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Tenstreet Market Index: What To Do When App Volumes Plummet

application
Archives, Global Trade Daily, Trucking

Tenstreet Market Index: What To Do When App Volumes Plummet

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A healthy interest in the driver market always ranks high on a carrier’s list. But given the tough conditions, the industry has experienced over the last year, this interest has shifted to a furrowed concern. With application volumes dropping every week and more trucks sitting vacant, the desperation for drivers means carriers are likely paying more for less in an attempt to avoid the same fate other carriers and small businesses have suffered.

What’s Causing the Drop?

It’s a combination of several factors. Clearinghouse eliminations, retirements, and early exits would have affected the industry in 2020-21 anyway. But COVID introduced unprecedented factors to the market for which it couldn’t have prepared – notably drivers who are waiting to reenter the market (possibly until vaccination numbers rise or until they can get vaccinated) and the stimulus checks that keep them comfortable while they do so.

The number one thing to remember is that you’re not alone. This is not a carrier- or service-specific shortcoming, it’s a broad drop in application volume that has impacted the entire industry. While that may bring you little comfort, there is something you can do to prepare for when drivers return.

First, let’s review the data.

Weekly Driver Activity – Last 53 Weeks

Typically, application rates tend to be high at the beginning of the year and during late spring/early summer. They gradually drop off until the holiday season, when the drop in the volume of applications tends to be most pronounced (see late November and December). Another case of seasonality explains the dip in February 2021 when the country was locked down by storms.

From the first two charts below, you can see evidence of an additional market element. While driver job-seeking activity is still significantly below pre-pandemic levels, the stimulus has managed to drop the floor out from under the situation.

This is made clearer in the second chart, in which we’ve zoomed in on the last 5 weeks. Note the last 2-3 weeks in March where the number of applications fell drastically. March 2021 still places application volume 10 or 15 points below where we were in March 2020.

Weekly Driver Activity – Last 5 Weeks

Application Activity Index

This index is derived from Tenstreet clients who have had a consistent IntelliApp volume for the past 25 months. We assigned January 2019 a value of 100 for comparison. This gives us an easy way to see rate of application activity change over the last two years while removing the impact of growth in the number of carriers using the platform. As you can see, carriers as a whole have seen a huge decline over the past year in general.

Cost Per Lead, Cost Per Full Application

As mentioned above, carriers are paying more for leads and full apps than they did just a year ago due to the more intensified driver shortage, and are likely finding that the more specific their search, the shorter their results fall. Nevertheless, cost per full application has risen +30% over the past year.

Hiring Cycle Compared to Hire Rate

This chart shows a solid inverse relationship between the number of days in your cycle and the chance that a driver will make it to a hired status. Put simply, the longer your hiring process, the more opportunities there are for drivers to drop out.

With carriers having to work harder for every candidate, it’s more important than ever that they be able to glide through your hiring process smoothly. As past data has shown, the more serious the candidate, the more carriers they are typically interacting with – so finding and eliminating any rough patches will pay dividends when the pendulum swings and application volume improves.

This process need not be overwhelming, and we can help. Start by walking through your process as a driver and making note of any bottlenecks and hiccups. Replace them with time-saving solutions, like automation and integrations. Remember, drivers will be coming out of their own slumber and will not hesitate to move swiftly on to the next carrier if they encounter any reason to think they’re in store for more hard times.

Engagement and Early Onboarding

In addition to automation and integrations, engagement in early onboarding is another way you can improve your hiring cycle to improve your chances of getting that driver in a truck. The below chart shows carriers who engage drivers with text messaging, digital forms, and digital training modules within less than a day have a 40% greater chance of getting that driver all the way to hire.

Time and drivers aren’t the only things you’ll save. The more you can move online, the more money you save on hotels, meals, and recruiter onboarding time. Carriers who onboard online experienced an immediate 20%-40% in savings when they free their onboarding processes from expensive and unnecessary activities.

Tenstreet Can Help

Just as you’re not alone in this drop-in application volume, you’re not alone in improving your hiring process. Let us help your business see a new level of success. Many of our account managers and advisors have worked for carriers like yours in the past and know how to help.

Give us a call at 877-219-9283 or email us at sales@tenstreet.com and let us help you put new strategies in place for the next surge of drivers who come your way. It’s only a matter of time.

This article originally appeared here. Republished with permission.

innovations
Archives, Global Logistics, Global Trade Daily, Trucking

Emerging Transportation Innovations to Watch out for in 2021

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As technology continues to develop, new trends emerge. While driving AI is still not advanced enough to give us fully automated vehicles, there are other trends that stand to change the transportation industry as we know it. So, to get a better understanding of where the industry is now, let’s take a look at some of the more notable trends. Here are emerging transportation innovations to watch out for in 2021.

Emerging transportation innovations

While the pandemic has impacted the transportation industry in general, the development of new technologies hasn’t slowed down at all. People have recognized that the setbacks were temporary. Some areas of transport, like medical equipment shipping, even grew due to increased needs. So, it is fair to assume that the transportation industry as a whole will continue to develop. Seeing how there are numerous innovations in electronic vehicles, eco-friendly fuels, logistic systems, and automation still in development, we cannot cover all of them. To keep a certain sense of scale, we will focus primarily on the innovations on the rise in 2021.

V2X communication

One of vehicle technology goals is that all vehicles have constant, seamless data change with their HQ. Ideally, this will include not only things like location and speed but also vehicle state, health, and fuel. While we have not yet achieved such a high level of communication, we have made significant steps toward its development.

One of those steps is the FCC ruling in November 2020 regarding V2X (vehicle-to-everything communication). To put it simply, it requires the 5.9 gigahertz band to allocate 75 megahertz for cellular V2X communication and Wi-Fi. Initially, the FCC used this band exclusively for DSRC (dedicated short-range communication) since 1999. Cellular V2X (C-V2X) is just like V2X. The only difference is that it contains two transition modes. Vehicles use the first one to communicate with other vehicles, as well as pedestrians and infrastructures. The second one enables them to connect to the cloud network. This allows drivers to get information about available parking, potential traffic issues, etc. If you want to research it more, know that the development of the 5G internet is closely connected to C-V2X.

