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COVID-19

How Can An Inbound Logistics Program Help During Produce Season?

For those in the trucking industry, produce season carries an awareness of the many opportunities and challenges that comes with transporting perishable commodities. Managing the rapid changes in available TL capacity when increased volumes begin to consolidate in California presents one of the most significant of those challenges. For produce sellers and retailers, the goal is to bring in the freshest produce at the best prices. In order to do this successfully, they will have to manage their logistics and supply chain accordingly. 

In our recent webinar, we addressed what challenges shippers face during produce season, the driving forces behind rising transportation costs and tighter capacity during produce season and how businesses can utilize an inbound logistics program to overcome the challenges of the produce season.

As the nature of logistics and supply chain management is complicated at the best of times, the produce season may serve as a further wrench in the works, especially as it falls during a time in which many carriers are being diverted for vaccine distribution. Below is a break down of a few of the points in further detail. 

Limited Equipment During Produce Season Complicates Supply Chain Needs 

The choice of which logistics approach to embrace becomes especially impactful as carriers feel the crunch in California. Meanwhile, stocking shelves with visually appealing, fresh produce is even more important in 2021 than in recent years. The pandemic has accelerated an existing consumer trend towards health-conscious, home-cooked meals, creating an increased demand for fresh produce across the country.   

The need for well below freezing storage temperatures necessitates the need for specialized equipment, specifically reefer units.

As COVID-19 vaccines are manufactured and subsequently delivered, the need for well below freezing storage temperatures necessitates the need for specialized equipment, specifically reefer units. Given the availability for these trailers and the public need for the vaccine to be distributed, produce shippers will have to pay a premium for reefers in addition to working around a delivery schedule that is tighter and decidedly more limited than years past.   

Driver Shortages and a Highly Regulated Supply Chain 

It is no secret that the United States has an incredibly finite amount of drivers, decidedly less than demand requires. Driver shortages and lengthy detentions have already plagued 2020 and are slow to show any significant improvements thus far in 2021. It’s no wonder so many agricultural carriers are concerned with the delicate nuances necessary to coordinate a successful produce season this year. The question is, what can shippers do to help mitigate the impact of the driver and equipment shortage so they can keep their shelves stocked in the coming months? 

In addition to the driver shortage, there are also federal regulations that need to be considered when transporting produce. The FDA has a fairly stringent set of standards in place regarding the transportation of perishable and consumable goods such as produce. The Food Safety Modernization Act (FSMA) has a myriad of sanitation, storage and transportation requirements that must be adhered to, or else carriers could be subjected to a series of fines and penalties.  

Perhaps a blessing and a curse for produce shippers.

In addition to the FSMA requirements, there are also the HoS mandates that dictate just how long a driver can work at any given time. Perhaps a blessing and a curse for produce shippers, there are some addendums and exceptions to the Hours of Service mandate when it comes to agricultural supply chains that allow shippers to be more efficient when moving produce. However, knowing what these exceptions are and how to best utilize them can be a challenge for even experienced shippers, given that the regulations continue to change.

Watch The Recorded Webinar Below

Delivering A Passion For Logistics

Mark Derks, Chief Marketing Officer

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

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

Automate & Simplify

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

Focus on Order Management

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

Improve Data Accuracy

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

Final Mile & COVID-19 Evolution

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

Sales Leadership

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

Work with a Driver-Lead Provider

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

Find Value

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

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

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

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

Shipping Challenges For The 2021 Produce Season

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

Driver Shortages

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

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

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

Social Distancing And E-Commerce Sales

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

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

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

COVID-19 Vaccine Distribution

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

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

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

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

Investing In Support

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

Outlook for LTL in 2021: A Pressurized Sector

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

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

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

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

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

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

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

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

Beware The Bottlenecks

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

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

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

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

Shippers Need To Start Planning  

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

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

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

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

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

Carrying the Cure: The Logistics Of The COVID-19 Vaccine

The first wave of the COVID-19 vaccine has rolled out into communities. First-responders and those who work in high exposure professions are first on the list to get the shot. The two major distributors for the vaccine in the U.S. are Pfizer and Moderna. According to the CDC, the Pfizer vaccine “will arrive at a temperature between -80°C and -60°C (-112°F to -76°F)” and the Moderna vaccine “will arrive frozen between -25°C and -15°C (-13°F and 5°F)”.

