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Middle of the Road for the Trucking Industry

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

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

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

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

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

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

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

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

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

Hitting Bottom

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

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

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

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

A Drop In the Trucker Pool

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

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

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

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

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

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

Navigating Through Industry Changes

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

Controlling Costs and Preventing Accessorial Loss

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

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

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

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

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

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

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

WHAT ARE ACCESSORIALS?  

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

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

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

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

HOW ACCESSORIAL FEES CAN AFFECT YOUR SUPPLY CHAIN  

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

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

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

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

LEARN MORE ABOUT HOW YOU CAN MANAGE ACCESSORIAL CHARGES   

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

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

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

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

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.

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.

Urban Logistics is Growing

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

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

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

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

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

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

Growing Trends in Last Mile Deliveries

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

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

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

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

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

Growing Challenges

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

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

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

The Growing F.A.D

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

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

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

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

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

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

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

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

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

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

Your Role in the Digitally Dominated Future

In 2018, the world is more connected than it has ever been before. With the advent and popularization of smartphones, we are able to instantaneously make connections all over the world in ways unimaginable just 20 years ago, before we knew the names Facebook, Twitter, and Amazon.

Today, these platforms not only heighten our social connections, but also our trade connections. With access to a smartphone and Wi-Fi connection, any individual almost any place in the world is able to participate in the international conversations on platforms like Twitter and receive goods purchased on e-commerce sites like Amazon within a matter of a couple days or in some cases hours.

With this increased connectivity, a new demand for trade between merchants and consumers all over the world has spiked

With this increased connectivity, a new demand for trade between merchants and consumers all over the world has spiked. Where such trade used to be dominated largely in a wholesale/business-to-business domain, now thousands of smaller merchants endeavor to connect more directly to their niche markets, utilizing platforms like Alibaba and Amazon.com to do so, increasing demand for companies, like BlueGrace, to handle the logistics.

Growing Pains

While the digital age is exciting for many reasons, it also means that there will inevitably be growing challenges, for individuals and companies alike; for companies, as they try to re-work the supply chain to accommodate a change in the trade landscape, and for individuals, as they arm themselves with skills and information to be competitive in a digitally dominated present and future.

with an evolving market, dynamic, data-driven, third-party logistics (3PL) companies like BlueGrace are in increasingly high demand, for their ability to navigate a changing trade landscape and help shippers optimize their operations processes.

Traditional logistics companies that once facilitated movement of commerce through the supply chain with standard practices slowly formed over a long period of time to support traditional commerce, many of which are still relevant to this day. However, with an evolving market, dynamic, data-driven, third-party logistics (3PL) companies like BlueGrace are in increasingly high demand, for their ability to navigate a changing trade landscape and help shippers optimize their operations processes.

As we stand at the precipice of this modern trade revolution, the next generation of the U.S. workforce is being encouraged to be strategic about how they position themselves in order to stay competitive in the digital future

As we stand at the precipice of this modern trade revolution, the next generation of the U.S. workforce is being encouraged to be strategic about how they position themselves in order to stay competitive in the digital future – a future that will look quite different from their parents’ generation’s youth. Technology companies are constantly making advancements in innovations like Artificial Intelligence (A.I.), Internet of Things (IoT), and blockchain, which are all being applied to automate and optimize traditionally manually operated processes, making manual labor jobs, spanning across industries, obsolete. But the result will be more of a shift in demand toward different kind of jobs and skill sets.

The Light at the End of the Tunnel

Before you fall into a depression about the future of jobs for the younger generation, take a look at the data from the “2019 Third Party Logistics Study: the State of Logistics Outsourcing,” which shows that though there is an increasing prevalence of automation, there are is increasing demand for individuals that understand how to strategize by utilizing such technological advancements, especially when it comes to the supply chain management industry.

There is a new market opening up for a more creative labor force that understands data, risk management, and planning – and due to that forthcoming demand, employers are paying competitive wages in order to attract and keep star employees. According to the survey, companies’ top reasons for looking externally for employees are a need for a new employee skill set to accommodate changes in strategy, updates in technology and innovation, and lack of “bench talent” (or internal employees) to move up into larger roles.

Join us in our excitement for the digital age

Employers at logistics companies like 3PLs are at the front of the pack in serving a new generation of clients that aim to be digitally-savvy by utilizing data to optimize their operations.