Federal transport funding

While the private sector knows that the effects of COVID-19 are temporary, the federal government doesn’t hold such views. Due to lack of travel in 2020 and 2021, the government has decreased funding to the transportation industry. How big of an impact this will have on the overall trading industry is hard to say. After all, commercial transport is still in high demand. Still, it is hard not to notice the substantial cut to funding.

Touchless activation

Once the COVID-19 pandemic started, one of the first things we’ve learned is that the virus can spread through physical contact. Apart from people disinfecting their hands and avoiding touching, this has also motivated the transportation industry to find as many touchless alternatives as possible. As a result, we have iDetect activation, where people can wave their hand in front of a sensor instead of pressing a button.

Furthermore, FLIR and TAPCO have partnered up to provide FLIR thermal activators for all pedestrian crosswalk systems. As the name suggests, this system uses thermal activation instead of physical contact to activate crosswalk signaling. Finally, we also have infrared bollards to help those that cannot reach the alert systems with such ease. These bollards automatically scan for vulnerable road users and set the necessary systems in motion.

License plate recognition

The final notable advancement in transportation (more specifically vehicle) technology is license plate recognition. Law enforcement especially has made great use of emerging license plate technologies in 2021. AI systems can load and check a license plate within seconds. This makes checking up on suspicious vehicles, both during the drive and while stopped, much safer, faster, and efficient. Even parking fines have become automated in certain countries as police vehicles simply drive through the city and gather info via video. Once these technologies become more available, we are sure that the logistics companies will find a good use for them. But, for now, they are more than useful for law enforcement.

What the future holds for transportation

While the emerging transportation innovations show much promise, they are only a glimpse of what’s to come. Before long, we won’t be surprised that there are individual vehicles and entire fleets of fully automated transports. We will probably first see these automated vehicles in trains and ships, as there are fewer variables to keep track of there. But, as the self-driving AI progresses, we are bound to see self-driving trucks, cars, and planes. Keep in mind that it’s in AI’s nature to develop exponentially. So, once it starts advancing, it is only going to speed up over time. Therefore, if we get rudimental self-driving AI within ten years, fully automated vehicles two years after that shouldn’t be surprising.

Logistics

Another trend to keep close track of is the development of logistics. More and more, logistics is becoming automated. After all, gathering and processing all necessary info for logistics far surpasses the capabilities of any human. While logistics managers simply use these systems to plan their routes, we won’t be surprised if logistics systems become better at planning. Remember, most logistics decisions are based on prior learning and predictions. So, the better a model we can create for logistics, the sooner the AI can start learning. And once it does, keep in mind the exponential development.

Fuel alternatives

When talking about emerging transportation innovations, it’s important to mention innovations in fuel and energy. While electric vehicles seemed impossible just a decade ago, Elon Musk proved everyone wrong with his Tesla company. While there are no huge updates in the industry, it is essential to note that it is growing. Eco-friendliness is, as it should be, a major concern for developed countries. With luck, we should see a general decrease in fossil fuels and an increase in greener options.

____________________________________________________________________

Jacob Sherman has worked in the transport industry for over 20 years, mainly helping moving companies like Zippy Shell Louisiana with logistics and planning. Now, he uses his experience to write insightful articles about the transportation industry. In his spare time, he enjoys cooking for his family and going on long hikes.

supply chain
Archives, Global Logistics, Global Trade Daily, Warehousing

Exclusive White Paper: Managing Inbound Supply Chains – Cost, Capacity & Delay Are The Supply Chain Manager’s “Nightmare”

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The Covid-19 Pandemic which impacted global supply chains hard in February of 2020, has grown as on “steroids” as we approach the 2nd Quarter of 2021.

There is no professional logistics service provider, freight forwarder, NVOCC, Carriers, 3PL, customhouse broker, consultant, or any expert in the industry who would have anticipated what has happened in the past 12 months and likely to have a legacy well into the balance of this year.

Demand had impacted capacity and capacity has impacted cost. Ocean freight rates have doubled and in some trade lanes have tripled and air freight pricing has multiples of 4-8 times more than we witnessed towards the end of 2019.

Making this all worse is how long this crisis has developed with no specific end in sight.

Tied into capacity and cost are the logistics delays, doubling and tripling expected ETA’s.

This past year has been a “nightmare” for all supply chain managers who are looking for relief … when very little is in-sight.

The biggest influence can be observed on the Asian to North American market where the impact has been most disruptive.

In our Supply Chain Management Consulting Practice, we have been approached by hundreds of companies desperately seeking assistance in finding options and providing some relief. We will share some of our recommendations at the end of this article.

Over the 40+ years of our practice in the global supply chain, we have witnessed other times where craziness and disruptive behavior impacting freight markets. There have been at least 6 times from 1981 to 2020 where the supply chain has been disrupted in a major way.

Most professionals point to the poor management of the carriers, who have difficulty managing capacity, assets, and client’s supply chain needs when disruption is looming. While that is true to some level, there are numerous other influential areas that add to the crisis. The impact of Covid-19, greater global demand for PPE, expeditious replenishment of global inventory levels, and uncertainty in consumer and commercial spending, are but a few of the other contributing factors.

Also keep in mind, that in North America the entire domestic transportation market is also experiencing increased costs, capacity issues, and delays in providing timely, comprehensive, and cost-effective transportation services.

While we have all this “gloom and doom” in front of us, there is some light at the end of the tunnel. Here are some recommendations that we offer:

1. Recognize that in all the other times (of which we estimate that there were 6 events) of disruption in the global supply chain … in time … balance and normality eventually prevailed.

The issue in this Covid-19 Freight Dilemma … is when will we see normality? Many experts advise by April and May 2021.

Our best estimate is that while we may see some sunlight by May, supply chain executives should plan that the disruption will last till September.

Demand planning, freight purchasing, and contract negotiations would best be accomplished by anticipating freight and supply chain issues not being seriously resolved till the Fall of 2021.

2. As a supply chain executive, create a greater reach into alternative options for the acquisition of logistics services. Come out of your comfort zones, your traditional “go-to” providers, and open the doors to a larger web of players in the freight market.

