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supply chain

5 Easy Ways to Make Your Supply Chain and Business Environment-Friendly

Climate change and a deteriorating environment is the most discussed subject around the world. In fact, it would not be remiss to say that issues related to environmental degradation and climate change have already begun to emerge in various parts of the world. In some places it is in the form of floods, storms, hurricanes, others it is showing up in the form of famines and long dry spells. In a few parts of the world, a distressed environment is protesting in the form of unbreathable air and shortages of clean drinking water.

It’s time to wake up and take positive action.

Irrespective of the way in which the environment is showing its displeasure, it is sending the same message everywhere – it’s time to wake up and take positive action.

While each one of us is responsible for protecting the environment and managing climate change, businesses can lead the way in creating positive change by making their supply chain environment – friendly and following sustainable business practices.

Why is it important for businesses to participate in this movement?

Given the negative impact certain business activities or accidents have on the environment, it makes sense for businesses to take preventive actions proactively. Sometimes the impact of these incidents lasts for years to come or worse, irreversible. While one doesn’t have any control over accidents, organizations can try to reduce activities such as throwing out untreated industrial waste, air pollution, noise pollution, energy wastage, and oil spillage. The other reason is that big corporations and brands tend to influence how people think and behave, this can be used to encourage people to practice sustainable living.

How can you contribute?

Overhauling an entire supply chain or changing business practices takes time. So, while all of us may not be equipped to build and operate a distribution based on renewable energy like Nike is doing or put up a fight against the ruling administration like the State of California, all of us can do little things to help the cause. Here are some ways in which you can make your business and supply chain environment friendly:

  1. Eliminate Single Use Plastic: This should not be difficult to do. Whether it is a part of your product-straws, bottles, stirrers, and packaging or a part of things you use within the company like drinking bottles and disposable cutlery in your canteen, plastic can be replaced with other eco-friendly materials. These 22 companies are doing it, so can you.
  2. Participate in The Community Discussion: This is a critical step to finding sustainable solutions that can help both businesses and communities live sustainably. At BlueGrace, we believe in working with the community. Our CEO, Bobby Harris joined the Northwestern University Transportation Center (NUTC) Business Advisory Council (BAC) last year. This group comprises of highly respectable senior – level business executives from the transportation industry. The group meets regularly to discuss the latest NUTC research and to consider solutions to the economic, technical and social problems facing national, local and global transportation systems. Connect and work with your local administration, research institutes, and environmental associations to find plausible and implementable solutions for the community. This will not only work for finding solutions to the environment problem but will also aid in identifying and finding solutions to other issues that impact the lives of the people who live in the community. Isn’t that what businesses are for?
  3. Use Energy-Efficient Lighting: Save electricity. Use lighting solutions that consume less power. Encourage your employees to switch off lights that are not centrally controlled and turn off the switches to their charging points or desktop connections when not in use. If possible explore if you can install solar panels to generate electricity in the office and other facilities like your warehouses and factories.
  4. Go Digital: One of the easiest ways to start the sustainability project is to eliminate or minimize the use of paper. Start digitizing company-wide communication, and bring all processes and systems online. While it may seem costly at the beginning, digitization will not only help you save paper but will also make your operations more efficient and easier to monitor. If you’re looking for an integrable logistics solution, connect with our team and let’s work on making your supply chain environment-friendly, effective and efficient.
  5. Optimize Logistics: Movement of goods is essential for both businesses and consumers. So while trucking is an integral part of logistics, it also causes air pollution. However, the threats to the environment from trucking can be controlled and minimized by making better transportation plans and optimal planning of loads. And as we said earlier, transportation is our area of expertise.

If you’re looking to optimize your logistics and contribute to reducing pollution levels, then let’s talk. Contact us at 800.MY.SHIPPING or fill out the form below to speak to one of our experts today.

CEOs Should Be Focusing on Their Supply Chain

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

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

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

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

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

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

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

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

A Changing Future for the Supply Chain

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

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

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

Is Your Supply Chain Ready?

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

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

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

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

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

Shippers Growing Success With 3PLs 

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

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

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

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

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

3PLs Are Rising to the Occasion 

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

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

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

Current Global Market Challenges

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

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

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

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

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

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

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

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

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

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

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

The Definition of Transparency

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

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

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

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

Understanding the Need Transparency

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

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

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

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

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

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

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

So Why Aren’t All Companies on Board?

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

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

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

The Benefits of Supply Chain Transparency

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

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

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

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

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

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

Making your Warehouse, Worthy

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Regaining Lost Customers in the Digital Age 

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

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

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

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

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

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

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

Rebuilding Relationships in the Digital Age

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

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

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

Managing Customer Expectations

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

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

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

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

Controlling Costs 

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

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

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

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

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

The Secret of Successful Supply Chains: A Culture of Continuous Improvement 

Why are some supply chains operating at an optimum level, while others are struggling to perform day to day operations? How are some supply chains able to respond quickly to market demands, while others miss opportunities? Why are some supply chain managers able to reduce costs without compromising product and service quality, while others are dealing with rising costs?  

There is only one answer to all these questions.  

An organizational culture of continuous improvement is the secret of a healthy, cost-effective, responsive and efficient supply chain.  

What is the Culture of Continuous Improvement?

As the name suggests, Culture of Continuous Improvement means – having a culture where process, system, service, and product improvement is an ongoing and continuous activity. This culture is embedded in the organization’s foundation. It involves, encourages and motivates all the employees, management, vendors, and suppliers to seek out avenues and means to improve how the organization functions at every level.

How do Supply Chains benefit from Culture of Continuous Improvement?