BlueGrace is hiring motivated people with unique skills, stimulating goals, and bold personalities to contribute to our diverse team of industry leaders. Our truly rare culture is built upon our team members’ individual strengths and talents, which serve as a rock-solid foundation for collaborative success. Visit our career page HERE to learn more on how to join our team!

Make Logistics Your Strategic Advantage

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

There could not have been a more accurate prediction.  

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

Why is logistics gaining so much importance?  

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

Logistics is the new differentiator.

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

What are the benefits of putting logistics first? 

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

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

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

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

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

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

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

BlueGrace Logistics 2018 in Review

2018 delivered some significant changes for BlueGrace Logistics. From new offices to charity events that helped others in so many communities, our amazing team made this year one to remember. We want to take some time to recap our biggest changes and our best memories of the year. 

CSO, Randy Collack Announces Retirement

Randy Collack, Chief Strategy Officer, has retired this year. Mr. Collack had been with BlueGrace since its inception in 2009. He oversaw several departments as the Chief Strategy Officer, including all Freight brokerage in the Tampa headquarters. Throughout his tenure with the company, Randy was responsible for the growth of the sales and operations departments, and was a critical component of the success BlueGrace Logistics has achieved to date.

We wish him the best in his retirement!

BlueGrace Takes 1st Overall At 2018 SportsFest

WE. DID. IT. In April, our outrageous employees beat 200 other companies and 4,000 other people at SportsFest 2018 and earned the #1 Company title at Corporate SportsFest! Can we get a WOOOO!? Congratulations to all BlueGrace employees who attended and competed in SportsFest 2018. SportsFest is always a wildly successful event that embodies team building, solid competition and fun. Exhausted, but ecstatic, our team returned home victorious and more engaged with both coworkers and customers. We’re extremely proud of our team and their drive to succeed! 

Opening Of Downtown Chicago Office

Mayor Rahm Emanuel joined BlueGrace Logistics to announce the company opening an office in downtown Chicago in May 2018. BlueGrace added 80 jobs at its new location in the iconic Chicago Board of Trade Building. The new office will continue to support the strong growth BlueGrace has accomplished since its launch almost 10 years ago. 

“The market we’re seeing now will be around for quite some time. We need to add a lot of capacity and a lot of professionals,” Bobby Harris, president and CEO of BlueGrace Logistics, said. Chicago “is a rich source of talent and resources, whether it’s truckload capacity or sales reps.”

Cats vs Dogs Raises 64,000 Pounds Of Food for Humane Society

Each year, BlueGrace female (Team Cats) and male (Team Dogs) employees compete against each other to see who can collect the most amount of pet food in total pounds. The food is then donated to a no-kill shelter to feed homeless animals in the community and used for pet owner assistance programs that benefit homebound and elderly residents on a fixed income. This year, the employees of BlueGrace collected over 60,000 pounds of food between Tampa & Chicago – reaching a new record for the contest on a location-wide scale.

The BlueGrace Webinar Series Is Introduced

BlueGrace began our new webinar series in February of 2018. With that announcement came 10 highly attended Webinars that offered valuable information from industry experts regarding everything from capacity issues, to freight data usage and visualization. Every attendee is offered a Free Supply Chain Analysis, utilizing BlueGrace’s proprietary data analysis tool, Vision. For a list of upcoming Webinars Click Here. Thank you to all that have attended in 2018!

CEO Bobby Harris Joins NUTC BAC

BlueGrace Logistics proudly announced that Founder and CEO Bobby Harris was welcomed as the newest member of Northwestern University Transportation Center (NUTC) Business Advisory Council (BAC).

Harris joined an esteemed group of senior-level business executives representing all modes of transportation. They meet 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.

15,000 School Supplies

Each year, more and more children are sent to school without the materials needed to be successful. BlueGrace Logistics partners with local organizations to assist in helping that need with their “Backpacks of Hope” drive. The drive divides each office into teams who then compete to collect the most supplies. The winning team wins simply bragging rights or a fun prize of no monetary value, but the competition as well as desire to help those in need truly push the drive to success each year.

