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LTL Is Capturing The Middle-Mile

COVID-19 has made a tremendous impact around the globe, and the United States was certainly no exception. The less-than-truckload (LTL) sector in particular saw volumes drop to levels not experienced since the Great Depression. However, for the 25 largest carriers in the US, the total revenue decrease was a mere 2.7 percent for 2020. Compare that to a staggering drop of 23.8 percent during the Great Recession a little more than 10 years ago.   

The intervening years of 2010 to 2018 saw a period of continual growth for the nation’s largest LTL carrier firms including a 10.7 percent growth spike year-over-year for 2018.  

The LTL sector is growing in spite of the financial disruptions

So why is this important? While recessions and economic downturns come and go, if one was to look closely, they would see that the LTL sector is growing in spite of the financial disruptions, and has been for over a decade.  

LTL Sector Homes In On Retail Market 

Historically speaking, the LTL sector has been focused on industrial manufacturing, which represents 60 percent of the total trucking tonnage in the country according to data collected from the US Census Bureau. Given the slow recovery of the US industrial complex, many carriers were unable to achieve year-over-year gains.  

The saving grace for the LTL industry has been the emergence of e-commerce.

The saving grace for the LTL industry has been the emergence of e-commerce, especially in the wake of the pandemic, as many house-bound consumers turned to sites like Amazon to fulfill all their shopping needs. As a result, LTL carriers have been picking up the “middle-mile” slack, hauling freight to end-of-the-line distribution and fulfillment centers. 

“The middle-mile for the retail sector was a huge contributor to shipment and revenue growth for the industry,” said Satish Jindel, President of Transportation Research and Consulting firm SJ Consulting Group. “For those LTL carriers who have traditionally avoided retail customers, it may be time to re-evaluate that thinking and look beyond just handling shipments where their trucks can bump the [industrial loading] docks,” Jindel added. 

The middle-mile, while good for both sustainability and growth of the LTL sector, isn’t without its own set of complications. More commonly, LTL carriers are delivering freight to big-box stores, shopping centers, and locations that lack even the simple convenience of a loading dock to receive freight. In some cases, LTL carriers are even moving into the last-mile phase by delivering large or bulky items directly to a customer’s home.  

Jindel points out that LTL volumes are declining faster than LTL revenue, at 5.4 percent and 4.5 percent respectively, according to data from an SJ Consulting Group analysis.  

“That’s an indication carriers are doing a better job of capturing price for the cubic attributes of their shipments, enabled by deployment of thousands of dimensioning machines,” Jindel said. The increase in e-commerce-related LTL freight and dimensional pricing “presents a great opportunity for the LTL industry to correct many of the ills of the past,” Jindel added, which includes many obsolete systems the industry has used for decades including but not limited to paper bills of lading, discounted rates, and outdated published tariffs.  

A Promising Future

Overall, the LTL sector is faring well given the circumstances. While many industries are still feeling the sting of the first half of 2020, when the pandemic brought almost everything to a grinding halt, the LTL sector has recovered and will continue to grow in the future.  

As the nature of the trucking industry tends to be a bumpy ride at the best of the times, the growth of the less-than-truckload sector in the United States indicates that carriers are flexible enough to handle any obstacles in the road ahead. This is incredibly important as it is unlikely that e-commerce growth is going to drop off at any point in the foreseeable future – due to the change in consumer buying behavior.  

Even smaller carrier operations are finding their own niches in the market, handling local fulfillment while their larger counterparts eat up the middle-miles. All in all, the pandemic has brought about a restructuring of the supply chain for many businesses, and carriers are responding in kind, ready to carry the load.   

Business Intelligence: Bringing Your Operations To The Next Level

Logistics and the global supply chain drive the world as we know it today. Everyday tasks such as going to the grocery store to pick up ingredients for dinner to online shopping all rely on the supply chain operating smoothly and efficiently. However, the logistics methods of the past have since become obsolete, especially in the wake of ever-expanding global operations, the boom in e-commerce and tightening delivery expectations, all of which put pressure on the supply chain. While navigating these challenges is a daunting task, business intelligence is the necessary game-changer for shippers to enter into the next era of the supply chain with an edge over the competition.   

Fortunately, logistics and the supply chain have entered into a veritable digital renaissance. Driven by ever-increasing competition, both carriers and shippers need to step up their operations if they want to remain competitive, both in terms of a consistent brand experience for their customers as well as balanced and competitive pricing structures.  

Driven by ever-increasing competition, both carriers and shippers need to step up their operations if they want to remain competitive.

There are challenges that need to be overcome in order to streamline operations to the point of optimal efficiency. These obstacles include compliance to ever-changing regulations, volatile fuel costs, supply chain management, and increasing demands from customers and consumers. These challenges are compounded by the fact that the supply chain across the United States is incredibly volatile due to a surge in e-commerce brought about by the pandemic, and the snarl in the global supply chain as a whole due to a shipping container shortage and heavily congested port traffic.  

As a result, shippers are constantly on the lookout for solutions that will make their lives easier and help them excel during these uncertain times.

The Benefits Of Business Intelligence 

Business intelligence is developing an operating strategy by leveraging technology to analyze data from the supply chain. This data analysis extracts actionable data from a seemingly incomprehensible data stream and can offer significant benefits for shippers.

Reduce Labor Costs through Automated Reports 

Business intelligence is the key to the kingdom of Automation. BI tools can reduce the need for labor hours that are spent on mundane tasks such as generating reports. Shippers can generate comprehensive reports automatically without requiring a manual effort allowing those employees to be dedicated to more value-added tasks.   

  • Automated data collection creates more detailed reports 
  • Reports are generated automatically on a daily, weekly, or monthly basis. 
  • Reduces time spent on training staff which further reduces labor hours. 

Information Transparency Leads To Better Visibility Into Your Supply Chain 

Supply chain visibility is crucial to the success of shippers. Business Intelligence reduces the need to sift through and extract the necessary data to create a comprehensive report. Organizations can drill down to specific metrics to create operation-specific dashboards based on their needs. BI tools can help to define and extract data as needed (avoiding data-overload syndrome) which improves efficiency and eliminates information blockages and data silos.  

In short, your company can find the data it needs, when it needs it, without all the hassle that comes with standard data analysis. 

Translate Data Into Actionable Business Intelligence 

Having data is all well and good, so long as you know what to do with it. The problem is, extracting the data is not the same as being able to interpret it. Transportation and logistics companies that rely on manual report generation often run the risk of working with outdated information, which can negatively affect business operations. Because Business intelligence tools can generate this information automatically, working through a BI suite can provide real-time information as to the current state of the business. This can, in turn, be used to spot issues as they happen and identify detailed information from a top-down view.   

Better Decision Making 

Armed with actionable intelligence, supply chain leaders are able to make better decisions about their supply chain and their operations. Higher levels of visibility within the supply chain means your company can perform a supply chain analysis. Business intelligence tools can help to draw out latent inefficiencies and reduce operating costs, which makes the supply chain run leaner and more efficiently than ever before. 

Tight Capacity In The LTL Market Puts Pressure On Shippers

Overall, the trucking industry is thriving in current market conditions. High demand and low capacity have made it a veritable “carrier’s market” allowing carriers to pick and choose the loads they wish to take. However, both the truckload and the less-than-truckload (LTL) markets are starting to get more requests than they can actually handle.

The LTL market, in particular, is becoming overwhelmed.

Historically speaking, the LTL market was seen as a way to mitigate the potential fallout from tight capacity in the truckload market. However, as LTL services are being more heavily utilized, especially for “middle mile” transportation, many LTL carriers are actually turning away business.

Current market conditions have been brought about by a multitude of reasons (any one of which on its own wouldn’t be as big of a problem) that have culminated into the perfect recipe for a capacity crunch. Current factors affecting the freight industry are:

  • Inventory shortages caused by COVID-19, which is creating increased demand as companies attempt to restock shelves.
  • COVID-19 vaccine distribution consuming already limited availability of specialized equipment.
  • Global shipping container shortage creating a backlog on U.S. ports.
  • Pervasive driver shortage in the United States.
  • Delays caused by severe winter storms.
  • Growing demand for e-commerce.

While the LTL market is showing positive signs of growth and has been over the past several years, the capacity crunch is creating increased pressure on the industry, creating other issues aside from shipment delays.

The Rising Cost Of Freight

Of course, one of the most problematic results of tight capacity for shippers is the rise in shipping costs. The law of supply and demand dictates that as demand increases, the price goes up as well. While this is common sense, there are other factors to consider as well. Import prices for ocean freight have spiked tremendously, a problem in its own right, as some shippers are having to delay bringing in new goods because the rates are simply ruinous. 

Simply put, the rates are rising.

Even if not moving freight overseas, shippers will likely struggle with rising rates imposed by LTL carriers. This is made even more complicated as previous forecasting statistics from years prior to the pandemic have been more-or-less rendered obsolete, given how unpredictable 2020 was. Simply put, the rates are rising. Shippers can expect to see rate increases in the 5-8 percent for the more desirable, high-density freight. Low-density freight, such as large and bulky items, are less desirable for LTL carriers, could see rate increases of 5-10 percent.

Why You Might Want to Consider Working with a 3PL for LTL

Partnering with a third-party logistics provider (3PL) is a viable solution for shippers looking to mitigate the rising costs of freight, especially given that the volatility of the freight market doesn’t show signs of calming down anytime in the foreseeable future.

3PLs can provide several different services for a shipper, depending on their needs. In addition to providing a better and more affordable experience for your customers, outsourcing your supply chain to a third-party also offers some other benefits that are crucial in the current market.  

3PLs excel in the services they provide, increasing both visibility and efficiency within your operations

In particular, a 3PL often has strong working relationships with carriers that can help you not only secure freight, but at a competitive rate that is more forgiving on the budget. In addition to better rates, 3PLs excel in the services they provide, increasing both visibility and efficiency within your operations, an essential feature if your organization is looking to do more than simply survive the current market conditions.

