare for future, large-scale disruptions, governments, and international organizations need to join forces with the private sector.

UPS and the Global Express Association, which represents the three leading global express delivery carriers, have provided practical policy recommendations to keep supply chains operating smoothly.

Implement protocols to ensure the safety of cargo crews and other workers: Health protocols differ from country to country. Having a standardized approach would mean more timely shipping operations while limiting the spread of COVID-19.

Such protocols could include making sure that all freight industries, regardless of mode, have access to adequate PPE to prevent the spread of COVID-19. There will also need to be a more precise focus on safety management principles, using recommendations from the World Health Organization (WHO) as a foundation.

Approach border clearance like a gateway, not a checkpoint: Customs clearance creates some significant obstacles for express delivery. However, inconsistent rules and restrictions from one country to another country makes trade unpredictable.

Customs modernization is critical for fast border clearance. This means leveraging the right technology including electronic records, e-payment systems, and a digital risk management system. Countries should also embrace more progressive regulations that would help transport life-saving shipments and reduce physical contact at border crossings and during last-mile deliveries.

Existing international treaties such as the Revised Kyoto Convention and the WTO’s Trade Facilitation Agreement make this possible. To work, though, governments must fully implement the agreements.

Building a More Resilient Supply Chain in the Wake of the Pandemic

These solutions are aimed at streamlining commerce, revitalizing businesses, and providing humanitarian relief where it is needed most. The biggest take away is that these measures aren’t just for the current pandemic, but would help the world be a step ahead of the next global crisis.

Day by day, the world comes closer to putting COVID-19 behind us, but that doesn’t mean that there aren’t hardships ahead. To truly maximize the efficiency of a global supply chain, it’s going to take a holistic approach, harmonizing all the players around the world. When that happens, there’s no telling what kind of potential we can see from the global supply chain.

Digitalization Is Ushering Visibility Into Supply Chains

The North American trucking industry is extremely fragmented, as over 90 percent of all fleets own six trucks or fewer. This fragmentation, aside from inhibiting technology incursion, has impeded visibility and transparency in freight movement.

The opacity in operations impacts stakeholders across the trucking value chain. Oftentimes, this lack of visibility or transparency within the supply chain is due to outmoded and dated systems of communication.

The opacity in operations impacts stakeholders across the trucking value chain. Oftentimes, this lack of visibility or transparency within the supply chain is due to outmoded and dated systems of communication. Not only do these systems impede efficiency, but they also result in a number of missed opportunities for shippers, brokers, and carriers alike.

The adoption of digitalization within the trucking industry has spiked in recent years. A lot of it has to do with the rise of e-commerce and its associated ‘Amazon effect,’ which has created the need for expedited supply chains, especially the last-mile. This necessitated that trucking operations shed off inefficiencies especially with respect to visibility, which in turn led to a rise in innovations and the digitalization of the industry.

The Data Differentiator to Visibility

Stakeholders within the freight industry, be it fleets or traditional brokerages, suffer from siloed operations that do not interact with other functions within the same organization. This leads to data streams being trapped within workflows, thereby reducing operational efficiency and visibility.

Companies should phase out paper documentation and adopt digitalization in order to usher in visibility, and reduce complexities in gathering and processing documents. Aside from increasing efficiencies, this will also reduce material consumption, helping companies reach their sustainability goals.

With data streams being streamlined, stakeholders can leverage them via data analytics to gain insights into operations.

With data streams being streamlined, stakeholders can leverage them via data analytics to gain insights into operations. For instance, data analytics helps brokerages prime their operations to be more proactive to market volatility as opposed to only remaining reactive to change. This is particularly crucial in the age of e-commerce, where logistics businesses are expected to be malleable to continually evolving consumer expectations. To help meet expectations, leading companies are (or should be) taking advantage of linking their existing ERP systems to a TMS system.