BlueGrace’s headquarters in Tampa, FL has partnered with Metropolitan Ministries for many years, and as the company has grown and added regional offices throughout the country, these offices have found local organizations and schools to partner with as well. Together everyone was able to donate a total of 15,381 supplies and 1,157 filled backpacks. 

Bobby Harris Named One Of Floridas Most Influential Business Leaders

BlueGrace Logistics CEO Bobby Harris was selected as one of Florida’s Most Influential Business Leaders on the Florida 500 – Florida Trend’s roster of the state’s 500 most influential business leaders spanning across more than 60 business categories and economic sectors.

The Florida 500 list is the product of a year-long research initiative by the editors of Florida Trend resulting in a personal, engaging look at the state’s most influential business leaders across major industries. The 500 executives were selected based on extensive contacts in regional business circles, hundreds of interviews and months of research, culminating in a highly selective biographical guide to the people who really run Florida.

Bobby is one of just 18 Transportation Executives chosen on the prestigious list of top business influencers throughout the entire state of Florida.

BlueGrace Logistics Becomes 6-Time Inc. 5000 Honoree

BlueGrace Logistics joined Inc. Magazine’s “Hall of Fame” as a 6-time Inc. 5000 Honoree. In 2012, BlueGrace was #20 on the annual list that ranks the fastest growing private companies in America – with 7,378% growth in just 3 years! Seven-Time Honoree, here we come!

BlueGrace Logistics Continues Chicago Growth Trajectory

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

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

Here’s To An Even Better 2019!

We are so proud of how BlueGrace has continued to grow, prosper and help others in 2018! Thank you to all employees, partners and vendors for another successful year, and we look forward to a bigger and better 2019.

The Fine Line Between Deregulation and Operation

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When it comes to regulations in the trucking industry, it’s something of a mixed bag. On an economical standpoint, the Motor Carrier Act of 1980 has given the industry free reign. On the other hand, the trucking industry is perhaps one of the most heavily regulated sectors in terms of safety, environmental protection, driver standards, and others.

the Trump administration is also reconsidering some of the regulatory strangleholds the government has over trucking and is leaning in favor of the truckers.

The Trump administration has also been a mixed bag for the industry. For shippers and manufacturers who rely on goods sourced from foreign goods, the tariffs and escalating trade war have made for a bout of white-knuckled planning. However, the Trump administration is also reconsidering some of the regulatory strangleholds the government has over trucking and is leaning in favor of the truckers. “This administration is looking at the regulatory environment a bit differently,” says Mark Rourke, executive vice president and COO of Schneider, the nation’s second largest truckload (TL) carrier. “We’re not seeing a lot of activity with new regulations.”

With President Trump now beyond his midterm, it’s worth taking a closer look at the regulatory environment surrounding trucking. There’s a fine line between too much regulation and not enough. While reducing regulations might make trucking companies more efficient, they could also encourage some unsafe practices. The tradeoff to that is that with more regulations, efficiency drops and rates go up, with shippers picking up the tab, of course.

Hard Hitting Regs

Of the numerous regulations that are out there, there are some that stand out more than others. The biggest of them include the Electronic Logging Device (ELD) the Hours of Service (HoS) and the age restriction that locks out aspiring truckers under the age of 21.

Given that the mandate has also begun to tighten capacity even further, it also encourages shippers and carriers to work more closely together in order to increase operational efficiency.

The ELD mandate has been one of the hardest to deal with this year and has caused a great deal of productivity loss for shippers as enforcement went into full swing. While it was originally intended to keep truckers honest on the HoS ruling by removing paper logs it hasn’t been a smooth transition. “After months of issuing warnings, state enforcement personnel began issuing stiff fines for HOS violations last spring. The result, executives say, is between 3% and 8% lost productivity due to the elimination of cheating,” according to Logistics Management. Evening out the playing field with ELDs does have some advantages. It encourages carriers to plan routes more efficiently so as to make their deliveries on time, this is especially important when you consider that some companies are threatening penalties for tardy drivers. Given that the mandate has also begun to tighten capacity even further, it also encourages shippers and carriers to work more closely together in order to increase operational efficiency.

Fine Tuning the HoS

While it has taken some time, ELD compliance has reached almost 99 percent across the entire industry. The biggest gripe truckers have, however, isn’t with the ELD but with the Hours of Service ruling. This is especially true for agricultural, seasonal deliveries, logging, and other select commodities.