When Choosing A Partner, You Want A 3PL With Best In Class LTL Blanket Rates

As small and mid-sized shipping companies often lack the purchasing power of larger organizations, a 3PL can help lower shipping rates through a blanket rate. Here, the 3PL can leverage the full weight of their spend, which tends to be considerably more than the shipper alone working with a limited shipping budget. Not only are these rates more stable than the open market rates (often held via a contract), but it also provides the shipper with more options for their freight. Ideally, when choosing a partner, you want a 3PL with best in class blanket rates. These rates are more competitive than what you’ll find on the market and may be more forgiving when shipping less than ideal freight.

3PLs also have an insight into the inner workings of a supply chain that you might be too close to see.

3PLs also have an insight into the inner workings of a supply chain that you might be too close to see. Working with a 3PL partner can help you to identify any weaknesses with your operations and provide solutions to fix them so that your supply chain can run leaner and smoother than before.

Roadcheck Week is Coming: May 4-6

Roadcheck week is a program created by the Commercial Vehicle Safety Alliance (CVSA) which will deploy inspectors across the country to ensure that commercial vehicles and their drivers are upholding the set safety standards. Every year, the CVSA chooses a focus for their inspections, typically based on the past year’s violations. Last year, in 2020, it was driver violations. This year, they will be focusing on the top vehicle maintenance issues and driver violations from 2020 which were vehicle lighting and hours-of-service compliance.  

CVSA President Sgt. John Samis, who is also with the Delaware State Police, said in a CVSA statement that there is an element of business as usual during Roadcheck Week. “The inspections conducted during the three days of International Roadcheck are no different from the inspections conducted any other day of the year,” he said. “Other than data collection, the inspection process is the same.

Shippers will need to take Roadcheck week into account when planning their freight movement.  

While Roadcheck week is an important safety measure to ensure unfit vehicles and drivers aren’t in operation (and a risk to the public) it does pose a serious issue in terms of how it affects the available capacity and market spot rates. Shippers will need to take Roadcheck week into account when planning their freight movement.  

2021 Inspection Criteria  

Inoperable lamps were the top vehicle violation in 2020, accounting for 12.24 percent of all vehicle inspection failures discovered for the entire year, according to the Federal Motor Carrier Safety Administration.  

Inspectors will also be checking the vehicle’s brake systems, cargo securement, coupling devices, driveline/driveshaft components, driver’s seat, exhaust systems, frames, fuel systems, lighting devices, steering mechanisms, suspensions, tires, van and open-top trailer bodies, wheels, rims, hubs and windshield wipers to ensure all meet the necessary specifications. 

For drivers, hours-of-service violations reached nearly 34.7 percent of all driver-related concerns. During the inspection, inspectors will check the driver’s operating credentials, hours-of-service documentation, seat belt usage and for alcohol and/or drug impairment. A driver will be placed out of service if an inspector discovers driver-related out-of-service conditions. 

Any vehicle found with a “critical vehicle inspection item violation” will be considered out-of-service, meaning the vehicle cannot be operated until the condition has been corrected and re-inspected.  

In light of the importance of COVID-19 vaccine transportation, any vehicle caring vaccines will not be held up for inspection, unless there is an obvious and serious violation that could be considered an imminent hazard.  

Successfully passing the inspection will earn the vehicle and driver a CVSA decal. During the three-month period that the decal is valid, both driver and vehicle will not be subjected to subsequent inspections. In light of the importance of COVID-19 vaccine transportation, any vehicle caring vaccines will not be held up for inspection, unless there is an obvious and serious violation that could be considered an imminent hazard.  

“CVSA shares the dates of International Roadcheck in advance to remind motor carriers and drivers of the importance of proactive vehicle maintenance and driver readiness,” Samis said. “International Roadcheck also aims to raise awareness of the North American Standard Inspection Program and the essential highway safety rules and regulations in place to keep our roadways safe.” 

Roadcheck Week Causes Volume Drop and Capacity Fluctuation 

While the program is designed to keep both truck drivers and other motorists safe, it also comes with an unintended consequence. During Roadcheck week, the Outbound Tender Volume Index (OTVI) drops precipitously, causing a shortage in both transportation volume as well as fluctuations in available capacity.  

In 2020, during the inspection blitz, OTVI fell from over 16,125 down to 13,628. The only other times during the course of the year it has been lower was over the Thanksgiving and Christmas holidays.  

Typically speaking as OTVI climbs, capacity gets tighter as it suggests that more loads are being tendered on a daily basis. That being said, a drop in OTVI would suggest more available capacity, but that may not be the case. As drivers and vehicles are flagged as out-of-service, the overall operational capacity, nationwide, could be affected. Given the immediate needs of the COVID-19 vaccine rollout, capacity is already stretched thin, especially for dry van and reefer units given the storage requirements of the vaccines. 

Many drivers prefer to avoid Roadcheck week altogether and opt to take vacation during this time which causes a temporary disruption in capacity and thins out the already shallow pool of available drivers.

Additionally, many drivers prefer to avoid Roadcheck week altogether and opt to take vacation during this time which causes a temporary disruption in capacity and thins out the already shallow pool of available drivers. With fewer available drivers and more shippers turning to the spot market to find available capacity, rates could increase 

Shippers, in particular, will need to keep a close eye on the OTVI during the beginning of May as it could affect both spot rates as well as overall transportation time. It is important that shippers begin considering their options now as Roadcheck week will soon be upon us. 

The Hidden Cost Of COVID And How To Manage

The COVID-19 pandemic caused a major upheaval in everyday life across nearly every industry. In freight, major supply disruptions have turned trucking on its head. An unprecedented demand on last-mile delivery quickly replaced initial slowdowns. Manufacturing continues to expand amidst labor shortages. Driver detentions exacerbate the current bottleneck issue at ports caused by empty containers being returned to Asia unfilled, due to demand flow. Normal operational conditions and the strategies used to manage them have gone out the window, with costly results. The good news is, those with an eye for innovation have an opportunity to jockey ahead of the competition.

COVID’s Costly Influence

Inflation is being driven by a combination of increased shipping costs and a quarantined labor force. Shipping demands are up. A rise in home-based e-commerce has resulted in a significant shift towards last-mile delivery. Freight has had to restructure its fleets to accommodate this, at no small expense to equipment and logistics planning. Containers are scarce, even at premium prices. Driver detention is up, conflicting with HOS regulations and requiring a larger workforce. Driver recruitment and retention are significant obstacles, which is in addition to the current driver shortage issue. The risk of infection has made in-person job training and travel less attractive. Shippers will have to offer competitive pay and incentives to sweeten the deal.

Too few hands on deck limit the growth potential of what could otherwise be a runaway manufacturing boom.

Additionally, many shippers responsible for distributing the COVID-19 vaccine require highly trained two-driver teams for one truckload, adding to the strain. Labor shortages in other professions are limiting growth as well. Short-term closures to sanitize facilities become less short-term on skeleton crews. Too few hands on deck limit the growth potential of what could otherwise be a runaway manufacturing boom.

Bottlenecks at ports occurred as a natural response to the shift from domestic in-person spending to shopping internationally online. Instead of buying from retailers who managed predictable inventories of imported goods, customers began making their orders with novel home-centered goals in mind. This profoundly disrupted trade patterns. The demand for imports, mostly from China to the US, has exasperated an existing imbalance in the flow of goods. China is not importing from US companies at nearly the same rate, causing a capacity nightmare. Sea freighters often choose not to wait for American exports to navigate congested ports and are sending back urgently needed empty containers.

However, with unpredictable route suspensions in response to COVID concerns, satisfactory results are mostly beyond the driver’s control.

Trucking companies are offering financial incentives to drivers who can pick up the pace to mollify the situation. However, with unpredictable route suspensions in response to COVID concerns, satisfactory results are mostly beyond the driver’s control. Companies that cannot afford to be affected by these delays are switching to expedited couriers. This can be an added cost for companies who choose to outsource in this way and also for companies who lose business to couriers.

Evading Expensive Pandemic Pitfalls

COVID-19 has changed the landscape of the freight industry. Knowing this, and knowing what to do about it, however, are two very different things. While the vaccine roll-out is fantastic news, it will still be quite some time before things get back to normal. Here are some things to keep in mind as we navigate our way through another year of COVID-19.

Optimize Labor Configuration

  • Mitigate the risk of shut-down due to the spread of illness among employees by following WHO guidelines and protocols
  • Evaluate how policy changes abroad could affect your business, suppliers, and trading partners
  • Address continuity by creating contingencies for the loss of key players within your business, through distribution channels, and among suppliers

Prioritize Transparency

  • Set up a command center for integrated and instant communication across all channels.
  • Redirect resources in a dynamic and unprecedented environment.
  • Quickly identify and respond to influences that threaten the supply chain.
  • Consider upgrading ERP systems and building well-integrated KPIs.

Risk Management

  • Establish proactive strategies that factor in supply chain disruptions and detect early signs of trouble.
  • Consider a granular, high-resolution digital twin. According to Forbes, “Supply chain planning is done for different forecast horizons – factory scheduling and fulfillment planning may be focused on what will be made and delivered in the next week. This is known as operational planning. Tactical planning is focused on what will be made and delivered in the next month or next few months. Strategic planning is focused on even longer time horizons – plans going out many months or even years.”

Fortify Supplier Relationships

  • Investigate suppliers within the supply chain to lower risk.
  • Gain insight into potential obstacles with the suppliers’ region, culture, political atmosphere, restrictions, etc.,
  • Protect shareholder interests with ethical choices.
  • Reduce the potential for losses by formulating a response to many possible scenarios.
  • Have backup suppliers lined up and integrated into contingency plans.

Restructuring logistics while maintaining operations is a challenge even within existing business models. Doing so while the world reinvents itself is a shot in the dark. Shippers will need to follow the example of thoroughly integrated giants like Amazon to survive. High-resolution 3PL support promises to pay for itself in salvaged opportunities moving forward into this gripping new landscape.

