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3pl

Controlling Costs and Preventing Accessorial Loss

Controlling costs is critical for any business to be successful. When working with a supply chain, the more complex it is, the more chances there are for additional costs and surcharges, any of which can cost your company a great deal of extra money.

They are any freight services that go beyond the normal scope of pickup and delivery.  

Accessorial charges are a particular type of surcharge. They are any freight services that go beyond the normal scope of pickup and delivery. This can include inside or special delivery charges, waiting or detention time, fuel surcharges, storage fees, and many others. Given the way the freight market is changing, especially due to the rise and continual growth of e-commerce, many companies are looking to a more specialized version of last mile delivery as customers want their products sooner rather than later. The “white glove” last mile service, while costly, is growing increasingly important as customer service is becoming one of the last true differentiators among the competition.  

In our webinar, we covered the basics and most common questions of accessorial charges which include:  

    • What are accessorials? 

 

    • How do they affect cost? 

 

    • How do they affect supply chain efficiency? 

 

    • How can we mitigate problems? 

 

  • How do we know if we have a problem? 

Consumers want their product today, that means that retailers want it delivered, checked in, and on the shelf yesterday.

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

What Are Accessorials?  

As we mentioned above, accessorials are extra charges associated with freight delivery that fall outside simple pick up and delivery. We gave a few examples above, but those are by no means the only accessorial charges that you could be stuck paying. Here are some other types of common accessorial charges.  

    • Reweigh 

 

    • Limited Access 

 

    • Liftgate 

 

    • Residential delivery 

 

    • Appointment / Notify 

 

    • Sort & Segregate 

 

    • Hazardous Materials  

 

  • Trade Show Delivery  

While inaccurate weighing of freight could be a result of an honest mistake, the cost of that mistake can add up quickly.

It’s important to control and monitor as many of these as possible to help control costs. Consider reweigh charges for example. When a carrier weighs freight and compares the actual weight to what’s listed on the bill of lading, the difference can be instantly tacked on to the invoice. For shipments that are 50 pounds or more over what the bill of lading states, there is a $25.00 validation fee as well as an increase to shipping costs. Additionally, all freight fees, fuel surcharge fees, and any other applicable accessorial fees will be adjusted accordingly. While inaccurate weighing of freight could be a result of an honest mistake, the cost of that mistake can add up quickly.

How Accessorial Fees can Affect Your Supply Chain  

One way to better control accessorial charges is to have a more efficient and agile supply chain. Detention fees are a prime example of where efficiency pays off. For the LTL market, every shipment has a set amount of free time per stop before the charges start being applied. While this is based on weight, meaning that heavier shipments have more time, it can be hard to gauge just how long each stop is going to take which leaves your company exposed to detention fees.  

Another thing to consider is that the ELD mandate severely limits the amount of working time a driver has available. The longer it takes to load and unload freight can cause delivery delays and will ultimately increase the price of a shipment. Once you start adding detention fees onto the bill it can quickly become more expensive than you were initially anticipating. 

It’s critical to have your supply chain running smoothly and efficiently.

Because of this, it’s critical to have your supply chain running smoothly and efficiently. Not only does it increase the chances that you will make your delivery schedule, but having a more efficient operation makes you a more attractive customer to carriers (which increases the likelihood of getting the capacity you need) as well as helping to control shipping costs.  

Learn More About How You Can Manage Accessorial Charges   

When it comes to controlling costs, the more you understand about extra fees the better off you’ll be. Because many of these accessorial charges can compound and complicate others, it’s important to understand the full workings of your supply chain and identify any potential problems before they arise.  

The truth of the matter is that the more you understand your freight and the way your carrier works, the more accessorial fees you can either reduce or negate entirely. Many of these fees won’t even enter into the picture so long as the shipper is taking the time to make sure they’re doing things right. Doing this means preventing the issue before it even begins. On the other hand, if your freight invoice is coming as a bit of a shock, it might be time to take a closer look at the surcharges and determine what you can you do to correct the issue.  

Ultimately, everything we covered in the webinar is about helping your company to manage these fees and perform better across the board. From internal operations to external executions, everything is connected and we break it down for you. Watch the full webinar to learn more about how you can be successful!

If you would like to speak to one of our freight experts, call us at 800.MYSHIPPING or fill out the form below:

 

Be Sure, Be Insured. Why Carrier Liability Is Not Insurance

Insurance is an important part of risk management. It helps businesses mitigate financial loss arising from unforeseen events that may disrupt their supply chain. Transporting goods from one location to another is a crucial part of the supply chain. It is what keeps the business running. Hence, transport or cargo insurance should be an essential part of a shipper’s supply chain risk management strategy. 

While most shippers understand the importance and the need for cargo insurance, there’s a debate on whether to rely on carrier liability or to get a separate insurance policy.

In the webinar titled  Be Sure, Be Insured, Brian Blalock, Senior Manager Sourcing Strategy, BlueGrace, and Tyffany Gunn Kelley, Senior Manager Strategic Partnership and Channel Partner Program, UPS Capital, discuss: the difference between carrier liability and real insurance importance of insurance insuring solutions how organizations can manage risks to their supply chain

  • the difference between carrier liability and real insurance
  • importance of insurance 
  • insuring solutions 
  • how organizations can manage risks to their supply chain

Here are a few important pointers from the webinar:

UPS Capital appointed Harris Poll to survey U.S professionals who supervise shipments or are key decision makers for their company to understand their views on cargo insurance and how they manage risks in their supply chain. For the study, Harris Poll surveyed more than 600 professionals.

Why do shippers need insurance?

Setting the direction for the webinar, Tyffany shared some of the findings from the survey which highlights the risks to shipments during transit and explain why shippers need insurance: 

  • 1 in 10 shipments face a glitch 
  • 92% of the respondents said they experience some delay, loss, or damage in transit each year
  • 15% of shipments can be affected due to in-transit incidents 
  • Approximately a loss of USD 56 Billion is reported annually due to cargo and freight movement (National Cargo Security Council)
  • No mode of transport is free of incidents like lost shipments, damages, or delays
  • Full truckload shipments report a loss of 12.8% annually 
  • LTL shipments show an annual loss of 10.8%  
  • Loss from ocean freight stands at 9.9% annually
  • Air freight reports a loss of 9.5% annually 

What is the impact of lost, damaged or delayed shipments?

To provide some perspective on the kind of damage such incidents can cause, UPS Capital asked the respondents to list down the areas that they thought were adversely affected due to lost, damaged, or delayed shipments:

  • 52% respondents said it hurt customer relationships 
  • 51% respondents said it resulted in financial loss
  • 46% respondents said it cost them in terms of employee time and cost
  • 36% respondents said it had a negative impact on company reputation

What is shippers’ view on carrier liability?

Do shippers, logistics professionals, decision makers understand what carrier liability is and what kind of coverage it provides to their valuable shipments? The survey provides some alarming results.

  • According to the results from the survey, almost 90% of the shippers rely on carrier liability to manage risks to cargo while in transit. 
  • Approximately 39% of the respondents thought that carrier liability is the same as real insurance. 
  • While 61% of the respondents believed that carrier liability and insurance were not the same, only a few of them were able to pinpoint the difference between carrier liability and insurance and the extent of cover each provides. 
  • Almost 25 – 50% of the participants thought that their carrier liability provided cover for incidents or events that it actually did not.

Why is carrier liability not enough?

Since a majority of shippers rely on carrier liability, it is necessary to understand what carrier liability is and how much coverage it actually provides. 

The Business Dictionary defines carrier liability as “Air and ocean carriers are normally liable for all damage, delay, and loss of cargo except those arising from the act of God, act of the shipper, and the inherent nature of the goods from acceptance of cargo through its delivery or release. Air carriers are usually liable under Warsaw convention, and ocean carriers under Hague convention.” 

The definition of carrier liability, also explained by Tyffany, itself provides a list of instances where a carrier cannot be held liable for loss to shipment during transit. Apart from the given instances, as Tyffany shares, the law allows carriers to limit their exposure and exempt a variety of situations thus further limiting their liability. To cite a few examples from the webinar that carrier liability does not cover:

  • Cross-border shipments getting damaged by a customs agent or other government agency during inspection
  • Pirates, hijackers or other “assailing thieves” stealing ocean containers  
  • A fire breaking out on a cargo ship that destroys cargo on board

What are the benefits of real insurance?

Along with providing a variety of policies which may be customized to suit the shipper’s requirements, real insurance also offers a host of benefits that can mitigate financial loss, help maintain the market reputation and customer relationships. Some of the benefits highlighted in the webinar include:

  • Claims are settled based on the real valuation of the shipment
  • It provides insurance coverage for all modes of transportation 
  • It covers door-to-door, so no separate policy is needed in case of multi-modal transportation 

However, getting a cargo insurance policy is not a complete solution. It is also necessary to record the information about your supply chain so that you can understand the consequences in relation to claims. One of the best ways to do it is in a transportation management system, says Brian. 

To know more about why you need real insurance coverage, insurance solutions and how a transportation management system can help keep track of and manage insurance claims, make informed business decisions for your supply chain, and mitigate risks to your supply chain watch the complete webinar HERE.  

Want to know more about UPS Capital’s insurance plans offered to BlueGrace customers or our transportation management system? Connect with our team today by filling out the form below, or call us at 800.MY.SHIPPING.

Intelligent Automation, the Future of Supply Chain. Is the Logistics Industry Ready?

It is a well-known fact that supply chain is increasingly becoming digital. But is simply adding a digital component to the complex supply chain network enough to make it efficient? Will it provide the edge that companies need to win in the current cut-throat and ever-changing global business environment?

What more is required?

According to a study conducted by IBM and National Retail Federation (NRF), the retail and consumer goods industry is designating intelligent automation, also known as artificial intelligence, as the future of supply chain. For this, IBM and NRF surveyed 1,900 retail and consumer products company executives across 23 countries.

The survey revealed that “intelligent automation capabilities help increase the annual revenue growth by up to 10 percent”. It found that of all the respondents surveyed, around 85 percent from the retail sector and 79 percent from the consumer products sector “plan to use intelligent automation for supply chain planning by 2021”. The study also found that 79 percent of the retail industry respondents “expect to use intelligent automation for customer intelligence by 2021”.

Combining human capabilities with intelligent automation can help reduce errors and encourage the culture of digital operations and customer experience innovations.

According to IBM, integrating supply chain with customer insight is essential for the success of the omnichannel. It further added that combining human capabilities with intelligent automation can help reduce errors and encourage the culture of digital operations and customer experience innovations.

When the retail and consumer goods industries, who have the most complicated supply chains, are envisaging intelligent automation as the future of the supply chain, then can logistics – the core of supply chain be left behind?