With that being said, Washington is looking to tweak some of the HoS terms in order to make it a bit more bearable. According to Logistics Management, there are four main areas, in particular, they are considering amending.

  • Expansion to the current 100 air-mile “short-haul” exemption from 12 hours on-duty to 14 hours on-duty in order to be consistent with the rules for long-haul truck drivers.
  • Extending the current 14-hour, on duty limitation by up to two hours when a truck driver encounters adverse driving conditions.
  • Revising the current mandatory 30-minute break for truck drivers after eight hours of continuous driving.
  • Reinstating the option for splitting up the required 10-hour off-duty rest break for drivers operating trucks that are equipped with a sleeper-berth compartment.

There is also an unintended side effect of the HoS and ELD mandates. Now that most of the entire trucking industry is on the same schedule, there aren’t enough safe places for truckers to park when they’ve run out of drive time. It’s actually gotten bad enough that many carriers are subsidizing their drivers to utilize paid parking at truck stops. These spots can range anywhere from $5 to $20 a night and while that’s not so bad for short trips, long-haul truckers could be shelling out a lot of extra cash to maintain compliance.

The Trucking Age for the Modern Age

The pool of truck drivers is drying up and it’s only getting shallower as more truckers hand in their keys and take to retirement. The Department of Transportation has announced that they will begin a pilot program which will allow drivers under the age of 21 to operate an 80,000 pound truck for interstate commerce.

Given that these youths would be behind the wheel of a 40-ton vehicle, there are more than a few safety advocates who believe this isn’t a good idea.

“The statistics are clear,” says Todd Spencer, president of the OOIDA. “There really isn’t any question that younger drivers are more likely to crash and be involved in serious incidents.” Given that these youths would be behind the wheel of a 40-ton vehicle, there are more than a few safety advocates who believe this isn’t a good idea.

The age restriction has been in place since 1935 and for the most part, no one has argued with the logic. However, the Trump administration is pushing hard to get this particular regulation removed and many don’t agree with it. However, there are some in the industry who think there can be some ways to ease new drivers into handling a rig, without just pushing them straight out of the nest. Handling the first and final mile of driving could give them the opportunity to experience freight handling without giving them total control of the rig from start to finish.

For better or worse, there will be some changes coming to the trucking industry. While these regulations have been put into place with safety in mind, have they reached the point where they’ve hindered operations? At what point does regulation get in the way of an enterprise?

Festive Cheer and Cargo Theft Go Hand in Hand During the Holidays

The holidays bring three main things for the shippers – festive cheer, increased business, and high risk of cargo theft. While increased business orders and sales are the reason to rejoice for shippers, the equally high probability of having their cargo stolen during transit tends to dampen the festive spirit. But given the season and business needs, cargo theft during the holidays is unavoidable.

Tis the Season

According to LPM Insider, businesses in the U.S. lose around $15 to $30 billion dollars each year. This figure too is on the conservative side as quite a few incidents of cargo theft go unreported, it further reports.

Do we just let the robbers rob us of all the hard work that we and our teams put in to getting holiday shipments out, or is there something we can do to safeguard our business interest and our shipments?

Among the various commodities being shipped during the holiday season, products that cannot be tracked and food and beverages shipments tend to be targeted most by cargo thieves. This doesn’t mean that shippers of other commodities or bulky products can rest easy. Cargo theft is a reality for most during the holiday seasons, so much so that there are reports of gift packages being stolen from front porches. Do we just let the robbers rob us of all the hard work that we and our teams put in to getting holiday shipments out, or is there something we can do to safeguard our business interest and our shipments?

Preventive Measures

If we treat cargo theft like any other business or operational risks, we might be in a better position to deal with such incidents and mitigate their impact on our business during the holidays.

Here are some measures that the shippers, truckers, and warehouse operators can take to minimize theft during the festive season.

