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What Logistics and Warehouse Businesses Should Learn From Amazon’s Mistakes During the Pandemic

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What Logistics and Warehouse Businesses Should Learn From Amazon’s Mistakes During the Pandemic

Amazon has dominated the COVID-19 news because of its ability to get some medical supplies and the reliance of people on ecommerce to protect them as they shop. It’s been a good time for the company’s financials, with significant increases in sales and secure positioning for its other services.

Unfortunately for Amazon, it was also in the news because of product mishaps, fulfillment concerns, worker illnesses, and poor handling of concerns. What the brand did, and didn’t do, can be a useful guide for smaller warehouse and logistics companies to follow.

The best lessons are from Amazon’s mistakes because few 3PLs and service companies are big enough to survive similar mishaps.

Take care of your partners

Amazon faced a tough situation, just like all of us. We all got some things wrong. The hope is that they won’t turn into long-standing issues. For Amazon, it’s unclear if that’s the case, but the thing with the most significant potential for prolonged harm is how it communicated and worked with its partners.

The biggest misstep from a partner standpoint would be when it announced a halt to accepting shipments from some third-party sellers and gave little guidance on what this meant. Sellers flooded Amazon’s forums to ask questions, and rumors spread just as fast as valid answers. People were upset, scared for their businesses, and frustrated that Amazon might not be a viable marketplace in the future.

While Amazon did eventually move back to allowing all third-party shipments for its FBA program, some harm has been done. Companies are looking at moving to do their own fulfillment — which was rewarded by the Amazon AI at some points during the pandemic — to prevent any future move from Amazon bringing an entire small business to a halt.

Amazon may be trying to tackle some of that relationship harm with efforts like waiving some storage fees or supporting more fulfillment operations. Still, it’s unclear how much harm happened.

Diversify and simplify when you can

An estimated one-third of top Amazon sellers are in China. It is believed to source some of its own products from China, and many of its smaller sellers also get products or drop-ship directly from the region. The spread of the pandemic and closure of factories, as well as shipping issues, then hit Amazon and its sellers quite hard.

Different points at the supply chain all ran out of goods or production capabilities, which started limiting what was available and hurt revenue for everyone involved. Diversifying sources and partners, both in goods and location, could have mitigated some of this risk.

Logistics professionals should look at regional needs and concerns right now. Identify where your product lines could struggle and if there are potential replacements for materials. If you’re a 3PL or providing other warehouse services, consider expanding to multiple locations. This can help you get goods to the end-customer faster as well as protecting fulfillment operations during COVID and similar black swan events.

Safeguarding people is just the minimum

At least seven of Amazon’s employees have died from the coronavirus, and the company has been very unclear about how many others have become ill. There is a new lawsuit by employees around the company’s contact tracing and potential exposure of employees — worth noting that the lawsuit doesn’t seek damages, just an injunction forcing Amazon to follow public health standards.

Throughout the pandemic, Amazon has taken heat for how it has treated its workers. This covered safety equipment and protections, sick leave and sending people home, and how it responded to labor demands. And, much of the anger is deserved.

The pandemic is scary and should be taken seriously. It was Amazon’s responsibility to make its employees feel like they were taken care of and protected.

Hopefully, this has served as a wakeup call for logistics and warehouse businesses. Your people matter, far beyond just what they contribute to the health of your business. There’s also a good chance your business will be judged by how you treat your teams. The world now makes much of this information public, too, if you need that extra layer of fear to get going and ensure your teams are safe, protected, and following the right policies.

Protect long-term customers and your business model

Consumers are spending more money on Amazon and shopping more often, largely due to the pandemic, but they’re not as happy about it. People saying they were either “very” or “extremely” satisfied with Amazon’s service fell from 73% to 64% from June 2019 to now.

The biggest frustrations have been delays in shipping and unavailable products. People view that they’re paying for the service, and its interrupted supply chain is still creating waves. Prime shoppers aren’t able to get the fast, two-day shipping on all purchases, despite being the most lucrative customers. Amazon has actually seen a decline in customer satisfaction over the last five years, according to that same report.

Growing discontent is a threat. Logistics and warehouse businesses don’t have the size of Amazon or the weight to throw around. If your customers aren’t getting what they’re paying for, they’ll move on to another service provider. The same is true if you’re late, damaging goods, or getting orders wrong. There are few real alternatives to Amazon, but there are many alternatives to all of us.