Definitely not. In fact, the current logistics landscape which is highly fragmented and complex will benefit immensely by leveraging the power of intelligent automation in its day-to-day functioning.

How Intelligent Automation Will Benefit Logistics

Better planning: Intelligent automation can integrate and streamline transportation planning, route planning, warehouse network, and inventory planning. It will enable data sharing among all functions, highlight errors and outliers in the data, and speed up data analysis thus increasing efficiency, improving accuracy and lowering operating costs.

Increased Transparency: The global nature of the industry, different rules and regulations across countries and multiple stakeholders has made transparency in operations and business transactions mandatory. Intelligent automation can be used to add checks at all data entry points to make sure that only verified and correct information enters the system and is available to all stakeholders on demand. This will improve decision-making, reduce incidents of miscommunication between users (internal and external), and decrease dependency on other departments for data.

Enhanced Visibility: A system empowered with smart technology like GPS and RFID can enable users to track shipments from pick up till the final delivery location. This can improve multimodal transportation planning and also keep the customers updated with a more accurate expected time of delivery. Visibility of shipments and other aspects of the supply chain also supports the planning function, highlights possible issues before they become roadblocks, and allows better control over the process.

Improved Efficiency: Adopting artificial intelligence to empower systems and processes will greatly reduce duplication and monotonous tasks. This, in turn, will improve both human and machine efficiency and reduce the turnaround time for each task to be completed.

Refined Analytics: Logistics is a data-intensive function. A large amount of data is used as the base for making strategies and taking decisions. An intelligent automated reporting system can reduce the time taken to collate, clean, format the data and minimize errors, thus leading to better, informed and quicker decision making.

Further benefits can be derived on a case to case basis as the technology is put in use. However, like with all new things, there’s a need to exercise caution.

These are just some of the benefits of using intelligent automation in logistics. Further benefits can be derived on a case to case basis as the technology is put in use. However, like with all new things, there’s a need to exercise caution. In a statement by the company, Luq Niazi, global managing director of IBM Consumer, explains the care organizations working with intelligent automation need to take. He says “The entire value chain operational infrastructure of B2B and B2C commerce, there has already been an increased adoption and demand for intelligent automation. This also brings forth the need for stronger transparency, ethical practices and business prioritization to evaluate and deploy AI responsibility.”

We at BlueGrace understand the importance of an intelligent tech-enabled ecosystem. Hence we have leveraged intelligent automation to build our transportation management system. The BlueGrace TMS provides its users with high-tech tools, visibility, visual analytics, speed, reliability, and it easily integrates with other systems and technologies. Along with performing all the regular functions, it also empowers you to identify opportunities to reduce costs and optimize your supply chain. To connect with our team to know more about BlueGrace’s TMS and how it can support your business growth, contact us at 800.MYSHIPPING or fill out the form below, and one of our experts will contact you today!

3PL’s Might Bridge the Gap in a Revenge Market 

We’ve all heard that turnabout is fair play but in the trucking market, that mentality could make for a vicious marketplace. Of course, no one likes to pay any more for a service than they have-to, but given the fluctuations that happen within the freight market it’s all part of the game, right?

The problem is, when you focus solely on the bottom line, working relationships, the level of the provided services, and customer care can often be shoved to the wayside.  

A Fairweather Friendship 

While not all shippers will use and abandon their third-party (3PL) logistics providers during an economic shift, enough have done so in the past that left a bad taste in the mouths of 3PLs.

Shippers tend to shy away from their “partners” when times are good, capacity is plenty, truckers are looking for freight. When spot rates climb, however, shippers tend to look for shelter in the contract market which makes for a volatile spot market that makes matters much worse than they need to be. 

If shippers weren’t as fickle during market shifts there would be more market stability. For shippers though, the bottom line is often considered as the most important factor.  

During 2017 we saw both Hurricane Harvey hit the coast as well as the introduction of the Electronic Logging Mandate. As a result, shippers skipped the middleman and dropped their 3PLs, opting to work directly with large asset-based carriers instead.

A year later, spot rates have dropped as much 12 percent, according to data from DAT solutions, which are resembling those seen back in 2017 across several markets. Conversely, contract rates have risen, on average, about 14 percent in 2018 and have increased a further 6 percent this year.  

With spot rates on the rise, shippers once again turn to third-party logistics providers with relatively no hard feelings. With negotiations underway, both parties more or less walk away happy.  

Creating a Vicious Cycle 

The same cannot be said for that type of mentality when it’s applied to the trucking companies, however. Here the negotiations tend to carry the memory of what happened the last time rates shifted in the favor of one side or the other. To be fair, that adversarial behavior does swing both ways. When capacity gets tight, trucking companies raise their rates to support the demand. When demand is low, however, and trucking companies are scrambling for a full load, shippers will push for lower rates, a behavior that seems to be hardwired into the business.  

Here is where 3PLs can bridge that gap and help to even out the “revenge” style of marketing.  

It’s hard for many companies to part with that “grudge” mentality, especially when both sides are angling to take advantage of one another when the market permits it. You’d be hard pressed to find a business that is willing to say “Sure, we’ll reduce our rates in favor of a good compromise,” and instead sounds more like “You raised your prices on us. Now it’s our turn.” Here is where 3PLs can bridge that gap and help to even out the “revenge” style of marketing.  

The True Value of a 3PL 

One of the biggest benefits of a 3PL is that they can help a shipper to access different parts of the very fragmented trucking industry. If a shipper has access to large trucking companies, a 3PL can give them access to smaller carriers, both of which have a place in a shippers supply chain. 

“It’s hard to handle relationships with tens of thousands of carriers, so if you let the broker handle that portion, and you have a relationship with your top 10­-15 asset ­based carriers, everyone can have a piece of the pie and work more collaboratively,” said Mark Ford, Chief Operating Officer at BlueGrace Logistics.  

 The main objective of any business is to conquer new frontiers and markets. And, to do this, it requires a wide logistics network and a robust, flawlessly executed logistics strategy.

As we explained it in more detail in one of our previous articles, 7 BENEFITS OF OUTSOURCING LOGISTICS TO A 3PL — The main objective of any business is to conquer new frontiers and markets. And, to do this, it requires a wide logistics network and a robust, flawlessly executed logistics strategy. Your 3PL partner is expected to and can help you achieve your business goals. They may either have their own network across regions or they may have business collaborations with transporters storage facility providers in different regions or a mix of these two, their own network in some cities and collaboration in another. They are thus better placed to help you expand and grow your business. To do this, all you need to do is work with them in a collaborative manner to din the most optimum solution to reach your customers.”

However, shippers who are too focused on their bottom line have a harder time seeing that value in a 3PL partner and might even remain hard pressed to change their ways. 

It’s less a matter of saving a few cents on the mile, however, and more about creating a sustainable and, more importantly, profitable supply chain.

It’s less a matter of saving a few cents on the mile, however, and more about creating a sustainable and, more importantly, profitable supply chain. For shippers who are willing to keep an open mind and maintain a good working relationship with carriers and 3PLs alike have a great opportunity to build longstanding and mutually beneficial relationships. Utilizing a 3PL as a broker can help to save money when the markets fluctuate, but using them as a supply chain consultant is where they can truly save in the long run.  

There are a number of other benefits that can come from working with and outsourcing your logistics to a 3PL. Not the least of all, a better and stronger bottom line.  If you would like to speak to one of our experts, call us at 800.MYSHIPPING or fill out the form below.

Chris Kupillas Named to the 2019 Food Logistics Champions: Rockstars of the Supply Chain

BlueGrace Logistics, a nationwide third-party logistics provider, is pleased to announce that Food Logistics has named Chris Kupillas, Regional Vice President, to its 2019 Food Logistics Champions: Rock Stars of the Supply Chain award.

Kupillas is Regional Vice-President for BlueGrace Logistics and the managing director of the Los Angeles office. He has a special focus on the complexity of the food distribution vertical, and works closely with his team developing tools, strategies, and planning processes to optimize supply chains of rapidly growing food and beverage distributors.

“There is no better title than “Rock Star” to encapsulate Chris’ efforts on behalf of BlueGrace,” said Bobby Harris, CEO, BlueGrace Logistics. “Chris has deep industry knowledge that makes him our customers’ ideal partner. He inspires the team and follows one of our top core values, which is to set outrageous goals. As a result, he is someone that everyone at BlueGrace looks up to. I am proud to have Chris as a member of the BlueGrace team.”

The work Kupillas does for BlueGrace isn’t just about getting products delivered on time, but how proper planning can help lean out inventory levels, plan production schedules, and drastically improve fill rates. Kupillas works with several large CPG clients and his creation of the foundation for the BlueGrace Big Box / Retail Compliance program earned him a spot on this impressive list, and helps BlueGrace’s food and beverage customers to stay a step ahead of food safety, tracking and compliance requirements. Through the development of these processes and tools, BlueGrace has been able to help customers increase Must Arrive By Dates (MABD) compliance from as low as 26% to over 95% within 90 days of implementation.

The Food Logistics Champions: Rock Stars of the Supply Chain recognizes influential individuals in our industry whose achievements, hard work, and vision have shaped and attained milestones in safety, efficiency, productivity and innovation through the global food supply chain. From early pioneers and entrepreneurs to non-conformist thinkers and executive standouts, this award aims to honor these leaders and their contributions to our industry.

“Our 2019 Food Logistics Champions: Rock Stars of the Supply Chain reflects the expanding diversity that is emerging in our industry, both in terms of demographics and talent,” remarks Lara L. Sowinski, Editorial Director for Food Logistics. “The combination of experience and wisdom complemented with a new generation of professionals is resulting in a food and beverage supply chain that is in sync with consumers’ demands while simultaneously adept and staying ahead of the logistical requirements.”

Recipients of this year’s 2019 Food Logistics Champions: Rock Stars of the Supply Chain award will be profiled in the March 2019 issue of Food Logistics, as well as online at www.foodlogistics.com.

About Food Logistics

Food Logistics is published by AC Business Media, a business-to-business media company that provides targeted content and comprehensive, integrated advertising and promotion opportunities for some of the world’s most recognized B2B brands. Its diverse portfolio serves the construction, logistics, supply chain and other industries with print, digital and custom products, events and social media.


Food Logistics is published by AC Business Media, a business-to-business media company that provides targeted content and comprehensive, integrated advertising and promotion opportunities for some of the world’s most recognized B2B brands. Its diverse portfolio serves the construction, logistics, supply chain and other industries with print, digital and custom products, events and social media.

