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Truckload

The Power Of Using A TMS For Any Size LTL Shipper

A transportation management system (TMS) is traditionally used in larger shipping operations. The benefits of these systems are managing transportation costs and navigating capacity crunches. They can also aid in balancing dynamic customer demands with driver scheduling. 

Small shippers tend to range from 5 to 25 shipments a day. The next step up is mid-sized shippers. Typically, midsized shippers consist of a number of smaller shipping operations across smaller businesses and locations. Usually, their freight consists of all less than truckload or full truckload with a one-off shipment here and there. They negotiate on a shipment by shipment basis, so a TMS is less about freight spend and more about getting the perfect price each time and squeezing more productivity out of shipments. 

Freight plays a prominent role in the reputation of a company. Timely drivers can make a significant impression. But managers also need to know how freight is moving in order to optimize operations, win customers and overcome some of the limitations of being a mid-sized company. 

TMS Adoption Is Low In Mid-Sized Shippers 

Some of the TMS in larger companies focus on things like managing a capacity crunch and optimizing their freight for transportation across various modes. Larger companies have a lot to gain from converting LTLs into truckloads and continuous moves. Since the volumes being handled are mostly one mode for mid-sized companies, there are fewer optimization opportunities from older TMS models. 

One of the barriers to entry for TMS in this sector is the gap between the clear advantage of using technology to manage shipments and the willingness to do so.

TMS is often seen as impractical by smaller and mid-sized shippers. Many managers feel they get their shipments out just fine with their existing practices. One of the barriers to entry for TMS in this sector is the gap between the clear advantage of using technology to manage shipments and the willingness to do so. Mid-sized companies find it too expensive and difficult to implement. It is overwhelming to their budget and operations. They may lack some of the staff necessary to support running a traditional TMS. When a shipper decides to use TMS, there is historically a lot of effort to get all of that data over to the TMS in order to simulate the rates that the carrier has loaded. This process can cost thousands of dollars in paid labor. Every year when the rates change, the process needs to be repeated. EDI setup is a part of this issue. Setting up TMS usually involves establishing EDI for dispatching to schedule pick up, handle tracking, etc… It’s a considerable upfront expense in labor, which is then being passed on to the customer and hurting the shipper’s ability to offer competitive rates. This can put TMS out of reach for smaller to mid-sized shippers. 

TMS can also be complex and intimidating for mid-sized companies whose employees are used to processing their daily tasks via apps, spreadsheets, and websites. 

Want A Free BlueShip TMS Demo?

Innovations In TMS Accessibility 

Recent advancements in TMS include the prevalence of Application Programming Interface (API) which are essentially programs that can communicate with databases, retrieving useful information that can be used in other applications. Carriers are gaining functionality from their core systems via APIs that other systems can consume. This innovation allows TMS to connect directly to the carrier and pull necessary information directly through machine-to-machine communication. This means there are fewer labor hours spent on back-end issues. It significantly lowers the time and labor investments that keep mid-sized shippers from adopting TMS. 

While a TMS is a powerful tool and typically full of various and helpful features, not every company will need the full suite of options in order for it to be beneficial. In fact, too many features can get in the user’s way. Instead, small and mid-sized shippers should look at carefully curated feature sets for their TMS. Modern TMS solutions are both scalable and customizable, so while an off-the-shelf solution is great for a larger company, this provides a better range of options for smaller companies. With a curated feature package, implementing a TMS becomes a less daunting task.  

An intuitive interface will streamline operations instead of frustrating the employees of mid-sized shippers.

In addition to having it scaled appropriately for your operations, user experience is another consideration. An intuitive interface will streamline operations instead of frustrating the employees of mid-sized shippers. Transparent pricing, next-day readiness, and a subscription model with no end-user IT effort are all attractive offerings of a modern TMS. 

Promising New Options 

Multiple transportation management systems are hitting the market presently, specifically geared towards small to mid-sized shippers. In some, invoices are streamlined via integration to QuickBooks. Attractive features allow carriers to split loads and plan legs of transportation as opportunities unfold. Push notifications keep drivers informed. According to MH&L, “The ability for carriers to connect their ELD providers (to TMS) allows for enhanced visibility for predictive ETAs, integration of Hours of Service information for driver scheduling, and improved location tracking. “ 

In an interview with Fleet Owner, Cody Schmidt, corporate purchasing manager at Plastic Ingenuity, touts his TMS experience. “I’ve seen my team save hours of time and remove many of the manual tasks involved with tendering freight. I’m impressed with how quickly we were able to get set-up within days.” Cody was able to slash time to tender “from three hours to under 15 minutes” by using modern TMS innovations for his mid-sized company. 

Mid-sized companies can create seamless integration by choosing a cloud-based TMS platform that connects directly to their current carriers and 3PL support of choice.

How BlueGrace can Help 

BlueGrace’s proprietary TMS 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. Our customers are especially impressed with the updated user experience, customer address books and product catalogs that make the entire process of creating new shipments simple and swift. 

The BlueGrace core technology platform enables you to proactively identify opportunities to alleviate costs and optimize your supply chain. BlueShip 4.0 gathers pricing and tracking data from 100’s of our carrier partners nationwide. Our updated LTL Volume solution allows users the ability to see real-time capacity and spot rates for their volume shipments. Our customers also receive access to our expert IT department and a full suite of web services and API’s. 

To learn more about BlueShip and to request a demo to see how our TMS can benefit your company, contact us at 800.MY.SHIPPING or visit us at https://mybluegrace.com.

Better Truckload Operations Efficiency Through Digitalization

Digital trucking is bringing unprecedented, large-scale benefits to the national transportation grid. Digitization takes living, real-time data from once futuristic fantasy to practical present-day tools. Companies who embrace these changes can stay ahead of shipping needs, coordinate the arrival and departure of shipments at distribution facilities and offer customers full transparency regarding product tracking.