Transit Priorities 

In addition to temperature-control needs, freighters will feel the crunch with capacity related constraints. Labeled “Operation Warp Speed” by the United States government, there is pressure on the labor force to transport these doses without delay or damage.  

Security and labor are another consideration companies need to make when meeting this unprecedented need for refrigerated shipping.

Security and labor are another consideration companies need to make when meeting this unprecedented need for refrigerated shipping. According to WSJ, “carriers typically use two-driver teams for such shipments to keep trucks moving and ensure valuable cargo isn’t left unattended.” Of course, this also increases costs by needing to pay a two-driver team for every shipment.  

Monitoring Temperature 

Temperatures need to be checked regularly and recorded each day to account for any excursions. For the most accurate readings, the CDC recommends using a DDL (digital data logger) with a detachable probe.  These probes should be buffered. Teflon®, sand, glycol and glass beads are all appropriate buffering materials for the temperatures required. According to CDC guidelines, monitoring temperatures should include “a temperature log and one of the options below:

  • Option 1: Minimum/Maximum Temperatures (preferred) Most DDLs display the minimum and maximum (min/max) temperatures. Check and record the min/max temperatures at the start of each workday. 
  • Option 2: Current Temperatures –  If the DDL does not display min/max temperatures, check and record the current temperature at the start and end of the workday. Review the continuous DDL temperature data daily.”

For the recommended storage log in Fahrenheit, click here.  To access the CDC recommended Celsius log, click here.

Projected Numbers

Recent estimates show that the number of doses the U.S. has signed up for will require about 632 trucks in 2021. Those numbers have room to grow.  Such narrow error margins with temperature mean replacement orders will happen. Security issues will arise, and the FDA will approve more manufacturers. Unforeseen events have already taken place, like the Wisconsin pharmacist who allegedly ruined a shipment of vaccines under his care.  

It is plausible to assume shipping demands will increase due to the Defense Production Act to expedite the delivery of 100 million vaccines during the first 100 days of President Joe Biden’s incumbency.  

According to information gathered by Heavy Duty Trucking, “WHO estimates nearly 20% of temperature-sensitive healthcare products get damaged during transport, and 25% reach their destination in a degraded state because of breaks in the cold chain”. While these are the present industry standards, the stakes are higher for a vaccine that will prevent a viral infection.

Managing Changes 

Presently, the number of trucking companies with both the equipment and the experience to handle the demands of this roll-out is a small percentage of the industry.  

In an interview with Wall Street Journal,  “Robbie Neilson, chief operating officer of Cavalier Logistics, a freight transport company based in Northern Virginia that specializes in temperature-controlled logistics and is involved in the Covid-19 vaccine distribution efforts” offers his opinion that the industry is well-equipped to handle the challenges. He admitted that the volume is unusual but further explained his confidence. Since this is a global problem, there is high motivation to be a part of the solution. He does not expect capacity constraints to be a significant barrier to success.  

However, not everyone in the industry agrees. Andrew Boyle, co-president of Boyle Transportation, shared his experience with WSJ as well. He says that developing the expertise necessary to work with pharmaceutical companies, obtain certifications to meet global standards for the transportation of medications, and “undergoing extensive quality audits, took us about 10 years. You can’t haul chicken nuggets and then transport oncology drugs”.

It is difficult for companies in any sector to make large changes to logistics.

It is difficult for companies in any sector to make large changes to logistics. To make those changes during unprecedented events can be near impossible. With so many lives on the line, companies would be prudent to invest in third-party logistics support.  Allocating internal efforts towards the training of drivers and cargo handlers will be of the utmost priority. High-end equipment will need to be acquired and maintained. While these are hefty up-front costs, there is an opportunity for companies to make a reputation for themselves.

