Going The Extra Mile | Global Trade Magazine
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  December 16th, 2015 | Written by

Going The Extra Mile

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  • How #3PLs Are Adding Value With 21st Century Tools

For today’s 3PLs, staying up to date is all about combining data with technology—even before getting goods on the path to their destination—as regulatory demands seek more data sooner, according officials with logistics companies. And they are dealing with a wider variety of products that needs special handling and must meet specific requirements.

“You have the breadth of products increasing, the breadth of [required] temperatures increasing and the breadth of services increasing,” says Mark Richards, vice president of Orange, California-based Associated Warehouses, Inc.

“I’m seeing more demand for refrigeration for shelf-life extension,” notes Carl Neverman, regional vice president in the San Bernardino, California, office of ODW Logistics, Inc.

More demands are also being placed on the handling of chemical and hazardous materials, according to Michael Ford, chief compliance officer at Philadelphia-based BDP International. Changes involving requirements and regulations are having the greatest impact, he says.

“Companies over the years have done a very good job at the physical movement of goods, getting them to airports and seaports,” Ford points out. “But they maybe haven’t spent enough time on the data that runs with those orders. The challenge is running your data faster than you can run your physical cargo. “

There is information you must have to get goods out of the country but just as important is the information you need to quickly get those goods into your destination country, Ford says. “Can you tell me now—not when the goods arrive—what I should know about the documents and registration needed for clearing those goods in through that country?”

Ford says U.S. Customs also wants to improve the data it receives from carriers and obtain it sooner, which puts pressure on exporters.

Under one new program aimed at improving risk assessment, Air Cargo Advanced Screening (ACAS), which BDP has joined, U.S. Customs is “asking for the same data they’ve always asked for but they’re asking for it as far in advance as you can get it [to them],” Ford says. In an effort to reduce paper consumption, Customs is also “currently testing electronic submission of manifest from carriers, freight forwarders and service providers that BDP is participating in and will soon submit that data electronically to Customs,” adds Ford, who notes data management must be established now to adapt to new regulations as they occur.

Data is even being used to find the correct carriers, says Douglas R. Waggoner, chairman and CEO of Chicago-based Echo Global Logistics, which has “massive amounts of data” on 35,000 carriers that it uses to not only make decisions regarding the best price, but also to best meet the requirements of the goods being transported. The company’s customer portals, he says, allow them to book shipments as well as track the status and location of shipments.
Technology, Waggoner adds, is being used at more and more levels.

“An industry that used to be very low tech and paper intensive is becoming more and more high tech.”

“You’re going to see a much greater need for technology,” predicts Erik Malin, executive vice president of Chicago-based CarrierDirect LLC. “It’s not very different than a lot of the challenges we see in our domestic marketplace regarding asset allocation to different markets.”

Associated Warehouses’ Richards agrees. “Technology is much more important today,” he says, “especially from a connectivity and visibility standpoint. Things are becoming easier to do all the time. EDI [Electronic Data Interchange] has been around for years and people are still using that. But you’re starting to see a ground swell of API [Application Programming Interface] applications. That’s something that really connects systems and makes it even more streamlined and easier to accomplish.”

Neverman from ODW concurs: “If you’re going to be a player in the market today, you’ve got to be using the latest technology.” ODW, he says, uses EDI and Radio Frequency wireless communication as well as web interfaces. “Radio Frequency,” he explains, “is normal in the industry now. It includes accuracy and it eliminates paper, eliminates errors and provides trackability and accountability.”

“There seems to be more regulations,” says Associated Warehouses’ Richards, “and significantly more for hazardous materials than there was a few years ago. It’s the whole notion of keeping products safe through the supply chain.” Food regulation, for example, has become much more stringent, to the point where some 3PLs have employees who do almost nothing but make sure they are in line with changing regulations, he explains.

“What those regulations are for a chemical,” says BDP’s Ford, “are different than those for a food. As you go across different industries, regulations change. If you’re moving dairy or chemical or food products, things are very sensitive out there in the world market.”
That sensitivity is being reflected in the concerns and responses to the huge chemical explosions that tore through the Port of Tianjin in China last August. “The impact of that reaches beyond the China market,” Ford cautions.

He notes that only one month after the Tianjin disaster, “we found out that Saudi [Arabia] is going to issue changes as to how certain hazardous chemicals arrive in their port and will be asking for advanced data. So that country is implementing some changes because of a situation that happened in another part of the world.

“I’m sure other countries are examining their current regulations, policies and procedures. In the management of hazardous materials they’re taking a second and third look for these sensitive materials and making sure they have everything in place. Other countries that have chemicals flowing through them are going to make changes and may make them pretty quickly.”

CarrierDirect’s Malin forecasts major changes in the ways that freight flows across the U.S.

“There are things on the horizon from a regulatory standpoint that are inevitably going to impact the way that freight moves in our nation,” he says, pointing to the proposed approval of twin 33-foot trailers. “That’s going to have some reverberating repercussions,” he maintains.

“There will be a lot of other opportunities in the near future that could have a pretty substantial impact on the way that freight moves in our nation,” he continues, “and in turn that’s going to impact global trade in the United States because shippers will decide where they’re going to move freight differently than they do today.

“One thing I anticipate seeing,” Malin concludes, “is that what is now the normal freight flow is going to change. Because of West Coast port disruptions, the Panama Canal expansion, right shoring, and the investments that are going into the East Coast ports, it’s likely that today’s general standard freight flows are not what they will be in five, 10, 15, 20 years because of how shippers manage the risks in their supply chains.”

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