Having uniform data instantly updated across many locations translates into an efficient organization. 

Digitally integrated metrics also mean the more efficient movement of goods. Well-kept maintenance and repair information leads to more uptime for fleets. Processes that depend on fax and phone calls to delegate shipment orders can see improvement through digitization by providing transparency in a shipment’s progress across the operation. Digital trucking further protects against losses from laggy communication by providing access to information like rates and available containers. The answer is simple: having uniform data instantly updated across many locations translates into an efficient organization. 

Hybrid Supply Chains

Naturally, some companies making the transition from silo-based tracking to a digital supply chain will find themselves in a mixed state of operations. Some information is digital, some are kept analog, and some remain decentralized in individual silos. However, it is best not to get comfortable here. The number of customers relying on internet transparency is increasing at an exponential rate. The weight of the digital world is enough to have deemed it the “Third Industrial Revolution.” In order to survive in the post-revolutionary landscape, successful shippers will need to become proficient with Digital Supply Chain Networks. 

Benefits Of Embracing Digital Supply Chain Networks 

1. Accurate Projections – An outdated but well-ingrained approach to supply chain management is to look backward at data. A forward-looking vantage point allows companies to remain better oriented to evolving needs.

Information from Blume explains that “AI and machine learning can uncover trends in the data and suggest likely short, medium and long-term demand and capacity — allowing you to get the right assets and resources in place .” Advanced models can help with recruitment, asset procurement, scheduling enough drivers and trucks and generally increase profits by keeping error margins minimal.

2. Data Visualization – Having data that is intuitive for managers to interpret increases efficiency. Data points are essential to ha. Still, unless these see integration into a medium with unambiguous meaning, they may fall short of their potential. The less time a manager spends trying to interpret numbers, the less time they spend repeating supply chain failures. Digitization automates the mundane manual task of creating a visual representation for complex data

3.  Connecting Data Sources – Modern supply chains rely heavily on a concept known as the Internet of Things (IoT).  IoT can improve processes, identify opportunities to move goods and stay ahead on preventative maintenance. However, IoT is only capable if it has many data sets from which to draw. Using QR codes to track goods, sensors for shipping containers and APIs to compile data onto logistics platforms is one example of how IoT shines brightest when prolifically integrated. IoT benefits conveyance when connected to multiple vehicles by improving operations through routing, navigation and avoiding common collision points. Equipping infrastructure with systems to monitor road conditions and congestion allows IoT to optimize capacity through effective traffic management systems. 

The more devices connected to a system, the more complete the data set.

The more devices connected to a system, the more complete the data set. Likewise, IoT can more efficiently bolster a supply chain by facilitating updates on spot-rates, capacity, demand for drayage, driver availability, GPS locations for disabled trucks and last-minute changes to every device and user within the network. Accurate data can significantly increase efficiencies and mitigate risk when shared across a centralized digital platform.

4. Direct Benefits to Supply Chain Management – Some concise benefits to supply chain management that companies can look forward to from digitization are: Increase JIT sourcing, decentralized inventories leading to satisfied delivery time requirements, competitive shipping by converting next-day-deliveries to same-day-deliveries, fewer number of logistics partners needed for transportation and translating LTL into parcel shipments.

The Risk Of Information Overload

When it comes to digitization, an abundance of data can tip the scales in either direction. Of course, having device-level data across an entire operation allows carriers to access essential information from asset utilization to invoicing. It also presents challenges for effective integration. In order for companies to achieve the desired level of granularity to get the most out of their data, expert logistics support is an invaluable step. For help with implementing these changes, contact one of our logistics experts.

The Logistics Of The Super Bowl

Not even COVID can stop what is according to Supply Chain 247  “the world’s most-watched single sporting event”. As Tampa, Florida prepares to host Super Bowl LV, a litany of logistics experts huddle to make sure wardrobes are the most consequential thing malfunctioning on February 7.

Creating A Super Bowl Experience 

Construction materials leading up to hosting a Super Bowl do need to be transported, but a much larger demand on shipping will be from the cultural traditions that football fans hold for the big game. It’s not Super Bowl Sunday without wings, our favorite drinks and every kind of chip dip imaginable!  

Over 1.25 Billion chicken wings, 28 million pounds of potato chips, 54 million avocados and 50 millions cases of beer will be consumed on what is known as the second biggest eating day of the year. 

With an abundance of demand, goods need to arrive on time to avoid shortages and missed opportunity for profits in retail. 

So whether fans make purchases in or near Stadiums, prior to a gathering at home, or out at their favorite sports bar; consumers are ready to spend for the experience. Food, alcohol, apparel, and decorations will all need to be stocked by retailers. With an abundance of demand, goods need to arrive on time to avoid shortages and missed opportunity for profits in retail. 

Meeting Inventory Demands Through Capacity 

The most important and often the most challenging problem in fulfillment is last-mile delivery. If disaster is going to strike with a carrier, the largest impact this can have is during the transfer from distribution center to storefront. Distribution centers cannot order perishable items too far in advance.  However, if an inbound load is late to the distribution center, stores have the option to order other items from their distribution inventory while still receiving their in demand non-perishables. With interruptions in last-mile delivery, consumables may not reach the shelves in time for the big game surge in purchasing. Retailers do not like losing profits and market share.  

Carriers want to focus on accurate projections in order to make best-fit decisions between FTL and LTL. FTL options are enticing due to their lower spot rates, however LTLs can have a significant cost-benefit advantage when expediting a load is the priority. Unfortunately, carriers can lose the gamble with FTL.  When shippers are in a crunch for time and need to get a load sent out, even if it’s a partial, they may end up paying FTL rates instead of LTL rates, which tend to be decidedly cheaper for the volume of freight being shipped. 

Luckily, resources like visibility and real-time notifications mean that making choices for a reliable supply chain don’t have to feel like betting the farm.