The supply chain is one of the biggest cost centers in an organization. It is the function responsible for manufacturing, storing, and distributing the product. It makes the product available to the end customer. To be able to keep up with industry trends and market demands it is necessary for supply chains to constantly innovate. And, innovation can’t happen without continuous improvement. In fact, both are interdependent. 

When supply chains improve and innovate, they are able to do the following:  

  • Reduce costs 
  • Enhance efficiency 
  • Optimize processes 
  • Improve service and product offerings 
  • Decrease go to market time 
  • Reduce response time to market and customer demands 
  • Helps integrate the different functions within the organization 

All these things help the organization improve revenues and remain competitive.  

How to Create a Culture of Continuous Improvement in the Supply Chain

Creating a culture of continuous improvement requires the involvement of the entire organization. It can’t be done in silos. For example, if you plan to continuously improve your supply chain, you will by default have to roll out the continuous improvement plan in all the other departments as well.  

Here’s how you can create a culture of continuous improvement in your supply chain and all the other functions of the organization:  

  1. Align the C-Suite: Any process or strategy change in the organization can’t succeed without the involvement of the C-suite and function leaders of the organization. Once the leaders and the management is aligned and agrees to make continuous improvement a part of the organization culture, it becomes comparatively easier to implement changes.
  2. Set clear objectives and goals:  Any change or activity undertaken without a goal or objective is not only difficult to achieve but also challenging to “sell” to the employees. So, when you decide to make continuous improvement a part of your organizational culture, define what you aim to achieve from it. For example, the supply chain’s objective can be improved inventory management, better machine utilization, or lower transportation costs.
  3. Define how you will measure it: Along with setting objectives and goals, it is also necessary to define how you will monitor and measure their performance. Unless there are proper metrics in place to measure the outcome, you will not understand if your plan is working in accordance with your goals. Apart from knowing how your plan is performing, results also help keep employees engaged. If they are achieving the said goal, it motivates them to do better and take initiatives to find other ways to further improve their performance. If it is not providing the said results, it helps find new solutions and opens doors for innovation. Either way, it keeps up the spirit of continuous improvement. 
  4. Seek input from employees: Your employees are responsible for implementing the strategies for continuous improvement. They also have first-hand knowledge of the pain points of the process they handle and have insights regarding how it can be improved. If they are also involved at the planning and strategizing stage, they will be motivated to take ownership for its success.
  5. Allow room for failure: Condemning failures is one of the biggest hurdles in embedding a culture of continuous improvement in the organization. If employees feel they will be penalized for failure, they will neither suggest new ideas nor be enthusiastic about implementing anything new. On the other hand, when they have the assurance that they will not be punished for failure, they will not only be motivated to find new ways and means to improve the processes and systems but will also put in their best efforts to make them a success. 
  6. Introduce technology: Technology is one of the tools to improve systems and processes within the organization. Any strategy to create a culture of continuous improvement in the organization can’t overlook the contribution of technology. By using the right technology, you can eliminate redundant and duplicate processes, reduce manual work, and integrate different processes. Technology also helps connect the end customers to the business, thus improving your service offerings. For example, if your logistics department uses a transport management system, you can connect with transporters and customers on the same platform. Track your shipment real-time and offer the feature to your customer as well. Additionally, a TMS will also help you monitor and track your logistics department’s performance. Thus, aiding you in your efforts to build a culture of continuous improvement. 

While these steps will help you initiate improvement, to make it a part of the culture and keep it “continuous” you will need to pursue it relentlessly and passionately.

While these steps will help you initiate improvement, to make it a part of the culture and keep it “continuous” you will need to pursue it relentlessly and passionately. It will require steadfast efforts starting from the leadership team going down to the employees at the bottom of the hierarchy. 

At BlueGrace we believe the passion for our work is what enables us to constantly look for ways and means to improve our services and products and find better solutions for our customers. It is the secret of the success of our organization. Want to connect with one of our experts to see how BlueGrace can help simplify your supply chain? Call us at 800.MY.SHIPPING or fill out the form below!

How the CFO Can be a Change Agent in the Supply Chain

Managing cash flow, planning the financial outlay, keeping the balance sheet in order, and ensuring all financial compliances are met are a CFO’s core job function. But this is not all that a CFO does. The CFO is also responsible for identifying opportunities to reduce operating costs without sacrificing the quality of the products and services offered by the company.

But is it a good strategy to wait for things to go wrong to ask the CFO to step in?

Supply chain and transportation are two of the biggest cost centers in an organization. The cost for these functions is measured as a percentage of sales and differs from industry to industry. However, according to this McKinsey study, most industries report supply chain and logistics cost in the range of 1.8% to 10%. When costs remain within the industry parameters, supply chain and logistics are usually given the leeway to make their financial decisions. The CFO steps in only when the cost rise above the set industry norms or in case any other financial abnormality is noticed. But is it a good strategy to wait for things to go wrong to ask the CFO to step in? Wouldn’t the supply chain and the organization as a whole benefit if the CFO is a part of the supply chain decision making?

What Does the Corporate World Think of CFO’s Involvement in the Supply Chain?

The necessity of CFOs involvement in supply chain is not a recent phenomenon. A 2013 study by Ernst & Young aptly highlighted the importance of CFO’s involvement in the supply chain. Ernst & Young surveyed 423 CFOs and heads of supply chain around the globe to understand their view of a CFO’s contribution to the supply chain.

According to the results of the survey, of all the respondents, “only 26% finance executives and 21% supply chain executives said that the CFO’s contribution to the supply chain is based around a business-partnering model”. But this trend seems to be gradually changing as “70% of CFOs and 63% of supply chain leaders responded that their relationship has become more collaborative over the past three years”.