If you need help raising the standards in refrigerated freight, BlueGrace can help. We provide real-time tracking of our full truckload fleet providers, including any and all temperature-controlled transport partners. With industry expertise and a reliable carrier network, we can secure capacity for you and eliminate common supply chain disruptions. Contact us at 800.MY.SHIPPING or fill out the form below to request a FREE refrigerated quote today.

 

Top 3 Factors To Consider In 2021 For The Trucking Industry

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

Impacts Of COVID-19

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

“The Amazon Effect” and E-Commerce

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

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

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

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

Ideal Capacity for Profitability 

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

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

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

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

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

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

Strengthening Capacity Foresight

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

Shifts in Consumer Trends and the Future of Retailers

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

How Will 2020 Impact Trends in 2021?

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

Consumers have become savvier about how they go about shopping.

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

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

Which Retailers Were Set Up for Success in 2020? 

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

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

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

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

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

Which Retailers Lacked Positioning?

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

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

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

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

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

These profits have exceeded any business lost during the quarantine.

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

Can the Ecosystems Fail?

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

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

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

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

New Year Resolution: Start Collecting More Data in 2021

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

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

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

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

The Big Benefits of Big Data 

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

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

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

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

Simply put, good data drives better service. 

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

How Do I Collect More Data? 

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

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

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

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

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

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

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

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

Help Wanted: The 2020 Seasonal Logistics Hiring Boom

The seasonal shopping madness is already underway as retailers begin priming their customers for the holidays. 2020 has, without a doubt, been one of the strangest years for just about everything. The global pandemic, a myriad of natural disasters, and a tense presidential election will very likely mean that consumers are going “all out” for the holidays, and companies like Amazon and Walmart are happy to help them with their purchase needs.

Many retailers, including Target and Walmart continuing through the month to meet the needs of online shopping.

Because there are still global restrictions and precautions in place due to COVID-19, we can expect to see a surge in e-commerce and retail sales. For example, Amazon’s Prime day, which usually takes place in July, happened in October this year. While Amazon hasn’t released their total sales figures, they did say that third party sellers on the marketplace earned over $3.5 billion. Black Friday looks to be on target as one of the biggest Black Friday ever, in terms of sales. Many retailers, including Target and Walmart continuing through the month to meet the needs of online shopping.

These companies are bracing for the massive capacity crunch, which could affect up to 7 million packages per day, between Thanksgiving and Christmas.

The real question is whether or not logistics companies will have the necessary capacity to deliver all of these orders. Even big players in the game, FexEx and UPS have already reached capacity. With the bulk of orders still to come, retailers and logistics companies alike are telling customers to shop and ship earlier than ever before. These companies are bracing for the massive capacity crunch, which could affect up to 7 million packages per day, between Thanksgiving and Christmas.

All Hands on Deck at Amazon

To make sure they are ready for the holiday rush, Amazon has announced that they will be hiring 100,000 workers.

Amazon is a giant machine with an uncountable number of moving parts. To make sure they are ready for the holiday rush, Amazon has announced that they will be hiring 100,000 workers. While they didn’t say if these workers will be seasonal specific or full-hires, the goal is to flesh out Amazon’s logistics and fulfillment network. Amazon is offering a minimum starting wage of $15/hr and up to $1,000 sign on bonus in some markets to entice warehouse and delivery workers. Amazon also plans to open 100 additional buildings across it’s fulfillment, sortation, and delivery network. The e-commerce giant intends to bolster their capacity by upwards of 50 percent by the start of the peak season to meet the uptick in demand.

UPS ups Their Workforce

UPS is also looking to bring in 100,000 seasonal employees to prepare for the holiday season.