Since retailers are not likely to forget the bad taste in their mouths left by coming up short during a high sales annual event, it may benefit freighters to make the safe wager on last-mile delivery by booking LTL. Luckily, resources like visibility and real-time notifications mean that making choices for a reliable supply chain don’t have to feel like betting the farm. With transparency through technology from BlueGrace, you can take a move out of the NFL’s own Frank Supovitz’s handbook and be prepared for anything this Super Bowl Sunday. 

Do you have questions about your LTL or FTL? Are you curious if you might need help optimizing either for them for your “big game”? Contact our logistics experts at BlueGrace Logistics today and let’s talk more.

How Can A 3PL Help My Organization Grow?

Now, more than ever before, businesses are being tested. Between the political climate of a tense presidential election year, the global pandemic, and natural disasters, many organizations have been finding it difficult to keep their doors open, let alone grow. However, there are a few paths forward that can lead to a company’s growth and financial well-being. One of those paths that is being chosen more frequently by companies in various industries is to partner with a third-party logistics provider. 3PLs offer a vast wealth of knowledge and experience in improving and streamlining operations and bringing new technology to the table. Combined, 3PLs have the potential to help companies overcome the logistics obstacles that block the way to overall growth.

Supply chain operations are often ignored so long as they’re operating within industry standards and customers remain relatively happy with the service these operations provide.

Business growth is often hindered by the limitations of supply chains and the silo of logistics operations. Supply chain operations are often ignored so long as they’re operating within industry standards and customers remain relatively happy with the service these operations provide. The issue with this is that there is little room amongst the status quo for improvement and growth, or to unlock potential savings. Logistics operations, even logistics operations done well, sometimes lack a view of the ‘big picture’, partially because of the way that these operations are often pushed into their own box to maintain operations.

Oftentimes, supply chains are viewed as a separate entity from the rest of the organization. However, the supply chain and the logistics and transportation operations that make it function directly relate to the overall success of the business. When the C-Suite looks to the supply chain as a partner in growth, collaborates to find solutions that both cut costs and creates opportunities for expansion, they may find that partnerships with third-party logistics providers are a viable option to achieve the desired growth.

To help shippers better understand how 3PLs can help their organization grow, we’ve put together a comprehensive white paper that breaks down the various assets a 3PL can bring to the table.

3PLs and Technology

New technology is always something of a double-edged sword for companies. On the one hand, new technology is costly and the setup can be disruptive to business flow and production. On the other hand, however, new technology is often the key to growth and higher levels of efficiency and customer service.

As 3PLs often develop their own proprietary software systems, there is none more qualified to help get it integrated into your current systems to augment and strengthen what you’re currently using.

Third-party logistics providers offer a huge advantage in terms of technology. Not only is the logistics solution tried and tested, but it often comes at a lower cost than buying a new ERP outright. As 3PLs often develop their own proprietary software systems, there is none more qualified to help get it integrated into your current systems to augment and strengthen what you’re currently using.

For example, we’ve discussed how integrating a TMS into your ERP system can be highly beneficial to your operations and help to streamline shipments while increasing overall visibility. This is just one of the many benefits that come from the technological aspect of working with a 3PL.

Is your organization looking for new technological solutions to manage your supply chain but you’re not sure which direction to take or is balking at the sticker price of a new, off the rack, software system?

3PLs can Improve Your Processes

Having an efficient process to the way you do business affects many different aspects of your overall success. Not only does your process determine and control costs, but it also affects the overall satisfaction of your customers.

3PLs are experts in logistics, that is their sole purpose. Their business model revolves around the concept of streamlining and simplifying their customer’s operations so that they, the customers, can be more efficient.

3PLs are experts in logistics, that is their sole purpose. Their business model revolves around the concept of streamlining and simplifying their customer’s operations so that they, the customers, can be more efficient. A third-party logistics provider can help improve processes in two ways: first, by reviewing current processes and making suggestions for changes that will lead to smoother-run operations, and second, by actually taking on those processes through outsourcing.

  • Process Improvements: 3PLs have seen the inner workings of countless organizations, identified potential improvements, and helped those organizations effect changes to improve efficiency and cut costs.
  • Outsourcing to 3PLs: 3PLs employ a host of veritable experts in these specific processes, which makes processes more efficient, more effective, more flexible depending on changing needs and less expensive overall.

Is your organization operating at peak efficiency? If not, does it have the capabilities in-house to identify and correct inefficiencies?

3PLs can Help Audit Your Operation

3PLs often offer supply chain audits, and with their deep industry knowledge, they frequently have great insights into improving operations and strategizing for and executing meaningful growth. The 3PL’s knowledge of industry best practices combined with their tendency to stay at the cutting edge of the industry make them extremely qualified to hand down advice. When these audits are performed on a regular basis, say bi-annually, logistics practices can be assessed by a qualified, unbiased third party. These assessments can help root out second nature practices at the company and are therefore not questioned but aren’t truly serving their purpose in the most efficient way possible.

Does your organization have an in-house auditing process that is geared to making necessary operational changes?

Want to Learn More?

Of course, this merely scratches the surface of what a third-party logistics provider can bring to the table. If you’re looking to make your organization grow, regardless of what events the rest of the world has in store, a 3PL can help you reach your goal. Want to know more about what a 3PL can do for you or answer the above questions? Download our whitepaper today to learn more.

What the Freight Industry Might Learn from COVID-19

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

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

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

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

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

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

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

Practical Policy Changes

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

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

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

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

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

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

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

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

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

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

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

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

Digitalization Is Ushering Visibility Into Supply Chains

The North American trucking industry is extremely fragmented, as over 90 percent of all fleets own six trucks or fewer. This fragmentation, aside from inhibiting technology incursion, has impeded visibility and transparency in freight movement.

The opacity in operations impacts stakeholders across the trucking value chain. Oftentimes, this lack of visibility or transparency within the supply chain is due to outmoded and dated systems of communication.