Organizations that have a collaborative relationship between the CFO and supply chain also tend to perform better.

The survey also revealed that those organizations that have a collaborative relationship between the CFO and supply chain also tend to perform better. “Among survey respondents with an established business partner model in place, 48% report EBITDA growth increases of more than 5% in their company over the past year, compared with just 22% of those that have not yet adopted this approach.”

In the past five years, the demand for CFO’s involvement in the supply chain has only grown. Last year, an article in the European Financial Review spoke about the book What CFOs (and Future CFOs) Need to Know About Supply Chain Transactions by X. Paul Humbert, Esq. According to the article, the book showcases not only the necessity of a collaboration between the CFO and the supply chain but also demonstrates how the company’s finances and its books are impacted by the decisions taken by functions within the supply chain:

“an organization’s financial results are intertwined with the performance of the purchasing function. Purchasing and purchased inventory affect the balance sheet and capital allocation.”

Another article in Smart Industry Update published in 2018, speaks on behalf of the CFOs seeking answers to supply chain issues which the CFOs may not have first-hand knowledge of. For example, the article lists the following three critical questions that CFOs should ask of their supply chain to be able to make better decisions regarding their supply chain and create better business strategies:

  • How accurate is our supply-chain visibility?
  • How quickly can we identify and address challenges in response to disruption?
  • How well can we respond to changes in the industry?

The survey and the two articles leave no doubt of how crucial it is for CFOs to be involved in the supply chain function and work in collaboration with the head of supply chain. In fact, it is not only the supply chain that needs the CFO, the CFO also needs the supply chain.

How The CFO Can Be A Change Agent For The Supply Chain

An article titled How Brilliant CFOs Use the Supply Chain to Drive Business Value – Do you know the questions you should be asking in Innovation Enterprise targeted at CFOs lists down possible areas that can benefit from the CFO’s involvement.

Source: Innovation Enterprise

It says “If the answer to any of these questions highlights a potential issue then it is important to engage with the head of supply chain and agree a process to address the issue. It may also indicate that there is an opportunity to partner more closely with supply chain/operations to leverage the knowledge and skills of the finance team to enable better decision making in the business.”

The transportation offered also influences customer’s buying decisions

All the above areas are crucial from the financial, product, and delivery point and can benefit from a collaborative effort from the CFO and the supply chain. For example, let’s take a look at the second, sixth and eighth question. Freight costs are pegged around 3 – 5% of supply chain costs. Freight contract negotiation is one of the most important activities of the logistics function. It has an impact on the budget, affects the cost reduction KPI given to the logistics department. In B2C businesses, to a certain extent, the transportation offered also influences customer’s buying decisions. How can the function benefit from CFOs insight?

When the CFO is involved in this decision-making from the start, it increases the possibility of improvement in contract terms and in cost reduction.

On the cost reduction and financial front, the CFO, with their fact-based view of the organization, can help the logistics team negotiate better freight contracts. The rates negotiated in these contracts are based on a multitude of factors like government policies, fuel prices, political relations between trading countries, and global business environment. Logistics may or may not have insight into these issues, but the CFO and his team will have knowledge of what is going on in the business world. So, if they know there is a possibility of fuel prices changing in the next six months or a recessionary trend is being noticed, they can advise the logistics team to negotiate a short-term contract and revisit it later. Similarly, in the case of B2C shipments (ref Q6), the CFO and the supply chain head can negotiate for contracts with different delivery options in order to serve different customers. But this can only be done if the supply chain knows the financial viability of these options and that information can be gained only from the CFO of the organization. When the CFO is involved in this decision-making from the start, it increases the possibility of improvement in contract terms and in cost reduction.

Today, to be effective in their job and to create a competitive supply chain, CFOs need to lend their expertise to the supply chain and seek their inputs in the setting the goals and objectives of the company.

Long gone are the days when the CFOs limited themselves to matters pertaining to managing company finances. Today, to be effective in their job and to create a competitive supply chain, CFOs need to lend their expertise to the supply chain and seek their inputs in the setting the goals and objectives of the company.

At BlueGrace, we have found that working with organizations where CFOs are directly involved has helped turn over a new leaf and make significant cost reductions, positively impacting the supply chain of that organization.

We provide quarterly business intelligence reports that give updates on the savings targets you give to us, key performance indicators (KPIs), and special project updates. The CFO of a company, in particular, is able to use these metrics to budget and forecast for the organization moving forward. Connect with our team at 800.MY.SHIPPING or fill out the form below to find out how we can work with your CFO to build an efficient and optimal supply chain.

The State of Your Supply Chain Affects the Level of Your Inventory 

Inventory is the core of any business. The right inventory, at the right time, at the right point in the supply chain is crucial for the success of the business.

For example, the shortage of raw material at the factory will affect production. If warehouses are not replenished on time, distribution will be derailed. If retail outlets run out of stock, sales and customer relationships will be adversely impacted. Each of these processes in the supply chain is dependent on the availability of inventory to carry out their function and meet business objectives. 

While the unavailability of inventory results in a loss of sales, too much inventory leads to an increase in the carrying cost.

While the unavailability of inventory results in a loss of sales, too much inventory leads to an increase in the carrying cost. Carrying cost is the cost incurred to store, handle, and maintain inventory at every stage in the supply chain.

The factory, warehouse, and the retail outlet all incur the cost of storing and managing the inventory until it is required at the next stage in the cycle or sold. A high carrying cost ultimately impacts the price of the product and the profit margins of the company. Hence, neither excess nor a shortage of inventory is an ideal situation. 

This is why it is essential to understand the inventory consumption pattern and arrive at an optimum level that needs to be maintained at each stage in the supply chain. 