UPS is also looking to bring in 100,000 seasonal employees to prepare for the holiday season. Much like Amazon, the UPS ranks have already swelled at the beginning of the year to meet the logistics needs of the e-commerce boom caused by the pandemic.  During the second quarter of 2020, UPS saw a 23 percent growth of package volume over the same time last year which forced the company to bring on an additional 39,000 workers. The shipping deadlines for UPS are December 15 UPS Ground, December 21 UPS 3 Day Select, December 22 UPS 2nd Day Air, and December 23 UPS Next Day Air. UPS will also impose surcharges ranging from $1 to $3 per package on high-volume US residential shippers.

FedEx is Growing its Capabilities

FedEx will expand its Sunday home delivery service to cover nearly 95 percent of the U.S. population.

In addition to the 75,000 seasonal workers hired for 2020, a 27 percent increase from last year, FedEx is putting more effort into growing its delivery capabilities. The company will expand its Sunday home delivery service to cover nearly 95 percent of the U.S. population. FexEx will also be increasing Ground’s network capacity and expanding the coverage radius of FedEx Freight Direct service. The shipping deadlines for FedEx are December 15 for FedEx Ground, December 22 for FedEx 2Day, December 23 for FedEx Standard Overnight, and December 25 for FedEx Same Day. FedEx will also be applying peak season surcharges to high-volume shippers, ranging from $1 to $5 depending volume.

The USPS Freight Prediction

The United States Postal service will bring on it’s usual 35,000 to 40,000 seasonal workers for positions

The Postal service is preparing for the busy season, with an expected 15 billion pieces of mail and 800 million packages. The United States Postal service will bring on it’s usual 35,000 to 40,000 seasonal workers for positions such as mail handlers, holiday clerk assistants, and mail processing clerks. USPS, like FexEx, is working on a different angle, and will be pushing its Click-N-Ship feature, allowing users to order free Priority Mail boxes, print shipping labels, purchase postage, and request free next-day package pick up. The USPS urges customers to plan accordingly as it predicts that December 14th will be the busiest day online with more than 13 million customers predicted to be on the postal service website for help with shipping holiday gifts. USPS shipping deadlines include December 18 for First-Class Mail and packages, December 19 for Priority Mail, and December 23 for Priority Mail Express.

Preparing for the Surge

This was one of the earliest holiday season kick offs ever, not to mention the biggest one to date. It is estimated that holiday spending will reach $1.15 trillion, a 1 to 1.5 percent increase from 2019. This year will see a dramatic increase in online sales as more and more customers avoid brick and mortar stores. Even with the increased personnel and investments in increased infrastructure, it’s unclear as to whether or not retailers will be able to handle the strain of increasing sales volumes. Even after the holidays are over, demand will still be radically steep as the post-holiday reverse logistics debacle begins. 

About 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.

But that’s only part of the story, because your success doesn’t depend on shipments and deliveries alone. To thrive, it needs dependable relationships between customers, carriers, and logistics experts. When Bobby Harris founded BlueGrace in 2009, he saw that even the top logistics firms were overlooking the true heart of their job. So, he built a company that put its people and its customers before profit. The proof of that is evident in our core values, our caring culture, our countless community efforts, and in the heartfelt testimonials from our customers.

We’re Hiring!

Looking for a job that’s miles away from ordinary? Do you want to work in a place where your voice will be heard and your passions celebrated? Do you want a career in one of the fastest growing business sections in the U.S? Why not join the BlueGrace team?

We’re always on the lookout for the humble and caring, the motivated and driven, the bold and talented – for those who want to have fun while contributing to the growth of a nation-leading company. Sound like you? Apply today!

How Technology Can Enhance Your Supply Chain In Four Ways

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

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

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

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

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

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

1.   Drive Comprehensive Supply Chain Visibility

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

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

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

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

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

2.   Properly Managing a Complex Supplier Network

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

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

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

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

3.   Pinpoint and Engage Diverse Supply Chain Partners

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

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

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

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

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

4.   Using Technology to Create a Disaster Preparedness Plan

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

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

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

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

Strengthening Your Supply Chain with BlueGrace

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

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

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

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

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

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

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

High Q3 Rates Will Lead to Even Higher Rates in Q4

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

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

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

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

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

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

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

What can shippers do to manage current market volatility?