About BlueGrace Logistics

Founded in 2009, BlueGrace Logistics is one of the largest third-party logistics (3PL) providers in the United States. With over 500 employees and working with over 10,000 customers to provide successful shipping solutions, the company has achieved explosive growth in its 10-year operating history. Backed by a $255 million investment by private equity firm Warburg Pincus, the company operates 12 locations nationwide, and its headquarters are in the sunny Tampa Bay area of Florida. Please visit www.mybluegrace.com for more information, or check out BlueGrace Logistics on Facebook, Twitter, Instagram and LinkedIn.

7 Benefits of Outsourcing Logistics to a 3PL

To outsource logistics or manage it internally is a major point of consideration for organizations. The decision is usually arrived at after extensive cost-benefit analysis of both the alternatives. While the outcome is often based on the size and nature of the business, availability of capital and manpower, geography served, operational risks involved and extent of control an organization is willing to let go of, outsourcing is increasingly becoming a favored option. Below we will highlight the top seven reasons why you should consider it too.

While your in-house team may be expert at all the functions, the complex nature of the job makes it challenging for them to do all of it by themselves.

Expertise: Logistics is a very dynamic function. A logistician is required to understand business strategy, manufacturing planning, inventory management, and the nitty gritty of different modes of transportation depending on regions served. Along with having expert knowledge of these functions, they are also expected to be good at creating strategies and implementing them. It also requires a lot of coordination and collaboration with various service providers and government regulatory agencies. While your in-house team may be expert at all the functions, the complex nature of the job makes it challenging for them to do all of it by themselves. A 3PL has expertise in all these functions, they also have a connection with external agencies. They can take over the more tedious and complex jobs, freeing your team to strategize and plan the business.

From negotiating rates, booking the freight, providing storage, arranging for the transportation, getting the shipment loaded to following up on the shipment till it reaches the final destination, a 3PL can do it all.

Taking product to market: A 3PL arranges the transportation – local or international, to ensure that your product reaches the intended destination on time. From negotiating rates, booking the freight, providing storage, arranging for the transportation, getting the shipment loaded to following up on the shipment till it reaches the final destination, a 3PL can do it all. In the case you have international shipments, a 3PL has the experienced professionals to manage that as well. How much and how a 3PL contributes to the process depends on the organization that it works with.

Trained staff: A 3PL not only brings in the logistical facilities like warehouse facilities and transportation, but it also brings with it trained personnel who are equipped to handle the day-to-day logistics of the business. 3PL staff is trained to handle the exigencies of the business and deliver on the KPIs you set for them.

This is the age of digital logistics.

Technology: This is the age of digital logistics. A 3PL brings with it specifically designed, trusted, and ready-to-use systems and processes that can manage the end-to-end logistical process on a single platform. Most of the 3PL service providers are also open to customizing or integrating their digital platforms with that of the organization they work with. This flexibility offered by a 3PL not only helps the organization bridge the gaps in its systems but also helps it to do it at a comparatively lower cost.

Large network: The main objective of any business is to conquer new frontiers and markets. And, to do this, it requires a wide logistics network and a robust, flawlessly executed logistics strategy. Your 3PL partner is expected to and can help you achieve your business goals. They may either have their own network across regions or they may have business collaborations with transporters and storage facility providers in different regions or a mix of these two, their own network in some cities and collaboration in another. They are thus better placed to help you expand and grow your business. To do this, all you need to do is work with them in a collaborative manner to find the most optimum solution to reach your customers.

A 3PL not only has the means to do so, but also the technology and the trained staff to execute the process efficiently.

Dedicated customer service: Logistics is now a major part of customer service. Obtaining the right product, packed in the right manner, at the required delivery time is on every customer’s wishlist. This can only happen if the ordering process and logistics are synchronized and managed correctly. A 3PL not only has the means to do so, but also the technology and the trained staff to execute the process efficiently.

Cost Reduction: Last but not least, outsourcing logistics and allied activities to a 3PL not only provides all the above benefits and improves efficiency but also reduces operating costs and administration overheads.

Why BlueGrace?

When companies want superior supply chain management services and best-in-class technology, they turn to BlueGrace®. Why? Our progressive approach to transportation management helps customers of all sizes drive savings and simplicity into their supply chains.

Tips for Becoming a More Strategic Shipper

While there are a lot of buzzwords in the logistics industry, it may be surprising to some but “business strategy” is not among them. Every company needs a strong plan of approach and a method of conducting business that will put them in a more advantageous position. Successful companies understand that good strategy isn’t about just doing better than the “other guy” but also about not hindering themselves in the process.

One of the biggest ways that shipping companies tend to shoot themselves in the foot is by looking at their carriers as a resource rather than an asset.

One of the biggest ways that shipping companies tend to shoot themselves in the foot is by looking at their carriers as a resource rather than an asset. Being a preferred or “shipper of choice” is one of the best ways to shore up your strategy to make you more profitable today, next week, next year, in five years and years after that.

With the dwindling supply of able-bodied drivers, the relationship between shipper and carrier is more important than ever before. Here are a few things to consider when it comes to attaining that status with your carriers and carrier conduct in general.

Move to an Integrated Supply Chain

One of the worst carryovers from the inception of the logistics industry is that aspect of the business is thought of as a separate entity, a cost center. By siloing these facets rather than integrating them, it’s easy to lose cohesion and efficiency.

For a shipper, every part of their business is (and should be) connected.

For a shipper, every part of their business is (and should be) connected. Your sales team is just as important as those in the warehouse or operating the dock. Even if those are all considered to be connected and are even working as a complete unit, transportation is no less a part of that. All too often, shippers look at their carriers as an afterthought and opt not to include them in the larger operations discussions as well as providing information to them at the last possible minute.

“When an order arrives, ideally the information shouldn’t only be broadcast to inventory folks and the distribution center. The information should immediately go to the transportation group so they can start to coordinate the capacity to move that freight. Too often transportation folks are only notified when the pallets are sitting on the docks,” said Brian Gibson, executive director of the Center for Supply Chain Innovation at Auburn University

While cutting down on the transportation budget might save a little cash up front, it could (and often does) have an impact on other facets of your business.

Of course, the cost is a factor in this regard. While cutting down on the transportation budget might save a little cash up front, it could (and often does) have an impact on other facets of your business. Disconnect and poor communication with a transporter tend to end up costing more in the long run with delays, detention fees, poor customer service, annoyed carriers, unsatisfied customers.

Do Unto Others

The golden rule certainly has its place in the business world and unfortunately, not all shippers and carriers have learned to get along as they should. Pricing is the perpetual thorn in the side, of course, and it’s easy for one side or the other to take advantage when the conditions are right. The “us-against-them” mentality may be useful when it comes to thinking about the competition, but it really has no place when you’re working with a carrier. Treating carriers poorly can have some serious consequences in the future.

Think about 2016 and 2017 when shippers could harangue carriers for a better rate and carriers had no option but to comply. In 2018, when demand was high enough for carriers to be more picky on what freight they carried, the worst of the antagonizers were either dropped or gouged when it came to the bill.

Trucking companies might put up with it when demand is low and they have no choice, but don’t think they won’t drop a company as soon as capacity picks back up.

Build a Good Working Relationship with Carriers

Remember, carriers, just as you as a shipper, are in the game to make money. For them, profit comes when they are more productive, so getting their drivers in, out, and on the road to the next delivery is key. However, when a driver is delayed, that puts a hurting on their productivity and ultimately their bottom line.

One of the best ways you can help to strengthen your working relationship is to ask your carriers to audit your supply chain and make suggestions and recommendations on how to make it more efficient.

One of the best ways you can help to strengthen your working relationship is to ask your carriers to audit your supply chain and make suggestions and recommendations on how to make it more efficient. While detention fees might help to recoup some of the losses from a delay, remember, carriers would much rather keep their drivers moving instead.

Looking Ahead

While we might not be able to predict the future precisely, shippers are able to put together a forecast of what they’ve got coming down the pipeline for deliveries. Communicating that information with carriers ahead of time not only helps to ensure there’s capacity available, but it also makes life considerably easier for both parties and strengthens the relationship at the same time.

Trucking companies like to know what’s coming down the line, more to the point, they like to have shipments lined up so they can keep their trucks moving. If they aren’t expecting anything from you, then they’ll look for freight elsewhere. While that’s a good move on their part, it doesn’t do a shipper any favors when they have freight that needs to get on the road.

One thing to remember is that the more communication you have with your carriers the better the relationship will be and the more reliable the service.

Small to midsize companies will typically make forecasts on a three week or monthly basis while larger companies will run a two-week forecast. Regardless of the number of days or week, though the one thing to remember is that the more communication you have with your carriers the better the relationship will be and the more reliable the service. The optimal goal is to have continuous service with the same carrier pool. This not only helps to build a more stable rapport with the carriers, but it’s mutually beneficial to both parties to have a consistent schedule that shipper and carrier alike can count on.

Make Decisions Based on Data

The technology available to the supply chain has grown up so much over the past few years that we’re able to make inductive leaps that we’ve never been able to do before. With the right technology, we can collect a seemingly endless number of data points, aggregate them and turn them into something comprehensible. From there we can take that information and use it to make informed decisions as well as highlighting opportunities for efficiencies.

Even on the most basic level, for example, this technology gives shippers the ability to track their freight in real time and proactively make decisions that could avoid delays, rather than reacting when it already happened.

Conversely, this data is also a great way to improve the communication between shippers and carriers.

Weekly communication with carriers helps to foster positive growth in relations as well as provides the ideal opportunity to discuss operational problems and pain points. Yes, the transportation budget matters, but that pales in comparison to the difference between getting exceptional service and poor service.

Why Shippers Should Consider Working with a 3PL

Third-party logistics providers (3PLs) can be instrumental in navigating this pro-trucker market. As a shipper, working with a 3PL can give you access to carriers that are not only rated and vetted but have a good working relationship with your 3PL partner. Consider it a “leg up” on building a good relationship. Additionally, a good 3PL knows what their carriers are looking for in terms of preferred or “shippers of choice.” Because of that and the changing market conditions, 3PLs are becoming more heavily relied upon to help get the job done.

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

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

Working with a partner that’s dedicated to shaping up your supply chain takes much of the guesswork out of having to do it yourself. We at BlueGrace specialize in doing just that, make your logistics work for you in the leanest and most efficient way possible.

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

Adam Blankenship, BlueGrace CCO, Talks Logistics With WFLA 970

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

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

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

Urban Logistics is Growing

We are witnessing one of the most interesting times in the development of logistics. Shippers and Carriers alike are working towards creating, innovating, and performing all out (and much needed) overhaul of the way we look at delivering packages.

Online and legacy retailers both are encouraged to work with their logistics partners to not only overcome the upcoming challenges but to find bold new approaches to compete as well as survive.

