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3pl

The Rise of the 3PL for Managed Transportation Services

Managed transportation services have widely become an integral function of modern supply-chain. As reported by Steve Baker of Forbes, the outsourcing of managed transportation services to other entities has different terminology depending on location. For example, managed transportation or transportation management might be the ideal terms to use in the US. Meanwhile, Europe will refer to the effective outsourcing of transportation management as “fourth-party logistics services (4PL).”

Outsourcing transportation management has the added benefit of taking advantage of external resources and physical assets.

In addition, outsourcing transportation management has the added benefit of taking advantage of external resources and physical assets. However, the aspects of managing transportation are much more profound when looking at the topic from a software standpoint. To understand the rise of the 3PL for managed transportation services, shippers need to understand how managed transportation services became a global power, why 3PLs in managed services work well together, and how 3PLs enable better management of transportation.

Why Managed Transportation Services Grew to Permeate the Global Supply Chain

Take a moment to define managed transportation. According to Chris Cunnane of Logistics Viewpoints, “in a managed transportation services arrangement, a shipper contracts with a third party to plan and execute their moves for them. In other words, instead of having internal planners plan and execute moves, those planners are employed by the MTS supplier, but work on the shipper’s behalf.”

As shippers face the need to ship more and keep costs under control, managed services through a 3PL is the easiest path forward. 

Unlike traditionally maintaining independent transportation management programs in-house, outsourcing the process allows companies to reap a stronger return on investment. In a 2014 survey of supply chain professionals, 9% of respondents saved more than 12% on freight costs through managed transportation services. That number rose to 32% by 2016, and preliminary reports indicate the continued growth of savings. That’s the distinction and primary driving force. As shippers face the need to ship more and keep costs under control, managed services through a 3PL is the easiest path forward. 

3PLs and Managed Services Go Well Together

Part of the rationale for the increased use of 3PLs for managed transportation services surrounds technology and capabilities. In a traditional logistics management approach, an individual shipper must contact carriers, request quotes, understand billing practices, validate invoice details, submit payments, share information from the carrier to this customer and so on.

Leveraging the technology of the 3PL to automate logistics management and effectively outsource the whole process of managing transportation is the gold mine.

While the process works great when the entire supply chain resided in a small town, it becomes grossly ineffective in the modern, e-commerce driven world. With more customers and volume than ever before, shippers need real-time visibility, advanced shipping notifications, increased responsiveness, and faster ways to handle logistics. Working with a 3PL for its basic premise of securing more capacity and lower rates is great. However, leveraging the technology of the 3PL to automate logistics management and effectively outsource the whole process of managing transportation is the gold mine.

Ways 3PLs Excel in Managed Service and Value

Using a 3PL for managed transportation services also allows third-party entities to effectively manage more freight, connect with more carriers, improve supply chain responsiveness, and work together without sacrificing the proprietary information of individual shippers. The various ways 3PLs excel in managed service and value is nothing short of remarkable. In fact, some of the largest managed service providers tend to rely on a unified transportation management system (TMS) that enables continuous growth and power. For those 3PLs that have lagged behind in offering a TMS, recent acquisitions around the industry indicate all larger 3PLs are now looking to deploy better, more reliable TMS capabilities to give all shippers an equal opportunity to leveraged managed services, such as the BlueGrace TMS combined with managed services.

Of course, the real value of managed services lies in the value-added services, such as auditing, accounting management, billing, compliance record keeping, load matching, big data analytics-driven insights, and more. It’s an endless pool of improvement, and 3PLs will continue to maximize service and value without adding to the costs of individual shippers. 

Tap the Value of Managed Freight Transportation Through BlueGrace

BlueGrace is a 3PL that understands the value of managed transportation services. With a strong history of working hand-in-hand with shippers to create customized solutions, and using our BlueShip™ TMS to transform logistics management into a turnkey, automated process. As the value of using a 3PL for managed services increases, BlueGrace will see an influx of more shippers and carriers that are willing to look beyond the company walls and realize stark benefits of using a TMS. Find out more about how to take advantage of BlueGrace’s managed transportation services by calling 800.MY.SHIPPING or completing the form below.

The Key to Managing Disruption? Outsourcing.

Crises such as the COVID-19 outbreak and the subsequent disruption to our economy and supply chains have truly brought to light the importance of effective risk management. In a world where normally reliable trade partners are shutdown for weeks or ports are closed or workers are furloughed, companies that were one minute functional are now scrambling for solutions to move goods from manufacturing to warehouse to distribution center to retail outlets. What once seemed like a well-oiled machine is now full of chaos or emptiness. 

Hiring a 3PL can help companies work their way through tough times.

Hiring a 3PL can help companies work their way through tough times. A lack of resources to maintain and improve growth, lack of experience coping with crises, a deficient organizational structure or insufficiently trained or available staff are all hurdles that can be overcome by outsourcing logistics operations. 

86% of Fortune 500 companies are outsourcing to 3PLs, and with good reason. 

A 3PL Allows You to Focus on What You Do Best 

Handing off some or all logistics operations to a Third Party Logistics (3PL) provider allows companies to focus on the product or service(s) they provide without dealing with the, well, logistics of it all. Whether a company is looking for help managing their entire logistics operations or simply needs help putting together a tech stack that serves their needs and goals, 3PLs can tackle the operations that are out of their wheelhouse. 

It Can Cut Costs 

Because of their industry knowledge, access to top tech, highly developed networks, and the potential for bulk discounts, 3PLs may be able to help companies cut logistics costs and manage their budgets more effectively. Outsourcing can lead to the development of smarter, more efficient processes tailored to a specific business’ needs. 

Reducing logistics spend through better deals with carriers and/or improved operational efficiency opens up opportunities for growth.

Reducing logistics spend through better deals with carriers and/or improved operational efficiency opens up opportunities for growth. It leaves room in the budget for improvement, whether that be through expansion, R&D, or hiring on top talent. 

3PLs Provide Scalability 

When you hire a 3PL to handle logistics, you’re gaining a modicum of scalability that you simply can’t get with an internal department or positions dedicated to logistics. A 3PL can provide the staffing you need during every season. A 3PL may also allow for scalability in a new location without the upfront expense associated with opening a physical location, providing expertise and connections in new shipping lanes without a dedicated staff.  

Outsourcing Isn’t Without Risk 

As with just about any business endeavor, outsourcing to a 3PL isn’t risk free. When a company is spending money, it’s inevitable that things could go sideways and they won’t receive the return on investment they’d hoped for. Risks involved in outsourcing to a 3PL include unexpected costs, trouble during the transition of operations from your company to the 3PL, and reduced customer service. 

Mitigating the Risks 

Discussions on expectations, service requirements, budget, and other pertinent details should occur before hiring a 3PL.

There are certainly ways to reduce the risks listed above. Choosing a 3PL with extensive knowledge and experience in your industry and in the type of operation you’re hiring them to carry out is critical. Look at references and reviews of the company and speak with companies who have used the provider if possible. Discussions on expectations, service requirements, budget, and other pertinent details should occur before hiring a 3PL, plus continued effective communication is important to ensuring key players are on the same page. 

In Conclusion 

When times are tough, whether due to extraordinary market conditions like the ones today, or just about any other circumstances, a 3PL can help companies work through problems without the large capital outlay often required with internal operational improvements. Wondering how a 3PL could help your company through a crisis? Contact BlueGrace today to get a free supply chain analysis from one of our experts! 

What Matters Most When Choosing A 3PL: Cost Or Customer Service?

While there are many factors to consider when choosing a 3PL service provider, cost and customer service are two of the most critical factors. 

Finding the right balance is the ultimate chicken and egg situation for all logistics managers. If they can crack this, they can get a step closer to creating a better and more effective supply chain.

Why The Conundrum?

On the one hand, organizations have a set budget to spend with a 3PL partner on transportation, warehousing, and related activities. On the other hand, the logistics partner is not only accountable to provide precise, efficient, and affordable logistical services to the organization but is often the face of the company for the end customers – regardless of the organization operating in the B2B or in the B2C space.

For both sectors, the 3PL is the first point of contact with the customer and more often than not, it has multiple contact points in the end-to-end supply chain. 

This is why, for logistics managers, choosing a 3PL partner is the crux of their job.

This is why, for logistics managers, choosing a 3PL partner is the crux of their job. The right decision may make the difference between success and failure. The wrong choice wrecks havoc not only in the logistics department but company-wide. When negotiating a contract with a 3PL starts logistics manager should: 

  • Conduct a thorough cost-benefit analysis of the proposal sent by the 3PL
  • Understand and calculate an estimate of the lost opportunity cost of choosing a low priced service at the expense of efficient customer service. 
  • Find out if the lost opportunity cost would be less or more than than the cost of hiring a 3PL which provides a premium customer service 
  • Understand the management’s position on overshooting the logistics budget

They should also ask the following questions: 

  • Can the organization accommodate an increase in logistics cost?
  • How will it impact the bottom line if the costs were to be absorbed by the organization? 
  • Is there a scope to increase the product price? How will it affect sales? 

