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The Rise of the 3PL for Managed Transportation Services

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

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

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

Why Managed Transportation Services Grew to Permeate the Global Supply Chain

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

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

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

3PLs and Managed Services Go Well Together

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

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

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

Ways 3PLs Excel in Managed Service and Value

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

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

Tap the Value of Managed Freight Transportation Through BlueGrace

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

The Key to Managing Disruption? Outsourcing.

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

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

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

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

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

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

It Can Cut Costs 

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

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

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

3PLs Provide Scalability 

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

Outsourcing Isn’t Without Risk 

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

Mitigating the Risks 

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

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

In Conclusion 

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

The Impact Of The Coronavirus On Surface Freight

Recall that at the beginning of the year, industry experts expected the surface freight spot market would gradually increase to make up for its decline over the past year. Every publication on the planet was encouraging shippers and logistics service professionals to start thinking about renewing their interest in contracted freight rates that would help keep freight spend under control. In addition, the uncertainty over a global trade war between the US and China was on the brink of collapse, and all signs indicated growth in the market. Then, the coronavirus became the latest hot topic in supply chain management. Shippers that wish to stay competitive need to understand a few things about the true impact of the coronavirus on surface freight and what they need to do to prepare for it now. 

What’s Happening With The Coronavirus? 

The coronavirus is a major threat to the global supply chain. While its spread has been largely limited to areas of the AIPAC region and a few thousand cases outside of that region, it appears to be catching fire more quickly. The mass quarantines in Wuhan applied the metaphorical breaks to production and left the Shanghai Containerized Freight Index closed for more than three weeks. Substantial drops in ocean container rate indices occurred, losing up to $100 per $800 in the time frame. While this might not seem like an issue for surface freight, it alludes to a lowering of spot rate volatility. Meanwhile, Greg Knowler of JOC.com notes that the coronavirus has not yet led to a “rapid resumption of manufacturing almost 4 weeks after the Chinese new year, factories are struggling to restart production. An advisory from UK foreign affairs stated February 17 words that China continues to restrict the movement of people in response to the coronavirus outbreak.” As the restrictions continue and grow more common, especially in areas like the US that are trying to keep the virus from spreading at all costs, the risk to spot rate markets will increase. Restricted movements effectively open more capacity and lead to the bottom falling out from the spot rate market.  

Potential Ways Coronavirus May Disrupt The Surface Freight Supply Chain 

The impact of the coronavirus on surface freight in the US is not yet a primary concern, reports DAT. It’s relative containment overseas and strict containment in the US means that its disruption will be menial for the upcoming weeks. However, even that is a relative example. US supply chains depend on Chinese imports, and as the factories shudder in empty silence, technology products, auto parts, and medicines and medical equipment import levels will decline. Thus, volume in the US will drop. As the drops occur, more carriers will face the problems of too much available capacity. It’s the grand irony of 2020. There were years upon years of discussions of preventing the capacity crunch, and now, there is just too much capacity to make a difference. 

The potential for disruption is severe, and companies need an alternate way to ensure a disruption-free supply chain.  

Of course, additional disruption risks remain. Widespread contamination of freight or spread of the virus in people could lead to mass callouts among drivers, a flat-out refusal to accept mildly ill truckers at warehouse gates, and more. The potential for disruption is severe, and companies need an alternate way to ensure a disruption-free supply chain.  

How to Lessen the Impact of the Coronavirus 

Let’s be clear on one area of concern. There is not a way or step that individual shippers can take to 100% stop the coronavirus from spreading around the globe. It is a virus, and it’s up to health professionals and experts to stop it. Now, that does not mean shippers are left with empty shelves and angry customers. Instead, it just implies a need for more diversity in the supply chain. Shippers need to increase the number of working carrier relationships.

Shippers should take added steps to ensure carriers comply with all applicable health and government regulations.

Shippers should take added steps to ensure carriers comply with all applicable health and government regulations. More visibility into truck location and ETA can also provide peace of mind to ensure shippers are not on the verge of interacting with truckers or others that were recently exposed to locations with a high volume of viral activity and potential effects of coronavirus on surface freight movements.  

Ensure you can always find available capacity and routes by leveraging an advanced transportation management system (TMS).  

Compared to the flu, the coronavirus is more life-threatening when people fail to take basic precautions, such as hand-washing, not touching the face, and staying home when ill. With that in mind, shippers should take those basic steps and radically evolve their logistics management operations to secure more drivers, more carriers, more trade lanes, more stops (or vice versa), and more suppliers. In other words, it is time to scale the supply chain network upward to find more suppliers and available business-to-business service partners to avoid disruptions. Also, do not cut your shipping volume due to the coronavirus. Instead, ensure you can always find available capacity and routes by leveraging an advanced transportation management system (TMS).  

Vaccinate Your Organization Against The Coronavirus With A BlueGrace Partnership 

Using a TMS is one critical way to vaccinate your organization against the coronavirus. If it is going to spread, you cannot necessarily stop it. However, taking the step of investing in a quality relationship with a TMS vendor and third-party logistics servicer, such as BlueGrace, will have a protective effect and help keep your business in business even as the virus spreads. Find out more about how to get started by completing the form below or call us at 800.MY.SHIPPING today. 

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

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

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

Why The Conundrum?

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

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

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

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

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

They should also ask the following questions: 

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

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

Why Is Cost Important? 

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

Why is Customer Service important? 

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

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

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

So, What Is More Important? 