The opacity in operations impacts stakeholders across the trucking value chain. Oftentimes, this lack of visibility or transparency within the supply chain is due to outmoded and dated systems of communication. Not only do these systems impede efficiency, but they also result in a number of missed opportunities for shippers, brokers, and carriers alike.

The adoption of digitalization within the trucking industry has spiked in recent years. A lot of it has to do with the rise of e-commerce and its associated ‘Amazon effect,’ which has created the need for expedited supply chains, especially the last-mile. This necessitated that trucking operations shed off inefficiencies especially with respect to visibility, which in turn led to a rise in innovations and the digitalization of the industry.

The Data Differentiator to Visibility

Stakeholders within the freight industry, be it fleets or traditional brokerages, suffer from siloed operations that do not interact with other functions within the same organization. This leads to data streams being trapped within workflows, thereby reducing operational efficiency and visibility.

Companies should phase out paper documentation and adopt digitalization in order to usher in visibility, and reduce complexities in gathering and processing documents. Aside from increasing efficiencies, this will also reduce material consumption, helping companies reach their sustainability goals.

With data streams being streamlined, stakeholders can leverage them via data analytics to gain insights into operations.

With data streams being streamlined, stakeholders can leverage them via data analytics to gain insights into operations. For instance, data analytics helps brokerages prime their operations to be more proactive to market volatility as opposed to only remaining reactive to change. This is particularly crucial in the age of e-commerce, where logistics businesses are expected to be malleable to continually evolving consumer expectations. To help meet expectations, leading companies are (or should be) taking advantage of linking their existing ERP systems to a TMS system.

For fleets, digitalization enables them to have visibility over driver behavior and freight movement. Aside from letting fleets provide an accurate estimated time of arrival (ETA), better visibility allows them to come up with flexible delivery models and faster shipping options.

On-demand fulfillment is a significant differentiator in the last-mile delivery segment. For this, businesses must understand customer behavior and buying characteristics – possible only by analyzing previous orders and having cognizance of market demand.

The Efficiency Perspective of the Freight Hauling Equation

Digitalization enables businesses to create greater visibility and increase cumulative efficiency across supply chains. Automation of repetitive manual tasks at the back office helps channelize worker hours in more productive and value-added endeavors. End customers gain access to shipping information, including real-time freight location, which improves overall customer service levels. Data streams are now stored in the cloud, making it easier to recall and share information between stakeholders in the value chain.

With technology like 5G coming up within the industry, high latency issues via the LTE network transmission will also be solved. Latency is the time it takes for data to travel from the place of origin (like a truck cab) to the destination – which is the cloud. High latency is a problem for data analytics, as it results in insights that are not, in essence, real-time. Bad cellular signals, which are commonplace when trucks haul through the country, result in high latency.

With 5G potentially becoming mainstream in a few years, the latency value can be expected to reduce. Stakeholders would then be able to access more ‘real-time’ insights, helping to further improve efficiencies.

Digitalization has helped businesses to eliminate cumbersome manual processes that have been an industry’s staple.

Digitalization has helped businesses to eliminate cumbersome manual processes that have been an industry’s staple. Data levels the playing field for shippers and carriers, whatever be their size of operations. With visibility being ubiquitous across the industry, the overall market can learn to handle volatility better, especially in the context of economic recession or a black swan event like the COVID-19 pandemic.

Of course, adopting new technologies is a costly and time-consuming endeavor, which discourages many companies from adopting newer innovations. This is where digital freight management, specifically third-party logistics providers (3PLs), shine. Partnering with a 3PL allows companies to reap the benefits of these digitized systems without the heavy investment cost of overhauling legacy systems.

Finalizing Your 2021 Transportation Budget – The New Normal

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

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

Freight Budgeting then vs. now

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

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

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

Predictive Analytics

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

Streamlining the freight budget process

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

Operational KPIs

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

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

Finalizing Your 2021 Freight Budget Webinar October 21

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

Digitalization In Trucking

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

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

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

Elements of Digitalization in Trucking

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

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

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

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

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

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

Benefits of Digitalization in Trucking

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

1. Optimum utilization

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

2. Enhanced integration

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

3. Enhanced efficiency

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

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

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

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

Experts Warn 2020 will be The Worst Hurricane Season In Years: Is Your Company Ready to Weather the Storm?

Every company has contingency plans for when things don’t go as expected. Whether it’s a backup supplier in the case of a material shortage; or a different carrier for when capacity gets tight. However, when the weather picks up, is your supply chain ready to weather the storm?

Major weather events pose a significant disruption for supply chains, and hurricanes are no exception.

Major weather events pose a significant disruption for supply chains, and hurricanes are no exception. High winds and torrential rains can make travel all but impossible. Flash flooding and road damage can make typical routes impassible. After the more severe storms, much of the carrier capacity is consumed by rebuilding and relief efforts. All in all, if you don’t have a solid plan, you could find your supply chain washed out.

To that end, we want to make sure that your supply chain is prepared. We believe that there is no such thing as being over-prepared, especially when it comes to hurricane season. We’ve created our 2020 Hurricane Preparedness Guide to help you make sure your supply chain is protected. But first, take a look at what’s expected this hurricane season.

2020 is set to be a Record-Breaking Year for Hurricanes

With the way the year has gone so far, is it really any surprise that 2020 is already breaking records for hurricanes? So far, the Atlantic Hurricane season is already in full swing, well ahead of the peak month which is typically September. Hurricane Isaias which caused significant damage on the east coast was the earliest ninth named storm on record. Now, the National Oceanic and Atmospheric Administration (NOAA) is predicting that even more records might be broken in the upcoming months with at least 10 more named storms.

The updated outlook released Thursday calls for a total of 19 to 25 named storms

“The updated outlook released Thursday calls for a total of 19 to 25 named storms (winds of 39 mph or greater), of which 7 to 11 are expected to become hurricanes (winds of 74 mph or greater), including three to six that could become major hurricanes (winds of 111 mph or greater). This update covers the entire hurricane season, which ends Nov. 30, and therefore includes the nine named storms to date,” reads a recent Washington Post article.