3. Alternative options should include:

-Direct to Carriers

-Integrated Carriers

-3PL’s

-Freight Brokers

-Logistics Consulting Companies

-Customhouse Brokers

-NVOCC’s

-Freight Forwarders

-Freight Purchasing Groups and Associations

-Consolidators

4. Friendly competitors also can present an option where you can combine your purchasing power and leverage your freight spend.

5. Evaluating your freight spend. Consider consolidating your freight with one company by putting “all your eggs in one basket” where you may achieve getting the best value for your dollar. However, when placing all your eggs in one basket, recognize the risk associated with that option and manage that basket diligently.

6. Hire very capable staff that can bring resources, contacts, and industry relationships that might prove beneficial.

7. Work with your suppliers who also may be able to provide lower-cost or more expedient freight solutions. It is their interest as well to make sure their customers are well-served and happy.

8. Work tightly with your demand planning teams to provide timely and comprehensive information flows, so they can better plan when placing manufacturing orders. Lead times may need to be doubled and tripled. This also means working more closely and proactively with your suppliers and vendors to enhance their performance in increasing capacity and on-time capability.

9. Consider where you distribute from. Consider the demographics of where your customers are. This may conclude you adding on or expanding the warehousing locations so you can meet clients’ needs less costly and timelier. The example is if your customer base is throughout the USA and you singularly distribute from one warehouse in Baltimore Maryland, what is the cost and time element to service a customer in Chicago and one in Los Angeles?

Additionally, if the freight is sourced from China, compare the time and cost to ship from Shenzhen to Baltimore to Shenzhen to Long Beach. The warehousing and distribution costs become part of your overall competitiveness. Any steps that can be taken to help offset and mitigate the impact of higher inbound freight costs can provide various levels of some relief.

10. Be open, honest, and transparent with all the partners in the supply chain, including your customers. Extoll these virtues and they will come back to you in spades.

Working with more integrity creates camaraderie, team efforts, affords a better understanding of common concerns, and allows better partnerships to form, which ultimately produces better outcomes for all parties to an international business trade or transaction.

The Covid-19 Pandemic has turned the world of international freight upside down. It has caused a lot of frustration, headaches, loss of markets and clients, and multiple areas of serious concern for everyone involved in managing all aspects of global supply chains.

There is no question that the challenges of 2020 and the legacy now in 2021 have become ground zero for supply chain managers, but there is light at the end of the tunnel. The above outlined ten recommendations have been time-tested, battle-worn, and seasoned successful concepts in managing the risks, lowering the costs, and allowing for better-managed logistics in global supply chains.

__________________________________________________________________

Thomas A. Cook is a 30 year seasoned veteran of global trade and Managing Director of Blue Tiger International, based in New York, LA and West Palm Beach, Florida. The author of 19 books on international business, two best business sellers. Graduate of NYS Maritime Academy with an undergraduate and graduate degree in marine transportation and business management. Tom has a worldwide presence through over 300 agents in every major city along with an array of transportation providers and solutions. Tom works with a number of Associations providing “value add” to their membership services and enhancing their overall reach into global sourcing and in export sales management. He can be reach at tomcook@bluetigerintl.com or 516-359-6232.

logistics
Archives, EU Trade, Global Trade Daily

How has Brexit affected Logistics and Handling Services?

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Since the new year, the impact of Brexit has had a clear effect on every stage of the logistics process, from transport fees and new limitations to restrictions on imported goods. According to new research, 50% of UK business decision-makers felt that Brexit uncertainty had negatively impacted their supply chain in the last five years[1], with this only set to increase as the full effect of Brexit becomes clear. As the difficulties of Brexit continue to hinder many logistical businesses at every turn, flexible logistics platform Trident Worldwide has assessed the impact across the industry.

What are the biggest effects?

UK logistics companies have had to adapt to huge changes, including:

Custom changes have been introduced as we saw the end of free trade between Britain and the EU. This means more paperwork and meeting new product standards which are stricter, particularly when trading restricted goods and livestock to name a few.

Supply-chain disruption has seen huge delays in custom checks at British ports causing a backlog of demand to major supply chains including grocery and manufacturing industries, however, this is anticipated to ease after the adjustment period.

Regulation changes have changed UK trading standards from European standards when it comes to workers’ rights and consumer protection.

The effect on suppliers

The Brexit deal left SME’s within FMCG specifically unprepared and in a state of loss moving forwards due to associating logistics costs, with many forced to cut off sales to the EU which in turn hinders business’s ability to scale on an international level, meaning bottom lines will also decrease. Logistics providers are still working their way around the new regulations and prices to be able to offer transport packages into the EU, which is anticipated to become smoother once the transition period is over.

In addition, suppliers in the UK have stockpiled prior to Brexit on medications and other emergency items, with three insulin suppliers for Diabetes UK already assuring the charity that they will be holding insulin stock to ensure a continuous supply of at least four months[2]. However, this was not an option for some other sectors, such as FMCG’s, as a lack of warehousing facilities and a short shelf life made this seemingly impossible.

Beth Hawley, Healthcare and Pharmaceutical Account Manager at Trident Worldwide explains “There have been disruptions to the medical supply-chain more so than ever as deliveries are stopped at the borders due to a lack of customs clearance. This has led to a shortage in medication supplies. This has been an ongoing issue pre-Brexit but has pushed the need to streamline the supply chain more than ever to ensure patients have the medication they need.”

Transportation

Road haulage, air freight, and maritime transport have all been affected:

Road haulage is the most dominant mode of transport in the UK, with most goods imported to and exported from the UK by road are handled by overseas haulers. UK haulers account for 8% of total haulage activity in the EU[3], meaning negative implications in the UK and EU as new administration hurdles, delays at ports, and mandatory border checks come into play.

However, air freight cargo services have soared due to ocean congestion and sea freight supply chain issues and additional hurdles, with a growth of 200% in January compared to January 2020[4], making air capacity stretched to the maximum as logistics businesses attempt to find the quickest and most effective solutions.

Will Annand, Manufacturing Account Manager at Trident Worldwide explains: “Manufacturers I’ve spoken to at the start of this year have explained that their main issue was, of course, the changes in documentation and how not providing the correct information causes huge delays, and in some cases, penalties from customs which is affecting businesses massively. This has caused them to change their shipping Incoterms more to X-works and FCA in order for the financial and timing responsibilities to be placed more on their customers rather than themselves.”