While every step of the process is certainly important, shippers and carriers have been placing a greater emphasis on the last mile of the delivery. And why not? It’s projected that by 2030 more than 600 million more people will be living in urban environments where standard delivery via truck may not be an option. Couple that with the booming growth of online retail sales (e-commerce) and the last mile not only becomes a crucial element for distribution but it’s also a differentiator from the competition. Online and legacy retailers both are encouraged to work with their logistics partners to not only overcome the upcoming challenges but to find bold new approaches to compete as well as survive.

Deliveries are no longer about a simple A to B route. Urbanization has seen to that. With more people living in much more crowded areas, the complexity of deliveries is growing exponentially.

Freight movement across all modes are projected to grow by approximately 42 percent by 2040.

According to the DoT, “The surge in population and economic growth brings with it escalating freight activity. Freight movement across all modes are projected to grow by approximately 42 percent by 2040. This trend means more “everything”. More pressure on roads and transit lines by commuters, more parcels delivered, particularly with the meteoric rise of e-commerce.”

Growing Trends in Last Mile Deliveries

“Shortening the Last Mile: Winning Logistics Strategies in the Race to the Urban Consumer” was a white paper compiled by DHL and Euromonitor which has identified four growing trends that are shaping urban last mile transportation.

  • Localized Delivery
  • Flexible Delivery Networks
  • Seasonal Logistics
  • Evolving Technology

In addition to highlighting these trends, the paper also explains ways that companies can begin to embrace these new tactics and adapt their supply chain to the changing market while growing their competitive advantage.

There must be more public and private sector coordination in freight planning.

“‘It must be recognized that economic activity in urban areas depends on the movement and delivery of goods through freight carriers. City and traffic planners must be made aware that urban settings can be inhospitable places for freight deliverers. There must be more public and private sector coordination in freight planning. Cities can shape markets to focus private sector attention and invest on the needs of cities and the people who live in them by mobilizing infrastructure, talent, and other assets to support the right kinds of AV-based solutions,” was one of the conclusions in “Taming the Autonomous Vehicle: A Primer for Cities (Bloomberg Philanthropies and the Aspen Institute)

Growing Challenges

The white paper found that major urban settings can cause a variety of challenges for distribution including cost, decreased quality of service, as well as overall organizational strain.

Seasonal growth is a good example of this. Not only are major holidays a heavy load time for logistics but many stores run various promotions throughout the year which require extra personnel. The only issue being, these short-term surges in volume aren’t nearly as easy to predict.

“Urban customers’ demands for speed and convenience are forcing retailers to overhaul their warehousing networks, replacing centralized networks with local fulfillment and distribution infrastructure, which can require a more accurate balancing of inventory,” says DHL on the matter.

The Growing F.A.D

With the importance of urban and last mile deliveries growing, how can companies best take advantage these growing trends to overcome the impending challenges as well as stand out from the rest of the competition? In order to be more competitive, efficient, and an overall more successful company the DHL study suggests applying the F.A.D strategy which they described as the following:

(F)lexible or more elastic transport networks can include the more efficient use of available transport capacity in a market, to achieve higher load factors, bring down costs, connect more quickly to end customers, and reduce environmental impact, but can also imply the ability to move shipments more easily between different modes of transport such as bicycles and vans to improve connectivity.

(A)utomation can include a higher level of automated processing at fulfillment centers, but also the deployment of autonomous vehicles and robotics to bring down labor costs, increase productivity, and enhance services.

(D)ata management enhancements allow retailers and their logistics operators to better forecast and position inventory to reduce waste within their supply chain and achieve better availability of stock. It also provides greater visibility on inventory and transport flows, allowing logistics operators to more effectively manage routing and exceptions, and providing tracking to enhance the customer experience.

There is some variance as to which sectors you’ll need to place more time and energy into.

Now there is some variance as to which sectors you’ll need to place more time and energy into. “Effectively, not all three elements need to be managed as actively or invested in as equally.

Different markets, commodities, and operating environments, as well as competitive pressures, may require prioritization of one particular focus area over the others, or a more substantial investment in certain focus areas at the expense of others. For example, if courier shortages are the most pressing issue for one company, that company would need to funnel resources into making its networks more flexible and likely consider automating some of its processes as well. However, another company may be facing increasing pressure from its customers to narrow the delivery timetables offered to them, incentivizing management to consider investing in a data system with AI capabilities to help predict the most efficient windows,” says DHL.

Not only urban consumers, but all consumers will continue to demand solutions that make life both easy and convenient.

Not only urban consumers, but all consumers will continue to demand solutions that make life both easy and convenient. When it comes to their expectations cost, convenience, and flexibility will all be important factors to both the relevance and success of e-commerce companies, as well as transportation companies who will continue to haul the growing industry along.

At BlueGrace, our proprietary technology is designed to put the power of easy supply chain management and optimization back in your hands. Many of our customers prefer to integrate their systems or ERPs such as SAP or NetSuite directly with our BlueShip platform. Not only will this simplify your freight but it also provides usable data to build measurable KPIs and continuously improve your program. To speak to one of our experts, call us at 800.MYSHIPPING or fill out the form below.

Make Logistics Your Strategic Advantage

The November 1977 issue of Harvard Business Review carried an article titled “Logistics – Essential to Strategy”. Citing reasons such as “a decline in the growth rate of domestic markets, large incremental costs of energy, and an increasing emphasis on multinational markets in corporate strategies”, it foretold that logistics will become an essential part of the “corporate strategy of the future”.  

There could not have been a more accurate prediction.  

Today, logistics has become the game changer for both business and the nation’s economy. For businesses, it forms an essential part of the complete product and customer service offering. By enabling the movement of people and commodities from one place to another, logistics has always played a visible part in building the nation’s economy. Now, it is also a significant contributor to the GDP. In 2017 the transportation sector alone contributed 8.9 percent of the country’s GDP.   

Why is logistics gaining so much importance?  

Globalization and the ensuing cut-throat competition has made it necessary for organizations to focus on providing customers with an added incentive to buy from them. Customers are no longer easily pleased. While one can sustain in the business for some time by introducing new variants, it is not enough to keep the buyers coming back for more. At times, even a price difference might fail to attract customers.  Then what can capture the attention of the customer? 

Logistics is the new differentiator.

Now, especially with the increasing popularity of online shopping, customers look for availability of the product at the required time and place followed by quick and timely delivery of their purchases. This demand can only be fulfilled if shippers can get their logistics right. Logistics is the new differentiator.  

What are the benefits of putting logistics first? 

Customer demand: According to a research conducted by Retail-Week, in response to a question on what they expect in terms of delivery, 70 percent of the customers surveyed said they would like to have more flexible delivery options. Statistics from another survey revealed that 56 percent of online customers in the age group of 18-34 years look for same day delivery options. 61 percent of those surveyed said they are willing to pay an additional price if they can get same-day delivery. These statistics clearly highlight the growing importance of why shippers need to pay attention to their logistics strategy, planning, and execution.  

Competition: It is no longer a seller’s market. Very few products or services enjoy a monopoly in the current market scenario. If one store or online shopping portal does not have the product in stock. There are many other options in the market for customers to buy from. So, whether you are an online store or a traditional retailer, if you fail to supply the product at the store when in demand, there’s a huge possibility of losing the customer to the competition. Regular and timely supply can be maintained only if the proper logistics program is in place. 

Given the fact that customers are willing to pay for a premium delivery service, it makes business sense to procure and provide this option.  

Achieving a balance in cost and service quality: Logistics is a cost. More often than not, shippers think that to remain competitive, one must negotiate and procure the lowest rates available in the market. While it is necessary to negotiate freight rates and keep the go-to-market price of the product in control, it is also equally important to understand how too low a cost can hamper the quality of the service. If shippers have insight into where and when they need to provide premium logistics services and where a regular delivery will suffice, they can hire a mix of vendors or negotiate for different service levels with the same vendor. This will help shippers offer the flexibility and choices in the delivery that the customers seek. Given the fact that customers are willing to pay for a premium delivery service, it makes business sense to procure and provide this option.  

Geographical reach: A strong logistics strategy can help you reach wider markets and more customers at the right time. This is especially important if you’re an e-commerce business or a retail chain with branches in different cities. A well-planned logistics system is essential to cater to different geographies and ensure that the product reaches the distribution centers or retail stores in time to fulfill customer orders. If the logistics operation is weak, it becomes difficult and financially unviable to operate a multi-city or an international business.  

If shippers do not take the required effort to understand the logistical needs of their business and plan in advance to procure the services they would need, it can have a negative impact on the business.

Logistics is the core of a business. It is what ensures that your product reaches the intended customer cost effectively and on time. This activity often involves multiple handling points and different modes of transportation. If shippers do not take the required effort to understand the logistical needs of their business and plan in advance to procure the services they would need, it can have a negative impact on the business. If you need help in understanding and building a strong transport management system, contact us at 800.MY.SHIPPING or fill out the form below to speak to one of our freight experts today!

GRI Season: The Importance and Benefits of Digitalization 

The arrival of fall marks the beginning of the biggest annual influx in demand for the transportation of freight. This is caused by the flurry of demand from shoppers that crop up in anticipation of the holiday season. While increased demand means increased business opportunity, it can also mean a headache for players in the logistics industry — shippers, forwarders, carriers and retailers alike — as they gear up to deal with the season’s intensity. Retailers hire on seasonal employees, while carriers brace for capacity to be pushed to the limits.

Carriers raise their rates to compensate for increased costs in fuel, equipment, technological investment, and the cost of paying their drivers.

Peak season manifests in the costs shippers pay to carriers in the form of General Rate Increases (GRIs). Carriers raise their rates to compensate for increased costs in fuel, equipment, technological investment, and the cost of paying their drivers. Depending on the current economic climate that year, GRIs can be higher or lower, but average at around 5 percent.

Which factors will be especially affected during this year’s peak season, considering the current economic climate?

Higher demand for e-commerce

Consumers’ love affair with online shopping is not going anywhere anytime soon. E-tailer juggernaut Amazon.com had their most successful Amazon Prime Day in history. International shoppers purchased over 100 million products on the website and the company saw more sign-ups for its Prime service on July 16, the Monday before the event than any day in company history.

With the boom showing no signs of slowing down, the rising costs to secure capacity are sure to remain a theme during peak season this year.

E-commerce directly affects the demand for logistics services, as it raises the demand for more routes and last-mile services. With the boom showing no signs of slowing down, the rising costs to secure capacity are sure to remain a theme during peak season this year.

The driver shortage

With the simultaneous driver shortage caused by a retiring generation of truck drivers and the somewhat unpopular ELD mandate, carriers are paying higher than average wages in order to attract good drivers. The domino effect through the supply chain means that this is another cost reflected in the GRIs that shippers pay, and ends up detracting from your company’s bottom line.