When Is The Right Time To Engage With A Managed Logistics 3PL

Shipping challenges are greater than ever this year. The COVID-19 pandemic accelerated already existing trends among customer expectations, it upset accurate forecasting in capacity, closed borders and redirected the flow of goods. Even companies that were well-positioned in their sector felt the tides change in 2020. The steel resolve of shippers is to be admired, but is sheltering in place with existing reaction-based tactics the smartest way to weather this storm? It’s been a year of challenges from every angle. What circumstances is your business experiencing that warrant outsourcing tasks to a 3PL?

An Exponential Increase in Orders

Growth is always the goal of every business. Increased contracts should equal increased profits. But when that growth outpaces the current abilities of an existing supply chain, it’s time to call a 3PL. Timeliness is key. Massive failures can permanently damage business relationships, tarnish a professional reputation and lose customers. It can even cause the entire business to fail. The sooner help is called, the fewer losses there are while recovering from the unexpected boom.

Tight Budget Margins

If you’re experiencing a tight budget but can’t find any fat to trim, a 3PL may not seem like a necessary expense. However, with their many connections and ability to consolidate the needs of their clients, they have the power to negotiate larger savings than individual shippers can manage on their own.

The Need For Improved Customer Service

Customer expectations have been trending towards same-day and next-day shipping under the Amazon Effect. Shoppers also expect transparency and 24/7 customer service. COVID-19 accelerated these trends as households turned to e-commerce for their daily goods. Customers aren’t aware of the many obstacles that exist in freight because of the pandemic, they only know that they’re suddenly very anxious about why the toilet paper is taking so long to arrive. If your customers are canceling orders, demanding refunds and complaining about package tracking, it’s time to let a 3PL come in and smooth things over.

Just Starting Out

If your company is wet behind the ears, there’s a lot to learn. This is the most formative time in creating core business initiatives and making a name for oneself. New shippers can quickly find they have too many irons in the fire. Taking advantage of a 3PLs existing distribution networks and warehouses is a smart way to get profits rolling before making large investments to handle these operations internally. Outsource these challenges and focus on establishing your company.

What to do in Uncertain Times

2020 was an unpredictable year and the ripple effects of this are carrying into 2021. 3PLs mitigate risks by taking responsibility for contingency plans. They also offer protection against lost or damaged goods. Additionally, if your company finds itself repeatedly in a capacity crunch or recording inaccurate inventories, there’s a huge cost benefit to letting the professionals identify and ameliorate the core issues at play.

Transporting Perishables

Shipping delays due to capacity constraints, detention, dynamic border regulation, container and labor shortages, sanitization slow-downs and several other pandemic-related supply chain disruptions have been a terrible feedback loop resulting in lost profits. Perishables are a difficult freight to move. As we’ve mentioned before, “If even one of the transport requirements of perishables is not met, the goods can become unfit for consumption or further processing.” If your company transports perishables or the COVID-19 vaccines, ensure this does not happen by enlisting the help of an experienced 3PL.

Operating In International Markets

Entering into international markets can be challenging to organize. But even shippers established in this market are dealing with surprises related to border closures and regulation changes from COVID-19. If you find yourself experiencing costly shipment delays, letting a 3PL handle customs, documentation, duties and developments at various borders is a timely investment.

Are You Looking to Expand?

Using a 3PL takes the guesswork out of establishing a presence in a new region. Access to distribution centers, local labor forces, warehouses, scalability, established tech systems for transparency and inventory management is a cost-effective way to make an entrance into new territories. Whether your company lacks internal resources or finds that the ones it already has are not enough to keep up with the current events, 3PLs are a worthy consideration.

Women Overcoming The Hidden Barrier Of Gender

When you think of a supply chain engineer, VP of logistics operations, truck driver or director of carrier sales what image pops into your head? Your immediate reaction might include a middle-aged man and there’s numbers to back your reaction up. According to the Bureau of Labor Statistics, 46.8% of the current US workforce are women, and that number drops to 24.6% in the transportation and warehousing industry.

The McKinsey & Company study “Women in the Workplace 2020” reports that before the COVID-19 pandemic began in the United States, the representation of women in corporate America was slowly trending up in the right direction. This was most pronounced in senior management. Between 2015 and 2020, the share of women grew from 23 to 28 percent in SVP roles and from 17 to 21 percent in the C-Suite.

So, where will the future female leaders be, especially those of color? 

However, the pandemic left more than two million women considering a leave of absence or leaving the workplace altogether, including 1 in every 3 mothers considering to scale back or opt out. So, where will the future female leaders be, especially women of color? How can we take these events as an opportunity to ensure our workplaces avoid both gender and racial bias?

The Challenges Women Are Facing Today

The empowerment of women in the workplace doesn’t only depend on the allocation of women in positions of power, but it is defined by the intrinsic characteristics of jobs and workplaces themselves. A few of the many challenge’s females of all races and ethnicities are facing today: 

  • The one and only: many females today are the only or one of the few women on the team at work. When it comes to performance, women in this group tend to feel the pressure of working longer hours and tend to have to prove competencies more often than their male counterparts. The most significant impact of this dynamic certainly generates a different level of apprehension and self-doubt that can only be defeated by empowering women in the workplace to lead and mentor others.
  • The stereotypical “woman role”: as stated earlier in this blog, women at work have to constantly battle societal preconceptions and beliefs about what kind of work a woman should do and/or a woman’s ability to succeed in jobs traditionally held by men. It is only evident that this unconscious bias can drive organizations to unknowingly design practices around talent management and hiring criteria that clearly disadvantage women, particularly working mothers.  

A culture that embraces and celebrates diversity will focus on recognizing the differences that women bring to the table.    

  • “Fake it until you make it”: this is probably the advice most professional females have received but this creates a culture that hurts gender diversity. “Faking it” has forced us to accept masculine cultural norms, pushing them to change their natural behaviors in order to progress and have a sense of belonging. A culture that embraces and celebrates diversity will focus on recognizing the differences that women bring to the table.    
  • Women also have a gender bias: this might not be a very popular point of view, but gender bias is not unilateral. Women at every level can also be enabling behaviors showing bias. Women are frequently striving for a smaller number of opportunities while being scrutinized and questioned about their abilities. More often, this correlates directly with isolation in the workplace, because sponsoring could be seen as a negative trait with high opportunity cost.

Minimizing The Impact Of Unconscious Bias In The Workplace

Recognizing these challenges and allowing women to network, collaborate and participate in the evaluation and design of processes and policies will bring a unique and much-needed point of view to the workplace. Structure and standardization of hiring, benefits, performance evaluations, training opportunities and other fields related to talent management, as well as promoting a data-driven culture will minimize the impact of unconscious bias in the workplace.

It has been evident that widening opportunities does not necessarily improve gender equality. The initiatives to improve long-term participation and growth in historically male-dominated industries starts with a thoughtful evaluation of workplace processes, policies and overall culture.

The Power Of Using A TMS For Any Size LTL Shipper

A transportation management system (TMS) is traditionally used in larger shipping operations. The benefits of these systems are managing transportation costs and navigating capacity crunches. They can also aid in balancing dynamic customer demands with driver scheduling. 

Small shippers tend to range from 5 to 25 shipments a day. The next step up is mid-sized shippers. Typically, midsized shippers consist of a number of smaller shipping operations across smaller businesses and locations. Usually, their freight consists of all less than truckload or full truckload with a one-off shipment here and there. They negotiate on a shipment by shipment basis, so a TMS is less about freight spend and more about getting the perfect price each time and squeezing more productivity out of shipments. 

Freight plays a prominent role in the reputation of a company. Timely drivers can make a significant impression. But managers also need to know how freight is moving in order to optimize operations, win customers and overcome some of the limitations of being a mid-sized company. 

TMS Adoption Is Low In Mid-Sized Shippers 

Some of the TMS in larger companies focus on things like managing a capacity crunch and optimizing their freight for transportation across various modes. Larger companies have a lot to gain from converting LTLs into truckloads and continuous moves. Since the volumes being handled are mostly one mode for mid-sized companies, there are fewer optimization opportunities from older TMS models. 

One of the barriers to entry for TMS in this sector is the gap between the clear advantage of using technology to manage shipments and the willingness to do so.

TMS is often seen as impractical by smaller and mid-sized shippers. Many managers feel they get their shipments out just fine with their existing practices. One of the barriers to entry for TMS in this sector is the gap between the clear advantage of using technology to manage shipments and the willingness to do so. Mid-sized companies find it too expensive and difficult to implement. It is overwhelming to their budget and operations. They may lack some of the staff necessary to support running a traditional TMS. When a shipper decides to use TMS, there is historically a lot of effort to get all of that data over to the TMS in order to simulate the rates that the carrier has loaded. This process can cost thousands of dollars in paid labor. Every year when the rates change, the process needs to be repeated. EDI setup is a part of this issue. Setting up TMS usually involves establishing EDI for dispatching to schedule pick up, handle tracking, etc… It’s a considerable upfront expense in labor, which is then being passed on to the customer and hurting the shipper’s ability to offer competitive rates. This can put TMS out of reach for smaller to mid-sized shippers. 

TMS can also be complex and intimidating for mid-sized companies whose employees are used to processing their daily tasks via apps, spreadsheets, and websites. 

Want A Free BlueShip TMS Demo?

Innovations In TMS Accessibility 

Recent advancements in TMS include the prevalence of Application Programming Interface (API) which are essentially programs that can communicate with databases, retrieving useful information that can be used in other applications. Carriers are gaining functionality from their core systems via APIs that other systems can consume. This innovation allows TMS to connect directly to the carrier and pull necessary information directly through machine-to-machine communication. This means there are fewer labor hours spent on back-end issues. It significantly lowers the time and labor investments that keep mid-sized shippers from adopting TMS. 

While a TMS is a powerful tool and typically full of various and helpful features, not every company will need the full suite of options in order for it to be beneficial. In fact, too many features can get in the user’s way. Instead, small and mid-sized shippers should look at carefully curated feature sets for their TMS. Modern TMS solutions are both scalable and customizable, so while an off-the-shelf solution is great for a larger company, this provides a better range of options for smaller companies. With a curated feature package, implementing a TMS becomes a less daunting task.  

An intuitive interface will streamline operations instead of frustrating the employees of mid-sized shippers.