_____________________________________________________________________

[1] https://www.sourcetoday.com/supply-chain/article/21867492/how-is-brexit-disrupting-the-worlds-supply-chains
[2] https://ifa-forwarding.net/blog/news/impact-of-brexit-on-logistics-companies-and-suppliers/
[3] https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/international-markets/deloitte-uk-brexit-industry-insights-logistics.pdf
[4] https://www.lloydsloadinglist.com/freight-directory/news/Air-freight-charter-volumes-soar-due-to-ocean-congestion-PPE-surge-and-Brexit/78483.htm#.YC_VwOj7SUk
dry bulk
Archives, Global Logistics, Global Trade Daily, Ocean Ports

EXPECTATIONS ARE HIGH AS PORTS HANDLING DRY BULK SURVIVE AND EVEN GROW DESPITE PANDEMIC

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Charting trade waters brought to a turbulent boil by a raging global pandemic would be difficult to do in the best of times. But these aren’t the best of times.

COVID-19, an uncertain global economy, and challenges to commodity demands and supply chains have all contributed, at least in part, to variances in trade trends. 

Those trends have been very evident in the volatile dry bulk trade.

“The turbulence of the past year has in many ways clouded the underlying fundamentals in the dry bulk shipping market, but with 2020 now behind us, we are in a better position to establish an overview of expectations for 2021,” says Peter Sand, chief shipping analyst with the Baltic International Maritime Council (BIMCO), the world’s largest organization for shipowners, charterers, shipbrokers, and agents. 

“For dry bulk shipping, the year (2020) can be divided in two with lower volumes and earnings in the first half followed by a recovery in the second as China split from the rest of the world, boosting tonne [metric ton] and tonne-mile demand and sending freight rates to profitable levels,” Sand says. “June was the turning point as volumes reached their highest point of the year and earnings jumped, especially for capesize ships.”

The BIMCO analyst points to these statistics: In the first 20 days of 2021, there were 1,427 capesize trips, up 10.4 percent over the same period in 2020. That strong start was reflected in earnings that, after high volatility in 2019 and 2020, have averaged $22,015 per day since the start of the year, comfortably above the $15,300 per day needed for an average capesize ship to break even. Rates peaked at $26,489 per day on Jan. 13 and stood at $24,148 per day on Jan. 19.

A sampling of U.S. ports involved in the dry bulk trade brought varied reactions to evolving trends and changing markets.

“The dry bulk sector is an important backbone of Port Tampa Bay’s activities and a major factor contributing to its status as Florida’s largest cargo tonnage port, as well as being one of the most diversified ports in the country,” says Wade Elliott, the port’s vice president of Business Development.

Elliott pointed to 38 percent—or 12.4 million tons—of Port Tampa Bay’s total cargo volume in 2020 having consisted of dry bulk cargo. Among the major dry bulk commodities handled at the port are phosphate fertilizer products, limestone, cement, granite, gypsum, coal, grain, sulfur, fly ash, salt, slag, pumice and bauxite.

Despite the pandemic, Port Tampa Bay’s total dry bulk cargo volume increased by 3 percent last year, and,” the VP says, “we are expecting that trend to continue. The demand for building materials remains very strong driven by Florida’s continued strong population growth, which is fueling the real estate construction market. The outlook for Port Tampa Bay fertilizer exports is also positive as Florida phosphate products are shipped around the world helping farmers meet expanding demand.” 

As the port’s dry bulk sector grows, the port is working closely with its dry bulk tenants to support their expansion of terminal facilities to keep pace with the demand by adding additional berths and storage.

Port Milwaukee has also managed to stay the course in the dry-bulk trade by keeping up on new trends and market conditions, working closely and regularly with port tenants and key stakeholders and leveraging opportunities collaboratively, according to Maria Cartier, the Market Development manager at the Great Lakes port. 

An example of taking advantage of market conditions, Cartier says, “is our partnership with the DeLong Company in the planned development of a new $31-million agricultural marine export facility. This new facility addresses the increased global demand for dry distilled grain solubles, a by-product of ethanol used in animal feed.” 

The port also “participates in conferences, events and various forums that allow us to network with industry partners and helps keep us up-to-date on new market conditions and developments,” she added.

Port Milwaukee is optimistic that by staying in tune with trends and markets, it will promote cargo growth. 

“A strong demand for Wisconsin-based agriculture, investments in infrastructure and our role as a major supplier of road salt to the region will continue to support our position as a primary handler of dry bulk materials on the Great Lakes,” Cartier says.

Dry bulk commodities—salt, cement, bottom ash and grain—account for approximately 80 percent of Port Milwaukee’s overall commodity throughput, according to the marketing manager.

“COVID-19 has not affected our cargo throughput thanks to Port Milwaukee’s team of expert staff and long-term tenants,” Cartier says. “Through their collaborative efforts, we have maintained safe, efficient and healthful operations without commercial interruption.” 

Dry bulk cargoes comprise about 7 percent of the Port of Corpus Christi’s (PCC) overall volumes that include a variety of commodities such as barite, iron ore fines, DRI, pet coke, slag, sulfur, grain such as sorghum and wheat. 

Unlike some ports, PCC has not escaped the pandemic.

COVID-19 “has impacted our oil and gas cargoes such as barite and some construction activity on aggregates coming in,” notes Eddie Martinez, PCC’s Trade Development manager. “Drilling activity has slowed down, in part due to COVID, as has a slowdown in construction overall,”

Although COVID is a constant these days, it hasn’t stopped the Texas port on the Gulf of Mexico from moving forward with growth in mind.

“PCC continues to make investments in our terminals to improve overall logistics for dry bulk cargo,” says Martinez. “The port acquired a new Liebherr crane in late 2019 to improve our overall discharge rate. Bulk grains are active and should continue to remain active in 2021.” 

The expectation, he said, is that dry bulk cargo will remain steady with nominal gains. Amid unpredictable market changes in the trade sector, PCC’s strategy is to work “hand-in-hand daily within our departments for capital project planning to improve overall facilities for our current and new customers to include planning, operations, engineering and trade development,” Martinez says. “We are actively engaged with our customers on their annual expectations and trends affecting them and offer possible solutions where we might be able to support them with logistic and infrastructure that may require capital on rail or waterfront.”