Why does the State of the Supply Chain matter?

How you operate your supply chain, how agile it is, the technology you use, the level of digitization, the extent of integration among the different stages of the supply chain. All these things affect the performance of the supply chain. The level of inventory you need to maintain at all times is dependent on the capability of these parameters.

An agile, integrated, and digital supply chain makes it easier to understand how the inventory is being consumed at each stage.

An agile, integrated, and digital supply chain makes it easier to understand how the inventory is being consumed at each stage. It enables inventory managers to calculate the optimum level of inventory more accurately. The optimum level of inventory is where minimum carrying cost is incurred and there is no loss of sale or disruption in the production or delivery process. In other words, the inventory reaches the required point just in time – not any sooner, and not later. 

When organizations use this strategy to design their supply chain they inevitably improve their inventory management.

Winning Logistics Strategies in the Race to the Urban Consumer, a whitepaper by DHL and Euromonitor on last-mile transportation, explained how companies can become more competitive and improve their supply chain by adopting the F.A.D strategy. The F stands for flexible transport, A is automation, and D is data management. When organizations use this strategy to design their supply chain they inevitably improve their inventory management. They can better plan inventory inward and outward movements, improve on speed and reduce administration and handling costs, can improve inventory forecasting and planning, process data real-time, and provide shipment tracking. 

For example, this article cites how Apple understood the importance of supply chain management as early as 1997 and with proper supply chain planning, the company successfully managed to beat the competition. For the Christmas of 1998, the company bested its competition by simply changing its freight mode from sea to air.

“To ensure that the company’s new, translucent blue iMacs would be widely available at Christmas the following year, Jobs paid $50 million to buy up all the available holiday air freight space, says John Martin, a logistics executive who worked with Jobs to arrange the flights.”

This one change made sure that its products were easily available during the holiday shopping season. Apple could not have done this if it had followed a rigid approach to transport planning and management. 

And, if the delighted customer is also a competitor, you know you’re doing something right.   

Another example in the article shows how it delighted customers with quick delivery and shipment tracking. And, if the delighted customer is also a competitor, you know you’re doing something right.   

“When iPod sales took off in 2001, Apple realized it could pack so many of the diminutive music players on planes that it became economical to ship them directly from Chinese factories to consumers’ doors. When an HP staffer bought one and received it a few days later, tracking its progress around the world through Apple’s website, “It was an ‘Oh s—’ moment,” recalls [former HP supply chain chief Mike] Fawkes.”

What are the benefits of a well-managed supply chain?

A supply chain that is managed properly makes it easier to monitor stock at various touch points. It can help improve inventory forecasting and distribution. Some of the benefits that such a supply chain offers for inventory management are: 

Visibility: Visibility allows inventory managers to monitor inventory levels at each stage. With a continuous and real-time view of the inventory, they can place orders or plan distribution of the inventory to reach the intended destination on time. 

A strong transportation management system also enables you to store historical data, provide advanced analytic tools and trend reports, enable users to optimize freight expenses thus helping you create an efficient shipping process.

TMS: While inventory is the life of the business, transportation is the backbone. Without adequate transportation management, it will be challenging to get the inventory to the right place at the right time in the required condition. In addition to planning transportation, a strong transportation management system also enables you to store historical data, provide advanced analytic tools and trend reports, enable users to optimize freight expenses thus helping you create an efficient shipping process.

Integration: We cannot stress this enough. Integration is crucial to get complete control over inventory. For integration to be truly successful, it needs to take into account the needs of different departments and their workflow. When all the parties handling inventory are able to connect to the same system, only then will you be able to get better visibility of your inventory, improve tracking, and planning. 

Analytics: The digital supply chain is a substantial resource of hard data. It provides stakeholders with the opportunity of developing and monitoring KPIs and assist them in improving their supply chains. When the data for all the functions are gathered at a single reliable source it increases accuracy in forecasting and improves execution. The reports and trends can be used for making informed decisions. 

The state of your supply chain and inventory, the levels you need to maintain are directly related. If the supply chain is equipped with the latest technology and is functioning at optimal levels at each stage, it would reflect in the form of optimum inventory levels. If it is not, then you may see piles of inventory accumulated at each stage. There may be situations when you need to keep unusually high or low inventory levels. However, when inventory levels fall below or go above the optimum without a valid reason, take it as a red flag, talk with an expert. Contact us at 800.MY.SHIPPING or fill out the form below to connect with our team today for a FREE analysis of your supply chain. 

Time Definite Freight & Positive ROI

The saleability of a product is not only dependent on its quality and features, but also on how it is delivered and how soon it can reach the customer. In other words, delivery has become a crucial part of a business’s success. If it’s managed effectively, it can positively impact the bottom line and help build a stellar market reputation. If not, then it can have a negative effect on both. 
 
In our March webinar, titled Time Definite Freight and Positive ROI, Brian Blalock, Senior Manager Sourcing Strategy, and Eric Chambers, Vice President, Field Performance at BlueGrace Logistics, discuss the delivery method that is redefining the logistics landscape.

What is Time Definite Freight?

What is time-definite freight and how is it different from the normal freight delivery mechanism? How does it benefit the business and its customers? These and other such questions tend to arise when we discuss why this delivery trend is quickly becoming an integral part of an organization’s logistics strategy and customer service offering. 

Time-definite freight is precision delivery. It’s not on any given day or any roundabout day. It’s on a particular day, a particular time – morning, afternoon, AM, PM. It can be any time of the 24 hour day.

To address these questions and provide context to the discussion, Eric explains “time-definite freight is precision delivery. It’s not on any given day or any roundabout day. It’s on a particular day, a particular time – morning, afternoon, AM, PM. It can be any time of the 24 hour day.”
 