Now that we know why the decision is critical and why it poses a challenge, it’s also important to know why both of these factors are individually critical. 

Why Is Cost Important? 

The cost of hiring a 3PL forms a part of the complete product cost and thus impacts the pricing. While a slight increase in the pricing for high-value goods may not affect a customer’s purchasing decision, it may impact sales of fast-moving consumer goods (FMCG). Sometimes even a slight increase in the price for FMCG goods can negatively influence its sales, giving the competition room to gain market shares. 

Why is Customer Service important? 

Like cost, customer service also plays an important role in the complete packaging of the product. How long can an organization sustain its business with a transporter who delivers goods late or in damaged condition? Or a warehousing facility that is not able to maintain the goods in a sale-able condition? Not for long. Sooner or later, these aspects – late delivery and poor product condition or damaged products will start to impact the product image in the market, and thus start to adversely impact its sales. 

How a 3PL handles customer queries related to product delivery, or processes returns also form a part of customer service and affect the overall perception of the customer about the product and the company. 

In addition to the above aspects, how a 3PL handles customer queries related to product delivery, or processes returns also form a part of customer service and affect the overall perception of the customer about the product and the company. Thus, both of these factors have the ability to influence the success or failure of the product or an organization. Then how does a logistics manager choose on which factor to focus on and where can he take a little leeway? 

So, What Is More Important? 

As we have seen, if the cost for a 3PL goes up, it will to some extent affect the product pricing. And depending on how the company chooses to deal with extra cost, it can also have a bearing on its profit margins and the bottom line. 

An article in CMO by Adobe shares that according to a survey by PwC titled Experience Is Everything, “52% of the respondents would pay for speedy and efficient customer service”. For 73% of the respondents, “a good experience is key in influencing brand loyalties”, and “60% said they would stop doing business with a company if they experienced unfriendly service”.

survey carried out by Capgemini in 2017 talks about consumer willingness to pay for a better service. According to the survey, 81% of the respondents are “willing to increase their spend with an organization for a better experience”. According to an article in Multi-Channel on a 2018 PwC survey titled: Future of Customer Experience, “customers across a wide variety of industries said they were willing to pay as much as a 16% premium for better service”.

The importance and need for good customer experience are only going to become more critical. 

These statistics spread over a couple of years adequately highlight the growing importance of good customer experience. In the interconnected global business environment, the importance and need for good customer experience are only going to become more critical. 

The above survey results also highlight two very crucial points related to customer service: the first, if it is good, it can help retain customers and even bring in new ones; the customers are willing to pay for quality customer experience and service. The second point that these surveys bring forth is that customers can discontinue business based on even single poor customer experience. In the long term, poor customer service will tend to have a larger impact on the bottom line than a slightly higher cost of the 3PL’s service. 

If you choose the right 3PL, in addition to good customer service you get many other benefits as well.

And if the surveys on customer service are anything to go by, efficient and timely customer service will be able to persuade the customers to bear a slightly higher product or service cost. If you choose the right 3PL, in addition to good customer service you get many other benefits as well. 

BlueGrace knows both these aspects are critical in creating a winning product proposition. We help build a cost-efficient and customer friendly supply chain, get in touch with our team today!

Supply Chain Technology 2020: What to Expect?

Technology has become synonymous with supply chains. It’s not only creating new and innovative products to support global supply chains,  but is also rapidly changing how the industry operates. These new technologies are being leveraged by both traditional and tech-first logistics companies in the freight and logistics space to help build digital and integrated supply chains that provide end-to-end visibility to all the stakeholders.  

According to this report by Gartner, released in January 2019, the top technology trends for the year were artificial intelligence, advanced analytics, IoT, robotic process automation (RPA), autonomous things, digital supply chain twins, blockchain, and immersive experience.  

Others like artificial intelligence, autonomous things, blockchain, and robotic process automation are comparatively new and yet to be explored fully.

While all the above technologies are gaining ground in the industry and are being used to solve supply chain problems, some of them like IoT and advanced analytics have been around for a while and are familiar. Others like artificial intelligence, autonomous things, blockchain, and robotic process automation are comparatively new and yet to be explored fully. However, 2019 did see some of the newer technologies making big strides and are expected to be in trend in 2020 as well. They are:  

  1. Autonomous trucks: We’ve been hearing about autonomous trucking for a while now. In 2019 autonomous trucking gained a lot of ground with a few companies in the sector ready to roll out their self-driving trucks on the road. Some companies making news in this sector are TuSimple which got funding at the beginning of 2019 and Plus.ai, a Cupertino, California-based startup, that has already tested its autonomous truck on the road. Plus.ai’s autonomous truck has made the world’s first cross-country trip to transport butter to a town in Pennsylvania. The autonomous trucking industry is expected to keep up the momentum in 2020 also. According to an article in Supply Chain Digital, Allied Market Research has forecasted that the global market for autonomous trucks is expected to cross $1 billion this year and show a growth rate of 10.4% every year up to 2025.  
  2. Blockchain: While Blockchain technology has been around in the logistics and freight industry for a few years, there’s still a lot of scopes to explore this technology. Last year, TradeLens – a blockchain shipping platform developed by Maersk and IBM finally started picking up after a lackluster start. According to a news release on Maersk’s website, the platform will now be used by MSC, CMA-CGM, Hapag-Lloyd, and ONE. The success of platforms like this will help in getting more companies in freight and logistics to explore blockchain technology. More supply chain partners on a single blockchain-enabled platform will help facilitate the timely and safe exchange of data among the various stakeholders, even competitors, and enhance traceability, reliability, and transparency in the system.  
  3. Artificial intelligence: The Gartner report had listed artificial intelligence as one of the promising supply chain trends of 2019. Since all technologies that require a certain level of responsiveness and user interaction are empowered by artificial intelligence, this is one technology that will evolve with new technologies and needs of the industry. So in 2020 also one can expect AI to be an important part of the technological revolution in multiple supply chains.  
  4. Robotic process automation: Robotic process automation (RPA) is an artificial intelligence software that helps program robots to carry out standard processes without intervention. It is also useful in programming robots to collect data while they are doing their set activities. According to a 2019 Gartner press release, in 2018, the global market for robotic process automation grew 63%. The research firm expected the revenue in 2019 to reach $1.3 billion. Similar to AI, the RPA software demand will grow along with the deployment of robotics in supply chains. 
  5. Digital supply chain twin: A digital supply chain twin has been defined as a replica of the real-world supply chain function. The digital platforms that helped integrate all organizational functions and manage and monitor the processes digitally have now given way to more sophisticated systems that present a mirror image of the on-ground supply chain functions. These digital replicas are making it easier for organizations to simulate the real-time supply chain, identify plausible issues and take preemptive actions. This kind of technological representation of the supply chain is expected to be one of the top trends in 2020.  

While technology forms a critical part of understanding where the logistics and freight industry is headed, it is not the only factor.

These are just some of the main technological trends of 2019 that are expected to continue getting focus in 2020 and probably even in the next few years as well. While technology forms a critical part of understanding where the logistics and freight industry is headed, it is not the only factor. There are other aspects like regulations, laws, economy, and freight rates that help determine the fate of the supply chain. To know how the industry fared on these counts on the year gone by and how these aspects are expected to impact the logistics and freight community in the new year, register for our webinar: State of the Logistics Industry here

In addition to connecting with industry experts and gaining insight into where the industry is headed in the new year, all registered webinar attendees will also have the option to get a free supply chain analysis and optimization study based on their current data! Get in touch with our team at 800.MY.SHIPPING or fill out the form below to find out more.  

What you can do to help “Weather-proof” Your Supply Chain?

Weather events can put a drastic slow down on your operations and unfortunately, it’s practically impossible to predict exactly when these events will happen. Sure, there are seasonal weather events like snow and hurricanes, which gives us a reasonable timeframe in which to expect these types of events. But even then, it still becomes a matter of “wait and see” as to whether or not the event will come to pass. And what about the events that we don’t expect such as nor’easters, polar vortex, or wildfires? There are certain catalysts that can create a potential for these events, such as an extended drought, but there’s no way of knowing for sure until the event is actually happening.  

In the event of something truly catastrophic, such as a hurricane, there’s even more pressure for the trucking industry to keep rolling on schedule.  

For most businesses, bad weather simply means staying home for the day and waiting for the weather to pass. Trucking companies, on the other hand, don’t have that luxury. Drivers are still expected to maintain their routes and delivery schedules, in spite of bad weather conditions. In the event of something truly catastrophic, such as a hurricane, there’s even more pressure for the trucking industry to keep rolling on schedule.  

Severe weather events can disrupt the supply chain causing lag and bottlenecks, especially during a true black swan event in which trucks are rerouted for emergency relief.  