Continuously rising fuel costs

During the spring of 2018, diesel prices increased in every region of the country with prices above $3 per gallon in many key logistics regions of the United States, and in August, diesel fuel costs 23 percent more compared to the previous year. However, there is light at the end of the tunnel. According to the Journal of Commerce, U.S. contract truckload rates will likely cool down to a more modest 5 percent on average in 2019, but will still be higher than in years past; the overall increases are another major factor that will continue to play into rising GRIs.

In the Case Study, “Manual Cost Removal and Freight Cost Reduction for Hardware,” BlueGrace explores a scenario in which a big box client grapples to deal with increases in GRIs. The client was operating with a single national carrier model, which at a time, was working sufficiently enough for the supplier. However, as demand increased and their business had grown, the old-fashioned operational system began to prevent the company from reaching its full potential. Operations were becoming time-consuming, employees were becoming overwhelmed, and profits were suffering.

Negotiating GRI costs with carriers during times of unexpected rate increases was a major emerging problem for the company.

Negotiating GRI costs with carriers during times of unexpected rate increases was a major emerging problem for the company. Its lack of digital booking meant that there was no way for them to verify if the invoiced amount of the shipment was the same as the quoted amount of the shipment. In addition, the overwhelming amount of volume being moved was creating a bottleneck in the process, due to the time required to record data manually.

The supplier contacted BlueGrace to address these issues, agreeing to integrate its in-house Enterprise Resource Planning (ERP) system with BlueShip®, BlueGrace’s Transportation Management System (TMS). In doing so, they were able to negate the time-consuming process of manually booking shipments by digitalizing the process. Digitalization also enabled the client to access its own data with better transparency, allowing it to make better-informed business decisions.

Once processes are made electronic, companies like BlueGrace are also able to help businesses save by using their pre-negotiated contracts with all of the carriers whose GRIs don’t adhere to the standard set by larger companies and working with online service providers directly to handle complex negotiations so that the client doesn’t have to.

Once processes are made electronic, companies like BlueGrace are also able to help businesses save by using their pre-negotiated contracts with all of the carriers whose GRIs don’t adhere to the standard set by larger companies and working with online service providers directly to handle complex negotiations so that the client doesn’t have to. The result is a lower cost paid by the client, and a healthier bottom line; the supplier detailed in the case study ended up saving 13 percent of their yearly freight spend, which added up to $260,000 annually.

To find out how implementing can enable your business to achieve its optimal cost reduction surrounding issues like GRIs to reach its full profit potential during the peak season rush, contact us at 800.MYSHIPPING or fill out the form below to speak to one of our freight experts today.

Picking up the Pace with the Supply Chain  

The global supply chain has been in the process of evolving over the past couple of decades. What was once a lumbering beast is now gearing itself into something decidedly more agile. It’s that evolution in the supply chain that is driving changes in business practices. The modern supply chain needs to be more agile, not only to keep up with consumer expectations but to keep abreast of fluctuations and disruptions as a whole.

As for retail stores, you can’t sell what you don’t have, and empty shelves mean missed profits, as well as running the risk of damage reputations and customer loyalty.

Fluctuations and supply chain disruptions can cost a company dearly. When a production line is shut down due to missing an inbound shipment, that could result in a loss of tens of thousands of dollars in both production time and man hours, not to mention shaving down precious lead time which can never be truly made up. As for retail stores, you can’t sell what you don’t have, and empty shelves mean missed profits, as well as running the risk of damage reputations and customer loyalty.

Cutting costs is just a matter of good business practice.

Efficiency will always have a place within the supply chain. Cutting costs is just a matter of good business practice. Building in agility, however, takes a bit more consideration and planning to do effectively. It’s a matter of balancing the need for cost-cutting, while being able to respond to new market conditions on the fly. It also means being able to overcome other challenges inherent within the supply chain, such as demand spikes, trade tariffs and more stringent trade agreements, as well as growing capacity shortages.

Agility Training

By putting agility in the forefront both shippers and 3PLs are able to position themselves to handle various market demands quickly and efficiently. Additionally, understanding the demands of particular customers, they can create “segmented experiential supply chains” to meet the ever-changing demands for a wide array of consumer needs. For most successful supply chains, third-party logistics providers are continuing to push upstream within the shipper’s supply chain to work directly with customers. This interaction allows a 3PL to help a shipper overcome the challenges that come with high delivery expectations and potential upswings or spikes in demand.

Cost will always be a determining factor for most companies, not just for shippers, but logistics providers as well.

According to the annual Third Party Logistics Study, many shippers say they understand the need for agility. However, “39% said they haven’t made changes to increase their inherent agility over the past five years and 15% reported decreasing supply chain nimbleness to reduce cost.” Cost will always be a determining factor for most companies, not just for shippers, but logistics providers as well. According to the survey, both parties said that it was the main factor in their decision-making process. “To help improve service and reduce costs, respondents said they are willing to try new approaches to the supply chain, with more than half of shippers—51%—saying nothing is off of the table and they are willing to evaluate all pieces of the supply chain.”

Breaking Away From Tradition

One of the biggest things that we need to realize is that we’re in the middle of a paradigm shift. Old business models are quickly burning out. Just look at retail stores like Toys R’ Us and Bon Ton, both of which have closed their doors for good. Retail stores that are willing to break away from the “tried-and-true” and willing to embrace the new way of thinking will thrive. This breaking away from tradition applies to more than just retail stores though. Even logistics companies will have to shake things up if they want to stay at the top of the food chain.

“The desire to reduce costs, improve delivery times and optimize networks is driving a willingness to eschew traditional business rules, particularly with tightening capacity in the trucking industry,” the Annual Report said.  “When there is no capacity, those conversations change. Today the focus is on maximizing utilization and resources as they are becoming more limited and moving products to the end user in the most economical way.”

Getting the most from current resources will be crucial in the near future, especially when it comes to freight transportation.

Getting the most from current resources will be crucial in the near future, especially when it comes to freight transportation. Capacity has been running tight and will only continue to do so. While that’s great for trucking companies, as they can pick and choose the loads they want to take, shippers are going to have a harder time meeting delivery deadlines all the same. As capacity continues to tighten and the driver shortage gets worse, shippers will need to take a long hard look at working with logistics partners who have a broad reach. “A shipper may have a wonderful supply chain department, but they’re not going to have the utilization. A 3PL will have a diverse set of customers and large bases they can work with.”

(Re)Examining the Supply Chain

One of the strategies that we’ve helped our partners to employ is understanding their distribution density, or “center of gravity.” The better you understand your customer base, the easier it is to make smarter decisions about how to move freight. One of the most efficient ways to cut costs while increasing the agility of the supply chain is to reconsider where your distribution centers are.

While a massive warehouse might hold more shippable goods and products, having to haul it a longer distance repeatedly ends up eating into profit margins.

While a massive warehouse might hold more shippable goods and products, having to haul it a longer distance repeatedly ends up eating into profit margins. To that end, many shippers are looking into smaller distribution centers located closer to their denser customer regions. Even Walmart is making some big moves to help back it’s online fulfillment orders, by turning many of it’s Sam’s Club retail locations into regional distribution centers. “Among shippers, the most common business events that trigger their firm to re-examine its supply chain include changes in performance (71%), mergers and acquisitions (54%), new market entries (54%) and new product launches (48%),” the annual survey said.

Whether it’s finding available capacity, collecting the necessary data to streamline the supply chain, or identifying your center of gravity, BlueGrace is ready to help. Contact us at 800.MYSHIPPING or fill out the form below to speak to one of our freight experts today!

BlueGrace Logistics Continues Chicago Growth Trajectory

BlueGrace Logistics Continues Chicago Growth Trajectory

Doubles Hiring Plans and Footprint at Chicago Board of Trade

CHICAGO, ILLINOIS | OCTOBER 23, 2018 — BlueGrace Logistics, a technology-enabled logistics company that takes a progressive approach to transportation management, announced that it will add new jobs and nearly double its footprint in the Chicago Board of Trade (CBOT), 141 West Jackson Blvd, after opening its second metro area office last July.

BlueGrace is boosting its downtown presence from 8,000 sq. feet to 15,000 sq. feet and will grow its Chicago workforce from 40 employees to 150 when the Board of Trade expansion is complete. BlueGrace also has an office in northwest suburban Itasca, where 60 employees are based.

The company’s prime Chicago Loop location matches perfectly with BlueGrace’s aggressive hiring approach aimed at attracting young sales professionals.

“Chicago is rich with young, college-educated talent, and it is already an elite spot for professionals with deep expertise in the logistics industry,” said Bobby Harris, CEO, BlueGrace Logistics. “We couldn’t be more pleased with our central business district location which has helped us attract candidates from a deep talent pool that is lured to the vast amenities, restaurants, and vibrant work and night life offerings in the heart of downtown,” added Harris.

BlueGrace Logistics is experiencing significant growth and greater demands for its tech-enabled third-party logistics services. BlueGrace Logistics, a six-time member of the Inc. 5000 list of fastest growing companies, anticipates 70% year-over-year revenue growth in 2018.

BlueGrace hosted a Chicago Open House at the Board of Trade to celebrate its new home in the Windy City. CEO Harris led a ribbon-cutting ceremony that included 42nd Ward Alderman Brendan Reilly and Professor Hani Mahmassani, CEO of the Northwestern University Transportation Center (NUTC). Earlier this year, Harris joined the NUTC’s Business Advisory Council.

About BlueGrace Logistics

Founded in 2009, BlueGrace Logistics is one of the largest third-party logistics (3PL) providers in the United States. With over 500 employees and providing successful shipping solutions to over 10,000 customers, the company has achieved explosive growth in its nearly 10-year operating history. Backed by a $255 million investment by private equity firm Warburg Pincus, the company operates 11 locations nationwide, and its headquarters are in the sunny Tampa Bay area of Florida.

Top Causes for Delivery Delays and How to Use Data to Avoid Chargebacks

The must-arrive-by-date (MABD) was introduced to the logistics world back in early 2016 when Walmart set a new bar for suppliers. The program, discussed in-depth here, mandated that any late, early or improperly packaged shipment would incur a charge of 3 percent of the value of the cargo for the supplier to pay. Following Walmart’s new policy, other big-box retailers, like Target and Home Depot, released similar rules, pushing any inconvenience or associated costs with unplanned inventory management problems back down the supply chain. While 3 percent seems like a small enough marginal penalty to justify pushing delivery-time issues to the back burner, it is not a cost that any supplier should be resigned to paying, if it can avoid it. Consistent charges can rack up quickly, into the thousands — all money that should be enhancing your company’s bottom line.