Even without a global pandemic, building dry bulk markets brings challenges, he notes. “PCC has to analyze where our strengths lie when being approached on new dry bulk opportunities. Some of our facilities are showing their age, and PCC is making necessary investments to get them up to standard. 

“Further, not every cargo is suitable for our port. The commodity itself, destination or origin, air permit limits, rail and dock infrastructure all play a role in the selection of new dry bulk market development. The port reviews each opportunity and tries to identify if it’s a good fit for both the customer and the port. We want to create a relationship where the client can really grow their business model here in our area and region for years to come.”

delivery
3pls, Archives, Global Logistics, Global Trade Daily

HOW TO GAIN A COMPETITIVE ADVANTAGE IN THE BRAVE NEW DELIVERY WORLD

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Ever since communities across the country began quarantining in early 2020, online shopping has become a way of life for many consumers. Faced with supply shortages and social distancing guidelines that restrict the number of consumers in a bricks-and-mortar store at any given time, online delivery services and online retailers such as Amazon are booming. But while these increases have been a boon to many online retailers, despite these sales increases, other, often-smaller retailers have struggled to provide satisfactory last-mile services to their customers. In an Amazon Prime world, many consumers expect fast, free (or low cost) and totally transparent shipping—but that’s not always possible. Unfortunately, this can damage a retailer’s reputation—and their chance at repeat sales. Hence, this is why last-mile services matter. 

But what are last-mile services, and who are the best providers of these services? Here’s what you need to know about the importance of last-mile for your business.

What are Last-Mile Services?

Last-mile services initially got their name from the telecommunications industry, where the last-mile referred to the challenges faced by telecom providers connecting homes to their main networks. Today, while last-mile issues still do exist in telecom, they also exist in logistics: namely, in getting merchandise into the customer’s hands.  

The “last mile” of service occurs in the final stages of your product’s journey—after your merchandise is manufactured and warehoused, and once the customer’s order is placed. From there, the merchandise must be pulled and packed and finally shipped and delivered. That shipping and delivery is what they refer to as last-mile service, and it comes at a cost. In fact, that cost can often compose more than half of an order’s total shipping cost, including the price of labor and shipping supplies. In fact, last-mile service is generally the most expensive part of an order’s journey. It also takes the most time. This can make last-mile shipping a big expense for smaller retailers trying to go toe-to-toe with the Amazons of the world, who often have their own logistics fleets and also utilize local carriers for faster deliveries. 

This issue is known as the “last mile problem” or the thorny issues of high shipping costs, slower-than-desired shipping speeds, and yet another big wrinkle: tracking difficulties. You see, even with a tracking number, tracking through some carriers often leaves much to be desired. With slow-to-update tracking numbers, delays and inaccuracies, customers are often left frustrated and unwilling to do business with you again.

So, how do you solve the last-mile problem? The answer lies in your last-mile delivery service.

Solving the Last Mile Problem

When it comes to last-mile providers, you have many choices. From couriers to smaller, local logistics companies, to larger household-names, who you choose to provide your last-mile service matters.

1) Higher Costs

Generally speaking, the larger the order volume, the lower the rates you can expect from your last-mile provider. While smaller 3PLs try to stay competitive, their efforts are often thwarted by higher fuel costs and delivery issues, such as having to return to a delivery stop multiple times to gain a signature. Thankfully, however, there are exceptions to this rule. Sometimes, smaller 3PLs can negotiate fair rates with your business, enabling you to ship your merchandise in a cost-effective manner. However, this works best if your deliveries are mostly local.

2) Delivery Times

Speaking of delivery times, this is yet another big issue faced in last-mile delivery. From far-spaced rural routes to jam-packed city streets, 3PLs can sometimes struggle with even getting to your customer’s front door simply due to time constraints caused by these problems. This can delay a shipment, causing customer frustration, which of course hurts your chances for repeat business.

3) Tracking Technology

When it comes down to how to make your last-mile services more efficient, the bottom line can often be the technology used by your last-mile provider. Third-party logistics providers such as FedEx, DHL and UPS all have their own tracking systems and proprietary software that allows for not just internal efficiencies, but for the transparency for your customers to track their orders. This improves customer experience and, naturally, customer satisfaction.

Last-Mile Providers

To better understand just what a last-mile provider truly does, here are some unique providers and what they’re doing to help your business.

Haultail. A new delivery service available in many markets across the U.S., Haultail uses its own app to allow customers to schedule their local pickup or delivery via its network of certified drivers. Haultail can collect and deliver new items from retail stores, storage facilities or even homes, and deliver them, often faster than delivery services offered by mass retailers, giving smaller retailers a competitive edge and consumers higher overall satisfaction with their purchase.

TForce Logistics. With headquarters in both the U.S. and Canada, TForce Logistics boasts a network of more than 6,700 last-mile providers in every major city in America. The company offers everything from warehousing to reverse logistics of last-mile products and keeps customers in the loop about their product tracking via text message updates. TForce has also expanded their last-mile services into Toronto, Ontario, Canada.

CFI. Based in Mexico, CFI has recently expanded to Chicago with its first U.S. consolidation and distribution center, and plans for more locations across los Estados Unidos de América. This is a rare move, as in recent years the trend in 3PLs is to move away from Mexico. CFI, however, plans to remain in the country, offering international services, including last mile, on both sides of the border.


Dachser USA. To help customers navigate the unprecedented increase in online sales and the need for last-mile delivery, Dachser USA recently created a “dedicated customer solutions desk.” This new department is staffed by logistics industry experts and serves to help businesses of all sizes deal with unexpected issues such as shipping delays, drayage capacity issues and even demurrage charges, according to Guido Gries, managing director of Dascher Americas.

SEKO Logistics. Based in Itasca, Illinois, SEKO Logistics has responded to the COVID-19 crisis by working with businesses of all sizes that have been impacted by shutdowns of their regular logistics providers due to the coronavirus. SEKO has enacted its own COVID-19 policy, requiring PPE for drivers to protect both employees and customers, including the last-mile customer.