For shippers and manufacturers, weather events can wreak havoc on delivery schedules, even when the weather event is thousands of miles away from you. Severe weather events can disrupt the supply chain causing lag and bottlenecks, especially during a true black swan event in which trucks are rerouted for emergency relief.  

So what can you do to prepare your supply chain against such events? 

A Reason for the Season 

Winter or summer, springtime floods or tropical storms in the fall, Mother Nature has predictably unpredictable conditions to throw at us. Plan in advance for alternate routes and parking locations if the regular road is closed and the usual truck parking is filled. Know in advance where road construction is planned. Always carry emergency gear appropriate to the season. Have a reliable response ready when faced with unreliable weather conditions. 

Part of preparing that reliable response is having good resources to turn to for accurate information. Every truck driver and every motor carrier dispatcher should have a list of phone numbers and websites for up-to-date reports on local weather, road closures, road construction and emergency notifications, such as during floods and storms. There are, of course, excellent commercial websites, products and services available. 

Here is a guide to begin building your own list of resources:

Always pull off the road and park in a safe location before checking websites or placing a phone call. Predictable responses and resources will help you meet the unpredictability of Mother Nature. 

Dealing with Sudden Spot Rate Hikes

One of the major aspects to keep in mind when you’re planning for weather events is how truckload rates can be affected by the weather. Since supply chains have become a global engine, a disruption in one location can cause problems in another. For shippers, that disruption can mean unexpectedly higher rates for shipping.

Here are a few best practices to dealing with a sudden surge in spot rates.  

  • Consider working with a third-party logistics (3PL) provider to augment your available capacity and carrier options: Outsourcing eliminates the burden of completing work in-house, but it still relies on efficiency in operation. 3PLs holistic approach, buying, and negotiating power can help augment your operations year-round.  
  • Explore intermodal and multimodal shipping options when the first chances of a storm’s arrival become apparent: Intermodal and multimodal shipping are usually used interchangeably, but both offer unique advantages to getting around after a major weather event.  
  • Increase the shipping budget through proactive, cost-saving measures through year-round operations: Cost-saving measures, such as improved dock management and load planning will naturally lead to savings in the budget. Such savings must not be 100% logged into the company profile. Instead, a percentage should be allocated for use in handling stretches in the freight budget after a disaster. More importantly, gains in efficiency will build resiliency and agility, allowing the supply chain to flex to meet the demands after a disaster.  

Batten Down the Hatches at HQ 

Spot rates are one way to deal with weather events abroad, but what happens when the storm is on your doorstep? Trucks being diverted can slow down your supply chain but when your base of operations is out of commission, everything comes to a grinding halt. Having a robust plan in place is necessary, especially if you operate in a location where inclement weather events is a yearly risk.  

Having the right infrastructure in place should be your first step.

Having the right infrastructure in place should be your first step. Does your main office have a contingency for backup power? How about internet access? Can your employees remotely access your company’s phone and operating systems? Something so simple as backup generators and remote desktops can keep operations moving despite external factors.  

Consider your personnel as well. Flexibility and cross-training of your staff mean that everyone on your roster is capable of handling a wider array of responsibilities. This is especially crucial during situations of crisis management when your A-team for customer service might be occupied with other necessary tasks.  

The better prepared it is, the more efficient it will be when it really counts.  

Having the right infrastructure in place is only the beginning, it’s important to have a plan in place for when the weather turns awry. More importantly, your team should know and understand the procedures for when such events take place. The better prepared it is, the more efficient it will be when it really counts.  To speak to one of our freight experts, contact us at 800.MY.SHIPPING or fill out the form below

Trucking Isn’t Going Away Any Time Soon

There is absolutely no doubt that we have entered into a new era of technology. As computing is getting more powerful, many technologies that were once science fiction are now either on the horizon or already here. Artificial intelligence, machine learning, and automation are three of the biggest hot tech topics out there.

While there is certainly a potential for job loss as this technology reaches maturity, that’s not likely to happen any time soon.

Of course, whenever new tech starts to hit the market, there is speculation as to what it means for the already existing framework of our reality. In this case, what do automated vehicles and AI mean for the truck driving industry? Currently, truckers move over 70 percent of all U.S. freight, by weight. The speculation is that we’ll see some 2-3 million jobs fall to the wayside as a result of emerging tech over the next few years. While there is certainly a potential for job loss as this technology reaches maturity, that’s not likely to happen any time soon.

According to the study: Industrial and Labor Relations Review, there is always a measure of attrition in terms of job loss when a new technology is introduced to an industry. However, there are three key reasons why truck drivers won’t be going away any time soon.

There’s More to Trucking than Just Driving

While it might seem like a truck driver has a fairly simple job of driving the truck from point A to point B, there’s a lot more to it than just that. Truck drivers also perform a number of other tasks in their daily routine. Everything from checking the status and upkeep of their vehicle and securing cargo, maintaining logs and invoices, and perhaps most importantly, customer service. While some of these tasks such as logs and vehicle status might be automated in the future, the technology isn’t there yet and some of those tasks aren’t even close to being ready for automation. For example, a smart sensor in the truck might be able to detect an imbalanced load or a flat tire, but it falls to the driver to fix that issue before rolling on down the road.

Customer service is also an incredibly important task of the truck driver

Customer service is also an incredibly important task of the truck driver, especially when you consider that customer service is one of the key distinguishers between companies today. Service needs a face, a smile, and a friendly voice and it’s that human interaction between the driver and the company that provides those necessities.

Fully Autonomous Trucks are Still on the Horizon

Just looking at the task of driving itself we can see that there are still quite some ways to go before trucks no longer need a driver. The Society of Automotive Engineers has developed the current standard to define automated vehicles on a scale of 0 to 5 with 0 being no automation and 5 being a fully automated and capable self-driving vehicle. Obviously, the amount of necessary human interaction/control goes down the higher up you go in the scale.

In fact, there tends to be a bit of sensationalism when it comes to headlines for automated vehicles. What we end up seeing is the full level 5 tests being touted as broad-scale implementation. These tests are very rare and conducted under carefully controlled conditions. In actuality, what we will see is somewhere between levels 2 to 3 where a human driver’s capabilities are augmented by robotics and automation. For example, the autonomous drive feature could take over for highway driving but for rural or city driving, it would be under human control.

Assume for a moment that level 4 automation was target for the trucking industry, how many jobs would that actually affect?

“Most of this development is focused on automating the long-haul/interstate portion of a truck trip, not short haul or local truck moves. We estimated the proportion of trucks in the U.S. that are used for long hauls, using the Vehicle Inventory and Use Survey (VIUS), last updated in 2002,” says an article from HBR.

“According to our computations, roughly one-quarter of all heavy trucks are used in long hauls of 201 miles or more, compared to roughly half of all heavy trucks used in relatively short ranges of operation (50 miles or less). Given that truck automation is currently targeted at these longer hauls, we are looking at potential job losses for roughly one-quarter of heavy truck drivers, or about 450,000 drivers, as the technology becomes more sophisticated and reliable over time and as regulatory obstacles are overcome,” HBR adds.

That is still a fairly significant number, but it is far from the millions of jobs lost that is being predicted now.

There’s Actually Fewer Drivers than People Think

Many of the sensationalized articles that are proclaiming the untold job loss at the hands of automation are also exaggerating the actual amount of human truck drivers employed in the United States. Most of the articles put the number around 3 million drivers when, in fact, that number is quite a bit smaller, meaning there are less jobs that can be lost due to the “total automation” scenario.

The federal government’s Standard Occupational Classification (SOC) system has a category called “Drivers/Sales Workers and Truck Drivers”, which is then divided into three smaller groups: “driver/sales workers”, “light truck or delivery services drivers” and “heavy and tractor-trailer truck drivers.”

The total pool employed within the broad heading is where most of these articles are getting the 3 million driver figure from. However, many who fall under one of these employment categories aren’t actually drivers or, if they are drivers, don’t fall under the risk of job loss due to automation.

Truckers Will Stay on the Road

Even if the technology for consistent level four technology was here, there would still be a heavy amount of government regulation to get through in order for it to be fully adopted throughout the industry. As there are so many variables to consider, there would likely need to be a massive infrastructure change for trucks to reach a level of autonomy that would completely remove human drivers from the picture.

It is fair to say, however, that as the technology continues to develop, we’ll likely see the amount of human drivers start to change roles.

It is fair to say, however, that as the technology continues to develop, we’ll likely see the amount of human drivers start to change roles. Instead of being phased out entirely, we’ll likely begin to see re-skilling of drivers into a different role that will continue to support the trucking industry. In light of all the challenges the industry is already facing, this could be a turn for the better.

CEOs Should Be Focusing on Their Supply Chain

As Jeff Bezos, CEO of the e-commerce juggernaut once said, “When [executives of other companies] are in the shower in the morning, they’re thinking about how they’re going to get ahead of one of their top competitors. Here in the shower, we’re thinking about how we are going to invent something on behalf of a customer.”

As a CEO, the path forward will be through optimizing your supply chain while keeping an eye on the goal; your customers.