  1. Pre-plan shipment deliveries: While it might not be possible to completely avoid making a shipment delivery during the holiday season, it would be helpful if shippers and their transportation providers could work out a plan to deliver high-value shipments before the festive mood kicks in. This can, to an extent, minimize the risks of cargo theft.
  2. GPS enabled vehicles: Transportation providers should install GPS trackers in their vehicles to be able to effectively track the shipments until it reaches the final place of delivery. If the vehicle is tracked, any irregular stoppages or route that has been taken can be noted and inquiries can be made with the driver as soon as there is any deviation. Knowing that the vehicle is being tracked and that they can be held responsible, the drivers will also be more cautious while making unscheduled stoppages or leaving the vehicle unguarded for a long time.

    Third-party service providers, such as BlueGrace, are professional and value their market reputation. They have checks and balances in place to avoid cargo theft or any other risk to the shipments while it’s in their custody.

  3. Vetted service providers: When appointing services providers, shippers should properly vet them and do a thorough reference check. Third-party service providers, such as BlueGrace, are professional and value their market reputation. They have checks and balances in place to avoid cargo theft or any other risk to the shipments while it’s in their custody.
  4. Hire additional manpower: This point is especially for warehouse operators. During the holiday season, staff strength tends to be low. Try to get additional workers and guards for the warehouses to cover the operations and security posts during the holidays before the season sets in.
  5. CCTV cameras: Equip your warehouses with CCTV cameras to monitor the warehouse at all times. Be sure to place cameras in a position that all the entry and exit points are covered.
  6. Alarms: Installing burglar alarms in vehicles and warehouses, will work as an additional security measure and assist in warding off thieves.
  7. Locks: Even though this is one of the most basic security measures, it is necessary to reiterate it here. Check to be sure all locks on truck shutters and warehouse entry and exit points are sturdy and in working condition. Train your staff to double check the locks after the truck or the warehouse has been locked.
  8. Train your staff: Train your truck drivers and warehouse staff to be able to detect suspicious activity and people lurking around the shipment. If the staff is trained to notice any such activity around the shipment, they can be on their guard or take measures to protect the shipment. Drivers should also be trained to avoid parking the trucks in unsupervised areas or in places where the risk of theft is high. If there’s a helper traveling with the driver, both of them can take turns to watch over the vehicle when making a stop for refreshments or rest.

Year-round Security

While incidents of cargo theft increase during the holidays, making the safety of employees, customers, business partners and security of the shipments in your custody a company culture and a year-round process is crucial. When this becomes a business practice, preparing for the holiday shipment delivery won’t seem like such a huge task and will also ensure that your employees are well prepared to deal with any such situation.

Different Freight Types, Different Risks and Rewards

When it comes to running your business, it can be difficult to identify points of improvement, leading you to believe that things are as good as they can get, but in a climate of rising logistics costs, making sure that your operations are running as smoothly and efficiently as possible, can mean the success or failure of your business.

Ground transportation is a cost faced by almost every shipper in every industry, and quite a significant one, yet many shippers aren’t paying enough attention to how their ground transportation spend is being allocated, or don’t realize that there are different ways to approach it. In this article, we will break down a major factor that affects transportation costs: the differences between less-than-truckload (LTL) and full-truckload (FTL) services. We will break down those terms, what they mean for your business, and give two examples of how BlueGrace helped clients that were operating with less-than-ideal business models save hundreds of thousands on their ground transportation costs.

Yes, the perceived cost savings associated with sharing a truck with five other shippers is tantalizing, and a legitimate notion, but it’s not everything.

LTL has gained a reputation of being a more efficient, cost-saving method of transporting freight. It can be thought of like carpooling for cargo; if two people are going the same place, why not double-up and go in one car, splitting the cost savings? Translating that idea into a business scenario, if you’re a small-to-medium sized business, you likely do not have enough product going to one destination to fill up a truck’s full trailer, so LTL can seem like a cost-saving no-brainer, but unfortunately, it’s not quite so cut-and-dry. Yes, the perceived cost savings associated with sharing a truck with five other shippers is tantalizing, and a legitimate notion, but it’s not everything. There are other factors to consider when deciding between LTL and FTL, and there is no, one-size-fits all approach.

Potential Downsides of Utilizing LTL

Timing: By nature of LTL, there are multiple stops along the route that means longer lead times and may cause delays in the supply chain. So, if you are aiming to minimize transportation time, which everyone is in the logistics world, then you are making a sacrifice.

If your company operates in the realm of e-commerce, it would be prudent to examine the costs associated with the loss of business that your business suffers due to potentially longer LTL delivery times, and evaluate what options would open up if you were able to reduce your transportation times by a period of days.