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

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

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

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

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

What the Freight Industry Might Learn from COVID-19

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

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

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

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

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

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

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

Practical Policy Changes

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

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

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

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

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

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

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

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

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

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

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

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

Finalizing Your 2021 Transportation Budget – The New Normal

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

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

Freight Budgeting then vs. now

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

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

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

Predictive Analytics

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

Streamlining the freight budget process

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

Operational KPIs

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

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

Finalizing Your 2021 Freight Budget Webinar October 21

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

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

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

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

Understanding the Relationship between Spot Rates and Contract Rates

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

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

Shippers Should Start Considering Contracts

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

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

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

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

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

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

Want to Learn More?

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

Digitalization In Trucking

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

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

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

Elements of Digitalization in Trucking

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

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

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

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

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

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

Benefits of Digitalization in Trucking

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

1. Optimum utilization

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

2. Enhanced integration

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

3. Enhanced efficiency

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

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

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

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

Seven Important Skills Every Supply Chain Leader Needs

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

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

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

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

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

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

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

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

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

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

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

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

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

11.84 Billion Tons Of Freight Moved And Other Trucking Trends

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

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

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

Understanding the Relationship between Spot Rates and Contract Rates

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

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

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

Shippers Should Start Considering Contracts

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

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

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

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

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

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

Want to Learn More?

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

Truckload Freight Contracts: Understanding Contract & Spot Rates

Throughout 2020, truckload carriers felt the burn of the China-U.S. trade war, declining capacity, and low spot rates. In general, markets with lower spot rates are more beneficial to shippers, keeping carrier profitability in check. The opposite applies when contract rates are lower, allowing carriers to retake control and reap greater profits. In addition, the risk for a resurgence of higher spot rates and renewing interest in truckload freight contracts is an area, shippers should understand and keep their eye on in 2020. According to William B. Cassidy of JOC.com, he describes this chance:

“After six consecutive quarters of deflation, the market is rebounding, heading back towards an inflationary environment, the spot market will reach an inflationary environment by Q1 2020.”

To combat that prediction and also consider the influence of the coronavirus, shippers need to understand the driving forces of change in the truckload market, what is already happening with the coronavirus, and a few tips to better underscore and improve use of both truckload freight contracts and spot rate shipping. 

Driving Forces of Change in Contract and Spot Rate Markets

The biggest driving force of change in the market involves available capacity and its influence on capacity. As explained by Cassidy:

“DAT noted that freight demand, in terms of total spot and contract volumes, has been increasing, with spot volumes rising 7 percent in 2019 year over year and contract volumes 4 percent. The American Trucking Associations (ATA) predicts a 1 percent increase in contract truckload volumes for 2019, down from annualized growth of 3.2 percent in 2018 and 3 percent in 2017.”

How much capacity must exit the market before supply and demand move back to a closer alignment? Some experts believe truckload capacity and freight demand already are closer to equilibrium than they’ve been since 2017 and that a surge in demand could tip the balance. Others think trucking’s supply-demand gap will take more time to close.”

Unfortunately, that prediction and driving force now hangs in the balance with a likely swing away from the prediction. That’s right. Capacity is rapidly increasing overseas, and it will likely lead to changes in the U.S. truckload freight contracts’ market.

The State of Truckload Freight Contracts Will Retract Due to the Coronavirus

Capacity is dependent on the demand in the volume of imported raw materials, finished products, and other supplies from around the world. Many electronics, automotive, and medications and medical equipment arrive in the U.S. from China. In addition, the flow of exports from the U.S. to the APAC region, including the iPhone and agricultural products, are at risk. There is a near-stop to the flow of freight in the region due to the coronavirus. So, what happens in other areas abroad and in the U.S.?