According to the National Weather Service Director, Louis Uccellini, 95 percent of hurricanes and major hurricanes, form between August and October. “In over two decades of issuing storm warnings and forecasts, NOAA has never predicted that as many as 25 named storms would form in a single season,” says the Post.

The Long List isn’t Quite Long Enough

Interestingly enough, the list of names that are assigned to storms is predetermined ahead of time by the World Meteorological Organization. As it stands, there are only 21 names left on the Atlantic list. Afterward, forecasters will have to resort to using characters from the Greek alphabet. This has happened only one other time, back in 2005, which was the most active hurricane season on record. 

NOAA’s Initial Predictions Might have been Too Optimistic

The initial prediction from NOAA, which was released in May, called for a 60 percent likelihood for an above-average level of hurricane activity. The prediction called for a 70 percent chance for 13 to 19 named storms, with six to 10 having the potential to become hurricanes. Of the predicted hurricanes, three to six could become major hurricanes with a Category 3 rating or higher.

The updated forecast now places the chance for an above-average season at 85 percent, 24 named storms, which include 12 total hurricanes, five of which will be major.

The season has the potential to be one of the busiest on record, NOAA said.

Battening Down the Hatches

A busy hurricane season in of itself has the potential to be devastating to businesses along the coast. Supply chains can very easily become disrupted as carriers are pulled away to haul for humanitarian aid for the places most heavily affected. Couple in the fact that storms will continue to hit in quick succession, leaving little time for roadways and other necessary infrastructure to be repaired and you have the perfect recipe for disaster.

For companies that manage extensive supply chains along the Atlantic coast, now is the time to begin preparing for the rough season ahead. Fortunately, we here at BlueGrace have a lot of first-hand experiences with Hurricanes, being based out of Tampa Florida. Working with shippers and carriers alike, we have our 2020 Hurricane Preparedness Guide down to a science. Don’t get caught unprepared, download our white paper today!

11.84 Billion Tons Of Freight Moved And Other Trucking Trends

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

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

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

Understanding the Relationship between Spot Rates and Contract Rates

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

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

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

Shippers Should Start Considering Contracts

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

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

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

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

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

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

Want to Learn More?

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

Understanding The Need For A Stronger Supply Chain

As much as we’d like to believe that our supply chains are both quick enough to react to major disruption and flexible enough to maneuver around major obstacles, the global pandemic has taught us that often isn’t the case. It is the single major weakness of most supply chains, an inability to react to a sudden and massive large-scale disruption, which can include pandemics (such as Covid-19) massive weather events, and a myriad of other setbacks. This lack of resiliency is most notable in supply chains for life sciences, health care, and food industries in particular.

The Chinese market is massive, for one thing, and most companies can’t afford to withdraw completely, otherwise, they might lose any competitive edge they might have had.

After COVID broke loose around the world, the current administration issued a call for companies that have offshored their production to Asia, (China, in particular) to bring it back stateside. However, for many companies, this proves to be challenging and counterproductive. The Chinese market is massive, for one thing, and most companies can’t afford to withdraw completely, otherwise, they might lose any competitive edge they might have had. Additionally, because the Chinese market is now either the dominant, if not sole source, for thousands of different items, reducing the dependence on those goods will take a significant amount of both time and money.

Reshoring wouldn’t necessarily mean resiliency either. The meat shortage in the United States is a perfect example of this. The industry’s supply chain is entirely domestic. In an attempt to reduce costs, many companies focused on consolidating manufacturing activities, which means a smaller number of slaughter and processing plants are now producing much of the beef and pork products consumed in the United States. This created a vulnerability as shutting down one plant, even for a few weeks, creates a major impact throughout the country. Farmers, who get paid to raise the feedstock, are now stuck with taking a potentially devastating loss on their products while the rest of the country faces months of meat shortages.

Remap instead of Retreat

Instead of retreating outright from the forign market, the best approach to building resilience into the supply chain is by conducting an internal audit. More specifically it’s the process of mapping out the layers of suppliers, manufacturing plants, distributors, and the other various elements of the logistics network and then implementing a stress test to evaluate the ability to recover from the disruption of any of the various links. Understanding where various bottlenecks will occur means being able to create mitigation strategies which can include increasing manufacturing capabilities, adding more suppliers to the roster, or building up buffer stock.

The added advantage to mapping and stress testing the supply chain is that companies using this method can find unexpected weaknesses or high risks throughout the organization. The more complex the produced good is, the higher the risk of utter disruption.

“Work that one of us (David) did with the Ford Motor Company found unexpected high risk associated with small suppliers, including many local suppliers. One part it identified that fell into this category was a low-cost sensor widely used in its vehicles: If the supply of it were disrupted, the carmaker would need to shut down its manufacturing operations. Because the total amount spent on this item was low, Ford’s procurement group had not paid much attention to it,” reads a recent article from HBR.

Stress Testing on a Policy Level

Essential industries, such as pharmaceuticals and health care, need to have a level of government involvement to ensure that supply chains are resilient enough to continue operating, even during the worst-case scenario. Consider the mask and hospital supply shortage when the pandemic first started to hit the United States. While panic buying created part of the problem, the supply chain itself faltered and eventually failed under the crushing demand.

If such a test can be conducted for banks, it can similarly be conducted for all life-critical supply chains.

There is a precedent for such involvement, however. Back in 2008, during the recession, the U.S. government and the European Union conducted a stress test for banks to guarantee that the major financial institutions that prop up the entire financial system, could survive a major crisis. If such a test can be conducted for banks, it can similarly be conducted for all life-critical supply chains.