For some shippers, timing is absolutely critical. The obvious examples are perishable products, like fresh produce and pharmaceutical products, which cannot sit for long periods of time in untempered conditions. But now, other “non-perishable” products, like apparel, electronics, and non-perishable food products are becoming time-sensitive in the e-commerce driven world, with monoliths like Amazon now offering same- and one-day shipping options, which have set a standard in the minds of consumers to receive products quickly. If your company operates in the realm of e-commerce, it would be prudent to examine the costs associated with the loss of business that your business suffers due to potentially longer LTL delivery times, and evaluate what options would open up if you were able to reduce your transportation times by a period of days.

Damage: Another common problem associated with LTL transportation is the higher occurrence of damage to cargo. Due to the frequent stops and touch points along routes, in which cargo is being loaded and unloaded from the trucks, freight generally incurs more damage on LTL trips than on FTL trips. For hardier freight, some light damage to exterior packaging is unlikely to be of major consequence, but for shippers dealing in more delicate products, delivering damaged product could mean having to refund a customer for the full price paid for the product, the burden falling on you. If your product is not easily damaged, this may not be an important factor, but if your product is damaged frequently or even occasionally, calculate the average cost that you end up paying to make up for damages per quarter, and then comparing to how much it would cost you to instead opt for FTL, which would result in significantly less damage. Which cost is higher in the end? It will depend on your particular business.

It’s not an easy task for shippers. At BlueGrace, we work with shippers on a case-by-case basis to help determine strategies that fit business’ specific needs. Our digital platform, BlueShip®, takes all of a company’s attributes into account to identify which options result in minimized costs and maximized profits. In the case studies, for example,“Private Equity Group & Transportation Cost Reduction,” and “Manual Process Reduction & TMS Integration for Restaurant Industry,” we dive into each case, exploring how BlueGrace helped two different clients with similar needs rethink their supply chain strategies that were giving them less-than-optimum results.

The routing guide left out multiple states that certain carriers could not go to. Because of this issue, the supplier was receiving chargebacks from distribution centers on a regular basis.

In the first case, a private equity group (PEG) was using proprietary enterprise resource planning (ERP) system to allocate resources and make business decisions. After analyzing the company’s situation, it turned out that the ERP was not suited for the client. The routing guide left out multiple states that certain carriers could not go to. Because of this issue, the supplier was receiving chargebacks from distribution centers on a regular basis. Once BlueGrace helped them downsize their carrier network to a more tailored group of carriers, it saw a 12 percent reduction in transportation costs and $300,000 in annual savings.

In the second case, a restaurant supplier was having difficulties managing their current in-house ERP system. They had looked at 3PL solutions in the past, but couldn’t find a solution that suited their needs, causing them to continue to incur chargebacks frequently, dinging their bottom line significantly over time. After the implementation of BlueGrace’s systems, the supplier was able to straighten out their supply chain and avoid chargebacks, saving them 12 percent in hard costs totaling at $468,000 in one year.

Do You Understand Your Business’ Needs?

At BlueGrace, we understand that every business has specific needs.We would love to learn what matters most to you in this aspect of your business. Contact us at 800.MYSHIPPING or fill out the form below to speak to one of our freight experts today, and learn how you can optimize your supply chain, minimize costs, and maximize your company’s bottom line!

GRI Season: The Importance and Benefits of Digitalization 

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

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

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

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

Higher demand for e-commerce

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

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

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

The driver shortage

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

Continuously rising fuel costs

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

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

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

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

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

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

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

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

Picking up the Pace with the Supply Chain  

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

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

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

Cutting costs is just a matter of good business practice.

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

Agility Training

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

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

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

Breaking Away From Tradition

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

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

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

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

(Re)Examining the Supply Chain

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

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

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

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

BlueGrace Logistics Continues Chicago Growth Trajectory

BlueGrace Logistics Continues Chicago Growth Trajectory

Doubles Hiring Plans and Footprint at Chicago Board of Trade

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

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

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

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

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

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

About BlueGrace Logistics

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

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

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

Common Causes in Delay

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

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

Below are some common causes for delays in ground operations:

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

BlueGrace’s Solution to the Complex Equation

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

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

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

Driving Forces for Change in the Supply Chain  

The freight industry is in the middle of a revolution. We are seeing changes take place at an unprecedented speed, and showing no signs of slowing any time soon. To track these changes and how the industry is responding to them, Forbes Insights conducted a survey of 433 senior executives in the Supply Chain, Transportation and Logistics industries. Of those polled, 65 percent of the respondents acknowledge that there is a monumental shift in operations of the corresponding industries as a whole. Of those responses, a similar number, 62 percent, responded that they are experiencing those changes within their own companies.