This definition provided not only answers the “what” but it also gives an insight into “why” shippers and logistics service providers need to know about it and make it a part of their organization’s logistics strategy. It is important because it puts the customer’s requirements at the center of logistics planning, ensuring that goods are delivered according to the timelines given by the customer.

Is Time Definite a New Logistics Solution?

The life sciences industry, e-commerce, cross border express providers like UPS, FedEx; last mile solutions by truckers, Amazon Prime’s free 2-day delivery, and disaster recovery institutions like the Red Cross are all using time-definite transportation.

No, it is not. Certain industries are already leveraging this delivery mechanism to optimize their supply chain and provide better service to their customers. The automotive industry started using just-in-time (a form of time-definite delivery) years ago. The life sciences industry, e-commerce, cross border express providers like UPS, FedEx; last mile solutions by truckers, Amazon Prime’s free 2-day delivery, and disaster recovery institutions like the Red Cross are all using time-definite transportation.

What Are the Benefits of Time Definite Delivery? 

“There are many many benefits of time-definite, it really depends on the individual working in a company or its customers”, says Eric. To provide an insight into how time definite can help improve the bottom line, he shares that it can help reach end customers faster and reduce handling points in a delivery.

When multiple handling points in a delivery are eliminated, the handling costs go down and it also reduces the probability of the shipment getting damaged. 

Both of these things have a huge impact on the bottom line. For example, if you are able to take your product to the market faster, it not only helps improve the cash flow but also ensures that you are a step ahead of the competition. Similarly, when multiple handling points in a delivery are eliminated, the handling costs go down and it also reduces the probability of the shipment getting damaged. 

Technology & Optimizing Time-Definite Freight

Given the fact that technology is being leveraged to improve and optimize different aspects of logistics, it is but natural to ask if time definite can be further improved with technology? Yes, it can.

Speaking about how technology is making time definite a complete logistics solution, Eric shares that: 

  • Technology can be used to improve response time and on-time delivery.
  • Technology can provide real-time visibility of the shipment.
  • If the shipment requires certain transit conditions, they can be arranged with the help of technology. For example, temperature monitoring and reporting to FDA for compliance for pharmaceutical products.
  • Technology can improve inventory forecasting and replenishment, thus minimizing loss of sales due to stockouts.

Success factors and a Real-Life Use Case

It’s not enough to just deploy new systems and processes. It is also important to know if they are working for you and your customers and how they can be further improved.

To know the success factors of Time-Definite Delivery and how we at BlueGrace collaborated with a pharmaceutical company to handle a critical business situation with the help of technology-powered time-definite delivery watch the webinar here
 
Questions regarding Time-Definite Freight, or want to explore how you can make it a part of your logistics strategy? Connect with our team by contacting us at 800.MY.SHIPPING or fill out the form below.

Why a Supply Chain Analysis is Crucial for Your Business

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Supply chains are complex and dynamic. They comprise many different variables that operate both on their own and as a part of a whole. The success of a supply chain depends on the integration of all the components without compromising their individual roles and responsibilities.

To design and operate a supply chain that is efficient and effective in both cost and service, it is important to analyze the contribution of each component in the system and how it impacts the other variables.

How Will a Supply Chain Analysis Help You?

A timely and periodic analysis will work as a preventive health check-up for your supply chain thus ensuring it continues to operate at an optimum level.

A thorough study of the processes will give you insight into the performance of the different aspects of the supply chain. It will help you identify which processes are crucial to the success of your business. An end-to-end in-depth analysis will also highlight which processes are redundant or need to be restructured. In short, a timely and periodic analysis will work as a preventive health check-up for your supply chain thus ensuring it continues to operate at an optimum level.

Apart from assisting you in understanding the different aspects of the supply chain, a study of planned against actual performance will also provide information on how you can further improve your services to match customer demand and control operating costs.

It’s safe to say that transportation is the backbone of the entire supply chain.

Transportation is one of the most crucial functions and is integral to almost all aspects of the supply chain. The manufacturing department is dependent on it to get raw materials to the factory on time. The factories need it to ship the finished goods to warehouses who in turn need it to ship the goods to the end customers. It connects the different parts of the supply chain and helps convert the final product into sales – thus generating revenue for the organization. It’s safe to say that transportation is the backbone of the entire supply chain.

A Deeper Look into Your Supply Chain

There are many factors that need to be considered when conducting a complete assessment of your supply chain. However, the health of the system can be easily ascertained by taking a look at how your transportation management system measures against the parameters given below:

Freight Costs: Transportation is a cost center. It’s considered to be operating at an optimum level if the rates are contained within a certain range of the cost per unit of shipment or net sales/purchase price of raw materials. The range of acceptable percentage varies from industry to industry.

Transit Time: Transit time is one of the main indicators of successful transportation planning. If your transport rates are low but the transit time is long, then you are saving money at the cost of service quality.

On Time Delivery: Are you delivering products within the timelines agreed with your customers or your retailers, such as Walmart or Target? Is the warehouse inventory replenished timely? Is the factory receiving goods in time? If the answer to these questions is yes, then its a plus point for your transportation planning. If the answer to any of these questions is no or most of the time, then you need to rework your transportation planning.

Damages: If you have managed to contain the transport rates and deliver within acceptable transit time, but there’s the rate of damage claims are high, then again, your transportation planning needs to be restructured.

Shipment Visibility: A good transportation system offers you and the customer visibility into the shipment’s location from the time it leaves the starting point until it reaches the intended destination.