For fleets, digitalization enables them to have visibility over driver behavior and freight movement. Aside from letting fleets provide an accurate estimated time of arrival (ETA), better visibility allows them to come up with flexible delivery models and faster shipping options.

On-demand fulfillment is a significant differentiator in the last-mile delivery segment. For this, businesses must understand customer behavior and buying characteristics – possible only by analyzing previous orders and having cognizance of market demand.

The Efficiency Perspective of the Freight Hauling Equation

Digitalization enables businesses to create greater visibility and increase cumulative efficiency across supply chains. Automation of repetitive manual tasks at the back office helps channelize worker hours in more productive and value-added endeavors. End customers gain access to shipping information, including real-time freight location, which improves overall customer service levels. Data streams are now stored in the cloud, making it easier to recall and share information between stakeholders in the value chain.

With technology like 5G coming up within the industry, high latency issues via the LTE network transmission will also be solved. Latency is the time it takes for data to travel from the place of origin (like a truck cab) to the destination – which is the cloud. High latency is a problem for data analytics, as it results in insights that are not, in essence, real-time. Bad cellular signals, which are commonplace when trucks haul through the country, result in high latency.

With 5G potentially becoming mainstream in a few years, the latency value can be expected to reduce. Stakeholders would then be able to access more ‘real-time’ insights, helping to further improve efficiencies.

Digitalization has helped businesses to eliminate cumbersome manual processes that have been an industry’s staple.

Digitalization has helped businesses to eliminate cumbersome manual processes that have been an industry’s staple. Data levels the playing field for shippers and carriers, whatever be their size of operations. With visibility being ubiquitous across the industry, the overall market can learn to handle volatility better, especially in the context of economic recession or a black swan event like the COVID-19 pandemic.

Of course, adopting new technologies is a costly and time-consuming endeavor, which discourages many companies from adopting newer innovations. This is where digital freight management, specifically third-party logistics providers (3PLs), shine. Partnering with a 3PL allows companies to reap the benefits of these digitized systems without the heavy investment cost of overhauling legacy systems.

The Top Three Undergraduate Supply Chain Management Programs

Technology continues to advance at an astounding rate, a statement that shouldn’t come as a surprise to anyone who has been paying attention during the past decade. In much the same way that we embrace new technology, we must also embrace the future generations that will inevitably carry the torch, taking your current business into the future.

While most people don’t aspire to be a supply chain leader when they’re children, there are a good number of young adults that are graduating from SCM programs at both the graduate and undergrad levels. A new study from Gartner has many of the key statistics for 2020.

Gartner’s study, which shows the top 25 Universities with Supply Chain Management degrees in the United States, revealed the following. The rankings were based on three categories of criteria: program scope, industry value, and industry size.

  • The top three undergraduate programs: University of Arkansas, Rutgers University and Penn State.
  • The top three graduate programs: Penn State, the University of Tennessee and Georgia Tech.

Interestingly enough, the format for ranking has changed for 2020, with the new scoring process to include global content, diversity, and inclusion measures. All of which ultimately means that there is a broader and deeper pool of supply chain talent to draw from.

An Ever-Growing Need for Talent

While there often seems to be a social disparity between the generations, there are strengths associated with each that can create a better, more well-rounded team regardless of the industry. Given that the supply chain is constantly in a state of flux, growth, and change, the best supply chain leaders are looking at the best ways to tap into the newest pools and recruit the top talent.

At BlueGrace, we believe in providing you the education necessary for You to be the best you can be!

With that being said, finding talent isn’t always as easy as one might expect. Yes, there are people that have these degrees and skillsets out there, but connecting with them and, more importantly, recruiting them, is often easier said than done.

Fortunately, there are resources out there that can help to point you in the right direction, such as the SCMTalentGroup, which specializes in connecting supply chain employers with prospective talent. Here are some tips from their recent series that you might want to employ in your day to day hiring strategy.

Partnering with the Right Supply Chain Universities

“Partner with universities that have the type of supply chain degree programs that align best with your entry-level job requirements, company values, and culture,” SCMTalentGroup suggests.