Common Causes in Delay

Due to the complex nature of the supply chain, there are many bumps along the road that cause unnecessary delays to getting your cargo where in needs to go on schedule, and often, these problems do not have easy solution

Unfortunately, getting cargo on the shelves of a retail store is not as simple as allocating extra time into your freight transportation schedule because often, delays do not happen simply due to a misjudgment of time needed. Due to the complex nature of the supply chain, there are many bumps along the road that cause unnecessary delays to getting your cargo where in needs to go on schedule, and often, these problems do not have easy solutions.

Below are some common causes for delays in ground operations:

  • Disorganized inventory: At the fulfillment level, a disorganization of inventory, or a large, difficult-to-navigate warehouse can often add unnecessary time to getting orders ready. Simple changes, like putting thought and intention into logically mapping the layout of your warehouse can make a huge overall difference in reducing the time it takes to get cargo out the door and en route to retailers.
  • Low morale: This problem could be affecting your business at any and every point. Employees that are not motivated to keep operations running quickly and smoothly can be the make-or-break for getting your cargo to retailers’ shelves on time. Consider whether or not your employees are being properly incentivized to put in the extra effort to maximize their on-the-clock time, and ask them if there are any inefficiencies at the ground-level of your company’s operations that could be improved.
  • Old fashioned systems (manual data entry): Digital systems are a necessity in the modern world of commerce. Warehouse management systems can improve the speed of warehouse activities for people to perform and reduce generated efficiencies to improve the fruits of employee labor. For example, digital systems eliminate time spent completing tedious paper forms or manually transferring data from documents into spreadsheets or data-management applications.
  • Dock waiting times: Wait times at shipper docks area long-time problem for trucking companies. In research conducted last year by industry data firm DAT Solutions, 63 percent of 257 carriers and owner-operators said they or their drivers spend over three hours at a shipper’s dock waiting to load or unload. This is the time that could be spent driving to get the cargo to its final destination that is essentially wasted due to congestion. The two most common reasons for wait times are one, shippers schedule trucks to arrive early but don’t schedule enough staff to unload them, and two, the fact that shippers have a “first come, first serve” system to unload trucks in the order they arrive, which means drivers have to wait in long lines.

BlueGrace’s Solution to the Complex Equation

With the insight that BlueGrace provided, the client was able to reduce its chargeback rates by 90 percent within the first 60 days.

In BlueGrace’s case study, “Carrier Cost Reduction for Consumer Packaged Goods,” we explore a scenario in which a client, a cosmetics supplier, faces the challenge of keeping up with rapid growth in demand, struggling to get their product to retailers Walmart and Target on time to avoid early/late fees. BlueGrace helped the client by implementing an enterprise resource planning (ERP) system, BlueShip TMS, which is an electronic data management system. ERPs promote easier access and better transparency of a company’s data so that it can be properly utilized to identify where inefficiencies lie. With the insight that BlueGrace provided, the client was able to reduce its chargeback rates by 90 percent within the first 60 days.

Supply chain management is a tricky, complex equation. In order to optimize efficiency, you need to take a well-informed approach to target your supply chain’s areas of weakness, rather than just allocating extra days in hopes that the equation will balance out. The only way to do that is by understanding your company’s data. That way, you can continue to work with clients like Walmart and Target and bring them orders on time, promoting a professional company image and avoiding extra, unnecessary fees. To learn how you can optimize your supply chain, minimize costs, and maximize your company’s bottom line, contact us at 800.MYSHIPPING or fill out the form below to speak to one of our freight experts today!

Can Your Supply Chain Weather The Storm?

With two months left to go of this hurricane season, the eastern seaboard has been hammered by Hurricane Florence. While the storm has died out, the overall damage reports are still rolling in. As of now, over 500,000 businesses and homes are without power, mostly in North Carolina. Prolific flooding and rainfall continue to be an issue for many in the area and current damage tolls from the storm are estimated to be between $17 and $22 billion in property damage and lost economic output.

a new report for the movement of critical supply chains, food, fuel, clean water, and medical supplies and equipment, during a hurricane

In the wake of these storms and natural disasters, the researchers from the MIT Humanitarian Supply Chain Lab have created a new report for the movement of critical supply chains, food, fuel, clean water, and medical supplies and equipment, during a hurricane and how these supply chains might be better directed during future disasters.

The report is a summary of the MIT roundtable discussion, “Supply Chain Resilience: Restoring Business Operations Following a Hurricane,” held last December. The discussion brought in 40 supply chain leaders from both the public and private sectors to discuss the challenges that were brought about by the 2017 hurricane season, which has proven to be one of the worst in U.S. history since 1900. The discussion focused on the need for better ways to share information and coordinate resources and how that could accelerate the restoration of business operations.

Pre-crisis supply chain mapping and post-crisis visibility may enable better management of resources.

“The discussions revealed potential opportunities for improvement, especially in the realm of business-government coordination. For example, pre-crisis supply chain mapping and post-crisis visibility may enable better management of resources. In cases where detailed real-time data is impractical, aggregate indicators and sentinel data sources could provide timely, actionable insights. Better relationships among businesses and the many government agencies in all levels of jurisdictions could improve coordination in a crisis. Although the future of disasters may be dynamic and unbounded, research, development, and rehearsal of resilience strategies can help mitigate the black swans to come,” MIT News says.

Transportation Breakdown

In addition to a number of businesses being closed due to loss of power or structural damage, there are some severe disruptions to transportation as a result of major hurricanes. Ocean transportation can be seriously disrupted by major storms. The port of Wilmington, for example, and the port of Charleston, just to the south, only recently reopened and resumed intermodal travel for freight.

The problem is that port closures can cause some significant delays for general freight transportation, even to areas that aren’t necessarily affected by the storm.

The problem is that port closures can cause some significant delays for general freight transportation, even to areas that aren’t necessarily affected by the storm. Freight has to be rerouted to another port which can cause some heavy congestion during the loading and unloading phase. In addition to that delay, the freight now has a longer distance to travel before reaching its intended destination. Hurricanes also bring on a tremendous amount of flooding which can shut down city infrastructures as well as closing off major roadways. The roads that are open are often heavily congested with traffic which can all but shut down transportation into these areas.

Temporary Regulation Repeal Should be Permanent Says Truckers

Of course, safety is also a concern for the trucking industry, but with the Hours of Service ruling and the Electronic Logging Device mandate, truckers are having to operate on a very tight schedule. This means spending time in rest stops and hotels while storm victims are left waiting for their supplies. Fortunately, the FMCSA granted blanket exceptions to the HoS regulation for any drivers carrying relief supplies for those that have been affected by Hurricane Florence.

Weather-related waivers are routine, says Todd Spencer, president of the Owner-Operator Independent Drivers Association (OOIDA). “It’s done for storms, whether it be for floods or hurricanes, it’s done for snow or dramatically cold weather. We watch with great interest in looking for the mushroom clouds. We don’t see them. Safety doesn’t go to hell.”

With the current ruling, once the driver starts the clock, they have to work their 14-hour block. This means a driver can’t take an extended break or wait for traffic to clear up. This combined with the ELD’s that are now required on freight haulers means that even moving the truck across the parking lot starts the clock running with no way to stop it.

Combine this with the inclement weather from a storm and drivers are going to be driving through the thick of it by necessity once the blanket exceptions are lifted.

Spencer argues that this inflexibility could actually detract from safety, rather than enhancing it. Because the clock starts running as soon as the truck moves, and doesn’t stop until the clock runs out, a driver is more likely to continue driving, rather than taking a rest break. Combine this with the inclement weather from a storm and drivers are going to be driving through the thick of it by necessity once the blanket exceptions are lifted.

Help Your Supply Chain Weather Out the Storm

Given the fact that a hurricane has the potential to severely disrupt your daily operations, it’s important to take precautions ahead of time.

Know when they’re going to happen: Hurricane season begins June 1st and runs until November 1st. During that time, it’s important to keep an eye on storms that could develop into something worse. When it comes to hurricanes, it’s usually not a matter of if, but when.

Increase Your Visibility: Visibility plays a huge role in protecting the supply chain. The more aware you are of your freight movements, the easier it is to reroute in the event of an emergency.

Plan Ahead: Making contingency plans ahead of time can save you a lot of hassle and heartache later on down the road. Having the right key systems in place and understanding your operations from front to back is crucial. Not just during natural disasters, but for day to day operations.

Get Help: Consider working with a 3PL to help manage your transportation needs. Freight capacity in the United States is scarce to begin with. During a natural disaster, capacity becomes needed for disaster relief efforts which makes that capacity window shrink even further. As a result, spot rates rise which can make hurricanes a truly costly endeavor for a number of businesses. Working with a 3PL like BlueGrace can help secure capacity and enhance your ability to book freight . This can help make all the difference. To speak to one of our freight experts, call us at 800.MYSHIPPING or fill out the form below.

Understanding the Capacity Effects of the ELD Mandate

Carriers in the trucking industry are still adjusting to the growing pains of the federally mandated electronic logging devices (ELDs) following implementation deadlines earlier this year. For many carriers, even with deadlines in the rearview mirror, there is still confusion around the details of the mandate. Even those who are fully intent on cooperating may not be confident that they are in full compliance, or which specific aspects of their operations even need to be in compliance. 

The fines, which went into effect in April, state that under Title 49, section 521, any driver or carrier who does not keep a Record of Duty Status (RODS) is subject to being pulled off the road and face a civil penalty of $1,000 to $10,000 for each offense. Even still, one-third of U.S. truck drivers still use paper logs to track hours of service, despite the federal mandate, says a new survey with 2,400 respondents from software-as-a-service (SaaS) company Teletrac Navman that provides GPS fleet tracking. 

But contrary to popular belief, fines are regularly being issued to carriers.

While there has been an industry narrative developing since news of the mandate emerged that the potential to face fines is more of a “boogeyman” scare-tactic than a real concern, the evidence tells a different story. But contrary to popular belief, fines are regularly being issued to carriers. Almost $32 million worth of fines had been racked up as of Feb. 28 and another $142 million as of Aug. 22, totaling at $174 million. 

Source: https://www.supplychaindive.com/news/fleets-not-using-ELD-data-survey/531410/

BlueGrace’s Brian Blalock, Senior Manager of Sourcing Strategy, and Raddy Velkov, Director of Trucking Operations, explain these fines’ effect on the nation’s trucking capacity, the lanes that are the most affected, and how to use mode optimization to respond to the situation in their webinar,“Response to the ELD Mandate”.

Blalock says that with trucks being taken off the road, shippers are experiencing a constriction of capacity, “which means things are becoming more and more difficult for us as shippers to be able to create good business plans, make good decisions and make sure our freight arrives on time and in full.” 