That’s perhaps the most important lesson in all of this for the logistics profession. Amazon needs to learn it before a genuine rival rises to compete, but it’s a good focus for warehouses starting today.

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Jake Rheude is the Director of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.

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BR Williams Trucking Shares Step-by-Step Guide for Shipping & Receiving

When it comes to a seamless and efficient process for managing the movement of goods, BR Williams Trucking knows what it takes. From accurately managing inventory, meeting timelines, and maintaining streamlined communications among workers, the below step-by-step process for shipping and receiving highlights why these steps are critical to supporting the health of the supply chain and developing a competitive advantage.

The Shipping & Receiving Process: A Step-by-Step Guide Infographic
Graphic provided by BR Williams Trucking

CTB Certification: Why it Matters for 3PL

BR Williams is the latest company to receive the Certified Transportation Broker certification from the Transportation Intermediaries Association. The certification is a game changer for 3PL. Three team members from the Alabama-based supply chain company completed the complex course to leverage the competitive advantage it provides. The team of newly certified members consists of TK Bardwell, Kenton Sprayberry, and Chris Nester.

“The CTB course was challenging but rewarding. The material provided insight into many industry topics that I had encountered but never fully understood,” said Kenton Sprayberry.

The CTB certification takes more than just a fee, however, as the Transportation Intermediaries Association describes the home study and exam program as “rigorous.” Those who attempt the exam must pass three sections covering principles for brokerage, traffic management and contract services, as well as legal and regulatory issues in a four-hour, multiple choice testing setting. If the test is failed, candidates have opportunities four times a year to re-take it (tianet).

When a company boasts the CTB Certification, the level of professionalism, industry expertise, and integrity that places them in an advantageous position over competitors and provides customers with assurance needed to develop life-long business relationships, especially for third party logistics companies. As explained by the TIA, holding this certification provides marketing advantages, professional recognition, and career advancement.

To learn more about the program, visit: TIA.net

Source: EIN Presswire, Transportation Intermediaries Association 

Hermes Logistics To Optimize Cargo Capabilities for Dubai World Central

Dubai World Central has decided to implement and designate Hermes Logistics Technologies and their Cloud H5 variant to ensure full optimization of cargo handling for logistics specialist RSA National’s new flagship air cargo terminal, according to a release this week.

Benefits the cargo management system provides stems directly from the joint venture between US-based National and UAE-based RSA Global. The integration of resources enables companies to utilize recommended supply chain solutions for e-commerce, perishables, government, humanitarian, and retail.

“RSA National is very pleased to partner with Hermes to provide a best-in-class platform, through which we can continue to provide seamless solutions to our customers,” said Abhishek Ajay Shah, Co-Founder and CEO of RSA Global. “Our steadfast goal is to steer our operations with utmost visibility and control, and to extend the same facility to our customers.

This Cloud H5 variant “Hermes 5 SaaS” offers high-performance and functionality along with a user interface and user experience all through the cloud-based system. This can also be utilized for messaging compliance, customs management and revenue accounting.

“This will be a full SaaS Hermes 5 implementation and we anticipate a quick implementation of fewer than three months from contract to go-live,” said Hermes Logistics Technologies CEO Yuval Baruch said. “We are particularly proud that RSA National selected Hermes after they identified our close fit to their vision and strategy as well as the high level of Hermes responsiveness.”

For more information, visit: meantime communications

Source: meantime communications

 

Tariff Turbulence

Whether you endorse or decry the strategy, it’s clear that the escalating exchange of tariffs between the U.S. and other countries is not going away anytime soon. The unpredictable roller coaster of tariffs in the last year has led to growing trade tension and shifting trade dynamics with countries like China, Canada, Mexico and Turkey.

For third-party logistics providers, the current state of affairs presents both new complexities and new responsibilities—but also new opportunities. While this trade instability persists, logistics providers’ ability to serve as true counselors and problem-solvers for their clients will be essential.

With new tariffs constantly emerging, third-party logistics professionals must think on their feet. They need to understand and appreciate what products (and in what forms) are subject to tariff taxes, and be willing and able to help their clients identify opportunities to recapture some of those taxes to lessen the impact on the organization’s bottom line. Clients expect their logistics partner to mitigate the extra cost of tariffs through other means, as well, such as localizing products in lesser amounts. Providers need to continue to get smarter and more strategic with respect to production and distribution locations as well.