Working directly with the Universities can give you direct access to some of the best and brightest up-and-comers in the field. SCMTG recommends taking it a step further by building relationships with the professors in the supply chain management curriculum, as they’ll know who the top students in every class are.

“Be sure to post your jobs with each university and outline the benefits of working for your organization. Once you start hiring entry-level candidates from your targeted universities, have these employees go back to their alma mater to help recruit supply chain students,” SCMTG adds. Which is fantastic when you think about it as it creates a self-perpetuating talent generation source.

It’s also recommended that you begin to nurture relationships with prospective students early, rather than waiting for them to get close to graduation. This way, when a student begins to consider what companies they would want to work for after graduation, your company is among their top choices.

Using the Right Job Board

Don’t get us wrong, sites like LinkedIn, Indeed, and various others have their uses and many potential job seekers have found placement in various industries. The problem with these sites, however, is that they are too broad and far too generalized. While you might be able to find employees through these sites, you’re not going to find the cream of the crop, as it were.

Instead of using generalized job posting sites, try using something more specific to your industry. Using a niche job board can help your company stand out to professionals looking for employment in supply chain specific fields, which means more relevant experience and interest in your specific needs.

SCMTG goes on to list other recruiting tips, of which some or all might be applicable to your company. Finding what strategies work for your company and hiring team is important, especially when you consider the changes and growing challenges that face the supply chain every day. 

BlueGrace believes, before all things, that people come first. That’s how we started and that’s how we will continue to grow!

Looking for a Career Change?

Whether you’re in school working towards a logistics degree, or you simply have a passion for helping people find the right solution for their own business, BlueGrace has opportunities for those looking for something more than just a job. Logistics is one of the fastest-growing job sectors in the United States, and we are growing right along with it.

Are you looking to be bold, and break the mold of the daily 9 to 5 grind? Can you embrace the chaos that comes with an ever-evolving industry? Are you looking for a company that cares as much about its people as it does its clients? Get in touch with us today to learn more about a potentially life-changing career with BlueGrace!

Finalizing Your 2021 Transportation Budget – The New Normal

Freight Budgeting for 2021 is going to be very different from the traditional budgeting done in previous years. The effects of the economic shutdowns stemming from the COVID-19 crisis have trickled down to Q4 and have managed to create unforeseen supply chain challenges for business operations across North America. Organizations have addressed and responded to the situation in various ways and the adaptations have been unique to each market and industry served.  With this same principle applied there cannot be one standard transportation budget methodology applied while planning for 2021 The ability to respond to these challenges will determine the future strategies required in 2021 to ensure recovery and possible profitable performance.

The essential goods movement surged in the past months, and different modes were preferred to move these goods.

Freight Budgeting then vs. now

The evident change in consumer behavior and the booming e-commerce marketplace has opened access to new consumer segments relying on faster doorstep deliveries for products that were earlier purchased the traditional way. The essential goods movement surged in the past months, and different modes were preferred to move these goods. The industry saw more parcel shipment related movements and trucking kept the economy afloat. The crisis brought many digitization initiatives to the forefront and accelerated technology innovations. The need for advanced analytics has been stressed time and again to enable businesses to respond better to disruption.

Budgeting for 2021 will need mapping existing resources with strategy and a shift from the traditional inputs and standard approaches.

Amidst all the industry changes and shifts, the crisis has brought in excellent opportunities to learn and implement new strategies for 2021. Budgeting for 2021 will need mapping existing resources with strategy and a shift from the traditional inputs and standard approaches. The need for more incredible speed and cost control spans across all industries, therefore making it a challenging task to achieve a perfect budget for 2021. The traditional approach to budgeting, whether bottom-up or top-down, can face roadblocks with repeated negotiations and may ignore syncing strategy with value creation and resource allocation. Therefore, the 2021 budgeting should be a strategic exercise that considers data insights to unlock value and bring flexibility in resource allocation to ensure desired resilience in the supply chains.