The Long Road to Resiliency

Creating supply chain resilience for essential products and services here in the United States could very well require domestic manufacturing. But that’s neither an easy nor cheap fix. Take the pharmaceutical industry, for example. Of the drugs sold in Europe, more than 80% of the required chemical components are manufactured in China and India. Because chemical production is a significant environmental hazard, it would require the development of clean technology and manufacturing processes to create a domestic supply chain. This process could take upwards of 10 years and would require a hefty financial investment. Could it be done? Absolutely. But not easy, and not cheap.

However, until companies have a full comprehension of the vulnerabilities throughout their supply chain, these kinds of decisions can’t be made. The pandemic has created an excellent opportunity and, perhaps more importantly, a motive to put in the necessary time, energy, and resources. Only then can they protect their supply chain from a potential devastating disruption that may be lurking on the horizon.

Do you have supply chain questions that you need answered? Do you need help bolstering your current supply chain to handle these new and disruptive global situations? Feel free to contact one of our logistics experts today and lets talk more about it today.

Detention and Dwell Times: The Menaces of Supply Chain Efficiency

Prolonged dwell times have been an age-old inefficiency that the trucking industry has been trying to curb. Longer dwell times affect the drivers, carriers and shippers alike. An estimated detention time or dwell time can cost trucking companies $3 billion per year as per the Federal Motor Carrier Safety Administration.

The total time spent at a facility by a driver is called dwell time while detention is the gap between the allocated time to start loading/unloading and the actual time of loading/unloading. Longer detention at customers’ premises has largely impacted drivers’ available hours-of-service. Ideally, shippers and receivers are allowed a 2-hour window to load or unload a truck. Any time spent outside the allotted time calls for detention charges. Detention is thus used to offset the cost of a truck being detained at a shipper or receiver’s premises.

Dwell time in unprecedented times – A challenge

The month of March saw an unprecedented rise in panic-buying, which resulted in a tremendous spike in demand. The truckers continued to ply on the highways, making essentials available throughout regions. With increased demand, came the perils of heightened dwell times and detention times. The added safety protocols, social distancing, precautionary SOPs to be followed at the shipper and consignee facilities and the shortage of manpower had considerably impacted the driver detention times. On the other hand, transit times may have improved, owing to less traffic congestion during the lockdown period.

Improvement in the check-in process, ensuring social distancing, enhancing driver safety and the use of technology to manage appointments and improve collaboration between all parties have been the key drivers of change.

Improvement in the check-in process, ensuring social distancing, enhancing driver safety and the use of technology to manage appointments and improve collaboration between all parties have been the key drivers of change. While the world adapts to the new normal in supply chains, it is of utmost importance that more sustainable solutions are innovated and implemented.

Detention: Causes and Impact

Inefficiencies at the facility such as the lack of manpower to load and unload consignments, the unwillingness of the shippers or consignors to invest in manpower to accommodate increased freight movement and the inability at the individual level are the main reasons for increased detention durations. Additionally, mismanagement of appointment times such as goods not being ready for dispatch while the vehicle arrives at the premises lead to unwanted delays. Another common reason is the overbooking of appointments – when more trucks are booked than what the loading location can handle. All of the above contribute to increased detention times, which in turn amounts to losses for truck drivers. On average, truck drivers spend two and a half hours waiting at the shipper or receiver premises to load or unload goods. These hours are not considered as working hours, thus, leaving them unpaid.

We need to understand that most of the drivers are paid on a per-mile basis, therefore, every moment lost in delays is a direct loss of income for drivers.

We need to understand that most of the drivers are paid on a per-mile basis, therefore, every moment lost in delays is a direct loss of income for drivers. On the other hand, for LTL carriers, waiting at a certain facility for longer durations can mean skipping the delivery altogether.

As per a  2018 report published by the Department of Transportation Officer of the Inspector General (OIG) that sought to understand the correlation between driver detention times, crash risks and costs incurred, it was found that detention time may impact annual earnings for truck drivers by $1,281 to $1,534 per year in the negative. Shippers of essential goods have experienced longer detention times at facilities lately. For example, the recent crisis of toilet paper around the nation had trucks lining up at facilities for hours before being loaded with goods. Detention fees paid by shippers to carriers can only offset the loss up to an extent but that money fails to cover the driver wages lost by not driving. Primarily, the carrier efficiency and a driver’s payable hours-of-service are at stake, but the effects of longer detention times invariably trickle down to every stakeholder across the supply chain.

Is there a long term solution – that can increase efficiency, while ensuring optimum asset utilization and prioritizing driver safety in times of crisis?

Longer dwell times and increased detention times are not a byproduct of the current economic crisis alone. They have lingered in the industry for quite some time now and only technology can help provide long term solutions to enhance supply chain visibility. In a recent statement by Collins White, the president of Alabama Motor Express, he stated, “It has become progressively worse since 2018. We have bought software that automatically tracks when the truck goes over the allotted two hours of dwell time and automatically bills the customer.” Better technology that tracks the movement of trucks with a precise estimation of time spent at shipper or receiver facilities will help us give a clearer picture of the spots where the detention is taking place. Identifying these spots will further enable a better understanding of bottlenecks, allow correct allocation of resources and change practices to streamline the flow wherever necessary.

On the other hand, the tried and tested drop-trailer business model may have worked for some quite well. In the drop trailer method, a driver leaves a trailer at the facility for a stipulated time period until another vehicle picks it up. This doesn’t time-bound the shippers and they can load trailers at their convenience. Given the current situation of restricted labor availability, this method comes as an interim respite but cannot be considered as an all-round solution to the problem.

Investing in data-enabled technology is necessary to be able to make any supply chain more robust and induce complete visibility.