Capacity Utilization: Are you utilizing truck capacities to the fullest extent possible when planning your deliveries or spaces on trucks are going underutilized? Unutilized space will translate into higher cost per shipment, leading to uncompetitive products and loss of profit.

If you’ve gotten a negative result or response for any of these parameters, then it is time to get a thorough inspection of all aspects of your supply chain.

At BlueGrace, we understand the importance of operating a robust supply chain. That’s why we offer a FREE Supply Chain Analysis to help you gain insight into how your supply chain is performing. Call us at 800.MY.SHIPPING, or fill out the form below to speak to one of our experts and set up your free supply chain analysis today!

Controlling Costs and Preventing Accessorial Loss

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

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

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

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

  • What are accessorials? 
  • How do they affect cost? 
  • How do they affect supply chain efficiency? 
  • How can we mitigate problems? 
  • How do we know if we have a problem? 

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

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

WHAT ARE ACCESSORIALS?  

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

  • Reweigh
  • Limited Access
  • Liftgate
  • Residential delivery
  • Appointment / Notify
  • Sort & Segregate
  • Hazardous Materials

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

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

HOW ACCESSORIAL FEES CAN AFFECT YOUR SUPPLY CHAIN  

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

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

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

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

LEARN MORE ABOUT HOW YOU CAN MANAGE ACCESSORIAL CHARGES   

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

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

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

There are a number of other benefits that can come from working with and outsourcing your logistics to a 3PL. If you would like to speak to one of our experts, call us at 800.MYSHIPPING or fill out the form below.

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

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

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

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

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

Here are a few important pointers from the webinar:

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

Why do shippers need insurance?

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

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

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

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

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

What is shippers’ view on carrier liability?

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

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

Why is carrier liability not enough?

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

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

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

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

What are the benefits of real insurance?

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

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

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

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

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

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

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

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

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

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

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

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

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

About Food Logistics

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


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

About BlueGrace Logistics

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

7 Benefits of Outsourcing Logistics to a 3PL

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

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

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

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

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

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

This is the age of digital logistics.

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

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

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

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

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

Why BlueGrace?

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

Will 2019 Be a Carrier or a Shipper-led Market?

Trucking is a cyclical business. There are periods of intense growth followed by a lull and then there are periodic seasonalities which may vary from one industry to another. How long each period lasts depends on the internal and external factors that greatly impact the trucking industry.

International trade policies and volume, capacity, manufacturing industry’s performance, local Government policies, fuel prices, and driver availability all impact the trucking industry’s growth

International trade policies and volume, capacity, manufacturing industry’s performance, local Government policies, fuel prices, and driver availability all impact the trucking industry’s growth. For example, all of 2016 was a difficult year for trade which also affected the trucking industry. However, when business picked up at the start of 2017 and soared till September 2018, the trucking industry also benefited. From there onwards, trucking growth has been showing a declining trend, suggesting that another slump is in the offing. 

What are the reasons behind this slump? Is it a short term decline or a repeat of the low experienced in 2016?

What are the reasons behind this slump? Is it a short term decline or a repeat of the low experienced in 2016? These are the two questions plaguing the trade and analysts since the start of 2019. 

What Factors are Contributing to The Industry’s Concerns? 

The trade war with China: The standoff between the US and China is being highlighted as one of the main factors that may impact the trucking industry in the country. There is fear of freight volume reducing due to the tariffs put up by the two countries on each other. However, according to Transport Futures Principal and Economist, Noel Perry who spoke to this article in TTNews.com on the decline in trucking growth, this fear might be unfounded. Noel Perry suggests that this problem may not be as severe as it is currently being made out to be. He feels that due to the prevailing state of the manufacturing industry in China, the Chinese may be amenable to work out a compromise with the US. 

Reducing truck orders: A common factor used to judge the health of the trucking industry is the number of orders placed for new trucks. According to industry news sources, the orders for new trucks has fallen considerably in January 2019. However, while sharing the numbers, Truckinginfo.com also puts forth a plausible explanation for the reduction in new orders. According to the news in Truckinginfo.comorders reduced by 26% in January 2019 as compared to December 2018 and were 68% less than the truck orders placed in January 2018.

Going by this forecast, it is quite possible that the transport sector may also experience a slow year.  

Economic growth slowdown: 2019 began with some concerns regarding the growth of the economy. In a Wall Street Journal article published in January, leading financial institutes shared their forecast for the year. Goldman Sachs predicts a growth rate of 2% for the first 6 months of the year and a rate of 1.8% for the rest of the year. Morgan Stanley presented a slightly more pessimistic view with a forecast of 1.7% growth rate for the year which could go down to 1% for the third quarter. The article also shares a quote from Jake McRobie, Economist, Oxford Economics, “We have been looking for a gradual slowdown in manufacturing activity amid headwinds from trade uncertainty, reduced fiscal stimulus and weaker global activity, but the risks of a sharper deceleration have increased”, to provide some explanation for the low growth forecast. Going by this forecast, it is quite possible that the transport sector may also experience a slow year.  

Even if one is to consider the lower number, the driver shortage is a critical issue.

Driver shortage:According to this piece in JOC.com, the American Trucking Association found a gap of 50,000 drivers and the FTR Transport Intelligence has reported a shortage of 300,000 drivers. Even if one is to consider the lower number, the driver shortage is a critical issue. The article further highlights that hiring companies are finding it difficult to get drivers onboard even after offering a pay increase. This is one aspect that can hamper the supply chain even when all other factors seem to be positive. 

The Silver Lining

Even the worst of situations tend to have a silver lining, so does the trucking slowdown. While the cost of operating and maintaining trucks is not likely to come down, the slump in business and the extra capacity built over the last two years may provide the shippers with a little leverage when negotiating freight rates. 