The Last Word in Last Mile

Ultimately, if you ship a product to a consumer or business, you’re probably going to need last-mile services. Whether you require local services and can partner with a smaller logistics company that can act nimbly and respond faster than larger delivery services, or you ship at a volume that enables you to benefit from reduced bulk shipping rates with a larger 3PL, choosing the right last-mile service can potentially save you money and help bolster customer satisfaction. 

When choosing your last-mile provider, look for bulk shipping rates, route consolidations and transparent tracking services. The important takeaway: Last-mile services shouldn’t be an afterthought. They are, in fact, a crucial step in your supply chain and can be the determining factor between a good transaction and a great one.

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Archives, Global Logistics, Global Trade Daily

A Coordinated Global Approach: Customs Recordation and Border Protection Program

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Counterfeiting is a global problem. And although the source of most counterfeits is China, in many cases, sellers and wholesalers outside of China are the driving force behind counterfeit goods. Developing and implementing a centralized and globally coordinated program is key to a successful anti-counterfeiting and brand protection effort.

Legal teams are well-positioned to identify the jurisdictions where anti-counterfeiting and brand protection efforts can have the greatest impact and value, and appropriately allocate resources that align with where the business is most profitable and has the most growth potential. They must carefully balance whether to target wholesalers and large distributors or shut down large and influential counterfeiting networks by sacking both suppliers and manufacturers. The former provides immediate relief, but the latter eradicates some of the most egregious culprits in the counterfeit supply chain.

Without global coordination, legal or business teams in disparate markets may act incongruously and duplicate efforts, using scarce resources while gaining limited value. Multinational manufacturing companies that maintain a lean legal team and a smaller intellectual property (IP) team realize multiple benefits and profit potential when following a centralized brand protection program.

Depending on the region, there are vast differences in the type of evidence needed, which IP rights must be asserted and the role proactive recordation with customs plays. Without coordination, this alone may cause self-inflicted harm to a business organization. A centralized and coordinated approach also empowers a business to “forum shop” and take advantage of the most favorable legal actions and jurisdictions available worldwide, such as ease of coordinating with law enforcement, strength of position in an administrative or court action, timeline, cost of legal services, nature and extent of remedies and potential damages.

Advancements in technology and software capabilities have made new, more efficient tools available for IP owners at a fraction of the cost. Examples include brand protection services that involve a single service provider for global monitoring of trademark applications and domain names and monitoring counterfeits and other IP infringements by third parties online. Many such services conduct large-scale takedowns of online infringement worldwide, which sends a strong warning to relevant online marketplaces and sellers. These services also lend insight into infringement and counterfeit trends (e.g., identifying the most targeted goods, destination markets and most popular marketplaces), making necessary and timely adjustments to brand protection programs.

A coordinated program provides higher quality data to evaluate the loss caused by counterfeits and infringing activities while tracking the impact on overall market share and sales globally. An effective coordinated anti-counterfeiting and brand protection program should provide immediate relief to a business globally and provides a better system for strategizing, implementing and evaluating anti-counterfeiting and brand protection enforcement efforts.

An effective customs recordation and border protection program is vital, as the real impact on any bottom line comes from coordinated and consistent efforts at the borders.

A common dilemma is that counterfeiting activities do not appear to subside despite increased resources and legal fees. Legal teams manage the tremendous transactional volume of enforcement actions, but business teams often fail to appreciate the outcomes and rarely buy in fully to brand protection efforts. The traditional approach of playing “whack-a-mole” with countless small and micro-sized factories located in China and other countries is not a viable long-term solution.

Fortunately, border intervention methods provide a better answer. When counterfeits and infringing goods are seized at borders, the risk of infringement and the impact on business can be measured because the counterfeits and infringing goods directly correlate to lost sales, harm to consumers, decrease in brand loyalty, and product liability risk.

When a legal team activates border intervention methods, it cuts off channels of trade for counterfeits; sets up roadblocks to importation and exportation; and amplifies legal and economic risks to wholesalers and distributors of counterfeits. Border intervention success means the costs of disseminating counterfeits go up, and so does the price of the counterfeit goods. We call this cycle the “bottleneck” approach.

Customs are best-positioned to disrupt the movement and transportation of counterfeits. Although it is practically impossible for customs to detect and seize all infringing products, most if not all customs programs have employed some form of risk modelling to improve both the success rate and accuracy of identifying and locating counterfeits.

The importance of customs recordation and seizures to a brand protection program’s success also makes it the ideal starting point for building up a globally coordinated brand protection program.

Start by following the money. Identify the most profitable and high potential destination markets of a business. It is essential to identify the jurisdiction and to understand the specific challenges at work within the market.

One common mistake is for brand owners to record too many trademark and IP rights. Instead, by focusing on the largest problems in each market, customs seizures may produce significant ROI.

If China is the primary source of counterfeits, it is necessary to record with Chinese customs. Unlike many jurisdictions, Chinese customs focus on inspection and seizure of outbound infringing goods. In recent years, over 90 percent of customs seizures concerning IP infringement were conducted against goods exported from China. Another reason to record with Chinese customs is that over 90 percent of IP related seizures were based on ex officio actions.

Centralized management of customs recordation and border protection actions begins with a holistic audit of trademarks and IP assets necessary and important for border protection; a standardized process to conduct customs recordation, training, authentication and seizures; a channel for timely sharing of information and knowledge; a mechanism to conduct coordinated releases and seizures globally for strategic reasons; and a system to evaluate the effectiveness of border protection efforts.

Customs recordation and seizures are an important part of anti-counterfeiting and brand protection efforts, but they are not independent of business operations, other legal functions and enforcement actions. Certain policies and procedures may elevate the performance of a coordinated customs and border protection program, including a global trademark and online infringement watch, a coordinated global approach to all enforcement actions, and a centralized and independent budget for anti-counterfeiting and brand protection.

Trademark and online infringement watch services are other tools to alert IP owners to new infringing trademark filings, domain registrations, and online offerings of infringing products. These services help IP owners take down counterfeits on the internet cost-effectively and efficiently.