The freight that would have filled trailers and help carriers push spot rates upward vanishes. Now, carriers have too much capacity, too many drivers, and too few lanes to travel that make a profit. As a result, the spot rate market is on the verge of bottoming out, and shippers will benefit to an extent. The real problems for shippers will not become evident until their favored carriers start to close lanes and begin to exhibit signs carriers are looking to gain profitability when more reweighs and reclasses occur or accessorial fees tick up. At this point, shippers will face the uncertainty of limited carrier availability, if any, and an inability to move freight to their customers as cost-effectively.

The only way to maintain operations lies in creating a balance between the use of contract and spot rates to get the best deal to benefit everyone.

The only way to maintain operations lies in creating a balance between the use of contract and spot rates to get the best deal to benefit everyone. As carrier operations begin to suffer the effects of continued drops in the spot rate market, it will be time for shippers to start looking for more carriers and fulfillment options to fill the void.  

How to Better Understand Contract and Spot Rates

Shippers that wish to create a successful balance between the use of spot rate and truckload freight contracts need to follow these steps:

  1. Connect your supply chain assets to a centralized supply chain control tower. 
  2. Leverage the full scale and scope of the BlueGrace TMS. 
  3. Take advantage of managed services, including invoice auditing and accounting services.
  4. Rate shipments across all modes and potential trade lanes to determine the best-case, not the cheapest, shipping option. 
  5. Always consider the “other” factors in tendering freight, including claims’ insurance and management needs.
  6. Diversify your carrier network to include the small and local carriers that have expertise in both truckload and last-mile delivery.
  7. Extend your TMS and order fulfillment systems across your whole supply chain, including brick-and-mortar stores.
  8. Remember to integrate new systems with existing platforms to enable omnichannel capabilities and take advantage of all available inventory. 

Gain Better OTR Rating With an Advanced, Customizable TMS at BlueGrace

The freight rate market is continuously changing to reflect the risks and opportunities in the market. As the year rolls on, shippers need to take the steps necessary to shore up their operations against the industry’s top risks, including market volatility and the coronavirus. Moreover, applying the functions and wide-ranging benefits of a dedicated TMS and 3PL’s lineup of managed services will provide a protective barrier against risk and help your organization succeed. Find out how more information and visibility can improve your use of spot rates and truckload freight contracts by calling BlueGrace at 1.800.MY.SHIPPING or filling out the contact form below. 

Outside-In: The Future of Supply Chain Planning

Supply chains are evolving fast. To keep up with the fast pace of supply chain evolution it is important for supply chain planners to upgrade their skills and step up their business planning and forecasting techniques. If the planners lag behind, it will have an adverse impact on not only the supply chain but also on the organization as a whole. 

The Gartner Supply Chain Planning Summit held in Denver, USA, in November 2019, emphasized this very aspect. According to Marko Pukkila, Vice President and Team Manager, Gartner, who shared his views during the summit:

“The job description of SCP leaders today looks totally different than 10 years ago. It’s no longer enough to provide copious amounts of data — planners must use the data to draw conclusions about future risks and opportunities. It’s all about supporting business objectives. Gartner calls this an outside-in mindset.”

What is the Outside-in Mindset? 

As Gartner defines it, the outside-in mindset is about being

aware of what is happening around you — be it a business objective or an upcoming recession — and use the capabilities of the planning function proactively to set up internal processes that are optimized for whatever will happen in the future.”

In simple terms, the outside-in mindset is about understanding external factors and the impact they will have on the business objectives. It is about creating a system that can not only take into consideration the impact of these outside forces but can also respond quickly to the ever-changing global economic-social-political environment. It is about creating a planning process that is agile and flexible enough to integrate future events. 

What are some situations where the outside-in approach would help? 

Let’s take the US-China trade war situation. This scenario has been in existence since 2018. It has impacted the trade relations between the two nations. Needless to say, it has had an impact on the supply chains of the organizations of the two countries. For example, Chinese organizations that were exporting to the US may have seen a decline in the orders due to tariffs or the US organizations would have had to reduce quantities of goods imported from their Chinese counterparts. In this situation, the US companies would have to find another source (country) to fulfill their requirements and the Chinese would have to find alternative buyers for their finished goods. 