Apart from the driver shortage, all other reasons leading to fear of a trucking slump are a part and parcel of the dynamic global business environment. As FTR Vice President of Commercial Vehicles, Don Ake suggests the lull in business is felt because the industry is comparing the exceptional peak experienced in 2018 to the current scenario.

Hence to get the best results irrespective of the prevailing trade cycle, it makes business sense think strategically, collaborate and maintain relations with well-established business partnerswho can help manage volatility in the current business environment.

That said, the freight market is fickle in nature and can unexpectedly turn into a carrier-led market from a shipper-led market and vice-versa. Hence to get the best results irrespective of the prevailing trade cycle, it makes business sense to think strategically, and collaborate and maintain relations with well-established business partners, like BlueGrace, who can help manage volatility in the current business environment. If you would like to speak to one of our freight experts, call 800.MYSHIPPING or fill out the form below.

How to Build an Effective Logistics Communication Process  

Communication is a vital aspect of building a successful business. An effective communication process ensures that information flows seamlessly between departments and amongst the various teams on time and in a form which will allow them to achieve individual, departmental, and organizational goals and objectives.  

While communication in varied forms and frequency is essential for all departments, it is extremely crucial for the executors of the organization’s plans and strategies – the Logistics Department. 

Why is communication important for Logistics  

Information interchange plays an important role in creating a cost-effective and agile logistics management process. It ensures that tasks are completed and transferred from one point to the other seamlessly and without delay.

For example, the sales department needs logistics data to analyze orders that have been shipped, customer service needs information to update shipment status, and the accounts section requires the data to cross-check transporter invoices. The procurement team needs information from logistics when new vendors are to be hired or old contracts are due for renewal. The other functions of the supply chain also have to collaborate or communicate with the logistics team to get their work done.  
 

In addition to the internal information requirements, vendors such as carriers, warehouse operators, and 3PLs also need to exchange information with the logistics team on a daily basis to ensure that the company’s products are delivered at the right time to the right place at the right cost.  

What are the features of an effective communication process for Logistics?

It should be in writing: Written communication is important as it minimizes the scope to misinterpret or forget the message. Today, written communication is the most common form of business communication. Since emails and all forms of messages across multiple platforms can easily be sent to multiple recipients situated across offices, countries, and continents, it is essential for all professionals to develop effective written communication skills and to encourage the same in all employees.

A clear, concise, and consistent message is the hallmark of effective communication.

It should follow the 3 C’s: A clear, concise, and consistent message is the hallmark of effective communication. A clear message ensures that there is no ambiguity in what needs to be conveyed. Conciseness ensures that the message is brief, but includes all important information. And, consistency in language, format, mode of delivery ensures that the receiver does not waste time in understanding the message.  

In logistics, given the fact that a lot of the work is time-bound, marking the right team or person on the email is of utmost importance.

It should be sent to the right recipients: More often than not information is lost in the organizational hierarchy because it is not addressed to the right person. In logistics, given the fact that a lot of the work is time-bound, marking the right team or person on the email is of utmost importance.  
 
It conveys urgency appropriately: Many executives are in the habit of marking all their emails as “urgent” to ensure that it gets immediate attention from the receiver. While this practice is great to ensure that important and critical communication does not get missed, however, if all communication is urgent, it becomes difficult to prioritize tasks. It also dilutes the meaning of the word. In such instances, the receivers take up the tasks in the priority that they think is correct. Hence, it is crucial to mark only communication or tasks that are the top priority as urgent and not all communication.  
 
It should provide clear timelines: The delivery or timeline for getting a response or the task being assigned should be clearly mentioned in the communication. This will help the receiver gather information, plan, and execute the requirements mentioned in the message and avoid unnecessary delays.  
 
It should be transparent and reliable: Interdepartmental conflicts, organizational politics, and cutthroat competition encourage employees to keep information from their counterparts or colleagues. This creates chaos, confusion, and mistrust which in turn affects the execution of tasks. It is thus important that the organizational culture promotes transparent communication and sharing of reliable information.  
 
It should be real-time: Logistics is a fast-paced function and information exchange also needs to be equally quick. Hence, information such as a change in freight rates, loading lists, customer orders, etc. needs to be verified and relayed to the next person as soon as it is received. Apart from these things, queries asked in relation to a task or process should be addressed promptly or the receiver should at least provide a timeline by when the sender may expect an answer. 

Technology Integration: In this digital age, just getting the written communication right is not enough to ensure the successful implementation of business plans. Organizations must also integrate the technologies, backend systems and processes that are used by different departments to ensure that information flows seamlessly and without manual intervention from one function to another. 

For logistics which is an intensely data-oriented function, this integration is crucial.

For logistics which is an intensely data-oriented function, this integration is crucial. It will help reduce manual data entry, delays due to incorrect system entries, and speed up the process. Digital records of all the transactions or logistical activities will also make it easier to get reports, analyze performance, find outliers, and standardize the process across different geographies and vendors. When designing or buying technology or outsourcing the process to a vendor, it is essential to understand if this technology will be able to integrate with other systems that your organization uses with ease and at least cost.

An organization’s logistical communication process can be complete only when all the above elements are present and interlinked via common technology.  

BlueGrace’s proprietary TMS (Transportation Management System) is designed to put the power of easy supply chain management and optimization back in your hands. BlueShip® 4.0 offers cutting-edge tools for strong reliability and quick performance. Many of our customers prefer to integrate their systems or ERPs such as SAP or NetSuite directly with our BlueShip platform. Our IT integrations team will work closely with your staff to complete the connection between systems. Not only will this simplify your freight but it will provide mountains of usable data to build measurable KPIs and continuously improve your program. To speak to a BlueGrace expert, contact us at 800.MYSHIPPING or fill out the form below.