That alone shows an interesting shift in the perception and could explain why Amazon is so wildly successful. It is that customer-centric focus that is going to pave the way for success going forward. Sure, it’s still going to be good business to be ahead of the competition, but the way we do that is measured by the way we serve our customers. That’s going to be vital going forward, especially when you start to consider all of the challenges facing the supply chain today. As a CEO, the path forward will be through optimizing your supply chain while keeping an eye on the goal; your customers.

With that in mind, however, there are some very uncertain times on the horizon, as the current administration continues to press its trade war with China, ensuring tariffs could bite some manufacturers hard.

Moreover, according to a survey conducted by the National Association of Manufacturers, there are plenty of other areas of concern, including; attracting and retaining a quality workforce and increasing the cost of raw materials.

There are no shortages of concerns for the manufacturing industry and all of these issues will have some effect on the supply chain for most industries.

If that wasn’t enough to contend with, there’s also the challenge of rising transportation costs and the overall challenge of managing a smooth-running supply chain. Simply put, there are no shortages of concerns for the manufacturing industry and all of these issues will have some effect on the supply chain for most industries.

For CEO’s the big question is this, “Is your supply chain ready for the road ahead?” Supply chain optimization will be crucial for the success of any manufacturing industry as failure to do so will mean missing out on growth opportunities as well as the inability to fulfill current customer orders and expectations. A flexible and well-structured supply chain will mean the difference between addressing new challenges appropriately or being knocked off balance by unexpected disruptions in the future.

A Changing Future for the Supply Chain

It’s not all doom and gloom on the horizon, and that’s part of what is keeping the levels of optimism high in the manufacturing industry. Many positive changes and developments are driving us towards a breakthrough in the way we do business. The new levels of technology and advancements in the Internet of Things are moving us closer to Industry 4.0 which will drive the levels of visibility and efficiency across the supply chain to new heights. The applications of these new technologies and advancements will separate winners from losers, survivors from the deceased, often in just a few years.

It will no longer serve to think of the supply chain as an isolated aspect of your business.

For the CEO of the Industry 4.0 company, you’ll have to keep in mind that supply chains are only going to get more complex going forward, especially when you start to consider the potential impact of tariffs. Think about manufacturing which is expected to be spread across the world as parts outbound China are hit with punitive tariffs. What kind of confusion will this cause within the industry? Within your own organization? What sort of opportunities will this create? As a leader, your approach will also have to become more sophisticated, using data-driven analytics to probe deep into your supply chain. It will no longer serve to think of the supply chain as an isolated aspect of your business. Instead, you’ll need to work on expanding your business philosophy. Who are your suppliers’ suppliers? Who are your customers’ customers? It is that total end-to-end level of thinking that will allow for the necessary insight into the supply chain to avoid potential disruptions to your business.

Is Your Supply Chain Ready?

Even at the best of times, the average supply chain is packed with pitfalls and bottlenecks, any of which could be the event that prevents an organization’s ability to maximize growth. At the worst of times, those hangups could cause a drain in cash and capital when the economy is in a downturn. This is why optimizing for growth now is important. It creates the environment and opportunity for critical improvements when times get tough. There is no mutual exclusivity in this, high performing supply chains and operations excel in either condition.

So is your supply chain ready? As a CEO, here are the three big questions you need to ask:

  1. How will my suppliers respond to a rapid increase or decrease in demand?
  2. How well are manufacturing and operating distribution facilities prepared to cope with an increase or decrease in demand while still maintaining quality and service with appropriate cost and cash levels?
  3. Do our logistics capabilities have enough capacity and responsiveness to accommodate a change in demand?

If your company can’t keep pace with the change, it’s as good as leaving money on the table, as your competition will likely be more than able to pick up the slack.

The answers to those questions are critical when estimating how well your company can perform in the event of an economic shift, in either direction. If your company can’t keep pace with the change, it’s as good as leaving money on the table, as your competition will likely be more than able to pick up the slack. Responding to these opportunities goes beyond simple, and BlueGrace can help with that. To speak to one of our experts, call us at 800.MY.SHIPPING or fill out the form below:

Shippers Growing Success With 3PLs 

The 24th Annual Third-Party Logistics Study for 2020 has been released and it shows a growing success between shippers and their 3PL partners. 

“The majority of shippers, 93%, report that the relationships they have with their 3PLs generally have been successful. A higher number of 3PLs, 99%, agree that relationships have generally been successful,” the study says.  

As 3PLs continue to offer a wider array of services, shippers have been eager to leverage what they have to offer.

The study continues to find that shippers and their 3PL partners are developing a much greater awareness and synchronicity of goals, as well as how data sharing and new technology can help them advance those goals. As 3PLs continue to offer a wider array of services, shippers have been eager to leverage what they have to offer. The result is an optimization of the supply chain, reduced costs, and the creation of overall value within the supply chain.

“This year’s study once again proves that shippers and their 3PL providers are strengthening their relationships and continually moving toward meaningful partnerships. They are collaborating to accomplish their supply chain goals and improve efficiencies. The available evidence confirms that both parties are creating reliable solutions and improving the end-user experience for the customer, which is allowing shippers to use the supply chain as a strategic, competitive advantage.” 

3PLs Are Rising to the Occasion 

Currently, both shippers and 3PLs have been enjoying favorable economic conditions both at home and abroad. That is not to say that it has been a perfectly smooth road as both continue to face challenges in transportation capacity and facility-based resources. However, the relationship has proven to be beneficial to both parties as they’ve worked together to overcome tight customer deadlines and raise both customer and consumer satisfaction levels. 

Another advantage to the relationship between 3PLs and shippers is the ability to adapt to and overcome challenges .

Shippers, of course, have higher expectations of their service providers and third-party providers have responded by increasing not only their service offerings but also their innovations when it comes to overcoming challenges within the current market environment. Simply put, transportation and logistics companies are realizing that the focus needs to be placed on digital capabilities, cost and asset efficiencies, and a broader range of services to meet their customers’ needs.

Current Global Market Challenges

The logistics and freight industry is in a state of flux currently. New technologies, tighter regulations, and growing customer expectations are all forcing necessary changes to the supply chain. According to the 2020 study, here are some of the biggest challenges shippers and 3PLs are facing to date. 

Growth of e-commerce: E-commerce and the “Amazon effect” have had a tremendous impact on brick and mortar retailers. The result is that many of them are branching out into omni-channel marketing and distribution to meet customer needs. This adds a whole new layer to existing logistics and supply chain structures.  

There are both domestic and global economic changes that are putting pressure on supply chains to adapt and react.

Economic uncertainty: There are both domestic and global economic changes that are putting pressure on supply chains to adapt and react. Many of these include sourcing new suppliers and improving cross border relationships with trading partners. There are also signs of slowdowns within certain major global economies which will soften demand and create new challenges for shippers.   

Driver shortage: This problem is not unique to the United States, but it’s certainly one of the most prevalent locations. With the average age of the American truck driver approaching retirement, there is a decided lack of interest in younger generations to get behind the wheel. ATA’s chief economist,  Bob Costello estimates that the current 60,000 driver deficit could reach 160,000 by 2028.  

Disruptive technologies: While disruptive technology breeds innovation within the industry the difficulty of adapting and integrating these new technologies also increases. Some of the disruptive technologies impacting supply chains include the use of drones, autonomous vehicles, cloud-based capabilities, artificial intelligence (AI), internet-of-things (IoT), blockchain.  

While dealing with all the above challenges, there’s also the challenge of keeping pace with the competition.

Competitive challenges: While dealing with all the above challenges, there’s also the challenge of keeping pace with the competition. Especially as there is a new start-up for every day that is poised to disrupt businesses, business models, or even entire industries. This applies to all, trading and manufacturing companies, as well as logistics providers, who are attempting to differentiate themselves from a growing number of startups backed with millions of dollars worth of venture capital investments. 

The take away from the survey is that shippers and third party providers are growing and prospering together.

The take away from the survey is that shippers and third party providers are growing and prospering together. As new challenges arise, shippers are looking to 3PLs for answers, innovations, and solutions. Conversely, 3PLs are looking to build long term and steady relationships with shippers as the number of providers continues to grow.  

With growing uncertainty in the geo-policitical arena, new technologies, and the explosive growth of e-commerce, it’s likely that we will continue to see growth in the relationships between shippers and 3PLs. For more information on how BlueGrace can be the partner to help strengthen and bring visibility to your supply chain, call us at 800.MY.SHIPPING or fill out the form below to speak to one of our experts.

The Definition of Transparency

As companies mature and the market changes, our understanding of crucial operating components of any industry has also grown. Supply chain transparency, in particular, has come a long way over the past twenty years. Transparency within the supply chain has gone from an unrecognized concept to a focus item for the C-Suite across a vast number of companies and industries. Given the current state of the market, it’s no small surprise either.

So in order to begin understanding transparency in the supply chain, we first need to define it.