In addition to having it scaled appropriately for your operations, user experience is another consideration. An intuitive interface will streamline operations instead of frustrating the employees of mid-sized shippers. Transparent pricing, next-day readiness, and a subscription model with no end-user IT effort are all attractive offerings of a modern TMS. 

Promising New Options 

Multiple transportation management systems are hitting the market presently, specifically geared towards small to mid-sized shippers. In some, invoices are streamlined via integration to QuickBooks. Attractive features allow carriers to split loads and plan legs of transportation as opportunities unfold. Push notifications keep drivers informed. According to MH&L, “The ability for carriers to connect their ELD providers (to TMS) allows for enhanced visibility for predictive ETAs, integration of Hours of Service information for driver scheduling, and improved location tracking. “ 

In an interview with Fleet Owner, Cody Schmidt, corporate purchasing manager at Plastic Ingenuity, touts his TMS experience. “I’ve seen my team save hours of time and remove many of the manual tasks involved with tendering freight. I’m impressed with how quickly we were able to get set-up within days.” Cody was able to slash time to tender “from three hours to under 15 minutes” by using modern TMS innovations for his mid-sized company. 

Mid-sized companies can create seamless integration by choosing a cloud-based TMS platform that connects directly to their current carriers and 3PL support of choice.

How BlueGrace can Help 

BlueGrace’s proprietary TMS is designed to put the power of easy supply chain management and optimization back in your hands. BlueShip® 4.0 offers cutting-edge tools for strong reliability and quick performance. Our customers are especially impressed with the updated user experience, customer address books and product catalogs that make the entire process of creating new shipments simple and swift. 

The BlueGrace core technology platform enables you to proactively identify opportunities to alleviate costs and optimize your supply chain. BlueShip 4.0 gathers pricing and tracking data from 100’s of our carrier partners nationwide. Our updated LTL Volume solution allows users the ability to see real-time capacity and spot rates for their volume shipments. Our customers also receive access to our expert IT department and a full suite of web services and API’s. 

To learn more about BlueShip and to request a demo to see how our TMS can benefit your company, contact us at 800.MY.SHIPPING or visit us at https://mybluegrace.com.

Delivering A Passion For Logistics

Mark Derks, Chief Marketing Officer

I have a passion for logistics and recently joined the BlueGrace Logistics team as Chief Marketing Officer. In my initial weeks of onboarding, I’ve been able to connect with many of the customer facing and supply chain engineering resources for the organization.

In my discussions I’ve asked what, as a shipper, should I be considering for a successful supply chain logistics program. Here’s a synopsis of what some of the industry’s most forward thinking thought leaders have to say.

Automate & Simplify

Breakdown your internal processes on a continual basis and automate everything you possibly can. Automating even one step of a process can mean significant savings over time. There are benefits such as employee/customer/user satisfaction, driving business rule compliance and creating scale while reducing OPEX when you simplify process to make work easier. The mostly likely areas for automation could be procurement, order fulfillment, service and system queries, tender activity, track/trace, payments and invoicing and any type of data entry or reconciliation processes. Eliminating repetitive, non-value-added tasks, while improving internal and external workflow should be a top priority across multiple business units.

Focus on Order Management

By unlocking order management processes, you remove bias to things like mode selection or freight service and focus on improving the entire fulfillment process for your end customer. The use of business rules can drive load planning and match your executive strategy to your tactical execution. For organizations who are ready to scale, order management supports automation across the supply chain. Order receiving, tracking, fulfillment, etc. under one cohesive brand experience.

Improve Data Accuracy

Good clean data drives viable consolidation, automation and optimization. Volumes of accurate data employ AI and machine learning strategies. Much of the available historical data from legacy transportation management systems doesn’t hold the accuracy or structure standards needed to accomplish actionable results. Improving data quality increases trust in technology and tech-driven outcomes. Quality data also helps brings normality to a fragmented industry. Efficiency, productivity, experience and more all start with clean, accurate data.    

Final Mile & COVID-19 Evolution

COVID-19 has resulted in changing buying patterns, shifting freight networks, fluctuating manufacturing cycles and more. As the market reshapes itself to address a more B2C environment now is a great time to adapt and be proactive in engaging a final mile strategy.

Sales Leadership

Include Sales Leadership in your supply chain strategy and decision making. The commercial leadership role stands behind the value proposition and service requirements to make customers successful. Supply chain logistics is at the heart of every customer transaction and being inclusive of sale leadership offers advantages and scale in customer service, communications and overall growth and retention. Actionable data and a proactive transportation network also help enhance the customer experience. Brands who leverage their supply chain team throughout the organization can increase sales and grow results.

Work with a Driver-Lead Provider

Drivers are the most critical part of transportation and the end-delivery of your freight. Most think truck drivers are the responsibility of the carrier they work for. In fact, organizations should consider their support and engagement of drivers directly, beyond that of the carrier. Driver retention depends driver experience throughout their supplier list, so it’s all our responsibilities to try to improve their life on the road. This driver-lead approach is unique and can keep the two most important commodities you have in transit: the driver and your freight.

Find Value

Grow valued-based relationships and bring them your biggest challenges. Solely buying on price might save you a few dollars but won’t bring you value and solve your biggest challenges. Look for that provider that makes you say, “I got what I paid for and find value in that.”

The Number One Item to Consider: Have A Passion For Logistics.

When prompted on what that means, it’s the idea that logistics can make every business better. Across industries, companies can make themselves better, provide greater customer experience and achieve higher employee engagement by improving supply chain logistics. One small change in the way you plan, organize, execute and communicate can have immediate and great impact on your costs, risks, efficiencies and growth.

Sound advice for organizational success. Does your company have a PASSION FOR LOGISTICS? I’d love to hear your thoughts as to why.

Better Truckload Operations Efficiency Through Digitalization

Digital trucking is bringing unprecedented, large-scale benefits to the national transportation grid. Digitization takes living, real-time data from once futuristic fantasy to practical present-day tools. Companies who embrace these changes can stay ahead of shipping needs, coordinate the arrival and departure of shipments at distribution facilities and offer customers full transparency regarding product tracking.

Having uniform data instantly updated across many locations translates into an efficient organization. 

Digitally integrated metrics also mean the more efficient movement of goods. Well-kept maintenance and repair information leads to more uptime for fleets. Processes that depend on fax and phone calls to delegate shipment orders can see improvement through digitization by providing transparency in a shipment’s progress across the operation. Digital trucking further protects against losses from laggy communication by providing access to information like rates and available containers. The answer is simple: having uniform data instantly updated across many locations translates into an efficient organization. 

Hybrid Supply Chains

Naturally, some companies making the transition from silo-based tracking to a digital supply chain will find themselves in a mixed state of operations. Some information is digital, some are kept analog, and some remain decentralized in individual silos. However, it is best not to get comfortable here. The number of customers relying on internet transparency is increasing at an exponential rate. The weight of the digital world is enough to have deemed it the “Third Industrial Revolution.” In order to survive in the post-revolutionary landscape, successful shippers will need to become proficient with Digital Supply Chain Networks. 

Benefits Of Embracing Digital Supply Chain Networks 

1. Accurate Projections – An outdated but well-ingrained approach to supply chain management is to look backward at data. A forward-looking vantage point allows companies to remain better oriented to evolving needs.

Information from Blume explains that “AI and machine learning can uncover trends in the data and suggest likely short, medium and long-term demand and capacity — allowing you to get the right assets and resources in place .” Advanced models can help with recruitment, asset procurement, scheduling enough drivers and trucks and generally increase profits by keeping error margins minimal.

2. Data Visualization – Having data that is intuitive for managers to interpret increases efficiency. Data points are essential to ha. Still, unless these see integration into a medium with unambiguous meaning, they may fall short of their potential. The less time a manager spends trying to interpret numbers, the less time they spend repeating supply chain failures. Digitization automates the mundane manual task of creating a visual representation for complex data

3.  Connecting Data Sources – Modern supply chains rely heavily on a concept known as the Internet of Things (IoT).  IoT can improve processes, identify opportunities to move goods and stay ahead on preventative maintenance. However, IoT is only capable if it has many data sets from which to draw. Using QR codes to track goods, sensors for shipping containers and APIs to compile data onto logistics platforms is one example of how IoT shines brightest when prolifically integrated. IoT benefits conveyance when connected to multiple vehicles by improving operations through routing, navigation and avoiding common collision points. Equipping infrastructure with systems to monitor road conditions and congestion allows IoT to optimize capacity through effective traffic management systems. 

The more devices connected to a system, the more complete the data set.

The more devices connected to a system, the more complete the data set. Likewise, IoT can more efficiently bolster a supply chain by facilitating updates on spot-rates, capacity, demand for drayage, driver availability, GPS locations for disabled trucks and last-minute changes to every device and user within the network. Accurate data can significantly increase efficiencies and mitigate risk when shared across a centralized digital platform.

4. Direct Benefits to Supply Chain Management – Some concise benefits to supply chain management that companies can look forward to from digitization are: Increase JIT sourcing, decentralized inventories leading to satisfied delivery time requirements, competitive shipping by converting next-day-deliveries to same-day-deliveries, fewer number of logistics partners needed for transportation and translating LTL into parcel shipments.

The Risk Of Information Overload

When it comes to digitization, an abundance of data can tip the scales in either direction. Of course, having device-level data across an entire operation allows carriers to access essential information from asset utilization to invoicing. It also presents challenges for effective integration. In order for companies to achieve the desired level of granularity to get the most out of their data, expert logistics support is an invaluable step. For help with implementing these changes, contact one of our logistics experts.

Hours of Service Update for AG Truckers 

The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) has worked closely with the USDA to clarify rules and definitions regarding livestock and agricultural commodities in its hours-of-service (HoS) regulations. Most notably, it has issued a 150 air-mile exemption. According to the FMCSA, the agricultural rule making “was prompted by indications that the current definition of these terms may not be understood or enforced consistently when determining whether the HoS exemption applies.” Here’s a breakdown of the new HoS terms and some elaboration on how the exemption will affect motor carriers. 