First, Blalock lays down how the ELD mandate affects different routes, i.e. local, short haul, tweener, and long haul.  

What Does the ELD Mandate Mean: Transit times, Capacity, and Rates 

Local (less than 100 miles): Runs that are under 100 air miles are considered not subject to the ELD mandate, so the segment of small carriers that operate entirely on a regional basis have been unaffected.  

Short Haul (100-450 miles) “As the mileage grows… there is more of an adjustment period due to the longer length of haul.” But if you drive beyond the 100-mile radius or take more than 12 hours to return to your home base, you are required to maintain a RODS.  

Tweener (450 – 800 miles) This category is the most affected by the ELD mandate, Blalock and Velkov explain. Smaller carriers that were running one- and two-day points illegally were able to charge shippers less because they were recording use of the equipment for one day, whereas the larger size carriers who were in compliance had to pay the true, higher amount. 

Once you’re inspected and ticketed by the DOT you are more likely to get ticketed or inspected again.

“Larger carriers… were compliant to run these two-day points,” Velkov explained. “Some of these larger carriers were already compliant for a lot of years, just due to the sheer size of their fleet.” Velkov added, “Once you’re inspected and ticketed by the DOT you are more likely to get ticketed or inspected again, so the carriers with larger fleets were getting inspected more than the owner-ops. with one or two trucks, so they wanted to adjust the playing field in this market space and be price competitive.”  

Long Haul (over 800 miles) The long haul runs are also affected by the ELD mandate, of course, but many carriers operating these runs were already in compliance. 

With the ELD-mandate changing business dynamics many carriers have made it their goal to minimize cost in order to reduce rates to stay competitive, but that’s only one piece of the puzzle.  

Analysis with BlueGrace 

If all of the conversations you’re having internally are about rates, you’re having the wrong conversation.

“If all of the conversations you’re having internally are about rates, you’re having the wrong conversation,” Blalock said, “because more of the cost can be driven out by better decisions than by any decisions that can be made to rates.”  Velkov and Blalock explain how businesses can use data to optimize their business models, using the metrics and analysis available with Bluegrace’s services. The process starts by looking at a full picture of the supply chain to understand the network and cost distribution. 

Shippers should internally ask questions like, which vendors are costing more money than they’re worth? Can I negotiate better dollar per pound rate with them? Are we losing money with this a specific vendor? Once you have a strong understanding of your current network and the costs associated with your vendors, you can begin to dig deeper by looking at various analysis offered by BlueGrace, such as the ship weight analysis, explained below.  

Ship Weight Analysis Report: This measure allows shippers to look at month-to-month based on average weights cost per pound per month to determine if there are any outliers. For instance, were there any particular times your company did better than others? 

There is a tendency to steer away from FTL because of cost, to shift to multiple LTLs, but this may not always be the best option.

“You’re not always looking for mistakes, but instances in which things were done considerably better,” Blalock commented. You want to understand the exact cost per unit, or as Blalock says, the cost to put each widget on the shelf. This will help you make smarter business decisions, for instance, whether or not to book full truckload (FTL) or less than truckload (LTL.) “There is a tendency to steer away from FTL because of cost, to shift to multiple LTLs, but this may not always be the best option,” Blalock said. You may be making the mistake of booking LTL thinking it is saving you excess cost, but if sixteen LTL booking costs you $200 each, versus paying for one $1000 FTL, you’ve just paid in excess of $2,200. 

How BlueGrace Can Help

With the ELD-mandate in effect and a capacity crunch in full swing, there is an industry-wide pressure to curb costs, but there is no reason to fold under the pressure. There are plenty of opportunities to save on costs waiting to be revealed. All it takes is a hard look at your business model.  To speak to one of our freight experts, call us at 800.MYSHIPPING or fill out the form below. 

6 Reasons Why We Must Appreciate Truck Drivers All Year

Every year, from September 9th to 15th, we celebrate Truck Driver Appreciation week to thank the 3 million plus professional truck drivers in the country for their tireless service to the nation and all of its people.

While as an industry we have earmarked a specific week in the year to acknowledge the great work these professionals do for us, appreciation for their work should not be limited to seven days in a year. It should be a part of how we interact with them day in and day out all year round.

Six Reasons to Thank and Appreciate Truck Drivers Every Day of Every Year

#1. They drive the economy – Road transportation makes it possible for us to reach our end customers with ease and on time. Our truck drivers deliver the goods and commodities that we or our business require on a day to day basis to function with efficiency.

#2. Truckers facilitate other modes of transportation – Over the road transportation provides the link to sea, air, and rail transport. Our truck drivers deliver our goods to the terminals where they can be loaded on ships, cargo planes, or trains for further transportation. Road transportation managed by our truckers is what makes international trade and global movement of goods possible.

#3. Truck drivers keep our roads safe – By following all rules and regulations set for safe driving irrespective of how long they’ve been on the road, truck drivers ensure that the roads are safe for the other drivers and pedestrians. They are the monitors and the guides on the road.

#4. They’re always at work – Torrential rains, rough storms, heavy snowfall, or hot summer days, nothing can stop truck drivers from getting on the road and working. They’re working even when the roads are closed due to rough weather and all of us are sitting beside our fireside enjoying a day off from work with a hot cup of coffee or chocolate.

#5. They provide the calm in the calamity – When entire cities get washed away in storms or collapse due to earthquakes, truck drivers are the first to offer their services to go to the affected areas with food, clothing, medical aid, and other support. If required, they also help evacuate the people to safety, even if it means putting their own life at risk.

#6.  They stay away from their families for many days – Truck driving requires drivers to be on the road for days, sometimes even weeks at a time. To ensure that our lives and businesses continue to function without any hassles, the drivers often miss out on special occasions of their loved ones – wedding anniversaries, children’s birthdays, holidays, and other functions where their families may need their support or presence. For this devotion to their jobs, we must thank not only the truck drivers but also their families who support them in fulfilling their duties efficiently and effectively!

Take Time to Thank The Trucker Community!

As a part of the freight and logistics industry, we at BlueGrace Logistics would like to thank the truck driver community for the work they do to keep our business operating seamlessly and efficiently and for keeping our customers happy with every trip they make! Here’s a big THANK YOU to the drivers who keep our lives moving!  

What Can Shippers Do To Stay Competitive?

The e-commerce boom has no doubt stimulated economies internationally, driving demand for consumer goods and creating jobs in its wake. Logistics companies and carriers have celebrated the phenomenon. After all, growth in consumer demand means growth in demand for transportation services and invariably juicier bottom lines. Right?

Actually, the story doesn’t quite follow the Economy 101 text book’s narrative of what happens when an uptick in demand occurs. Real world factors have made the equation more complicated. The trucking sector of the logistics industry experienced this boom firsthand — ground carriers seeing massive growth in demand for the transportation of smaller loads, characteristic of e-commerce cargo. So, what is the downside?

While ground carriers should be reporting their best quarters on record, they are instead coming face to face with a serious problem: meeting the demands of their customers.

The trucking capacity shortage. There is simply not enough capacity to go around. While ground carriers should be reporting their best quarters on record, they are instead coming face to face with a serious problem: meeting the demands of their customers. As a result, shippers are forced to be more competitive about reserving trucking capacity, and the price of that capacity has risen substantially. This economic situation is the reverse of what was happening in recent years when carriers were scaling down their fleets, holding off and making any orders of new trucks in the face of overabundant capacity. Now, carriers are putting in orders all at once due to an uptick in demand experienced in both land and air freight, that commenced during the first half of 2017.

How are shippers being affected? 

Shippers are experiencing the shortage of capacity in raised shipping rates. The script has flipped on them; instead of being able to shop around for the best package deal on their ground transportation needs, they are instead experiencing limited options for their needs at higher prices. The Wall Street Journal recently wrote about the effect of the trucking capacity shortage on shippers, referencing that last year, transportation costs rose 7% for U.S. businesses, a substantial increase compared to the 4% average over the last five years ended in 2017. This data was originally reported by the Council of Supply Chain Management Professionals’ annual State of Logistics Report. The rise in costs are not likely to be temporary. This means shippers will have to adjust to new tighter margins, allocating more of their budget to transportation costs. For some, this difference could mean being nudged out of the market, especially considering that the shortage is only forecasted to increase. 

What is causing the shortage? 

Growth in demand is one half of the coin that is the shortage in truck capacity. The other half is the shortage of truck drivers, which is a multi-faceted issue in itself. Until innovations like drones and autonomous vehicles become real-world technologies, which are still a long ways from hitting the market, there is no getting around the fact that truck drivers are crucial to the supply chain.  The driver shortage is not a cyclical issue that will decrease or stabilize anytime soon, according to experts. The U.S. saw a shortage of 51,000 truck drivers at the end of 2017, according to the Washington Post’s sources, up from a shortage of 36,000 the year before, and according to NASDAQ: CNBC, the shortage is actually going to triple in the next decade if nothing changes. The acquisition of a trucking license takes only a few weeks. Even though drivers are now being offered upwards of $80,000 yearly salaries, and some in the six-figure range, low barriers to entry and high salaries are not enough to attract enough drivers for a combination of reasons. So, why can’t ground carriers find enough manpower to keep up with demand?  

Electronic logging devices 

The electronic logging device (ELD) mandate has caused some controversy in the industry. Truck drivers and CEOs alike have opinions on both side of the fence, as to whether or not the federal requirement of the implementation of ELDs is a good idea. 

While it’s true that truck driving deaths have increased over the last decade, the drivers themselves don’t necessarily appreciate the new, digitized version of hour logging.

The mandate was established to hold drivers more accountable for accurately recording their hours in hopes that fewer accidents and fatalities would occur as a result of fatigue from overworking. While it’s true that truck driving deaths have increased over the last decade, the drivers themselves don’t necessarily appreciate the new, digitized version of hour logging. Executives are also apprehensive about the mandate because of the high cost of implementation, the associated learning curve and the hiccups that come along with it. Many believe that the ELD mandate has been a major cause in deterring truck drivers from continuing their careers in the field, due to a perceived distrust or disrespect of privacy. 

Public perception & lifestyle 

Outside of the ELD mandate, experts also think that a low public perception of truck driving is causing a low rate of entry to the career. As the older generation of drivers begins to retire, they are not being replaced with a younger generation as quickly as demand for capacity needs.  The lifestyle associated with being a driver includes sleeping on the road, long hours, and many nights spent away from family.  

With the younger generation pursuing higher education at higher rates than ever before and unemployment being at a low right now, the workforce is not gravitating toward trucking, despite the appeal of high pay. 

While the wages seem like they should be attractive to younger generations entering the workforce, it seems that lifestyle may be another deterrent. With the younger generation pursuing higher education at higher rates than ever before and unemployment being at a low right now, the workforce is not gravitating toward trucking, despite the appeal of high pay. 