Many, if not all, companies are facing increasing pressure from governments, consumers, non-profit / activist groups, and stakeholders to provide more information about their supply chain. Failure to do so could mean some serious damage to the company’s reputation. Slave or forced labor conditions, health and safety violations, animal exploitation, and child labor are all becoming hot button topics of the growing consumer conscience. While the reasons for explaining a higher need for transparency are clear, what is less clear is how to get there. Some companies are struggling to make a meaningful change to their operations to provide the much-needed levels of transparency.

As it is with most problems there is a lack of a clear and concise definition, according to an MIT study which conducted a survey of the apparel industry only to find wildly different results. So in order to begin understanding transparency in the supply chain, we first need to define it.

Understanding the Need Transparency

At its core, supply chain transparency is understanding what’s happening within the supply chain and being able to communicate that knowledge both within and outside the organization.

As we mentioned earlier, there is an increase in customer demand for insight into the supply chain, but it’s not without benefit. The researchers at the MIT Sloan School of Management found that consumers are willing to pay between 2 and 10 percent more for products produced by companies that have better supply chain visibility. The study showed that consumers place a higher value in a company that can prove the ethical treatment of their workers. What’s more is that this growing consumer base is seeking more information about product ingredients and materials, where the product is coming from, and the conditions in which it was produced.

As the demand for visibility continues to increase, so too will the potential fallout for companies that fail to provide it.

As the demand for visibility continues to increase, so too will the potential fallout for companies that fail to provide it. Over the last decade, there have been a number of scandals that have had a significant detrimental impact on company image and reputation. Slave labor in the Thai seafood industry and deforestation in Malaysia and Indonesia are ample examples of this.

The backlash created from these scandals has forced the creation of new transparency laws around the world. Australia the UK have created new regulations to combat forced labor. The state of California has also created supply chain transparency laws (California Transparency in Supply Chains Act.) The U.S. Food Safety Modernization Act is targeting food safety and ingredient fraud. There are also further regulations to come from the Netherlands and Switzerland, with other countries to follow suit.

What this means for companies is that a lack of supply chain transparency can stop operations dead in their tracks.

What this means for companies is that a lack of supply chain transparency can stop operations dead in their tracks. Something as simple as missing origin documents could cause a shipment to be either held up or even turned away at ports which can result in a costly delay throughout the entire supply chain.

So Why Aren’t All Companies on Board?

You would think that with the new levels of consumer consciousness and the growing global regulations that all companies would be scrambling to build transparency into their supply chains. Yet, there are many companies that are either slow to act or not act at all.

One reason for the delay is that the supply chain itself was never designed to allow for transparency. Manufacturers and suppliers alike fear to expose their sources as they might lose the edge against their competition. Another explanation for being slow to act is inaccurate data coming from upstream, assuming there is data to be had at all. Lastly, there’s also considerable concern about the ROI for investing in supply chain transparency.

Despite the challenges, there are plenty of reasons to get on board with supply chain transparency.

The Benefits of Supply Chain Transparency

The returns gained from efforts made on improving supply chain transparency will vary by business model and industry but overall there are a number of benefits that are applicable to most companies.

One of the most straightforward benefits is that increased transparency means keeping in compliance with the new regulations that are being enforced. Operational risks drop as a result as companies no longer have to worry about being able to get freight through customs.

There are also considerable benefits to a company image that come with higher levels of visibility. Consumer conscience is a huge market factor right now. Customers are happy knowing that their products are made with care and concern towards the environment and the people working to make their products. As a result, they’re willing to pay more, which can help offset potential higher supply chain costs. Additionally, consumer trust and satisfaction also rise, which creates stronger brand loyalty and a larger customer base.

Better visibility means better, more actionable data, which in turn can help drive a company’s growth and profitability.

Of course, there are also operational benefits to be had by utilizing a highly visible supply chain. Better visibility means better, more actionable data, which in turn can help drive a company’s growth and profitability. That data also highlights areas of improvement, meaning a company can run leaner, cleaner, and a whole lot greener.

This isn’t a trend in the sense that we’ll see it fall out of fashion any time soon. Supply chain transparency is becoming an industry standard and will continue to flourish. If your company isn’t working towards transparency, it might be time to get started. For more information on how BlueGrace can help give you the visibility you need to gain efficiency, feel free to contact us at 800.MY.SHIPPING or fill out the form below:

Making your Warehouse, Worthy

For a logistics player to be successful, it is imperative to regularly check if every aspect of the supply chain process is working at optimum capability. The surest way to ensure this is to keep a checklist. Tom Peters, the author of In Search of Excellence, says, “Almost all quality improvement comes via simplification of design, manufacturing, layout, processes, and procedures.”

In this article, we delve into the details of making a warehouse future-ready and examine the steps required to achieve warehouse excellence.

The Bigger Picture – Before getting into the nitty-gritty and finer details, it is first important to have a macroscopic view and understanding of the warehouse as a whole. This entails mapping the warehouse, studying the building & area and checking the surfaces for damages and weak areas. All these actions ensure that before the warehouse is stocked, and equipment such as forklifts are brought in, it is capable of handling the capacity and regular operations.

Goods that are easily visible, make them easy to locate when timelines are short and add to the smooth functioning of the supply chain process.

Light, Ventilation & Drainage — A well-lit warehouse makes it easier to navigate and work in. Goods that are easily visible, make them easy to locate when timelines are short and add to the smooth functioning of the supply chain process.

Ventilation goes a long way in combating dust and fumes that may arise when moving equipment within the warehouse. A well-designed ventilation system will make a huge difference in maintaining the longevity of the warehouse. 

In a similar way, a disaster-proof drainage system can make all the difference in the preservation of products during a natural disaster such as a storm or a fire or even areas that are exposed to the elements. Paying due attention to designing these crucial details improves efficiency and adds immensely to not just improving daily operations, but also, preserving the warehouse in the long term.

Cleanliness is the Key — Keeping the warehouse clean entails a number of practices that contribute to the overall hygiene of the warehouse while making it easy to maneuver on a daily basis. Ensuring that trash cans are placed at convenient locations, emptying trash cans periodically, keeping the area clean, all play a part in the overall maintenance and upkeep of the warehouse. Additionally, keeping the floors clean afford clear visibility of the exit signs and protect against accidents that could occur due to spillage and obstructions that may happen during daily operations.

Safety is the most important factor in any industry and must be prioritized above all else.

Safety is Paramount — Safety is the most important factor in any industry and must be prioritized above all else. This includes various aspects from regular fire drills and ensuring the equipment is serviced and up-to-date for any contingency to giving employees access to adequate training and gear for safe operations. Staff handling forklifts and heavy machinery must be provided with certified hard hats, gloves, and other protective gear to protect against any mishap that might happen. Labels and handling instructions on products must be visible all the time. Continuous training of staff about the correct and expected ways of protecting themselves, others, and assets is essential. In the event of an emergency, staff must have easy access to all the tools necessary to not just protect themselves but any other persons that may be in the warehouse. These competencies can be the difference between life and death in times of crisis.

Regular checks and inspections are essential for maintaining the standard of a warehouse.

Miscellaneous — Apart from taking care to examine that the above aspects are in order, regular checks and inspections are essential for maintaining the standard of a warehouse. From checking the storage racks and vehicle inspection processes at the loading dock, to inspecting elements such as the quality of the railings, uniformity of the stairs, access areas, aisles etc. on a regular basis must be taken into due consideration and set within processes that should be part of a cycle within organizations.

Apart from the above, Everything Warehouse lists a warehouse audit checklist that demonstrates what an audit should include:

  • Facility current and optimum capacity and throughput
  • Logistical layout and material flow
  • Safety, security, and housekeeping
  • Systems functional capabilities and performance
  • Customer service performance metrics
  • Productivity analyses
  • Storage and handling equipment
  • Inventory accuracy
  • Identification of opportunities for improvement
  • Comprehensive warehouse audit report with recommendations

In conclusion, there are many aspects that go into making a warehouse and in turn, the whole supply chain process efficient and future-ready. If done periodically, this ensures smooth operations, regular maintenance & review and better planning.

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Regaining Lost Customers in the Digital Age 

Let’s be honest, there are few things that feel more rewarding than securing a new customer. It’s incredibly important for business growth and development and at the end of the day, more customers mean more money. With that being said, no business should ever operate on a model where the acquisition of new customers supersedes the importance of advancing old or preexisting customers. More specifically speaking, winning back profitable old customers that you might have lost. 

In the business-to-business (B2B) world, reacquisition is incredibly important. Losing customers happens more often than you might expect, especially given the current market, where customers have more options than ever to evaluate and re-evaluate their suppliers, find new ones, and make changes. 

Losing a customer can be a costly endeavor, and that cost is only going up.

Losing a customer can be a costly endeavor, and that cost is only going up. For some firms, long-standing customers are also their best customers.  As recently as 2014, for example, “the average publicly traded manufacturing firm received over 25% of its revenue from large buyers, up from 10% in the early 1980s.”. Any company, regardless of size, would be leery at the prospect of losing a customer like that. 