Defining Terms And Boundaries  

An “air-mile” is equivalent to 172.6 miles and is roughly used to account for the shortest distance between two points regardless of the terrain. Essentially, if a driver stays within this radius while transporting certain agricultural commodities, they are exempt from HoS regulations. Drivers do not have to use an ELD because they are not required to keep logs of their hours.  

An interview conducted by FleetOwner further clarifies the exemption. Joe DeLorenzo, director of FMCSA’s Office of Compliance and Enforcement, describes which activities the exemption covers and what happens if a truck carrying agricultural commodities travels outside of the 150 air-mile radius. “Any of the time that takes place working within that 150-[air]-mile radius is not counted toward the driver’s hours of service,” he said. “That includes empty miles driven to a pick-up point, it includes loading time, and it includes the time driving with an agricultural commodity within a 150-[air]-mile radius of the source.”  This applies to the full round-trip (before and after drop-off). 

A truck may arrange multiple stops to pick up agricultural commodities, but under the FMCSA’s rules, those stops do not count as a new source point.

The mid-point of the radius is placed on the map when the commodities are picked up. This point is officially termed the “source.” The driver is then covered under the exemption at any point within the 150 air-mile radius of the initial load in. There can be only one source per trip. A truck may arrange multiple stops to pick up agricultural commodities, but under the FMCSA’s rules, those stops do not count as a new source point. Therefore, drivers will not have to log their hours when making additional loading stops within the 150 air-mile radius of their initial source.

What Happens When Drivers Leave The Radius? 

When a driver hauling ag crosses into the 151st air-mile from the original source, HoS rules apply, and the clock starts at zero hours. This can provide a significant extension to the workday. Drivers who re-enter the exemption radius from the original pickup should note that their routes re-enter the timeless zone.  

Drivers do not necessarily have to resume the use of their ELD when they re-enter territory subject to HoS regulation. 

Here’s where it gets a little confusing. Drivers do not necessarily have to resume the use of their ELD when they re-enter territory subject to HoS regulation. This ELD exemption could apply. A driver can forego the use of an ELD in favor of paper logs if they only need to record hours of service for 8 out of any 30 rolling calendar days. Since this rolling period is cHoSen at the driver’s discretion, a driver could craftily choose which 30-day window to use. The goal would be to choose any 30 days during which they left the exemption radius on fewer than 8 separate days. Using this approach, a driver would not have to obtain an ELD. 

The Implications: Some Pros & Cons 

It enables ambitious drivers to log more miles.

Since the HoS regulations are meant to limit the maximum number of hours drivers are allowed to be on duty while also mandating the number and length of rest periods, the revision made on June 1, 2020, has raised some safety concerns. Extending the workday to such extremes helps farmers move their commodities and supports grocery stores. It enables ambitious drivers to log more miles. It also effectively rolls-back the safety efforts made by the HoS to protect driver alertness through the use of ELDs in December 2017. Safety groups like The Commercial Vehicle Safety Alliance (CVSA) have warned federal regulators that their actions make agricultural haulers vulnerable to fatigue. They additionally expressed concern over the ambiguity of what defines an “agricultural commodity” between the FMCSA and the USDA. While the FMCSA cited this as the revision’s primary goal, there are still many practical gray areas.

In order for drivers to remain compliant, CVSA has insisted that the FMCSA should make changes as follows: 

  • Specify that drivers of mixed load cargo hauls do not meet the definition of an agricultural commodity for transport  
  • Provide clearly stated guidelines on the extent to which a raw agricultural product can be altered before it has to be claimed as a cargo of processed goods 
  • Require drivers to still use their ELDs to record hours driven under the exemption as a result of hauling livestock or agricultural commodities 

The key to navigating these regulations is to understand exactly how the exemptions work. Especially as the United States begins its produce season, ensuring that these time-sensitive goods reach their destination in a timely manner is critical.

Shipping Challenges For The 2021 Produce Season

Volume increases in shipping can drive up rates and create challenging conditions in freight capacity. Under normal conditions, the strain on CPG shippers occurs tidally. Produce season causes disruptions, but occurs with a fair degree of regularity. Even if a carrier does not transport agricultural goods, the influx of produce to shipping can affect operations, capacity and costs. COVID-19 is a new factor in shipping volume. Therefore it is challenging to prepare already tight margins for additional freight volume.

Driver Shortages

LTL is estimated to be experiencing a shortage near 20,000 drivers. A lack of qualified drivers is one theory. Prospective employees deciding their pay is inadequate for the working conditions is another. HOS regulations, meant to keep drivers safe, have also eaten up revenue opportunities for the young and ambitious.

arriers, shippers and 3PLs will all have to work together to entice drivers back towards the industry.

Due to COVID-related closures, supply chain disruptions have increased driver detention, which costs both drivers and shareholders significant amounts of both time and money. The threat of infection has slowed enrollment for in-person training programs and made travel less appealing. Older workers may decide to retire rather than risk exposure as high-risk individuals. Currently, there is no standardized hazard pay for drivers working through the pandemic. Carriers, shippers and 3PLs will all have to work together to entice drivers back towards the industry.

Social Distancing And E-Commerce Sales

According to Zipline Logistics, “when carriers devote trucks to moving high crop volumes, the available capacity diminishes. This yearly phenomenon drives up rates and can affect your ability to book shipments in or out of affected and nearby states.” LTL freight has already entered 2021 with significantly higher demands. Quarantine has driven consumers to fill their carts online. Amazon remained ideally situated to support consumers during the pandemic with an efficient last-mile shipping model and obsession with customer service. Unfortunately, most other major carriers got caught in a capacity crunch. Border closures resulted in a bottle-neck of supply chains and forced some on-the-fly spot rate decisions. The shift from retail stores to individual homes for house-hold purchases put added emphasis on timeliness.

To stay ahead of the many challenges this produce season, freighters will avoid unnecessary losses by turning to 3PL providers for capacity foresight.

Carriers found themselves choosing between paying FTL rates for trailers that were not full and waiting on further LTL shipments. Companies that remain competitive with Amazon will have to change their operations to meet customer expectations amid the rising demands of e-commerce. Shoppers unable to go to a retail shop cannot absorb lengthy delays the same way as a box store can, and with Amazon offering same-day shipping in much of the country, they don’t have to. COVID-19 has exponentially accelerated a generational industry change that was already on its way. Amendments to a business model while running operations are a tall order for any company. To stay ahead of the many challenges this produce season, freighters will avoid unnecessary losses by turning to 3PL providers for capacity foresight.

COVID-19 Vaccine Distribution

We’ve seen that COVID has put pressure on carriers due to its effect on e-commerce trends. Labeled “Operation Warp Speed” by the United States Government, vaccine distribution adds another layer of urgency to shipping logistics. Vials from all approved sources currently require handling without any breaks in the cold chain. Vaccines are a part of the solution to COVID-related slowdowns in the flow of goods, but they also compete for refrigerated capacity.  Security concerns and the unstable nature of the COVID vaccine require constant monitoring, which means two-driver teams. Doubling drivers puts further strain on staffing shortages coming into produce season.

High demand means high value. Carriers who lose or damage shipments will forfeit contracts, profits and industry standing.

The shipment of fragile medical supplies also requires additional training for all who will handle them. COVID-19 is a matter of life and death, so the vaccine has a high demand. High demand means high value. Carriers who lose or damage shipments will forfeit contracts, profits and industry standing. According to information gathered by Heavy Duty Trucking, “WHO estimates nearly 20% of temperature-sensitive healthcare products get damaged during transport, and 25% reach their destination in a degraded state because of breaks in the cold chain”. Refrigerated freight specialists will need impeccable capacity logistics, highly trained drivers, well-maintained fleets and smooth transitions at both load-in and load-out to compete in Operation Warp Speed.

Carriers who possess both the experience and equipment needed to handle the vaccine roll-out is a small percentage of trucking. These companies will find themselves highly sought after as a part of the solution to a virus projected to have claimed 1 million Americans by May 2021.

Investing In Support

Factors such as driver shortages and a massive overhaul in e-commerce are sure to confound already challenging conditions. Investing in 3PL support is the profitable choice for fleets distributing any kind of temperature controlled freight this produce season. BlueGrace is connected to both national and regional carriers with refrigerated capabilities ready to handle your next load. Contact one of our experts today to learn more.

Outlook for LTL in 2021: A Pressurized Sector

The height of the COVID-19 pandemic forced many businesses to close their doors, in some cases for good. In March and April, during the early days of the “shelter in place” order and red phase, the less-than-truckload (LTL) sector saw a considerable drop in volume, as much as 20 percent.

Within a few months, freight volumes rebounded quickly, leaving carriers struggling to move freight.

Trucking firms, in an effort to keep their own doors open, issued extensive layoffs to compensate for the loss of business. However, within a few months, freight volumes rebounded quickly, leaving carriers struggling to move freight. So much so that some companies had to turn away new business in favor of trying to hire new drivers.  

“All the carriers I talk to are looking for another 100 to 500 drivers,” Satish Jindel, president of transportation research firm SJ Consulting Group, said in an interview with the JOC. “The trucking industry is short 2,000 or more drivers just on the LTL side. That tells you demand is robust. This is a great time for the whole industry and LTL carriers should be operating better in this environment.” 

It is indeed a profitable time for LTL carriers, especially as the demand for e-commerce continues to swell. XPO Logistics, the third-largest stand-alone LTL carrier in the United States, had to lower its adjusted LTL operating ratio to 79.7 percent in Q3, while Old Dominion Freight Line, the second-largest LTL carrier company, lowered their’s down to 74.5. This means that these carriers saw operating profit margins upwards of 25 percent, while most publicly owned LTL carriers are working with operating margins below 10 percent.  

“If XPO and ODFL can do this, there’s no reason others should not be able to,” Jindel says. “The LTL industry should be printing money right now; demand is exceeding capacity.” 

As with other modes of freight transportation, LTL contract rates will continue to climb, but not at the same rate as truckload pricing. LTL shippers and carriers should be expecting increases to remain in the mid to high single digits, whereas FTL freight is seeing double digits. As LTL volumes continue to rise, freight pricing will continue to stay steady throughout the year.  