Investing in data-enabled technology is necessary to be able to make any supply chain more robust and induce complete visibility. Location Intelligence (LI) is set to make location data more accessible to participants in a supply chain. The use of LI is a promising trend as it uses geographical relationships to decipher complex data that can provide fleets with critical insights of accurate detention time calculations. It can provide accurate information such as time of arrival and departure of a truck at a site. They can also monitor a driver’s fuel stop time or break times which can further help enhance asset utilization. Insights into trends pertaining to a particular time of a day or week can translate to better prediction of transit times and estimated time of deliveries. All of these are elemental in aiding data-enabled business decisions through optimized route planning with reduced dwell times that boost overall productivity and enhance supply chain performance.

As the nation grapples with the ongoing economic crisis, a sudden surge in demand followed by flattening of the curve, the unpredictable rise of freight volumes and its correlation with increasing or decreasing dwell and detention times remain a cause of concern. What must not be forgotten is that these problems of detention and dwell times pose the opportunity for a permanent change towards creating a symbiotic relationship between carriers and shippers. There is an immense potential for cost savings and enhanced operational efficiency that will invariably impact the driver community’s way of life on the road.

Is Your Supply Chain Ready For Weather Disruptions?

To a large extent, Supply Chain and uncertainty go hand in hand. Driver delays, transportation failure, strikes, hike in fuel prices, carrier capacity shortage, vendor hold-ups, thefts, and fires at warehouses are all common issues in the supply chain ecosystem. Most supply chain leaders are not only aware of them but also have alternate plans or solutions ready to tackle these issues as and when they arise.

However as supply chains become increasingly global in nature, businesses not only have to contend with minor uncertainties but also have to manage larger global disruptions that may threaten their very existence. These disruptions are like black swan events which no one can forecast or plan for in advance. They arrive on the horizon suddenly and upset the status quo, often requiring a rearrangement of how the business functions and manages its supply chain in the future.

What Global Disruptions does the Supply Chain need to be aware of?

Globalization has added a layer of complexity to business operations. Now businesses have to keep an eye on what’s happening around the world and be able to identify possible threats to their business in all the countries that they operate in or source raw materials from.

Natural Disasters:

Natural disasters are the most common global disruptors. Wildfires, earthquakes, hurricanes, storms, and floods can interrupt regular operations for a long time in the country that they happen in. It can take years to rebuild factories and get them operating at optimum capacity. For example, according to reports, the 2011 earthquake and Tsunami in Japan had caused grave damage to infrastructure and manufacturing facilities in the country. Given the wide scope of Japanese companies’ operations, the impact of the earthquake and Tsunami was felt by their business partners around the world.

Political and Trade Relations:

Cordial political and trade relations amongst the governments of the originating country and the nations that the organization wants to do business are a must for smooth operations. If there’s any change in the relationship either political or trade, it can become difficult for the business to carry out its business activities without disruptions. A recent case in point is the ongoing trade war between China and the US. This has not only soured relations between the two nations but has also created a tumultuous situation for other nations involved in international trade with the two countries.

Similarly, an unfavorable change in foreign trade policies – without the threat of a trade war – due to political fallout or change in the growth strategy can make it hard for foreign businesses to sustain long term in the country.

Economic Factors:

Another factor that can derail supply chains across the globe is an economic recession. If any of the major economies of the world like the US, China, Germany, India, France, and the UK experience an economic downturn it is bound to impact the nations that it does business with. A major economic failure can also lead to a global recession like the 2008 global recession which led to many businesses closing shop or limiting their reach to certain geographies only.

Cyber Threats:

Since digitalization and technology have become an integral part of the supply chain, another threat that can cause great damage to not only the business but also customers are cyber attacks. These attacks on technology and systems can impact a business’s reliability, trustworthiness, and endanger the trade and even personal data.

Unlike the regular supply chain disturbances, these threats are unforeseeable and due to their unpredictable nature, not easily manageable. Each event – even if it is of the same kind – requires a specialized and unique response.

The better prepared a supply chain is to respond to a sudden event, the more likelihood of it overcoming the challenge and sustaining its operations. Hence, now more than ever it has become critical for supply chains across the globe to assess themselves against invisible threats and prepare to deal with black swan events as and when they occur.

What can you do to make your supply chain ready to weather disruptions?

While there is no fixed roadmap on how to deal with these kinds of threats, there are a few steps that businesses can take to safeguard their interests and bounce back with minimum possible damage.

  1. Imagine the unimaginable: Organizations now need to think ahead and plan for events that may or may not happen. It is critical to simulate scenarios that can disrupt your business and find solutions to overcome them before these scenarios play out in the real world. Create a contingency plan for what-ifs: for example – what would you do if an earthquake struck your manufacturing facility or if one of your vendors had to temporarily close down business because his unit was in the eye of the storm? Do you have an alternative option? If not, then that’s where you start your planning.
  1. Find substitute suppliers: We have often highlighted the importance of having multiple trusted vendors on board. There’s no better time than now to reiterate this point. Find vendors in different regions when the business and the world is functioning in normal conditions. Try out a few transactions with them and work on building a relationship with them. Access to vendors in different regions can help keep the business running  even if there’s some disturbance in one region or country. This will enable you to keep your supply chain functioning.
  1. Build alternative service providers and business partners: It’s not just the suppliers that you need to keep your supply chain up and running. Along with a roaster of trusted suppliers you also need to build a repository of other service providers and business partners such as transporters, shipping lines, warehousing facilities in all the regions where your business operates. This is critical because if you have to shift your business from one sector to another due to some contingency, you will know who to hire and partner with.
  1. Identify the pain points of your supply chain: No business or supply chain is perfect. Some have a strong inventory management system but a poor relation with transporters. Others have a rigorous forecasting procedure in place but struggle with people management or may have customer issues. Any of these weak points have the capability to be further aggravated during an emergency. Hence, it is critical to know the pain points of your supply chain and work on finding viable solutions.
  1. Make data security a priority: In the current scenario where technology is a part of every function and system within an organization, data security has become critical. It’s not just your business data that is at risk, but also the information that your customers and vendors share while doing business with you that is in danger. Even a small breach of data can put your and your customers or business partners at risk. So make technology and systems audit an integral part of your organization.
  1. Learn from past disruptions: Maybe the earthquake in Japan did not impact your business or the hurricane Katrina did not affect your region, but it did cause damage to other businesses and regions. Observe what they did to get their business and supply chain up and running. Find out what were the difficulties they faced, learn from them, and find solutions for such situations that are viable for your business.
  1. Analyze, Analyse, and Analyse: We can’t emphasize the importance of carrying on an ongoing analysis of your supply chain. This is the only way where you can not only find out the risk to your business, but also identify threats and challenges, and work on solutions to mitigate them before they become unmanageable.