The following tips will help third-party logistics providers achieve some of those goals, navigating today’s rapidly shifting tariff landscape and mitigating the financial impact of the current trade war. In the process, both clients and providers will be better able to position themselves for continued flexibility and resiliency going forward.

 

Open negotiations

Now is the time for clients to head to the negotiation table with their supply base. We strongly advise our clients to use the current circumstances as a negotiation tactic to try and get as many pricing concessions as possible. Approaching a steel supplier in Canada, for example, and informing them that you can get a better deal here in the U.S. might secure those concessions without requiring costly and complex adjustments to your existing supply chain.

 

Make exceptions

Look closely at any available duty exceptions, and identify opportunities to leverage those exceptions to your clients’ advantage. The high-profile 25 percent tariff on raw steel imports from Canada and the EU might be avoidable if a manufacturer purchases the steel and ships it to an outside processor before bringing it into the U.S. Modest changes to a product or tweaks in the supply chain may make it possible to bypass tariffs that would otherwise be costly or prohibitive.

 

Conduct an audit

In today’s environment, it makes sense to conduct a full-blown audit of the Harmonized Tariff Schedule (HTS) codes that apply duty rates globally to different commodities. Third-party logistics providers need to ensure that, whether the product is steel or potatoes, the HTS codes applied by U.S. Customs are accurate and valid. Within the category of steel alone, for example, there are literally thousands of different HTS codes. Errors are surprisingly (or perhaps, depending on your perspective, unsurprisingly) common.

 

Utilize duty drawback programs

Another strategy is to make efficient use of duty drawback programs, especially with respect to temporary bonds. When material is imported, processed or altered and shipped back to its country of origin within a certain time frame, clients can file through a temporary import bond instead of a their standard continuous import bond. Logistics providers should be diligent about ensuring that all clients with a supply chain that ships freight back are doing so through a temporary bond. If not, they can apply for a duty drawback—essentially a refund from U.S. customs. Duty drawbacks can also recoup funds in the event of mislabeled/mischaracterized material or misfiled documentation. Mistakes are all too easy to make, especially when dealing with massive volumes of  customs import entries.

 

Go direct

Finally, advise clients to create a direct ACH (automated clearing house) account with U.S. customs. Duties can be paid one of two ways: either through a contracted customs broker who makes payments on your behalf and subsequently invoices you/the importer of record, or through a direct ACH account with U.S. customs. With the first option, importers are typically paying a disbursement fee (typically 1-3 percent). While this wasn’t usually a significant sum with the modest to minimal tariffs in the past, it can now add up to a painful chunk of change.

 

While these practical and specific steps can all be impactful, third-party logistics providers should remain cognizant of the big-picture, recognize the value of staying nimble in the current environment. With circumstances changing constantly, maintaining strict record-keeping and regular audits is essential. None of these measures should be a one-time check list item. Navigating turbulent times requires a full-blown maintenance program that should continue indefinitely. Taking the time and investing the resources to set these systems up correctly before mistakes happen or circumstances change can help you avoid missteps and missed opportunities in the future. Don’t scramble and patch holes when your vessel springs a leak in the rough seas of a trade war—instead, do the proactive work and ongoing maintenance that it takes to make your operation seaworthy for years to come.

 

 

Drew Janney is Vice President of Operations at Michigan-based Argus Logistics, a non-asset based, third party logistics management provider with operations across the globe. To connect with Drew, email djanney@argussolutions.net.

 

ROAR Logistics Opens New Florida Distribution Center

Buffalo, NY – Global third-party logistics provider ROAR Logistics Inc. has opened a new operations center in Clearwater, Florida.

The new Florida facility is the company’s sixth US location and continues a run of strategic acquisitions and expansion that began more than 18 months ago.

The new office “provides the company and its customers direct access to myriad shipping opportunities through Port Tampa Bay, which handles nearly 40 percent of all cargo moving in and out of the state of Florida,” the company said.

Founded Oct. 1, 2003, ROAR Logistics is a subsidiary of global food manufacturer Rich Products Corp. and offers a broad range of logistics services to an array of local, national and global customers.

In January 2013, ROAR opened its first office on the US West Coast in Temecula, California, extending its reach into Mexico and positioning the company in proximity to the most-active ports in America, including Los Angeles and Long Beach.

In May 2014, ROAR purchased Phoenix-based Legend Transportation Group, a full-service, third-party logistics provider known for its managed solutions model and online, Less Than Truckload (LTL) shipment solutions.

10/14/2014