Jindel said LTL operators “need to get their finances in order so they can reinvest in what’s going to be needed” in 2021. This means hiring more drivers, ordering new equipment, and investing in new technology.  

Beware The Bottlenecks

As it stands, capacity is tight, regardless of what mode a shipper decides to use, be it LTL, FTL, drayage or intermodal rail. Shippers are struggling to find the right fit for their freight needs, even more, to make sure the customer receives that freight on time.  

While the increase in demand makes for lucrative contracts, an overabundance of capacity is just as bad as too little if there isn’t enough equipment to move it.

While the increase in demand makes for lucrative contracts, an overabundance of capacity is just as bad as too little if there isn’t enough equipment to move it. This is being seen it two distinct problems. The first being the pervasive driver shortage in the United States. There simply aren’t enough drivers to fill the number of open seats behind the wheel, which leaves carrier companies competing over the same limited resource.  

The second issue is the amount of time it takes for a trailer to be unloaded. With the massive influx in demand, most big-box retailers are getting more trailers in faster than they can be unloaded, which is problematic. As most LTL carriers have a limited amount of equipment, every trailer that is tied up, waiting to be unloaded, shrinks the total amount of available capacity. 

Shippers Need To Start Planning  

Despite the vaccine rollout, there is no telling how much longer we will continue to experience COVID-19 restrictions. This means that pressure on LTL prices will continue, which could affect shipping budgets.

Unfortunately, due to how turbulent and unprecedented 2020 was, data from years prior is of limited help, shippers will basically have to figure out their shipping budget on the fly this year as we continue to navigate uncharted territory.

As e-commerce demand continues to grow, it is likely that many shippers will continue to see delays in their deliveries, which could be problematic if operating under tighter deadlines or restrictions such as OTIF policies.

In addition to higher prices, shippers will also have to factor in delays, as many carriers are struggling to keep up with the workload. As e-commerce demand continues to grow, it is likely that many shippers will continue to see delays in their deliveries, which could be problematic if operating under tighter deadlines or restrictions such as OTIF policies.

While capacity will remain a challenge, shippers do have some options available to them. One of the best methods is to work with a third-party logistics (3PL) provider. As a leader in LTL, BlueGrace can help you to find the capacity you need when you need it. Contact one of our experts today to get a quote on your next shipment.

The Logistics Of The Super Bowl

Not even COVID can stop what is according to Supply Chain 247  “the world’s most-watched single sporting event”. As Tampa, Florida prepares to host Super Bowl LV, a litany of logistics experts huddle to make sure wardrobes are the most consequential thing malfunctioning on February 7.

Creating A Super Bowl Experience 

Construction materials leading up to hosting a Super Bowl do need to be transported, but a much larger demand on shipping will be from the cultural traditions that football fans hold for the big game. It’s not Super Bowl Sunday without wings, our favorite drinks and every kind of chip dip imaginable!  

Over 1.25 Billion chicken wings, 28 million pounds of potato chips, 54 million avocados and 50 millions cases of beer will be consumed on what is known as the second biggest eating day of the year. 

With an abundance of demand, goods need to arrive on time to avoid shortages and missed opportunity for profits in retail. 

So whether fans make purchases in or near Stadiums, prior to a gathering at home, or out at their favorite sports bar; consumers are ready to spend for the experience. Food, alcohol, apparel, and decorations will all need to be stocked by retailers. With an abundance of demand, goods need to arrive on time to avoid shortages and missed opportunity for profits in retail. 

Meeting Inventory Demands Through Capacity 

The most important and often the most challenging problem in fulfillment is last-mile delivery. If disaster is going to strike with a carrier, the largest impact this can have is during the transfer from distribution center to storefront. Distribution centers cannot order perishable items too far in advance.  However, if an inbound load is late to the distribution center, stores have the option to order other items from their distribution inventory while still receiving their in demand non-perishables. With interruptions in last-mile delivery, consumables may not reach the shelves in time for the big game surge in purchasing. Retailers do not like losing profits and market share.  

Carriers want to focus on accurate projections in order to make best-fit decisions between FTL and LTL. FTL options are enticing due to their lower spot rates, however LTLs can have a significant cost-benefit advantage when expediting a load is the priority. Unfortunately, carriers can lose the gamble with FTL.  When shippers are in a crunch for time and need to get a load sent out, even if it’s a partial, they may end up paying FTL rates instead of LTL rates, which tend to be decidedly cheaper for the volume of freight being shipped. 

Luckily, resources like visibility and real-time notifications mean that making choices for a reliable supply chain don’t have to feel like betting the farm.

Since retailers are not likely to forget the bad taste in their mouths left by coming up short during a high sales annual event, it may benefit freighters to make the safe wager on last-mile delivery by booking LTL. Luckily, resources like visibility and real-time notifications mean that making choices for a reliable supply chain don’t have to feel like betting the farm. With transparency through technology from BlueGrace, you can take a move out of the NFL’s own Frank Supovitz’s handbook and be prepared for anything this Super Bowl Sunday. 

Do you have questions about your LTL or FTL? Are you curious if you might need help optimizing either for them for your “big game”? Contact our logistics experts at BlueGrace Logistics today and let’s talk more.

Top 3 Factors To Consider In 2021 For The Trucking Industry

With the effects of 2020 reverberating into the new year, business carries on in some unusual new ways. Most notably, COVID-19 disrupted the global supply chain and profoundly altered the flow of goods. E-commerce has shaken the retail industry’s logistics approach, as Amazon’s model dramatically altered consumer expectations in a phenomenon now known as the “Amazon Effect”. Under orders to stay home, much of the world turned to online retailers like Amazon for shopping that was previously done locally and in person. Between hard to predict consumer behavior and the erratic flow of goods, outlooks on capacity continue to vary and become more heavily influenced by urgency. 

Impacts Of COVID-19

COVID-19, which required government response worldwide, presented many barriers to the existing standards of freight. Many workers considered non-essential by governments, happened to be essential in producing, packaging and transporting goods. Borders were closed to stop the spread, further bottle-necking the flow of supply chains. The threats that COVID-19 presented to supply chain security, continuity and resilience exacerbated traditional risks faced every year and also created new vulnerabilities and risks that experts will need to tackle in the year ahead. 

“The Amazon Effect” and E-Commerce

As slowdowns became prevalent in other major carriers such as FedEx and UPS, Amazon remained comparatively unphased.  Obsessed with customer satisfaction, Amazon was well seated to thrive during what was for most others, a crisis. With COVID-19 creating changes in best-fit practices, Amazon contributed to the plight of its competitors by raising the bar.

Consumers had come to expect options like free shipping, free return shipping, same-day delivery, and high visibility. As Forbes states, “last-mile delivery is one of the most challenging problems in fulfillment,” and “The Amazon Effect” has had its heaviest influence here. Amazon has the same logistics focus as it’s competitors, inventory and freight. However, it has shifted the weight of this focus largely on controlling its freight costs. Since last-mile delivery is almost exclusively by road, shifting investment towards freight allows delivery models to expedite delivery with smaller fleets.

For freight shippers to keep pace, they will need to make logistics-minded investments that allow them to evolve with the pervasive influence of Amazon’s near-instant gratification. 

Due to the high influence of this phenomenon over last-mile delivery, the trucking industry will continue to be affected in 2021. For freight shippers to keep pace, they will need to make logistics-minded investments that allow them to evolve with the pervasive influence of Amazon’s near-instant gratification. 

Ideal Capacity for Profitability 

2020 came with many uncertainties, but there is one thing the trucking sector knows about shares: they tend to outperform as the industry emerges from capacity-related stress or economic pressure. Inventory to sales ratios are at record lows. Businesses that responded to The National Federation of Independent Business (NFIB) Optimism Index showed that increasing their inventories was a chief priority in their developing plans for 2021.    

Given the industrial exposure of LTLs, the most optimistic of analysts are preparing for a bull market.  

The end of 2020 sees all-time highs in LTL stock trading. Many analysts are projecting that the COVID-19 vaccine will increase not only consumer economies but provide a catalyst to company inventories-related-spending. Of course, the implication of this outlook is positive strides in the industrial sector. Given the industrial exposure of LTLs, the most optimistic of analysts are preparing for a bull market.  

FTL shipping has many benefits over LTL in expedition, and is favored for it’s lower spot rates. However, as factors like the Amazon Effect come into play, it is important to think critically about best-rate decisions.

FTL shipping has many benefits over LTL in expedition, and is favored for it’s lower spot rates. However, as factors like the Amazon Effect come into play, it is important to think critically about best-rate decisions. 

Trucking stands to see plenty of action in 2021. If freight companies can accurately forecast capacity-related needs, they will remain insulated from the chaos 2020 brought with it’s unprecedented factors as they continue to hit the open road into 2021.  

Strengthening Capacity Foresight

BlueGrace offers end to end support by assessing and integrating your needs into projections from our data analytics team. Partnering with an extensive list of carriers, BlueGrace can help ease the significance of the dreaded capacity crunch. If you would like more information on how BlueGrace can help you meet tightening deadlines and reduce transportation costs, contact us at 800.MY.SHIPPING or fill out the form below to speak to one of our experts today!

Lack of Safe Truck Parking Remains an Issue for 2021

2021 is still carrying over problems from 2020. Hours of Service regulations have been amended as of June 1st, 2020, to provide greater flexibility without compromising the original intent, which is safer driving practices for truckers. While keeping over-tired truck drivers off the road is certainly a worthwhile goal, providing an adequate amount of safe truck parking spaces still presents a problem.  

Nationwide, the shortage of safe spaces for truck parking is on the rise.

Nationwide, the shortage of safe spaces for truck parking is on the rise. Despite ongoing concerns, including the tragic murder of one exhausted and sleeping Jason Rivenburg at an abandoned gas station on March 5, 2009, drivers remain wanting safe truck parking spaces. Jason’s Law Truck Parking Survey and Assessment was developed and implemented to identify driver safety problems and avoid further tragedy. 