Former customers already have a certain expectation about your company and capabilities, and it’s almost impossible to change the first impression.

The reacquisition process, however, is a bit different than acquiring fresh customers. The most obvious difference is former customers already have a certain expectation about your company and capabilities, and it’s almost impossible to change the first impression. The other side of the coin, however, is you also have your own set of criteria and history, so you know if that customer is worth pursuing. 

Fortunately, when it comes to winning back a lost partner, it’s less about wining and dining, although that’s certainly a part of it in some cases. Realistically it comes down to this, can your company get the job done this time better and in a most cost-effective way? The good news is that a lot of what customers are looking for, both new and old, can be found from within your supply chain.

Rebuilding Relationships in the Digital Age

Assuming you’ve done the math, you’ve come to realize that Customer ‘X’ is definitely an asset to your roster and is worth romancing back into a partnership. Where do you begin? This isn’t necessarily an easy question to answer as not only does it depend on the specific customer, but it is also prone to change due to the current state of flux in the market. Everything is shifting, getting technological upgrades, and becoming digital. Even customer expectations are starting to trend towards digital solutions. Having said that, finding the right way to move forward is like trying to find the needle in a haystack, in the back of a moving truck. 

What many businesses are looking for today is visibility, flexibility, and assurance that they’ll get what they need, when they need it.

What many businesses are looking for today is visibility, flexibility, and assurance that they’ll get what they need, when they need it. The ability to provide those things to a customer not only marks you as a good business partner, but it’s also a key differentiator amongst the competition. The digital “olive branch” in today’s market is what kind of data and information you can provide your customers, and overall accountability of your services and, most importantly, the strength of your supply chain.

Managing Customer Expectations

Customer expectations are constantly growing and changing. Walmart is a prime example of this. The superstore is locked in a battle of epic proportions against Amazon. Every empty spot on a shelf means a potential missed sale. A sale that could end up going to Amazon or even a different competitor. 

As a result, Walmart started stepping up their expectations from their suppliers, hitting those that don’t hold up their end of the bargain with charge-backs and other fees. However, given the size and reach of a retail giant like Walmart, business potentials for suppliers are enormous. If you make the supplier list, they tend to be the kind of customer you don’t want to lose. To that end, suppliers have little other choice but to pull up their bootstraps and live up to Walmarts expectations.

No doubt, the bar is set high, but this may also present the opportunity for those who are able to demonstrate that they have been developing and evolving their business practices. Showing your former customer that you can get the job done and done right is a sure fire way to win that customer back. 

You need to be able to prove that you have a robust plan to meet their needs as well as the capability to follow through. If they have a tight delivery schedule, then you’ll need to have a plan in place to accommodate it.  Those accommodations are made through shoring up your supply chain to create the flexibility and visibility necessary to handle the freight, even when capacity and other elements are against you. 

Controlling Costs 

Controlling costs and optimizing the supply chain also means that you can provide your customers the visibility, flexibility, and the overall assurance that they will have what they need, when they need it. 

Costs are a big factor in any working relationships. A lot of partnerships have dissolved simply due to an inflating price point, which can be caused by any number of reasons. Unfortunately, it tends to be either a knee-jerk reaction to pass the buck when times get tough and for some customers, that cost is simply too much. Controlling your costs goes a long way towards repairing broken relationships, especially when it means that you can regain a former customer at the expense of your competition. Controlling costs and optimizing the supply chain also means that you can provide your customers the visibility, flexibility, and the overall assurance that they will have what they need, when they need it. 

The benefit to this approach is two-fold, really. First, you’re gaining back a lost customer as well as proving that your business solutions have grown and matured from the last time you’ve worked together. This not only opens the door to regaining a lost customer but could also provide opportunities to gain new ones. The other is that controlling your costs, via your supply chain, also increases overall efficiency which extends to all of your customers and your operations as a whole. Ultimately, the bulk of costs comes from transportation and the supply chain. As freight rates are prone to fluctuate wildly, the cost of shipping goods can also vary to a great degree making it hard to manage. For manufacturers shipping goods to customers, this needs to be managed effectively to keep costs low and both parties happy.

There are a number of different factors to consider when you’re trying to evaluate your supply chain. The good news is, you don’t have to do it alone.

Making these corrections and changes on your own can be a difficult proposition at the best of times. There are a number of different factors to consider when you’re trying to evaluate your supply chain. The good news is, you don’t have to do it alone. Having a 3PL partner like BlueGrace can help get your supply chain where it needs to be, not only win back former customers, but to also help you win over future prospects. Call us at 800.MYSHIPPING or fill out the form below to see how we can help!

Middle of the Road for the Trucking Industry

Of all the industries that American consumers have come to rely on, perhaps the most underrated, and subsequently complex, is that of the transportation industry. While the laws of supply and demand will affect every form of business it is perhaps the most volatile and fluctuating when applied to the transportation industry. Last year was a great year for trucking companies, demand was high, capacity was low, and it allowed them to more or less pick and choose the jobs they wanted to do.

With so many wild swings in one direction or another, we’re entering a period of “new” balance that no one is quite sure of.

Shippers, for their part, have accepted the higher rates as an understood cost of business, but with so many wild swings in one direction or another, we’re entering a period of “new” balance that no one is quite sure of. Shippers that turned to contracts to escape the high rates are now making a return to the spot market as there’s plenty of available capacity currently on the market.

Aptly put, this “muddy middle” for the trucking department is a rare moment when supply and demand have reached something of an equilibrium, something that hasn’t been seen for years. Spot rates for FTL have dropped upwards of 12 percent from this time last year while contract rates, on the other hand, have climbed up 14 percent in 2018 according to data from DAT Solutions and Truckstop.com. Shippers that turned to contracts to escape the high rates are now making a return to the spot market as there’s plenty of available capacity currently on the market.

Given such a high volume of transference, it might have actually created an overly strong demand on contract rates which would have caused them to increase.

It’s rather reasonable at this point to speculate that the current shift towards the muddy middle was caused by overcompensations. Beneficial cargo owners (BCOs) reacted to the rate spike mid 2017 by shifting over to contract rates. Given such a high volume of transference, it might have actually created an overly strong demand on contract rates which would have caused them to increase.

Going into 2019, carriers and 3PLs were using terms such as “balanced” and “equilibrium” to describe the current state of the market. However, that might not be entirely accurate, or, at least not strong enough of a prediction to hold fast in the days to come.

The transportation industry is precariously balanced amidst two slippery slopes and it could go one way or the other.

“With contract and spot rates currently headed in different directions, it’s unclear exactly how this will all play out. IHS Markit chief economist Nariman Behravesh put the odds of a recession in 2019 at around 30 percent but upped that chance to 50-50 for 2020. A recession would mean lower cargo volumes, which would drive down both contract and spot rates, creating a buyer’s market,” according to an article from the JOC. Hence, the muddy middle. The transportation industry is precariously balanced amidst two slippery slopes and it could go one way or the other.

Hitting Bottom

Given the nature of the industry, balance doesn’t tend to last overly long. Eventually, rates will break either one way or the other to someone’s advantage (or disadvantage depending on your perspective.)

“A lot of shippers who started the process in the third or fourth quarter, they saw the rates [moving] in the right direction for them, so they actually held out on releasing the awards until mid-January or even into February,” said Mark Ford, our very own chief operating officer here at BlueGrace Logistics. “Shippers are trying to figure out where that bottom is, throwing out their routing guides, and going to the spot market depending on the cost differential.”

Shippers aren’t the only one that has a card or two up their sleeve.

Given that time is such a commodity, shippers have the power to drive rates in either direction, depending on what value they attribute to their time. However, shippers aren’t the only one that has a card or two up their sleeve. Given a recent downturn in the trucker pool in addition to more stringent regulations that make it harder to operate, carriers might have a little more say about carrier rates than one might expect.

A Drop In the Trucker Pool

While shippers can garner some power to affect rates, that doesn’t mean that carriers aren’t without an answer. A recent report from the Wall Street Journal states that carriers have cut payrolls by 1,200 jobs last month, owing largely to a softening of demand at the tail of a profit-boosting hot streak all through 2018. The drop in demand for new trucks is also a good indicator of a softening in the trucking sector.

“Orders for Class-8 trucks – the heavy trucks that haul consumer goods, equipment, commodities, and supplies across the US to feed the goods-based economy – plunged 52% in April compared to April last year, to 16,400 orders, according to FTR Transportation Intelligence on Friday. It was the lowest April since 2016 when the industry cycled through its last transportation recession. This comes after orders had already plunged 67% year-over-year in March, 58% in February and January, and 43% in December,” reads a recent article from Wolfstreet.

The flip-side of that particular coin is that warehousing and storage company job positions have been on the rise, up 1,700 in March alone, likely due to the continual increase on online consumer shopping. Same can be said for courier and messenger companies that make last mile deliveries.