With e-commerce sales of counterfeit goods, it is most efficient to tackle it with online brand protection services that provide digital solutions to automate monitoring, reporting, and takedown of counterfeit and infringing activities. This segment is proliferating, and prices are no longer prohibitive.

In conclusion, businesses should take a global approach to anti-counterfeiting and brand protection, specifically to customs recordation and border protection efforts. Mapping out markets and problems further identifies waste and adds value, and a brand protection program provides data for evaluation and further improvement while building a stable

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Archives, Global Trade Daily, Special Reports

Adapting Your Sales in a Six Feet Apart World

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We talk about it all the time – “when things go back to normal.” But will they? Will sales ever be the same?

2020 forever changed us. Sales processes were turned upside down. In-person meetings – probably not happening for quite some time. Remote presentations – now the norm. Sales engagement software – a must. These changes are not temporary. If you aren’t yet, how do you adapt to the next normal?

Digital first

The pandemic accelerated the rate of change and digital transformation much faster than any of us anticipated. Now, B2B buyers and sellers doing business digitally is the norm. According to Mckinsey, more than three-quarters of buyers and sellers say they now prefer digital self-service and remote human engagement over face-to-face interactions. The path forward is clear: Digital is here to stay.

We might physically have to remain six feet apart, but digitally nothing is slowing down. In a digital selling environment, the speed of sale is increasing in importance. Gone are the days of sending a PDF attached to an email or getting on a plane and waiting days for the next step in the sales process. In our time of immediate gratification, inefficient, time-consuming sales processes will no longer be acceptable.

Digital first also transforms the traditional sales hire. Tech-savviness is now part of the job description. A high-level of familiarity with popular CRMs, sales enablement solutions, and contract automation are now a must-have. As we continue digitally, the technical requirements for sales hires will increase.

Humanize the digital experience 

Today, buyers have more access to information and knowledge than ever before. They’ve read online reviews, seeked advice from peers, and compared features of multiple products before they even speak to you. If you want to remain competitive, you have to go beyond the basics. You must provide value that a buyer can only receive from an expert. By putting your prospect-first, you will stand out from the crowd.

In addition to putting your prospect-first, it’s important to keep the personal touch throughout the digital sales process. Without personal touches, trust issues can arise, and closing the deal becomes harder. You need digital tools to create engagement and human touch with prospects. Adding a personal video when presenting proposals and sending out agreements is an emerging way to humanize the digital experience. Live chat has also emerged as a top channel to create engagement and trust with prospects.

Empathy is key to the digital experience. The need for empathy for your prospects and yourself continues in the next normal. We wake up ready to slay each day, but inevitably something will humanize the day. You want to answer your prospect’s questions and provide a solution that will help them thrive, yet it won’t dominate every conversation. Connect human to human when dogs bark at the mailman or children need help with a virtual school. We’re all in the next normal together.

Technology is a co-worker

Digital first not only transforms the traditional sales hire, it transforms co-workers. With reliance on digital selling, so does the need for sales software solutions that helps sales reps humanize the digital experience and close more deals. It starts with a team of technology co-workers automating the sales process from proposal to eSignature. Combine that with the tools to connect with prospects through video, live-chat and real-time data tracking, your sales team will stand out from the crowd. Now, more than ever, it’s important to have a solid team of technology co-workers.

When it comes down to it, sales will never be the same. Legacy processes can’t keep pace with today’s buyers. Being digital first, humanizing the digital experience and building a team of technology co-workers will have you on your way to succeeding in the next normal.

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Tara Pawlak is the Head of Marketing for Get Accept, the all-in-one sales platform where you design, send, track and market your proposal to get more deals digitally signed. 

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3pls, Archives, Global Logistics, Global Trade Daily

Why Paper is Limiting the Supply Chain Industry

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Through time, means of communication have evolved to meet the needs of those sending and receiving information. Hieroglyphics paved the way for the creation of the alphabet and pigeon carriers preceded the postal service. Paper has done the same for the current digital landscape, however, unlike the means before it, paper has a tendency to linger.

Although it has long been considered the tried and true form of communication, paper is now limiting the supply chain. Shippers, carriers, and retailers experience trials in the industry brought on by limited visibility, truck drivers face inefficiencies and health and safety concerns, and warehouse space is overcome by boxes of files, left to sit for years to come. As industries experience digital transformation, the supply chain must evolve too.

Visibility

The bill of lading originated during a time when the ability to track a mode of transportation was virtually non-existent. As crates were loaded onto ships and the back of horse-drawn buggies, suppliers simply relied on the ship’s ability to stay afloat and a coachman to stay on path. Today, however, advances in technology trump the need for reliance, as delivery services like Amazon Prime and GrubHub allow consumers to track their items, down to the very street their package or meal is at any given time.

The same should hold true for trucks carrying goods. Yet, the supply chain industry continues to rely on physical bills of lading to transmit important information, creating communication delays and preventing essential information from being shared among shippers, carriers and retailers. By ditching paper and implementing supply chain automation, the anticipation of expecting a load or receiving an approved bill of lading in return is alleviated, allowing shippers, carriers and retailers to utilize time often spent tracking down drivers to make real-time decisions based on evolving developments in the field, including necessary changes to routes, timely responses to customer complaints and detailed planning based on data that paper simply doesn’t provide.

Subsequently, the industry’s reliance on paper costs companies upwards of $3 billion per year in detention fees. Shippers, carriers and retailers rely on drivers to report time spent in detention, oftentimes resulting in best guesses and inaccurate accounts. While companies and drivers don’t conspire to commit detention fraud, inaccurate detention timing is inevitable. Through a more digitized, advanced supply chain automation system, mistakes can and should be removed from the process, allowing companies to reallocate budgets and save billions of dollars every year.

Efficiency

In the same notion, if time is truly money, there is no better instance of shippers, carriers and retailers losing money than through the unnecessary time drivers spend getting in and out of their cabs to deliver physical BOLs. An industry-wide implementation of a supply chain automation platform would allow drivers to remain in their cabs, all while delivering and receiving important information. By providing digital capabilities in sharing this information, drivers can be more efficient in finalizing deliveries, putting them back on the open road sooner and making more money for themselves and the trucking companies.