The US Department of Transportation explains: Jason’s Law requires the U.S. Department of Transportation (DOT) to conduct a survey and comparative assessment in consultation with relevant State motor carrier representatives to: 

  1. Evaluate the capability of each State to provide adequate parking and rest facilities for commercial motor vehicles engaged in interstate transportation.
  2. Assess the volume of commercial motor vehicle traffic in each State.
  3. Develop a system of metrics to measure the adequacy of commercial motor vehicle parking facilities in each State.

Evaluating Capability and Assessing Volume 

During a meeting revealing the latest survey results, Jeff Purdy, a transportation planner with the FHWA’s Office of Freight Management & Operations, said, “Major freight corridors and large metro areas have the most acute shortages.” The problem spans the nation, with shortages peaking overnight and on weekdays. There is still no time of day where parking is consistently available.” 

Despite increases in public parking spaces (6%) and private parking (11%) in the five year period preceding the 2019 survey, there were new shortages found along the entire Interstate 95 corridor, Pacific-region corridors and the entire Chicago area.  These reports included a 15% hike in miles traveled between 2012 and 2017 in addition to locations that were identified as problematic in a separate survey from 2014. 

Identifying Metrics and Contributing Factors to Parking Adequacy 

The 2019 survey by Jason’s Law was considered more statistically valid by the measure of compliance. More drivers responded to the survey increasing the data pool by 43% (11,696 participants). Even more impressive was the response from trucking managers (increasing 205% to 760). Truckstop operators responded at a 34% increase, including 524 additional data points.

The 2019 survey grew comprehensively to include truck drayage at ports, a growing issue and gathered data from 18 port authorities. 

This has an especially negative impact on scheduling pick up and delivery times.

During this briefing, U.S. Maritime Administrator Mark Buzby voiced, “ports have their own challenges on congestion due to the scope and scale of vessels discharging 10,000 to 15,000 containers at a time. The last month or two with the great flood of inbound containers has exacerbated the problem”. He said this has an especially negative impact on scheduling pick up and delivery times. State transportation departments responded that the development of new public facilities and parking are few and far between, citing ongoing challenges with funding, planning and accommodations for trucks. Despite these obstacles to improvement, truck stop operations reported:

  • 79% do not plan to add more truck parking. 
  • 73% do not monitor parking. 
  • 78% do not offer reservations. 
  • 75% do not charge for parking. 

Further identifying systematic barriers to safe parking, president of REAL Women in Trucking, Desiree Wood shared her observations during the meeting in an email to FHWA.  She revealed that Rivenburg “would not have been able to pay $12, $15, $20 a night to park his truck safely. What are we doing to address the issue that most company truck drivers are not reimbursed for paid reservation truck parking? Who is paying for it? 

Legislation and Projected Industry Effects 

Efforts made by the Owner-Operator Independent Drivers Association (OOIDA) came up short.  Although they got bipartisan truck parking legislation introduced in March incorporated into a huge infrastructure package, passed by the House of Representatives in July, neither bill will see any movement by the end of the year. Congress has awarded “$231 million in project requests were submitted to FHWA, and approximately $34 million in funds were made available to support awards made to 20 projects.”

At the end of the meeting, a voice of reason comes from Darrin Roth.  As the Vice President of Highway Policy for the American Trucking Associations, he offers insight that “Billions of dollars have been added to the national freight bill due to lost productivity.” Data on congestion and highways safety provides context, “Congested conditions reduce travel speeds and increase travel times throughout the highway network, yet the physical limitations of drivers (i.e., their need for rest facilities and supporting amenities) and HOS regulations that govern their work environment are time-based, not distance-based. “

Safe parking will be necessary to keep pace with supply demands.

Safe parking will be necessary to keep pace with supply demands. As Roth suggests, these changes will benefit the industry from the bottom up resulting in more desirable work conditions for existing and prospective drivers, shorter transit times for deliveries and increased profits for trucking companies.

Shifts in Consumer Trends and the Future of Retailers

Consumer behavior during the global pandemic of 2020 is proving difficult to absorb for many businesses. Fraught with the risk of infection, restricted business hours, and massive unemployment, the average shopper has reallocated their purchasing power online. The virus has impacted traditional brick-and-mortar retailers in the United States particularly hard and bankruptcies are on the rise as a result. 

How Will 2020 Impact Trends in 2021?

A popular theory has been that the retail world was already experiencing an overhaul based on demographics.  More people reside alone.  This leaves less time for shopping in person. With increasing connectivity and on-the-go attitudes, it is natural for shopping to gravitate towards handheld apps and home deliveries.

Consumers have become savvier about how they go about shopping.

Additionally, consumers have become savvier about how they go about shopping. Prices and online reviews are easily compared in a matter of minutes. This creates an opportunity for disruptors to undercut competitors in a range of categories, such as price, customer service, and speedy delivery.

According to a recent interview done by Harvard Business Review with Marc-Andre Kamel, a partner who heads the global retail practice at Bain & Co, these retail trends existed before the momentous events of 2020.  Rather than creating new trends, it is reasonable to conclude that recent events merely accelerated existing trajectories. 

Which Retailers Were Set Up for Success in 2020? 

Naturally, online retail giants like Alibaba or Amazon entered the tumultuous year with enough resources to weather the storm. But what about smaller retailers? Many haven’t fared so well, but what about the ones that have?  There are four prototypes necessary to maintain a sustainable position.

Regional Gems: These companies find their strength where their larger competitors are not prevalent.  Protected by their ties to the regional consumer base and culture, their business model is thriving.  Due to the relative novelty of online shopping in these areas, it is difficult to project how these companies may fare against emergent business models.  

Hitchhikers: With a flair for creativity, these companies rely heavily on branding status to appeal to consumers. While these retailers could not hold their own against a company like Amazon, they can profit by riding those coattails.  

Value Players: It seems simple, but keeping prices low ensures stability during a widespread financial crisis. Aldi, TJ Maxx, and Burlington are a few examples.

Scale Fighters: The final possible precursor to success in 2020 is size. Retailers like Walmart have the heft and established consumer base to fight other ecosystems. 

Which Retailers Lacked Positioning?

With cash flow reduced for most shoppers and a focus on buying online, many retailers found themselves at a disadvantage while simultaneously needing to change their business model to survive. Shifting shrinking resources is a challenge for any business. Trying to do that while restructuring a business during a global crisis borders on the impossible.

Legacy Laggers: Aptly named because they are often some of the more visible household names (and they’re falling behind). Facing immense pressure from both the market and shareholders when profits plummet, many of these companies choose to consolidate. Many doomed department stores could survive as something reinvented by re-imagining ambitions and joining forces. 

Unsustainable Innovators: These exciting new entities face a dead-end when it comes to profitability. They either perish during growth or gain the attention of a previously mentioned Scale Fighter who wishes to absorb their knowledge.

Is It Reasonable to Expect a Retail Rebound Post-Vaccine?

The trend from older to younger generations is a reduced emphasis on showy consumption and a shift towards sustainability and personal meaning. Data shows that COVID accelerated this trend and a percentage of older generations have adopted their children’s shopping habits. This is a sign that a retail rebound is not likely.  

These profits have exceeded any business lost during the quarantine.

Meanwhile, consumer data from the East suggests that shoppers are eager to buy. China, which had a more comprehensive response to the pandemic than the United States, has emerged from lockdowns and enjoyed a surge in retail activity. While this was seen mostly online, those who browsed were more likely to take their carts to checkout. These profits have exceeded any business lost during the quarantine. China did previously outpace the US in luxury purchasing, however, so this trend may not translate to an accurate projection for the Western market.  

Can the Ecosystems Fail?

According to Harvard Business Review, Amazon will invest $100 billion more than any other top 10 retailers globally. Add to that their history of successful innovation, and they’re more likely to drive consolidation than a stall in growth.

While Amazon has a robust consumer base relying on them for online purchasing, part of what made them so successful in the 2020 pandemic is the nearly doubling number of Hitchhikers that sell their products on its platform. In fact, one of the only major obstacles Amazon faces right now is keeping deliveries timely amidst such prolific demand.  

For smaller retailers, keeping pace with e-commerce giants will be a difficult task, but it is possible through innovation, creativity, and a weather eye on consumer trends. 

Retailers are not the only ones struggling with the new economy. If you are a shipper trying to overcome the impending obstacles of COVID-19, our team of experts are available and ready to help. Contact us today!

It’s Cold Outside. What Are My Options to Keep My Freight From Freezing?

Winter is rough on freight for many reasons. Snowstorms and ice can create dangerous travel conditions that delay trucks in the best case scenarios and can bring the supply chain to a screeching halt in the worst.

However, while most people are worried about the tractor-trailer jackknifing in the middle of the highway, most people aren’t considering the condition of the freight itself. Winter weather conditions can damage even the hardiest of freight. However, as most shippers are moving raw materials around, it raises the question: What are my options to keep my freight from freezing? 

Know Your Product

Did you know that freeze-dried goods like coffee and flour are vulnerable to spoilage due to low temperatures? Before you do anything else, it is vitally important to understand what temperature ranges are okay for your freight. Different goods require different temperatures, so what is perfect for one item might be too cold for another.

After all, it doesn’t make sense to spend the extra on specialized equipment for your freight if only certain items will survive the trip.

If you haven’t done so before, now is the time to take stock of your products and get a better understanding of what temperature is safe for your items to travel at. Not every product is rated for the same temperature, and some goods might need to be kept warmer than others. It’s important to make sure that you’re not mixing these types of items on your pallets. After all, it doesn’t make sense to spend the extra on specialized equipment for your freight if only certain items will survive the trip.

Plan Your Route And Keep An Eye On The Weather 

As the cold season runs from December to March, it’s important to plan accordingly. Understanding where your freight is going and what route it will take to get there is important. While California might be fairly warm when the rest of the country is freezing, the Midwest and Upper Northwest states can see temperatures fall to double digits, below zero.

Keep an eye out for any impending weather events that not only can that affect the temperature, but it can also delay your shipment.

Keep an eye out for any impending weather events that not only can that affect the temperature, but it can also delay your shipment. Both of which we are looking to avoid. 