What can shippers do to stay competitive? 

As industry leaders work to find solutions to attract more truck drivers, many companies are rethinking their supply chains in order to prepare for a continued more expensive freight market. This means optimizing inefficiencies wherever possible in order to compensate for the greater expense by minimizing costs where you can. Shippers can implement strategies like defining business rules around factors like weight, volume, time constraints, and cargo sensitivity of their shipments in order to gain a strong understanding of what their actual costs are and where there is an opportunity to minimize them. 

Investing in software that will allow you to purchase capacity and plan your shipments can be the make-or-break factor in a highly competitive environment.

Investing in software that will allow you to purchase capacity and plan your shipments can be the make-or-break factor in a highly competitive environment. BlueGrace’s proprietary technology is designed to put the power of easy supply chain management and optimization back in your hands. BlueShip® offers cutting-edge tools for strong reliability and quick performance. To speak to one of our experts and find out more about BlueGrace and how we can help provide you with the solution to your supply chain needs, fill out the form below or contact us at 800.MYSHIPPING.

Stepping Towards a Digital Supply Chain

Technology is changing the way we look at logistics and, ultimately, the supply chain as a whole. With today’s global marketplace being what it is, companies need to be both agile and smart about the moves they make. “Making do” simply isn’t good enough. Supply chains, by necessity, need to be leaner, meaner, transparent, and most importantly, smarter.

The digital supply chain offers companies a degree of visibility and insight into their supply chain that was never before possible.

For that reason, many companies are beginning the process of digitizing their supply chain. Moving away from the analog game of tag that was the way of doing things in the past, the digital supply chain offers companies a degree of visibility and insight into their supply chain that was never before possible. In order to do it correctly, companies need to have a plan. “The impact of digital trends on the supply chain has caused plenty of excitement, but also confusion. In a 2017 Gartner survey of 318 supply chain organizations worldwide, 75% reported concerns about the governance of digital projects. Yet corporate digital business initiatives continue to evolve rapidly, and 36% of supply chain organizations say their own digital projects don’t align to them,” says Gartner contributor Rob van der Muelen.

Supply chain leaders should already have a plan for supply chain digital initiatives and how to align them to what’s going on in the wider organization and its ecosystem.

“Supply chain leaders should already have a plan for supply chain digital initiatives and how to align them to what’s going on in the wider organization and its ecosystem,” says Michael Burkett, vice president and distinguished analyst at Gartner. “Yet the reality is that organizations pursue digital projects in silos far too often.” Burkett encourages companies to be proactive and to “define the emerging technologies that will best optimize and transform your supply chain.” “Feed this expertise from the front line into the organization’s wider digital business strategy, and then do your part to make it a reality,” Burkett says.

Understanding the Digital Vision 

Wanting to digitize the supply chain is all well and good, but knowing what you want to accomplish with it is the important part.

Burkett says that the starting point for creating a solid plan for going digital begins with breaking out of the data silos and agreeing to a digital business vision across the entire organization. This agreement is what sets the gears in motion, where the needs of both the company and its customers are defined, and what changes will need to be made to the supply chain to make it happen. Wanting to digitize the supply chain is all well and good, but knowing what you want to accomplish with it is the important part. “Look for supply chain technologies that have the potential to open new revenue streams rather than simply efficiencies, and get buy-in and participation across the business,” says Burkett. 

Align the Supply Chain to Match the Vision 

According to Gartner, only 25 percent of supply chain organizations have their digital projects aligned under a single governance process. “A lack of alignment clearly makes it less likely a supply chain will successfully support key organizational priorities,” Burkett explains.This ultimately shapes what you can deliver to your customers and what changes will need to be made to the supply chain to make that happen. “For example, a product manufacturer’s business priority might be to ensure that a customer’s equipment never stops working. Digital advances now give it the ability to digitally monitor assets and offer solutions in near real time. This capability effectively creates or improves a service-based revenue stream for the manufacturer.” In order to make that a reality, the company must be able to predict a malfunction or failure and have a process in place to preemptive send both parts and a service technician to maintain the equipment to reduce downtime. In the past, this would have been all but impossible. However, digitization has created a useful toolkit that can make that a reality.

  • Internet of Things (IoT) to measure performance in real time 
  • Data Analytics to predict failure and automate delivery and service processes 
  • Mobile Data Access Capabilities 
  • Application program interfaces (APIs) to share data with the partner ecosystem 

Prioritizing Technology Investments  

Digital supply chains, when done correctly, do more than simply streamline operations, they become a differentiator from the competition, setting your company apart from all the others.

Investment in new technology can be hard to swallow, especially considering the uncertainty of the global market. As a result, many supply chain organizations tend to focus their investments on upkeep rather than upgrades. While that strategy might have a short-term effect of bolstering profits, it will ultimately prove to be short-sighted as customer’s expectations shift to a digitally based supply chain. Digital supply chains, when done correctly, do more than simply streamline operations, they become a differentiator from the competition, setting your company apart from all the others.“This is a supply chain that delivers a customer experience and not just a product,” says Burkett. “It’s an intelligent supply chain that makes decisions as it interacts across an ecosystem of digitally connected partners.” 

Simplify Your Supply Chain

BlueGrace Logistics offers complete, customized transportation management solutions that provide clients with the bandwidth to create transparency, operate efficiently, and drive direct cost reductions. For more information on how we can help simplify your supply chain, contact us at 800.MYSHIPPING or fill out the form below to speak to one of our freight experts today!  

Growing A Green Supply Chain

“Going Green” has been an action catchphrase for just about every industry over the past decade. Consumers laud companies that put out green initiatives or take other steps that make their company run cleaner and help slow some of the daily damage caused to the environment. Yet despite all the happy little symbols and environmentally friendly packaging, many companies aren’t really concerned about it. Off the record, some companies will admit that they don’t think the effort is actually necessary and that their company is running just fine the way it is. A more common opinion is that even if global warming is a real danger, that it’s simply cost prohibitive to make any drastic or long-lasting changes to their operations.

There is something of a disparity between consumer idealism and what a corporation deems as necessary. Moreover, it creates an argument between the two. The need to protect the planet, and a corporation’s responsibility to create paying jobs for the general public while providing affordable goods and services. 

The Lesser of Two Evils 

Even for the corporations and manufacturers that realize the need for environmental sustainability, there is a need to continue to manage their supply chains in such a way as to sustain their own business. This creates a rift between corporate and consumer. A good example of this was when NGO ForestEthics released a report that slammed retailers and logistics providers alike for using companies who fueled fleet trucks with diesel that was created with bitumen sands from Alberta which causes a considerable strain on the environment 

Even when companies are trying to do the right thing, it’s never so cut and dry, leaving them handling the proverbial double-edged sword.  

Alberta’s government, however, countered with statistics showing the number of jobs created by the oil sand farming as well as the overall economic contribution that came from the operation. Walmart also came up against a consumer conscious hardship in the effort to take steps towards sustainability. In 2015, the retail giant developed a seafood certification plan that was intended to promote ocean sustainability. The environmentalist group, Greenpeace, said that Walmart’s efforts weren’t enough, whereas the Alaskan fishermen that were providing the seafood said that the requirements were too much to handle. Even when companies are trying to do the right thing, it’s never so cut and dry, leaving them handling the proverbial double-edged sword.  

A Matter of Cost 

Why should a company go the extra mile to make sure they’re going green if the consumer isn’t willing to meet them at the checkout line?  

Speaking of the double-edged sword, there’s also the cost to be concerned with. While the general consumer consensus says that they would like everything to be sustainably sourced and environmentally friendly, the truth of the matter is that most consumers don’t want to pay the extra costs associated with it. So that begs the question, is environmental sustainability really worth the effort? Why should a company go the extra mile to make sure they’re going green if the consumer isn’t willing to meet them at the checkout line?  

Three Big Reasons to Go Green 

According to Yossi Sheffi, the Director of the MIT Center for Logistics and Transportation, there are actually three big reasons why companies should continue to make the effort to become sustainable. Risk mitigation, cost-cutting, and hedging. “Regardless of the degree to which company executives believe in the threat of climate change or the ravages of environmental degradation, many of their customers do, and they need to respond to these beliefs (even though the same customers are not likely to be willing to pay more for sustainable products). If they don’t, they risk incurring the wrath of NGOs and the media, leading to reputation damage,” Director Sheffi explains. In terms of cutting costs, Mr. Sheffi explains that green initiatives can help to reduce supply chain costs. “An example is how reducing the number of empty miles can shrink a company’s carbon footprint and capture cost savings in freight transportation. Retailer Macy’s eliminated 21% of empty miles and saved about $1.75 million annually by joining a program that posts retailers’ empty miles and finds shippers that can take advantage of the unused truck capacity.” 

Millennial consumers tend to be more environmentally conscious than the baby boomer generation of consumers, and these convictions may shape future markets.

Hedging is also a big reason to start planning and initiating green operations. Given that the generational dynamic is moving away from the baby boomers and into the millennials, there is going to be a change in consumer taste and demand. “Millennial consumers tend to be more environmentally conscious than the baby boomer generation of consumers, and these convictions may shape future markets.” Sheffi explains that the Clorox Company actually lost money with their green initiative “Green Works.” It was a small, environmentally friendly product line, that didn’t fare too well in the market but in exchange, the chemical company learned a lot about the manufacturing and marketing of such products.  

It’s Not Easy Being Green  

Finding the right balance between green practices and practical manufacturing is easier said than done. In the case of Clorox, they had to lose money to learn a valuable lesson. But not all initiatives are a loss for the company. Campbells Soup, for example, managed to change their packaging process which cut waste and saved them a good bit of money in exchange.  

Companies really have to examine their operation and decide which is the best course of action to take for manufacturing and the transportation of their goods, start to finish. In this, the ultimate intentions aren’t really what’s important. Even if a company tweaks their supply chain just to be more efficient and ends up cutting down on carbon emissions, the end result is a net win, both for the environment as well as the profit margin.  

 Improving the supply chain is not only a great way to lessen the carbon footprint, but improve operational efficiency and profits.

With better efficiency comes a reduced impact on the environment. As the supply chain is the industry heavy hitter for greenhouse gases and carbon emissions, improving the supply chain is not only a great way to lessen the carbon footprint, but improve operational efficiency and profits. This is where a 3PL like BlueGrace can help. BlueGrace specializes in identifying weak spots in the supply chain and provide a holistic solution, making your supply chain run as smooth and efficient as possible. To find out more about how we can help you improve efficiency, reduce cost, and simplify your supply chain, call us at 800.MYSHIPPING or fill out the form below to speak to one of our freight experts today!