In general, the transportation market, which has been ramping up over 2017 and 2018 is beginning to slow down, allowing them to control their overall available capacity and their spot or contract rates as a result.

Utilization seems to be the key to determining which way the rates will go. Shippers should be using this time to consider how they can vastly reduce their load times and what sort of effect that would have on the available capacity in the market. Given that there’s no clear indication of which way the market winds will blow next, focusing on optimization and utilization could be the necessary elements to not only help drive rates down, but to keep them down.

For carriers, the means of reaching a perpetual middle of the road would be to find alternative service offerings as well as increasing their focus on last mile deliveries. Doing so allows them to provide more value to their customers and increase their profit margins as a result.

Navigating Through Industry Changes

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

Controlling Costs and Preventing Accessorial Loss

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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

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!

There are a number of other benefits that can come from working with and outsourcing your logistics to a 3PL. If you would like to speak to one of our 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.

You landed the Wal-Mart account! Now what? The Retail-Supplier Relationship

An enviable position

Congratulations! You made it this far – you’re a Walmart supplier. To achieve this, you’ve provided all your information, proven that your products are a good fit for Walmart’s customers and demonstrated that you are the sort of business Walmart wants to work with. You’ve filled in the forms, shared your certificates and completed the 11 step onboarding process.

It’s a fantastic achievement. According to Walmart, you’re now one of 100,000 businesses worldwide supplying products to its customers. That number demonstrates just how much Walmart is the “800 lb. gorilla” in the supply chain, and it’s also a mark of how highly regarded you are, as a CPG company, to have it agree to distribute your products.

We know that all your distributors, all the retailers you sell wholesale to, are important to you, but Walmart is possibly just that little bit more special. Whether you’ve just started, or have been supplying it for a few years, it’s a different business to the one we all grew up with. The pressure Walmart faces are the same as the rest of the retail sector. Its size is a double-edged sword – its footprint of stores and operations means there are more places to be affected by market disruptions, yet it has the resources to not only weather the storm, but profit from it too.

Just being big isn’t enough, however. What marks Walmart out is its commitment to innovation. In July 2019 it opens its first high-tech consolidation center — a 340,000-square-foot dock in Colton, California that will use automated technology to receive, sort and ship freight. According to the announcement, this ‘will enable three times more volume to flow throughout the center’.

Walmart innovates to maintain its position. Why does it need to do that?

The Situation Today

Walmart needs to continually innovate because it faces a very real threat.

Amazon.

Amazon has been at the forefront of the consumer shopping experience revolution. One-click payments, same-day delivery in certain geographies, multiple delivery and collection options, dash buttons – all features that are shaping customer expectations. Its dominance of the retail landscape is such that it has gone from driving 15 percent of core US personal consumption expenditure (PCE) growth in 2013 to 69 percent in 2017, according to Morgan Stanley Research.

This has forced many retailers, including Walmart, to revise how they serve customers. For Walmart, that means a switch from building stores to focusing more on e-commerce to drive growth. In September 2016, it acquired e-tailer Jet.com, accelerating its online sales and helping it to outperform the retail sector within a year. It consolidated its e-commerce position with the purchase of Indian online retailer Flipkart in 2018.

In much the same way that Amazon purchased Whole Foods to acquire physical presence, Walmart acquired Jet.com to give it a credible e-commerce function.

That does not mean that Walmart is abandoning its bricks and mortar business. Those stores mean that it is closer to more people in the US than any other retailer, with 90 percent market penetration, versus Amazon/Whole Foods’ combined 74 percent.

So, Walmart is closer to you, but Amazon can offer a great experience. This is where Walmart’s innovation switches from automation technology in vast consolidation centers to delivering efficiencies in its extended supply chain. A customer can find anything in Amazon and get it the next day. With a Walmart down the street, if a product is in stock, that same customer can walk away with it on the day.

It is here that suppliers come in. Products have to be in stock. As Steve Bratspies, the chief merchandising officer for Walmart US, told the Wall Street Journal, “When we receive the product that we ordered, we see better sales.”

In other words, if a customer can not find what they want, they will go somewhere else. Not only does the retailer lose that sale, it also loses the opportunity to sell complementary products, or perhaps something that simply catches the shopper’s eye on the way to checkout. According to Greg Foran, Walmart US CEO, five percent out of stock at Walmart’s scale translates to 5,000 orders.

So, Walmart will do everything to make sure that its shelves stay full, that customers can find what they want, when they want it. If insufficient stock is ordered, that’s a retailer issue. If insufficient stock is delivered at the right time, that’s a supplier issue.

At the same time, as Walmart and other bricks and mortar retailers look to economize, they’re looking at where they hold stock. They want stores to sell, not to act as warehouses – the price of retail square footage simply does not allow that in the current market. That’s why Walmart is introducing these consolidation centers – to collate from hundreds if not thousands of suppliers, before using their own distribution networks to get the stock to stores.

That’s the retail landscape suppliers are entering into when they become part of the Walmart supply chain. Alongside this are rising fuel and transport costs – the US Energy Information Administration (EIA) May 2019 update forecasts that regular gasoline retail prices will average $2.92 per gallon (gal), up from an average of $2.85/gal last summer.

It’s an additional cost that both suppliers delivering to Walmart and the retailer itself, through shifting products from consolidation centers all the way to stores, are going to have to take on board. This ultimately impacts margin across the supply chain.

Ramifications: they say jump, you say how high

An environment of ruthlessly seeking efficiency, with fluctuating transportation costs, dominated by 800 lb gorillas.

What that means for suppliers is that they have to deliver when Walmart wants, not when the suppliers feel like it. It’s where OTIF comes in – on the actual due date, exactly the right amount. There is no grace period, limited leeway. That’s because flexibility eats into the margin.

Struggle to comply and chargebacks kick in – currently three percent on all shipments below the threshold. Amazon, with MABD, may appear slightly more lenient, but it has a similar level of chargeback on both late and early deliveries. On top of that, purchase order (PO) and advanced ship notice (ASN) violations (such as failing to confirm a PO or not sending an ASN in good time) levy a two percent charge

It’s just got stricter, as well. From May 2019, suppliers that ship full trucks must hit a specified window 87 percent of the time, up from the previous 85 percent previous target. For less than truckload (LTL) shippers, the jump is that much higher – up to 70 percent in that window, from 50 percent before.

It gets trickier. Historically, suppliers were judged on how consistent deliveries were on time and how complete they were. Now, those two parts will be evaluated separately. It’s all about having data that can be fed back into a stringent evaluation process to identify further efficiency opportunities.

Then there’s the challenge of Walmart as an international operation. As you grow within Walmart, there may become opportunities to supply its Canadian subsidiaries, or even further overseas. That brings its own challenges as you will need to comply with local regulations and legislation, both in terms of your products and your business practices.

What you need to think about if you are

So far, what we’ve discussed applies to all shippers. Yet every business is different, and there will always be specifics that only certain types of suppliers need to focus on. In this section, we’ll take a brief look at three types in particular: newer CPG companies, LTL shippers and those dealing in perishables (such as fresh food).

…a newer CPG shipper

With the introduction of consolidation centers, and the end of stores holding inventory, the onus of predicting consumer demand is passed on to CPG companies. That means knowing who your end customers are, how they shop and when there might be spikes in demand, even if you do not sell direct. This is a challenge for all CPG shippers, but whereas more established brands may have the resources to store spare stock, for newer businesses that capacity may not be available. This is where really clear insights into customers, coupled with efficient internal processes and a lean supply chain of your own, come into play. Falling foul of chargebacks will quickly eat into profits, making it vital that shippers can accurately predict consumer demand.

…LTL

If you’re LTL, the positives are savings in not paying for half-empty trucks, but the drawback is less control over how the carrier gets to your distributor than if you were a full-truck shipper. The carrier may pick up your pallets, then go to another shipper for their products. It might head to a regional dock to unload your pallets to go on another truck heading somewhere else, before being cross-shipped on to a third truck with everyone else heading to Walmart. That means you have to build in additional time to your shipment planning to ensure that you comply with OTIF, which will have ramifications for your own production processes and supply chain.

…dealing in perishables

While targets may be tight for long-life or non-perishable goods, for suppliers that deal in products that have a limited shelf life, OTIF goals are even stricter. That two-day window becomes one, which puts the emphasis on the shipper to be absolutely accurate with their deliveries. All retailers that stock food and drink, particular that which needs to be kept in controlled, refrigerated environments, need it to be able to stay on the shelf for as long as possible, in order for it to be as attractive as possible to customers. Get closer to use by or best before dates, and consumers are less likely to buy, leading to last-day discounting and wastage.

The upside

It might seem like becoming a Walmart supplier is nothing but hardship and the constant threat of chargebacks. Yet it is challenging because Walmart is such a golden opportunity to get your products into the hands of millions of consumers, both in the US and further afield.