Will the analysis help in mitigating risks from black swan events? If you keep these threats in mind while conducting analysis, then it will help build awareness among your team and urge them to work on finding viable solutions.

If you need any assistance in starting your supply chain analysis journey, then get in touch with our team of experts today!

Truckload Freight Contracts: Understanding Contract & Spot Rates

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

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

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

Driving Forces of Change in Contract and Spot Rate Markets

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

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

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

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

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

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

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

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

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

How to Better Understand Contract and Spot Rates

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

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

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

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

Outside-In: The Future of Supply Chain Planning

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

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

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

What is the Outside-in Mindset? 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Diversification Is The Lifeblood Of Your Supply Chain

In the current economic scenario where businesses are shutting shops with alarming regularity, it has become necessary for organizations to diversify their supply chain. Given the importance of the subject, we hosted a webinar on the topic – From Chips to Dips in Service? Supply Chain Impact of Diversifying Chris Kupillas, VP Sales, at BlueGrace Logistics discussed the topic. They talked about why it was crucial for businesses to bring in variety in their supply chain, what factors were needed to be considered and the challenges that businesses might face in the process. 

Below, taking reference from the article, we discuss why this is good for the business and how it can benefit them and other stakeholders in the ecosystem. 

How does a diversified supply chain help the business? 


Source: BlueGrace Logistics Webinar: From Chips to Dips in Service? Supply Chain Impact of Diversifying.

As the quote from Greg Foran suggests, diversifying the supply chain helps businesses stay relevant. There are multiple ways in which businesses can do this. They can offer variants in their current product offering, introduce new products, introduce the business to different regions within their country or go global.    

Variants and new products will allow businesses to retain customers by enabling them to cater to their ever-changing needs and demands. And entering new regions or countries will widen their customer base. A business with more products and/or serving multiple regions or countries tends to have a better chance at survival in times of economic recessions or downturns or political strife. 

Is diversification only for the demand side of the supply chain? 

No. For a business to be prepared for different cycles of the market, it is also important to introduce options on the supply side of the business. This means identifying new sources for raw materials, spare parts, and alternative manufacturers where they can outsource the manufacturing of their products if required. They also need to identify service providers like transporters, warehouse operators and 3PL service providers who can work with them when needed. Having these alternatives on standby or in a working relationship will ensure that in the event the regular service provider cannot fulfill the business requirement, the business will not suffer. 

Diversification is great for other stakeholders in the ecosystem 

A manufacturer is just one of the beneficiaries of a diversified supply chain. Other stakeholders in the business ecosystem also benefit from it. For example wholesalers, retailers, e-commerce websites, also benefit in the form of more saleable goods to offer their customers. For them, the wider the range of products, the higher the probability of making a sale. This means more business for them which ultimately generates more business for the manufacturer. 

Similarly, it provides transporters and other logistical service providers with more business and regular work opportunities. Take, for example, a small transporter who is working with a company that produces only seasonal goods – let’s say woolen garments. The transporter will only get work from this organization until the woolen garments season lasts. After that, it may have to search for another client until the season rolls back again. Now, if the same company started to also produce summer wear, the transporter will not have to engage another client if it doesn’t need to. It will have year-round work from one source. 

That’s not all. Diversification also empowers customers. It gives them multiple options to choose from. Since diversification also creates competition, it provides customers not only with quality options but also competitively priced products, making sure businesses work on creating better products within a set budget. 

What are the benefits of diversification for the supply chain? 

Now that we know why diversification is crucial for businesses, let’s look at why it is the lifeblood of it benefits the supply chain of your business. 

  1. Risk mitigation: As mentioned earlier, a diverse supply chain helps businesses sustain in less-than-ideal circumstances. It provides alternatives to continue the business even if the demand for a product goes down, or a supplier discontinues service or there is a disruption – political, nature-based, social, economic or cultural. For example, take the case of the coronavirus outbreak in China. If companies selling their products in China do not have a presence in other markets, it will adversely impact their business. Or if a company is only sourcing from China then it’s supply of material or products will be affected which would again create an untenable situation for their business. 
  2. More flexibility: A diverse supply chain provides opportunities to optimize available supply options with the demand side of the business. It gives the opportunity for businesses to divert their manpower, funds, and efforts to products or regions that are doing well.  If the business operates in a single product or serves a single market, this flexibility is not available.
  3. Negotiation power: Cost is an important factor in supply chain. A supply chain that can control its costs has a higher opportunity to improve its bottom line and earn profits. A supply chain that works with multiple suppliers and service providers has more room to negotiate better rates and service contracts as compared to the one that works with a single source or service provider. 
  4. Promotes out of the box thinking: To diversify one has to continuously be on the lookout for new opportunities to differentiate. It can be for a new product mix, design, packaging, supply, or go-to-market strategies. This helps employees develop curiosity, find creative solutions to operational problems and creates a culture of innovation in the organization.

This is just the tip of the iceberg of supply chain diversification. To know more about the topic listen to our webinar: From Chips to Dips in Service? Supply Chain Impact of Diversifying, hosted by Chris Kupillas, VP Sales where they talk about the importance and the challenges of diversifying the supply chain. 

To know how you can improve your supply chain and transportation to keep up with your customers demands, get in touch with our team today! 

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!