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

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

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

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

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

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

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

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

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

CEOs Should Be Focusing on Their Supply Chain

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

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

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

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

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

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

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

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

A Changing Future for the Supply Chain

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

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

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

Is Your Supply Chain Ready?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Innovation Enterprise

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

The transportation offered also influences customer’s buying decisions

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why does the State of the Supply Chain matter?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

Tips for Becoming a More Strategic Shipper

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

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

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

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

Move to an Integrated Supply Chain

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

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

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

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

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

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

Do Unto Others

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

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

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

Build a Good Working Relationship with Carriers

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

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

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

Looking Ahead

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

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

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

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

Make Decisions Based on Data

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

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

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

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

Why Shippers Should Consider Working with a 3PL

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

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

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

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

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

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.

Connected Logistics is the Future of Global Trade

According to reports, the connected logistics market is set to grow at a CAGR of 30-35 percent by the year 2021. In the next 2 to 3 years, analysts predict the connected logistics industry to be worth USD 40 – 50 Billion. It is expected to change the entire landscape of the global supply chain.

Integrated, Digital, IoT, Smart Logistics, Automation, and Big Data are some of the words and phrases that we’ve come to associate with logistics. All these together give us what we call connected logistics. With even one of these aspects missing from the mix, it would be highly difficult to build a logistics network that links all the players in international trade.

Who Are Parts of The Connected Logistics Network?

But today, logistics has ceased to be just a process of storing and transporting goods.

More often than not, when we speak of logistics we tend to associate the word with storage of goods and their movement from location A to location B. But today, logistics has ceased to be just a process of storing and transporting goods. It’s no longer limited to transport and storage facilities.  Apart from the road, rail, air, and sea transport and warehouse operators, the term connected logistics also includes customer service teams, manufacturing, production planners, inventory planners, and the sales team. All these teams have responsibility for processes that are necessary to deliver the final product to the end consumer. IT companies, software and hardware providers enable these teams to stay connected and support them to deliver a superior customer experience through cutting edge technology. This is how evolved logistics has become.

It is now not only a crucial part of the supply chain, but also an essential element of an organization’s product and customer service strategy.

In fact, it will not be remiss to say that logistics is often a key differentiator – a USP for certain consumer products. In addition to the businesses and technology providers, connected logistics also includes lawmakers, cybersecurity monitoring agencies, and government authorities – especially transport, IT, and infrastructure departments across the globe. This group is responsible for creating a framework that can take into account the variations in rules and regulations across the globe and ensure that trade across borders is carried out efficiently.

What are the features of a Connected Logistics Network?

Real-time data: With the use of new and advanced technology and advanced analytics, the connected logistics network provides its users real-time data and market insights. This is making it simpler for organizations to make informed business decisions.

Now shippers can track their shipments from the time it leaves their warehouse or factory till the time it reaches the final place of delivery right on the platform where they booked the transport. 

Increased shipment visibility: Gone are the days when one had to follow up with customer service executives at transport companies to know the location of their shipments. Digitalization, RFID tags, and GPS trackers have immensely improved shipment visibility. Now shippers can track their shipments from the time it leaves their warehouse or factory till the time it reaches the final place of delivery right on the platform where they booked the transport. This is also facilitating better transport planning especially in the case of intermodal transportation.

Inventory management: Imagine a large warehouse with stacks of boxes of different SKUs. Earlier, warehouses would have to maintain physical records of the goods and manually manage FIFO and order picking. Even after the initial ERP systems were introduced, there were still some challenges in the order picking process. Now, with the new technology like the RFID tags and ERP systems warehousing operations have become much easier, less time consuming and more efficient.

JIT inventory: Both manufacturing and retail organizations are working on leveraging the Just in time inventory management concept to help reduce inventory holding and storing cost. This process can be better managed with the connected logistics network as an advanced system can be equipped to provide triggers for when is the optimum time to place an order for inventory – FG or raw material – so that it reaches the factory or store at just the right time.

Global compliance management: Global trade comes with different rules, regulations, and legal requirements. It is difficult to keep track of changes in the rules and adhere to all the requirements of each country one does business with. New systems that are equipped to store legal checkpoints and raise a red flag when these requirements are not being met are making it comparatively painless for companies to meet country-wise compliance requirements.

This not only reduces the organizations’ cost on systems and software, but it also ensures seamless flow of information from one process to another in a standard format which will, in turn, limit the loss of data.

Integrated systems: System integration is one of the major facets of connected logistics. Now, organizations do not need to maintain separate systems for their different departments. Transport management system, warehouse management system, sales and billing, production planning, and finance-management can all be integrated into one platform with different modules and controlled access. This not only reduces the organizations’ cost on systems and software, but it also ensures seamless flow of information from one process to another in a standard format which will, in turn, limit the loss of data.

Document management: System integration has also helped improve documentation management and storage. Now, documents pertaining to a shipment or sale can be stored in digital format on the system. There is limited need to store and maintain physical copies. Authorized personnel can easily access these documents whenever they need to. Potential benefits are:
● Easy access to delivery signatures, original BOLs, and W&I docs
● Fast PODs to verify deliveries and invoices
● Clear view of delivery receipts and customer notes
● Clean/organized shipping documentation

While the initial investment in such technology and equipment might seem huge, the returns are equally attractive.

While the initial investment in such technology and equipment might seem huge, the returns are equally attractive. Since these systems and technology have become the demand of the day, it has become imperative for organizations willing to get a share in global trade to upgrade their systems and stay connected to the global business via their logistics network. This is especially critical for 3PL and 4PL logistics service providers.

Get Connected

At BlueGrace, we offer a proprietary TMS that 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, keeping you connected every step of the way. To request a BlueShip demo, call us at 800.MYSHIPPING or fill out the form below to speak to one of our experts. 

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.