Finding the Right Equipment

The best method to protect your freight from freezing is to utilize the right equipment for the job. Load it onto a temperature-controlled unit, such as a reefer truck or in a heated dry van trailer. A reefer unit is a trailer equipped with a refrigeration unit that controls the trailers’ internal temperature. While these units are typically used to keep goods cold during the summer months, they can also work in reverse, keeping freight at the right temperature even when it’s freezing outside.

Some drivers have the option of parking their trailers in a heated warehouse. This is a great option to take advantage of, especially if the shipment will arrive over the weekend when the loading dock might not be manned until the following business day.

Another option is for the driver to idle their truck. The engine’s small vibrations can actually prevent freight from freezing and can be useful in shorter hauls. This option can also be augmented by using thermal blankets and pallet covers, which can help keep most of the chill off freight during transit. The level of protection necessary will depend on what type of freight is being transported.  

Detail the Bill of Lading 

If you’re shipping temperature-sensitive goods, it’s important to document that on your bill of lading. Many carriers offer a protect from freeze (PFF) option, which can be agreed upon once a carrier accepts a load. If the shipper decides how they want their goods to be protected from the cold, this should be detailed in the BOL. A good rule to follow is the more detail provided, the fewer chances there are of damage to the product.

Additionally, issuing a PFF means that a claim can be filed when the freight arrives at its destination frozen. Otherwise, the shipper is liable to pay the damages to the freight.

Don’t let your freight give you the cold shoulder this winter. Take time to consider how you’re shipping it, where it’s going, and what kind of protection you’ll need to keep it in proper condition.

New Year Resolution: Start Collecting More Data in 2021

Most of us are happy to have put 2020 behind us. A new year means a new start and for most people, that means setting goals of making it out to the gym, cutting back on the indulgences and maybe paying a little more attention to the checkbook. With everything the past year has thrown at us, a fresh start sounds like just the thing the doctor ordered.  

If 2020 has taught businesses anything, it’s that our supply chains are not nearly as secure as we might have once thought.

However, resolutions need not only apply to individuals. A new calendar year is a perfect time to set some goals for your organization and start planning new business strategies. If 2020 has taught businesses anything, it’s that our supply chains are not nearly as secure as we might have once thought. COVID-19 has exposed quite a few vulnerabilities in both the procurement and distribution process of goods and materials and the overall transportation process. As many organizations have scrambled to find alternative suppliers and quick solutions to the myriad of problems that cropped up from the pandemic, now is the time to reflect on what we’ve learned and begin to implement a more robust system to be better prepared for when such disruptions happen again in the future.  

So what should the number one resolution be for every organization that is responsible for managing a supply chain? As you might have guessed from the title, it’s time to start collecting more data. 

The Big Benefits of Big Data 

Over the past two decades, information technology has grown by leaps and bounds, which, considering how outdated most practices are in the freight industry, it’s a welcome change.

For starters, the process of digitalization means that companies are moving away from paper logs and forms, countless emails and phone calls, and are automating their processes. Not only does this result in fewer human errors (a missing form here and a mis-click there), but it expedites the entire process of booking and shipping freight, allowing organizations to operate more smoothly and efficiently.

However, the benefits of this process don’t stop there. Digitalization also creates the opportunity to collect data that would otherwise fall into the unknown. That data is what creates the necessary visibility into your supply chain and day-to-day operations to truly understand what’s happening behind the scenes.  

In the past, companies have simply operated blindly. A carrier was booked, the cargo was moved, it arrived where it needed to go, maybe late, maybe on-time. Job done. However, in today’s marketplace, that’s not enough as the “Amazon Effect” has pushed customer expectations to new heights. Consumers aren’t content to order their package and wait. They want real-time updates as to where their goods are; they want ultra-fast delivery times; they want it for free (or as close to free as possible), and they want it now.  

Simply put, good data drives better service. 

In the B2B world, shipments must be on time, in full, or shippers run the risk of getting hit with fines, penalties, and chargebacks. Not to mention the risk of losing preferred supplier status, which is a major hit when dealing with big retailers like Wal-Mart. With competition tighter than ever for just about any industry, providing that insight isn’t just a nicety, it’s a necessity. Simply put, good data drives better service.  

How Do I Collect More Data? 

This is one of the most important questions every company needs to be asking themselves. The supply chain is capable of generating vast amounts of data, in some cases, too much. There are a few problems with this. First problem is that the data either gets overlooked, or siloed away where it doesn’t serve any other purpose than consuming bandwidth. Companies that ignore their data miss out on some significant opportunities to improve their operations and reduce their overall operating costs.

Without a focal point and clear goal, too much data is just as bad as not enough data. 

The second issue is that even if companies begin collecting the data, they end up getting lost. This is known as “analysis paralysis” a state in which so much data comes flooding in and there is no conceivable means of separating what’s good from what’s not. Without a focal point and clear goal, too much data is just as bad as not enough data. 

This brings us to the third point, oftentimes there is no clear goal or direction to go with the data. Data analytics is a powerful tool that can push shippers to new levels of operational efficiency if they know which direction to go with it.  

To that end, many shippers decide to bring in help from outside their organization either by working with a third party logistics provider or by incorporating a transportation management system (TMS).

A TMS is key in helping you mine valuable data from your supply chain, which increases your operational visibility and offers insights into areas where your company can improve. But it also goes beyond that. A TMS can also reduce your operational costs, which, given what we’ve seen from 2020, will be an essential survival strategy for every company going forward into the new year.  

The good news is, implementing a TMS into your organization doesn’t have to be a costly or disruptive endeavor, and the benefits that can be realized from both the supply chain optimization and the cost reduction are significant. Moreover, the data collected from utilizing a transportation management system can create an insight into your organization that you might not have had otherwise. That insight is both powerful and necessary should you decide to take your resolution a step further and perform an internal audit of your operations.  

The New Year is just around the corner, so it’s time to start making your resolutions and more importantly, planning to make them a reality. Request your FREE Supply Chain Analysis today!

The Impact Of The Amazon Effect On Traditional Freight Transport

Before the e-commerce segment rose to mainstream relevance, the retail industry’s logistics part had seen little disruption over decades preceding it, sandwiched between opaque workflows and stifling inefficiencies. That said, the consequential impact that e-commerce has on the workings of the supply chain today would not have been possible without the online retail behemoth Amazon and the ‘Amazon effect’ that lies in its wake.

In essence, Amazon obsessed over its customers.

Put simply, the Amazon effect is the evolution of supply chains from looking at end consumers as ‘yet another’ part of the value chain to putting them at the center of their operations. In essence, Amazon obsessed over its customers, aligning its product offerings and services to ensure the highest standards in parcel delivery experiences.

Subsequently, the consistent efforts of Amazon to provide impeccable delivery fulfillment to its customers snowballed to create an environment where expedited shipping became a parameter that set businesses apart from their market competitors. Eventually, this led businesses to start looking at delivering faster and keeping their customers in the loop on last-mile parcel movement.

While the need for visibility and expedited shipping have long been an expectation within the supply chain industry, they are not possible without digitalization.

While the need for visibility and expedited shipping have long been an expectation within the supply chain industry, they are not possible without digitalization. In many ways, digitalization within the freight industry can be inferred as the direct consequence of e-commerce. Data in supply chains remains frozen within siloed operations, as companies continue to cut off their data streams and not gain insights by feeding them to data-driven algorithms.

Meanwhile, consumer expectations within e-commerce have overflown from its business to consumer (B2C) segment to the business to business (B2B) segment of freight logistics, where shippers are increasingly expecting better experiences while moving freight. Shippers often rationalize their visibility requirements, contending that when Amazon could show them precision location status of individual parcels, fleets could afford to track entire containers.


Amazon effect’s impact on inventory levels

The e-commerce segment differs from the traditional retail industry in the way the former reduces the number of intermediary nodes within supply chains connecting the manufacturer with the end consumer.

Traditional retail moves products through several nodes in the supply chain, including manufacturers, distribution centers, and retail inventories, before selling to end consumers in retail outlets. E-commerce compresses this value chain, cutting out the retail inventories and storefronts, and replacing it with a multitude of last-mile delivery models.

As e-commerce bites into the physical retail market, there is a steady shift in the size of inventories and the way they are held. The depth in e-commerce offerings has translated into an increase in the variety of products stocked in inventories, inevitably showing up as an expansion in overall inventory volumes.

However, the inventory volume increase is not proportional to the expected increase. Shortening of lead times can be one of the reasons for the inventory volumes to not increase to expected levels. That apart, while logistics stakeholders look to stock products that are in demand, they also opt to stock limited quantities and not worry about overstocking due to short lead times. This way, companies also reduce the risk of stocking product lines that have become obsolete. Obsolete product lines are a real possibility as product demand is an extension of consumer interest in a said offering, which can abruptly change in a matter of days.

This is especially true of electronics, where older versions witness a rapid fall in demand as improved versions hit the market. The ease of e-commerce makes it easier for manufacturers to approach the market without intermediaries, increasing the chances of entire product lines being trashed due to a better alternative mushrooming in the market.


Last-mile delivery disrupted by the Amazon effect

Amazon’s customer obsession has ensured that the last-mile segment is one of the primary differentiators for delivery fulfillment within the e-commerce market. The last-mile is expected to be nimble, with the gravity of consumer expectations making it one of the crucial parts of freight movement.

Retailers are reevaluating their supply chains, attempting to consistently improve their customers’ delivery experiences. Technology has come to the rescue, with several additions being made to the way the last-mile is handled, including automated delivery bots and VTOL drones. Dynamic route optimization is part of a last-mile delivery company’s arsenal, with delivery vans given routing instructions based on parameters like location, parcel specification, and delivery time windows.

or logistics at large, there are two main operational costs – inventory and freight.

For logistics at large, there are two main operational costs – inventory and freight. While expenses on inventory and freight are comparable, the Amazon effect has successfully pushed scales towards freight costs – courtesy, an inordinate increase in air freight movement due to expedited shipping options. However, with the last-mile almost exclusively fulfilled over the road, the trucking industry would inevitably continue being impacted by the ubiquitous Amazon Effect.