Predictive Analytics

Predictive Analytics regarding supply chains can help provide some actionable insights into the budgeting process. The data insights can help predict customer responses or purchase behavior based on 2020 to suggest better ways to respond to demand in the coming year. Questions like how has the crisis impacted other stakeholders across geographies and what are their implications in freight budgeting for 2021?

Streamlining the freight budget process

Streamlining the freight budget process to be more responsive in disruptive scenarios is essential. The procedure to achieve such streamlined and efficient budgeting may vary from business to business this year. What may work for one company may not drive results for the other.

Operational KPIs

Comparing the recent trends and linking operational KPIs with strategic plans are elemental to drive data regarding the actual impact the business has endured in times of this economic crisis. How has the economic crisis impacted liquidity risks and how the uncertainties in the market impact these operational KPIs must be understood to plan the recovery and the strategy governing the freight budget for 2021.

A careful assessment of all factors that brought about the level of disruption for businesses this year will determine the strategies for 2021. Some may have to focus on sustaining the business while others may focus on restructuring the business to match the demand.

Finalizing Your 2021 Freight Budget Webinar October 21

At BlueGrace, we are addressing the need for a more strategic approach to freight budgeting in 2021 through a webinar. Watch the recorded Webinar now to learn how to steer your budgeting exercises for 2021 to build a more robust and agile supply chain for your business. We will address the burning questions related to planning the freight budget this year and discuss how BlueGrace is helping navigate the uncertainties of post-pandemic normalcy.

Truck Load Freight Contracts: Understanding Contract Rates and the Spot Market

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, 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. 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.

Digitalization In Trucking

Digitalization, as an industry trend in the logistics world, has emerged quite late. However, now that digitalization and innovation seem to have caught up the industry’s pace, much transformation can be expected. Digitalization refers to using advanced technologies to integrate physical and digital worlds through a seamless exchange of information occurring at different supply chain nodes. Hence, the process helps improve productivity, use data analytics for informed decisions, automate mundane manual tasks, reduce the scope of error, and induce process excellence throughout the supply chain.

Logistics, as a whole, is experiencing this wave of innovation in automation and digitalization initiatives.

Logistics, as a whole, is experiencing this wave of innovation in automation and digitalization initiatives. When we refer to trucking, digitalization may refer to a comprehensive and automated system where processes are monitored and controlled by technologies that optimize operations while directly contributing to the bottom line. The extensive growth of e-commerce is a driving force behind driving digitalization in trucking. Changing consumer behavior, prolific e-commerce discounts, same-day deliveries are all changing the way products move at different stages of the supply chain. The need for digitalization in the industry is greater now than ever.

Elements of Digitalization in Trucking

Digitalization can be witnessed in broadly four segments of the industry: Goods, Conveyance, Infrastructure, and Business Processes. Therefore, the elements of a digitally enabled trucking system can be an autonomous communication system, remote diagnostics, real-time tracking and tracing capabilities, and seamless exchange of information among integrated systems. The large-scale penetration of mobile connectivity, smartphones, geo-location tracking systems, and sensor technologies like the Internet of Things are all contributing to the logistics industry’s digital revolution. With the growing need for data analytics, the future of trucking will be mostly dependent on critical insights from analytical systems to drive forecasts, meet demand, manage risk, and reduce costs.

With the growing need for data analytics, the future of trucking will be mostly dependent on critical insights from analytical systems to drive forecasts, meet demand, manage risk, and reduce costs.

Goods: Inserting tracking devices such as a tracking bar, QR code stickers, and RFID tags in goods are common. RFID tags are quite useful in providing real-time information about location or GPS and external climate conditions such as temperature and humidity. Having such tracking systems in goods and containers that carry these goods is particularly relevant because tracking them while on transit across geographies is necessary to provide real-time data and shipment status. Sensors, connectivity, and the application are the three elements that comprise the tracking technology for shipping containers. Sensors tell the containers’ location, and through connectivity, the data transmits to the application. APIs are used to extract this data further and put it on the logistics platform to be analyzed.