Tips for Becoming a More Strategic Shipper

Want A Free Supply Chain Analysis?

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

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

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

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

Move to an Integrated Supply Chain

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

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

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

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

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

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

Do Unto Others

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

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

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

Build a Good Working Relationship with Carriers

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

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

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

Looking Ahead

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

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

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

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

Make Decisions Based on Data

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

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

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

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

Why Shippers Should Consider Working with a 3PL

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

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

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

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

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

What will 2019 bring for the trucking industry?

What will 2019 bring for the trucking industry? Will there be a capacity crunch, demand – supply imbalance? Will the rates increase or will they remain steady? What would be more cost effective – booking spot rates or negotiating contract rates? How will the changes in the trucking industry impact a shipper’s business?

Knowledge of the existing trends can also provide insight into what one may expect from the trucking industry in the coming year.

As the new year begins, all these questions and many more are on the minds of shippers. While no one can accurately predict the changes in the business environment or how the trucking industry will respond to those changes, deliberation on the current year’s performance can help form a more reasonable line of thinking. Knowledge of the existing trends can also provide insight into what one may expect from the trucking industry in the coming year.

Here’s a look at some of the crucial parameters of the trucking industry that can impact shippers.

Rates: According to an article in Logistics Management, the US trucking industry showed a rate increase at 6.2 percent. Long distance full truckload rates showed a growth rate of 7.8 percent in the first half of the year. Less-than-truckload rates increased at the rate of 7.4 percent. The report forecasts a rate increase of around 3.6 percent in the coming year.

A JOC.com article stated 3 differing opinions of what one can expect from the trucking market in terms of rates. It has a bullish rate increase prediction between 5 to 8 percent, a bearish rate hike forecast between 0 to 3 percent, and a median rate increase prediction in the range of 3 to 5 percent.

While there isn’t a consensus on by how much the rates could increase, given the forecasts, shippers might fare better by building in at least the average rate increase in their trucking budgets for the coming year.

While there isn’t a consensus on by how much the rates could increase, given the forecasts, shippers might fare better by building in at least the average rate increase in their trucking budgets for the coming year. These predictions and forecasts can also help them better negotiate their rate contracts with trucking companies or 3PLs.

Capacity: This is the holy grail of the trucking industry for both the truckers and the shippers. Availability of drivers and vehicles, manufacturing industry’s performance, and legal compliances laid down for the industry all have a bearing on carrying capacity. Capacity, in turn, has a strong impact on the rates. When there’s a capacity crunch, rates increase. When it is in surplus, rates decrease.

This increase in trucking volume may lead to capacity constraints in the coming year.

For 2019, according to this article in Reuters, the American Trucking Association (ATA) predicts a 2.3 percent increase in trucking volume every year from 2019 to 2024. This increase in trucking volume may lead to capacity constraints in the coming year. A contradicting view presented by JOC.com and Freightwaves.com, says that while earlier in the year, trucks utilization was at its full capacity, it has come down to 94 – 95 percent. The trend is expected to continue at the start of 2019.

The Freightwave article also points out that the capacity might also be influenced by the availability of drivers rather than the availability of trucks. So even if the vans are available, a shortage in capacity may be experienced due to the lack of drivers.

Given the unpredictable nature of the industry, for shippers who have regular freight, it would make better business sense to work with 3PLs or professional trucking companies instead of individual truck contractors or vendors with smaller fleets to avoid getting short supplied in the event demand increases.

The Economy: How the economy performs has a huge impact on the transportation industry. According to the GDP forecast shared at the Federal Open Market Committee meeting, as reported by The Balance, the GDP is expected to be 3 percent in 2018. In 2019 and 2020 it is predicted to be slightly lower at 2.3 and 2 percent respectively. The fall is being considered an outcome of the ongoing trade war with China. The trade war has also created some skepticism in the freight market.

However, the release also forecasts a decent growth rate for the U.S manufacturing sector. It pegs production to increase at 2.8 percent in 2018. A slight decrease in momentum in growth is projected in 2019 and 2020 with rates at 2.6 and 2 percent respectively. Even if the manufacturing growth rates slow down slightly, it is not expected to have too much of a negative impact on the local freight market.

The other trend that seems to be picking up and is expected to continue is shorter distance freight movement.

Apart from these factors, the other trend that seems to be picking up and is expected to continue is shorter distance freight movement. According to this article in Freightwaves.com which quotes Bob Costello, Chief Economist, ATA, “the average length-of-haul for dry van truckloads fell to just around 500 miles for the year-to-date period, down from an average of 800 miles in 2005”. The article highlights that this trend is being attributed to shippers basing their fulfillment centers nearer the customers.

Going by the reports and views expressed by industry experts, 2019 seems to look positive for the industry vis-a-vis economic performance and rates. Shippers may fare better by factoring in a freight rate increase. For both the vendors and the shippers, there may however be some ambiguity on capacity as it is to an extent dependent on the trucking industry’s capacity to attract professional drivers to fulfill the current shortage.

For a 3PL perspective on 2018 and what to look for in 2019, join us on February 20th at 2pm for our FREE 20 minute webinar, STATE OF THE (LOGISTICS) UNION . We’ll discuss the major concerns for shippers entering 2019, and what the next frontier in transparency will be. Click HERE to sign up today!

You can also speak to one of our experts and find out more about BlueGrace by filling out the form below or contacting us at 800.MYSHIPPING

Adam Blankenship, BlueGrace CCO, Talks Logistics With WFLA 970

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

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

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