While the trade war is an anomaly, as a concept is not unheard of. In this situation, organizations that may have researched and identified alternative buyers or sellers ready to do business with them in case of a change in the trade relationship between their countries would have suffered less of a set back as compared to those who may have neglected to take this factor into consideration.

A current situation that is creating havoc on supply chains is the Coronavirus virus outbreak. An article published on February 14, 2020, in The Wall Street Journal which quotes Lars Jensen, head of Denmark-based maritime research group Sea-Intelligence, saying:

“Substantially less cargo is being moved between China and the rest of the world.  Last week we had an additional 30 sailings canceled, with 23 across the Pacific and the rest to Europe.” The article further states that “Mr. Jensen said the canceled trips, which have topped 50 since late January, will delay or reduce shipments into the U.S., where retailers may see a slowdown in their traditional restocking of inventories for the spring.”

Another article titled The new coronavirus could have a lasting impact on global supply chains published in The Economist shares the example of Apple supply chain which manufactures a bulk of its iPhones in China, being impacted by the virus outbreak.

According to the article, “Analysts reckon that the virus could lead to Apple shipping 5-10% fewer iPhones this quarter and could scupper its plans to ramp up production of its popular AirPods.”

These are just two instances that are coincidently related to one of the major economies of Asia and will have an impact on US businesses. But there are many other situations that may not have a far-reaching, global effect but can disrupt the supply chain at a local level. For example, labor strikes can impact day-to-day operations and create a backlog in the supply chain. Supply chain planners need to factor in local incidents as well while making supply chain plans. 

The Gartner outside-in approach suggests that it is important for supply chain planners to be able to read the data and information available to them and identify possible outliers – roadblocks, challenges, and opportunities, in the future. They should then incorporate solutions or plans to be able to navigate their supply chain should those outliers become a reality in the future. 

How to incorporate the outside-in approach in supply chain planning? 

To incorporate the outside-in approach in supply chain planning, Gartner advises a 3-step process: 

1. Realize that the time to transform is now: Citing the 2008 – 2010 economic recession, Gartner says that organizations that were ready with planning processes in place that provided forward-looking insights fared better during and post the recession than those who tried to streamline their supply chain after the recession hit. To put it simply, there’s no time like the present to streamline the supply chain with the evolving global business, economic, political and social scenario. While the change may seem to be in the distant future, it is wiser to prepare the supply chain for it today. 

2. Refocus the planning team to business outcomes: Organizations need to understand that supply chain planning and business planning are not independent of each other. Explaining this point, Gartner says: “It’s no longer enough to just provide a forecast — planners must use the forecast to find pathways that guide the business to where it wants to go. Think of an advanced navigation system that doesn’t only plot the best route, but also foresees roadblocks and traffic jams and navigates around them.” Further adding, that the planners need to be able to convince the other stakeholders why this plan is good for the business and how it will help them succeed. 

3. Become the orchestrator of success: The supply chain planners need to take the lead on creating cohesion between the different departments of the organization and their business plans. Explaining the point, Marko Pukkila, Vice President and Team Manager, Gartner, says: “The whole is more than the sum of its parts when all parts of the business go into the same direction. This is what planning should accomplish”

Today supply chain planners have data available to them from every touchpoint of their business. This data, if used effectively can form a strong foundation for supply chain plans. But data is just the starting point. As the Gartner three-step process suggests, supply chain planners should use this data in a constructive manner to create actionable insights, solutions, and bring all the stakeholders on board to follow through the plan. 

We know implementing an outside-in approach in supply chain planning is easier said than done. That is why our team of experts not only helps you analyze your supply chain with the help of advanced technology but also guides you in finding effective and efficient solutions to address the issues in your supply chain. Get in touch with our team to know more! 

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! 

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