It isn’t all about the sales opportunity, however. With retailers like Walmart looking for efficiencies, it forces their suppliers to either follow suit or fall off. By aligning your own systems and processes with the demands of OTIF, you will end up a leaner, meaner machine. This means less wastage in your operations, resulting in less outgoings and more profit.

At a time when all sectors are undergoing huge disruption, this streamlining sets you up to thrive rather than simply survive. While it is demanding, the practices and processes you onboard will unlock long term gains for your business.

The question is, what do you need to consider when aligning your business with the demands of Walmart?

Top tips on being a star supplier for Walmart

Here’s what we’ve learned turns a good shipper into a great Walmart supplier from working with businesses just like yours:

  1. It’s all about data: Walmart wants its supply chain to be as efficient as possible, so it’s willing to share the data it has to help you shape your operations. If you don’t sell direct, getting tangible customer intelligence can be a challenge, but Walmart will share information, such as on-shelf availability and point of sale insights, more often.
  2. Work from the customer backward: On time doesn’t mean in-time to Walmart. If you don’t want to suffer chargebacks, you need to think about your timings from the customer backward. The customer buys your product after it’s been on the shelf X days, so how long prior to that do you need to be delivering it to the distribution or consolidation center? How long does it take to get from your warehouse to that point?
  3. Chargebacks hurt, so make sure it’s justified: Walmart may be huge, but it isn’t infallible. There’s a lot of automation, which means sometimes chargebacks can be applied due to mistakes in their processes rather than your failed compliance. For instance, a carrier may have delivered your shipment OTIF, but the DC did not unload that day. The only way you can contest, however, is to have full and complete records showing how you delivered OTIF against the buyer requirements. Having a trusted logistics partner that can audit your scorecard and compare it to carrier manifests is critical, and it could be the difference between receiving a chargeback or being able to challenge it successfully.
  4. Load planning: If you supply multiple products to Walmart, think about how they are loaded on the pallet or in the truck. It’s no good having the back half of the truck full of products for distribution centers further down the line, or shorter life products nearer the bottom of the pallet.
  5. Think like a Roman: The Romans crisscrossed their empire with straight lines, because that’s the most efficient way from point A to B. You want to do the same, but build in factors such as weather forecasts, traffic patterns, fuel levels, and load points. You’re looking for the most optimized route because it will save you time, which in turn saves money.
  6. Packaging tips: People need to know what’s in the box. That means distribution center employees, yes, but it also means customers. How will it look on the shelves? At Walmart’s Supplier Summit 2019, Foran said “packaging should be designed for impact and efficiency with large fonts that are easy to read, easy to find and bar codes which also are prominent on the packaging.”
  7. Cut down on travel time: Fuel and transport costs are the great unknown, tied to everything from crude production levels to the political situation in the Middle East and South America. You want to control as much as possible, so limit how far you need to move your inventory by positioning it closer to warehouse locations. If Walmart is selling your product predominantly in California, why not get as close as possible to the new consolidation center? Limit the variables and you have a more efficient machine.
  8. Appointment scheduling: Be aware that your mode of transport will dictate when your products can be delivered. Most LTL carriers will not allow you to pre-schedule appointments, preferring to wait until your freight has arrived at the consolidation terminal. It will then be co-loaded with other Walmart-bound deliveries, with appointments based on the trailer the carrier has allocated for that day. It’s therefore vital that you, or more likely your logistics partner, can work closely with both the carrier and scheduling system to make sure this is being done. By doing so, you will be better placed to identify exceptions, such as where the carrier cannot accommodate the delivery, to adjust OTIF without penalty. Most suppliers don’t realize this and miss the opportunity. It is important to note, however, that this must not be abused and is for exceptions only. Your lead logistics service provider is expected to have the right connections and expertise to manage it professionally.
  9. Speaking of carriers, reliable ones are worth their weight in gold: We hear of horror stories where carriers and shippers fall out because neither can clearly understand what the other is actually trying to achieve. The number one mistake people make is to think that being efficient equals going for the cheapest option, when it’s actually about having every part of your chain operating reliably. There are carriers that will drop prices to get business on board, but if you’re then simply more low-paying cattle, is your OTIF compliance going to be top of the carrier’s agenda? You want a good price, certainly, but you need a partner that’s aligned with your objectives more.
  10. The right foundations: You can’t operate a 21st-century business using 20th-century tools. To compete in today’s market needs having the right technology underpinning your operations, foundations which give you visibility and control and allow you to have sight of, and optimize, every aspect of your business.
  11. Embrace digital: Walmart is investing billions in its technology – that means manual processes and paper documents are disappearing. Digital tools like electronic bills of lading are becoming the norm. Do you really want to be the only shipper the trucker has a paper docket for, with the rest on his mobile device the dock or DC are simply scanning?
  12. Ensure everyone lives by OTIF: It’s all well and good your logistics team being held to OTIF, but when the penalties impact the rest of your business, isn’t it really a matter for everyone? It comes back to working back from the customer – the process doesn’t stop when the product leaves your dock but should carry on through to your production team. If you’ve got a lead time of two weeks to produce new stock, that’s not a just manufacturing factor, it’s a supply chain one too.
  13. Walmart want you to win; let it help you: Walmart run a sophisticated education network designed to support suppliers. It’s in its interests that you are operating to the best of your abilities, so make full use of the classes, academy, and tools it offers to help you do just that.
  14. OTIF is vital, but so is everything else: Walmart is taking huge strides in making its entire operation as sustainable as possible, which includes targets for suppliers. These are only going to get stricter, so it’s a good idea to know what they are and keep yourself aligned. There will come a point where being 100 percent OTIF compliant, with customers buying your products in droves, won’t save you if you have a huge carbon footprint and are unsustainable. That’s a lot to take in, so here’s a one-off tip:
  15. How to write a great OTIF action plan: Walmart lives on data, which means evidence. Write a great OTIF action plan and you will have evidence on how you will improve standards. But how do you do that if you’ve not done one before? Googling isn’t an option here – you need qualified, experienced support. Hiring the right people is one route – but they won’t come cheap, and can you justify having them on staff as a permanent employee. Another option would be to outsource to a competent third party. One which has experience of supporting suppliers to build efficient supply chains, whether they’re supplying to Walmart, Amazon or any other big box retailer. Having a supportive partner that has done this, time and time again, for all sorts of different businesses and sectors, means you get access to the right experience and support, tailored to your unique requirements

Being a Walmart Supplier – a story from the frontline

For one Houston-based health and beauty supplier, working with Walmart was a dream come true, until the tremendous growth it propelled led to distribution challenges.

With vendor scorecards dwindling and chargebacks against purchase orders mounting the need for a better solution was apparent. From numerous carrier meetings to drive on-time compliance to costly upgrades in service levels, the trend continued to show little improvement.

Lead times were not an issue and inventory levels were manageable, yet carriers could not seem to comply with the OTIF date clearly displayed on the BOL. Purchase orders were being shipped with ample lead time and in most cases early with guaranteed service at a premium. However, even with upgraded service, the carriers would typically refuse to refund the charges since they were delivered “on time” per the standard transit.

To tackle this, the supplier analyzed the data and scorecards to determine the root cause and set a baseline for current state performance. Next, an assessment of ERP integration capabilities was performed. By linking this with a transport management system, this supplier was able to apply custom business rules to achieve the missing link of the overall issue.

What this meant was that no matter when the order was received in advance of the OTIF, the supplier could effectively route the “Best Value Carrier” and provide the most optimal ship date, relative to the selected carrier’s standard transit time. Each order, once approved within the ERP, would be rated and routed with a Walmart approved carrier delivering the lowest cost, standard service and shipped on the day that would best fit that carrier’s network, all to allow for the delivery within the specified OTIF window.

The supplier showed a 90 percent reduction in chargebacks within the first 60 days of implementing this program and realized the best scorecard performance in recent history.

Now it’s time to start work

As we said before, the hard work starts now. Remember, you aren’t alone – many CPG companies experience difficulties keeping up – back in August 2017, OTIF compliance stood at 70 percent, and it’s taken a while to get higher. Walmart wants you to do well, so listen, learn and take the opportunity that awaits. Look at your own network, your own suppliers and operations, and see how they can work together to support your business with Walmart or any other big-box retailer. Technology and nuances of logistics and supply chain operations are vital here. Working with partners who have the connections, first-hand experience, and understand both the business and technology can make the difference between success and failure.

BlueGrace is a freight and logistics services provider and one of the top 3PLs (Third-party Logistics Providers) with invaluable experience in managing complex logistics programs of leading CPG companies. The dedicated team has the first-hand experience in planning, building and delivering supply chain solutions for CPG businesses that not only help them meet the requirements of their retail partners but turn their logistics from a cost to value add.

You’ve done great work getting this far. Now it’s time to do even better. Give BlueGrace a call today at 800.MY.SHIPPING or fill out the form below and see how we can help you achieve exactly that.

Tips for Becoming a More Strategic Shipper

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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.