Conveyance comprises the trucks, delivery vans, and other vehicles equipped with sensors that report their location, speed, engine condition, etc. to the systems.Routing and navigation are integral elements of this aspect as they facilitate improved operations considering constraints such as congestion. Autonomous trucking is finding increasing mentions in enabling digitalization in the industry. PwC, in a 2016 report, predicted that trucking and logistics would soon comprise an ecosystem of autonomous vehicles, combining driverless, cabless trucks and delivery hubs staffed by robots. It further stated that a fully automated end-to-end supply chain would be capable of building a product on a digitized assembly line with digital capabilities that signal and book transport for its delivery when it is close to being completed. The customer’s address that the goods are shipped to will be already coded, and the freight-matching system would match the available capacity on trucks destined for the specific route. While this may seem a bit futuristic at present, autonomous vehicles are invariably gaining momentum, and companies like TuSimple, Aurora, Daimler, and Embark Trucks have aggressively ventured into this avenue. German automaker Daimler AG is also experimenting with ‘Platooning’ to improve efficiency for long-haul transport. Platooning is when a single truck pilots a fleet of trucks that follow the same route and instructions as made by the driver. The trucks in platoons will be controlled centrally to ensure uniformity in speed, fuel consumption, and delivery speed.

The digitalization of infrastructure is also of utmost importance, including the things that support the transportation activities. The road infrastructure is the central element in the planning and management process of road transport. Thus, digitalizing roadways, terminals, distribution centers, logistics parks form an integral part of the initiative. Equipping infrastructure with sensors helps monitor their use and condition that enable effective traffic management systems to optimize capacity. Similarly, smart roads with sensors and data collecting devices that can detect collision points and warn nearby drivers can be of great use in avoiding road accidents.

Business processes are the glue that binds all the different elements of a supply chain. These processes support the transactional functions of freight distribution. Business processes such as inventory management, demand forecasting, assigning load to carriers, managing and allocating warehousing capacity, freight invoicing etc can all be digitized using TMS, WMS, and their integration with ERP. EDI (Electronic Data Interchange) has, for long, governed the integration of information between systems. Lately, APIs have enabled seamless data sharing for easy management of platforms and extraction of relevant data. Another technology that is enabling automation of business processes is Robotic Process Automation (RPA). This technology is non-intrusive in nature and leverages the existing IT infrastructure of organizations. The increasing adoption of Electronic Logging Devices (ELDs) as a replacement for paper logs is also an initiative to move to more digitized systems.

Benefits of Digitalization in Trucking

With the proliferation of e-commerce and the need for trucking growing leaps and bounds, the digitalization of trucking is needed more than ever now. The digitalization of trucking comes with its share of benefits that enable optimum fleet and space utilization, enhanced efficiency, significant cost-cutting, and integrated systems.

1. Optimum utilization

Empty runs of vehicles is a major cost in trucking. Inefficiencies of dispatching systems where trucks travel to pick-up destinations without load contribute to additional costs and wastage. Digital platforms interconnecting systems help in the consolidation of truck capacity are a necessity.

2. Enhanced integration

Digitization facilitates the integration of trucks in sync with the logistics chain through real-time data of locations, estimated shipment arrival times, and information regarding departure times to factories, warehouses, and customers. Such integrations foster timely delivery, better performance, and customer satisfaction, enabling them to track the shipments’ status remotely.

3. Enhanced efficiency

Digitized trucking enhances efficiencies at granular levels as well as in the broader scope of processes. By incorporating cutting-edge materials handling practices into daily operations, better allocation of space, capacity, and resources, enhanced inventory control, and significant cost reductions contribute to enhanced efficiency and productivity.