Health & Safety

Now, more than ever, the ability to remain in-cab while continuing to transmit information during a pick-up or delivery is important, as drivers come face-to-face with multiple people per stop. Not only is the safety of the driver a priority, not having enough staff to man the guard shack, run administrative tasks or load and unload delays deliveries and prevents shippers, carriers and retailers from delivering, carrying and receiving products in a timely manner is a priority as well. While attributed to the manner in which the supply chain has always operated, paper now adds an extra layer of risk to the industry. Enforcing supply chain automation platforms throughout and implementing the use of electronic BOLs eliminates the need for direct contact, protecting and providing reassurance to all parties involved, while ensuring deliveries are executed safely and the health of employees is of the utmost importance.

Sustainability

An issue not specific to the supply chain industry, but certainly one to identify, is the dilemma of what to do with all of the physical bills of lading once copies are delivered and processing is complete. With thousands of deliveries occurring each and every day, the paper has to go somewhere, often resulting in a warehouse full of stacked boxes. Not only does this create clutter and take up unnecessary space, but it also leaves supply chains scrambling to find information when they need it most. The power of supply chain automation allows companies to store paperwork, including BOLs, digitally, saving space and positively impacting the environment.

Although the supply chain struggles to adopt an industry-wide supply chain automation platform, steps can be taken by individual companies to ease the current outdated process shippers, carriers and retailers face. Implementing electronic BOLs, driver workflow and mobile capture can relieve stress on companies and demonstrate the need for an industry-wide standardization to others in the supply chain.

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Darren Chan is a co-founder of Vector, a contactless pickup and delivery platform that ensures supply chain partners get the right load to the right place at the right time. Darren grew up witnessing the collaboration difficulties firsthand in his family’s foodservice distribution business and is excited to help build and deliver modern, user-friendly solutions to the industry. Prior to Vector, Darren was the Director of Design at Addepar, a wealth management platform, which manages more than $2 trillion in client assets.

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Archives, Global Logistics, Global Shippers 101, Global Trade Daily

How Will Ocean and Air Market Conditions Affect Your Shipping Decisions?

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Global transportation—like many industries—has faced unparalleled disruptions over the past year. Now, as we head into 2021, there are new and different challenges added to the mix.

Many of our global shipping customers are up against the clock with Chinese New Year (CNY) approaching, while also navigating potential changes from a new U.S. administration. Of course, fast-changing consumer behaviors, port congestion, and continued uncertainty around the impact of COVID-19 continue to bring changes to the market as well.

Today I’m going to focus on how the ocean and air shipping markets have been affected and steps you can take to successfully account for these and other events.

Greater market demand overall

The global logistics market is forecasted to grow over 17% in 2021. And only a month into the year, that growth seems to be on track due to heightened demand across major global trade lanes. Volumes between China and the United States have increased by 30% compared to this time last year. It is likely the demand will continue past CNY, which falls on February 12, this year.

We historically see a spike in demand before CNY, but this year looks different from past years. Many companies are stockpiling and replenishing stock rooms in the wake of COVID-19 disruptions. And with a continued need for PPE and the dramatic uptick in ecommerce shopping, it’s no wonder there’s greater amounts of freight being moved right now.

Demand and disruption in ocean shipping

Ocean shipping capacity and port congestion

You’re most likely to see the most congestion and capacity constraints when shipping via ocean service in early 2021.

Significant increase in demand and equipment shortages in Asia have led to longer dwell times for vessels, which inevitably delays export shipments. In the United States, carriers continue to reduce the amount of exports in order to reposition empties back to Asia. Additionally, the uptick in vessel accidents due to inclement weather has added to the delays. Companies whose freight went overboard are not the only ones impacted, in fact the recent incident with ONE APUS resulted in all remaining freight being unloaded in Japan for further inspection. Inspections and transloading are likely to add considerable delays to a container’s journey.

Historically, ocean carriers announce the percentage of capacity that will be removed from the market during CNY. However, with the continued high demand and equipment shortages likely to continue through March, carriers have announced they will only remove 2-4%. This is down from the average 15-20% that we’ve seen removed in previous years.

Demand and disruption in air shipping

COVID-19 vaccine distribution

Air passenger travel is still down, and capacity for air cargo remains tight. Today, COVID-19 vaccine distribution has had minimal impact on capacity, but we’re closely monitoring the situation as it could and likely will change rapidly.

The majority of COVID-19 vaccines will not require inter-continental airlift, however, when doses do need to be transported via air, many airlines are already prepared to reposition capacity. When this happens, expect heavy demand from both Europe and India. And if/when this capacity is pulled from today’s already tight air market, your global supply chain may need to pivot in response.

With new COVID-19 strains and outbreaks, many countries are now requiring pilots and airline crews to quarantine or limit overnight deliveries. These changes will likely add to the inconsistencies and put pressure on air freight costs.

Successfully overcome shipping challenges

Monitor global events

Shipping across borders inevitably means customs and global compliance will play a vital role in your supply chain. It’s important to keep abreast of the changing global trade climate so your company can remain compliant and avoid customs delays. This is especially true with a new U.S. administration in place and Brexit in full swing.

While President Biden has indicated he does not plan to focus on trade and tariff changes immediately, he has already expressed his intention to approach trade differently than the previous administration.

Additionally, shippers both in and out of the UK will need to stay up to date on changing regulations as Brexit continues to progress, and any change may directly impact many supply chains.

Establish a plan for disruptions

Despite the challenges, it is possible to mitigate delays due to congestion and equipment shortages. We’ve been able to help multiple customers avoid 10+ day delays by routing shipments through a different port or shifting freight across modes.

Instead of trying to keep up to date about market changes from several news sources, you can trust a single information source to help you see how market trends will impact capacity and pricing. C.H. Robinson’s Global Forwarding Insights webpage provides a clear picture of rapid shifts in ocean and air capacity by aggregating current market information, like I shared above, in one easy to view place. With trade lane level detail, these market insights provided by industry experts are presented with an easy to understand summary of past and present market conditions so you can maintain flexibility, adapt to potential disruptions, and prepare for the most complex shipping challenges.

To dig deeper, connect with your logistics provider to develop a disruption action plan which is key to creating an agile, flexible, and well-rounded supply chain.