“We’re at a point where there’s more change taking place in this instant than what I’ve seen in 25 years on the front lines,” says the president and CEO of a major transportation and logistics provider.

These changes are coming from the massive influx of new data that is being collected and collated between the industries, extracted via telematics and the Internet of Things (IoT). Conversely, the data is being driven by massive upgrades in computing power and data storage, as well as being enhanced by Artificial Intelligence and Machine Learning, which removes the tedious and often time-consuming process of human data processing. Transportation is also seeing some considerable advancements in technology, specifically in drones, driver safety technology, driverless vehicles, and blockchain data storage.

Supply Chains that are enhanced by these technologies will be the front-runners in the global market, having a competitive advantage compared to other companies.

Supply Chains that are enhanced by these technologies will be the front-runners in the global market, having a competitive advantage compared to other companies. 58 percent of the consumer base (retailers, manufacturers, etc.) recognize the importance of supply chain, transportation, and logistics for the success of their business. “Anyone whose success depends on their ability to fulfill orders of physical goods for customers is now caught up in this whirlwind of change,” says Mary Long, managing director of the Supply Chain Management Institute at the University of San Diego School of Business.

The Driving Forces

As we mentioned above, these changes are coming faster than we’ve ever seen before. We can attribute this to four driving forces behind the changes.
 
1. Technological Advancements

Half of the respondents say that advancing technology has a strong impact on their company’s logistics, supply chain, and transportation operations. The heavy hitters for technology are IoT/telematics, AI, Machine Learning, Blockchain, Driver technologies, and Automated Delivery Machines. According to Langley, though the transport industry has always been data-focused, today “We see all of this added computing power—IoT/telematic data collection, data mining, AI and ML—that can be focused on making better decisions, not only from an overall strategic and resource planning basis but in real-time decisions: which routes, which carriers?” says C. John Langley, a clinical professor of supply chain management as well as the director of development for the Center for Supply Chain Research at Penn State’s Smeal College of Business.

Automated delivery technology such as drones and driverless trucks are still in development before we’ll see a full release, but that implementation is certainly on the horizon. In the meantime, we’re seeing advances in driver safety technology such as lane control and safety-braking. As these technologies continue to develop we’ll see a continued evolution of the freight industries.

2. The U.S. Economy is on the Rise  


According to half of the survey respondents, there is a growth in the U.S. economy which is having a strong impact on their businesses. While this might fall under the purview of disruptive, the addition of trade tariffs from the Trump administration is changing demand and long-standing transportation patterns. 44 percent of the respondents say that lower U.S. taxes and other such reforms are helping to drive demand upwards.

“This resonates with the CEO of a major trucking carrier, who says, ‘We see it daily, the economy is rolling.’ But this is both a blessing and a curse. Indeed, ‘there’s heightened demand for our services.’ At the same time, however, ‘capacity is extremely tight, so the industry doesn’t always have the trucks it needs right where and when they’re needed.’ Piling on, the industry for some time now has been experiencing a driver shortage—an issue that’s only exacerbated by a strong U.S. economy. Overall, says the CEO, “there’s more freight and more trucks than there are drivers to drive them” says the report.

Nearly half of respondents, 48%, say they are experiencing the need to reevaluate warehouse locations due to shifting trade patterns resulting from changes in the U.S. economy: taxes, tariffs and, to some degree, the return of manufacturing.

Nearly half of respondents, 48%, say they are experiencing the need to reevaluate warehouse locations due to shifting trade patterns resulting from changes in the U.S. economy: taxes, tariffs and, to some degree, the return of manufacturing. All “impact the location of hubs and warehouses,” says Langley.