Digitized trucking will enable faster transfer of goods in and out of distribution centers and to end customers.

Digitized trucking will enable faster transfer of goods in and out of distribution centers and to end customers. Through easy track and trace capabilities and smooth booking processes, customer experience can be improved. Measurement of key performance indicators can further help improve operations. Furthermore, blockchain can enable the complete transparency of the social and environmental footprint of purchases shared with end-users. All in all, the digitalization of trucking as an industry is a win-win scenario for all.

Questions on how digitized trucking and other technology will be changing the logistics landscape for your business? Ask an expert with the form below.

Automated Logistics is On the Horizon

Boston Dynamics new CEO, Robert Playter, has his sights set on the logistics market as the company’s first vertical. BD has proven that it has the ability to produce robots at scale as Spot, a versatile quadrupedal robot, as just recently entered into commercialization.

Automation is a goal for many companies across many industries as there is a myriad of applications.

Playter, who has only recently stepped up from his role as COO of the company, spoke publicly for the first time on the company’s behalf, “We weren’t sure exactly what the target verticals would be,” he admitted, and seemingly neither did the customers, who have collectively bought about 260 of the $75,000 [Spot] robots and are now actively building their own add-ons and industry-specific tools for the platform. And the price hasn’t been a deterrent, he said: “As an industrial tool this is actually quite affordable. But we’ve been very aggressive, spending a lot of money to try to build an affordable way to produce this, and we’re already working on ways to continue to reduce costs.”

Automation is a goal for many companies across many industries as there is a myriad of applications. This has only been further enforced by the global pandemics as many industries are still working remotely or only now beginning to phase in their workforce.

“People are realizing that having a physical proxy for themselves, to be able to be present remotely, might be more important than we imagined before,” Playter said. “We’ve always thought of robots as being able to go into dangerous places, but now danger has been redefined a little bit because of COVID. The pandemic is accelerating the sense of urgency and, I think, probably opening up the kinds of applications that we will explore with this technology.”

A Not-so-New Trend In Logistics

Boston Dynamics isn’t the first company to look towards automation for logistics. e-Commerce giant Amazon has already begun blazing the trail for robots in the warehouse as a means of boosting productivity while lowering labor costs. Boston Dynamics is ready to dive into the market with a variety of different robots.

we’re going to have some exciting new logistics products coming out in the next two years. We have customers now doing proof of concept tests.

“We have big plans in logistics,” Playter said. “we’re going to have some exciting new logistics products coming out in the next two years. We have customers now doing proof of concept tests. We’ll announce something in 2021, exactly what we’re doing, and we’ll have product available in 2022.”

BD already offers Pick, a stationary item-picking system, and they are working on a new version of Handle, a birdlike mobile robot that can grab boxes and move them around without taking up too much space, about the same as one or two standing, human workers. The added mobility of Handle would allow it to unload things like shipping containers, trucks, or other confined and less predictable spaces.

BD has released a video of Handle working with an off-the-shelf pallet robot. Playter emphasizes the need for this type of cooperation between robots in general and not just those made by a single manufacturer.

“We’ll be offering software that lets robots work together,” he said. “Now, we don’t have to create them all. But ultimately, it will take teams of robots to do some of these tasks, and we anticipate being able to work with a heterogeneous fleet.”

What This Means for Logistics

Simply put, it’s an exciting time for logistics. As technology continues to advance, not only will it become more efficient, but it will also become less expensive. This means that many companies within the logistics field will be able to operate more efficiently and safely, be it during a pandemic or when working with hazardous materials.

This disruption will also facilitate a necessary skill shift for human workers. Not necessarily replacing them in the warehouse but instead shifting their focus to more value-added tasks than menial physical labor resulting in a more highly skilled and adaptive workforce.

While it will take time for these robots to hit the shelves, now is a good time to start considering how they can be implemented into your day to day operations. Questions on how technology like robotics will be changing the logistics landscape for your business? Ask an expert with the form below.

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.