3. The Amazon Effect and Changing Consumer Expectations 

 
Changing consumer expectations are having a considerable effect on the industry, heavily impacting logistics, transportation, and the supply chain. Consumers now have the expectation of finding whatever they want, whenever they want it and having the order arrive within the next two days. Even the two-day window is beginning to shrink as Amazon rolls out with next day and same day deliveries. “The effect of Amazon is heightened expectations,” says Langley. “Next week is no longer good enough. It’s got to be on its way now and arrive at the destination within a day or two!” It’s not just consumer expectations that have changed because of the Amazon effect. Truckloads also experience a considerable delay because they require more touches before their final delivery.

“Loads used to see two, three, maybe four touches before the goods were in the hands of the end consumer,” explains an earlier-mentioned CEO. But today, getting goods to consumers faster means “seven, eight or nine touches [moving] the freight to a network of warehouses and forward positions.” In short, says the executive, “that final mile is being redefined almost every day.” Interestingly, this is spurring a veritable arms race between e-retailers like Amazon, and brick and mortar retailers by rewarding innovation and pushing advance in customer service and fulfillment.

4. Tighter Regulations  

 
The final driving force for change is the higher level of regulation and control from the U.S. government. Approximately 46 percent of the respondents say that regulations continue to push changes in transportation. The Electronic Logging Device (ELD) mandate is just one example of those regulations. By forcing drivers away from paper logs, there is a tighter restriction on the amount of hours a driver can be on the road. With the ELD, drivers cannot be on the road for more than 11 hours in a 14 hour period, even if it’s not a logical stopping point. It doesn’t always make sense to stop right at 11 hours,” explains an executive interviewed for the report (but preferring anonymity). “What if the driver is on a bridge or stuck in traffic or is only a few minutes away from a proper rest stop?”

That lack of flexibility is increasing the delivery cost.

The paper logs provided drivers a larger degree of flexibility, allowing them to decide when to stop and when to operate. The ELD’s are decidedly rigid, and the clock starts rolling once the truck moves, even if it’s just to move the rig across the parking lot. That lack of flexibility is increasing the delivery cost. “For example, as reported in the Chicago Tribune: For Pete’s Fresh Market, a 12-store grocery chain in the Chicago area, truckloads of produce from Mexico have roughly doubled in cost since the new [ELD] devices were mandated—from about $2,400 for 40,000 pounds of produce to more than $5,000,” Forbes Insights adds.

Surviving the New Era of Transportation

There’s no mistaking the fact that the freight industry is undergoing a massive evolution, scarcely resembling the industry that has remained virtually unchanged for the past several decades. As time and technology advance, these changes are only going to continue at an even faster pace than they’re happening now. This rapid pace of evolution will leave those unprepared off balance and at risk of collapse. Staying ahead of these changes will be essential to survival for the new era of transportation. This is where a 3PL like BlueGrace, will be crucial to your supply chain. To speak to one of our freight experts, call us at 800.MYSHIPPING or fill out the form below.

Can Your Supply Chain Weather The Storm?

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

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

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

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

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

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

Transportation Breakdown

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

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

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

Temporary Regulation Repeal Should be Permanent Says Truckers

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

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

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

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

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

Help Your Supply Chain Weather Out the Storm

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

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

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

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

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

BlueGrace VP Randy Ofiara on WGN Radio

The news for the week was Tesla, but isn’t it always? This time the discussion was around Elon Musk’s comments about being in “logistics hell” and his company’s inability to get the now finished electric automobiles delivered on time. On Wednesday, September 19th our VP of Enterprise Sales, Randy Ofiara was invited to speak on WGN Radio in Chicago. He shared his expertise on why Tesla and other freight shippers are having difficulties meeting shipment deadlines due to the capacity crunch we are witnessing currently. Driver shortages, tariffs and government mandates are impacting shippers like never before.

Click HERE to listen to the podcast on the WGN website. The logistics discussion starts at the 7:30 mark. Take some time to listen to why the experts at BlueGrace are on top of the industry for you, helping you simplify your shipping everyday.

Even with the capacity crunch in full swing for all types of industries, there is still pressure to curb costs, but there is no reason to fold under the pressure. There are plenty of opportunities to save on costs waiting to be revealed. All it takes is a hard look at your business model.  To speak to one of our freight experts, call us at 800.MYSHIPPING or fill out the form below.