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The Importance of Freight Broker Bonds for your Business

freight broker tai group
Archives, Global Logistics, Global Trade Daily, Trucking

The Importance of Freight Broker Bonds for your Business

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Opening a freight brokerage can be a great way to accelerate your earnings. Freight brokers play an important role within the transportation industry by connecting shippers with transportation companies for trucks required to deliver their goods. While some shippers have contracts with specific trucking carriers, others rely on freight brokers for added flexibility, greater speed of delivery, and lower costs.

Freight brokers are required to comply with the Federal Motor Carrier Safety Administration’s regulations for licensing. There are a few different types of operating authority licenses that freight brokers need to operate within the US, depending on the type of cargo they broker. All of the different types of freight broker operating authority require brokers to meet certain requirements, including being bonded with a freight broker surety bond. Here is some information about freight broker bonds so that you can get started with your business and ensure that it successfully operates.

What Is a Freight Broker Surety Bond?

Also known as a BMC-84 bond, a freight broker surety bond is a type of guarantee issued by a surety company that the principal holder will perform the work as promised. It is not insurance since the principal broker is not protected from liability by the bond. Instead, a BMC-84 bond is required by the government before a broker can become licensed. It is meant to protect the companies that rely on the broker and contract with it for services and to ensure that the broker will comply with the applicable regulations and laws while operating.

If a freight broker fails to fulfill its contractual obligations, a claim can be filed against the bond. However, the surety company is not responsible for paying the claim. Instead, the freight broker must pay claims filed against its bond. The surety company only steps in when the freight broker fails to pay its claim. If a freight broker has unpaid claims, it could lose its surety and its ability to continue operating.

A broker that fails to pay a carrier what the carrier is owed might have a claim filed against its bond. The carrier’s claim will be in the amount the broker owes for the services the carrier provided for the shipper the broker connected the carrier to for the transportation of freight. An unpaid claim against the surety could result in the surety terminating the bond and the loss of the broker’s license. It can also make it more difficult for the broker to secure a new freight broker bond, forcing the broker out of business.

Why Are Freight Broker Bonds Necessary?

The Federal Motor Carrier Safety Administration requires brokers to secure operating authority licenses and to renew them annually to continue operating within the US. One of the requirements for securing and renewing an operating authority license is to secure and maintain a surety bond for freight brokers.

The governmental requirement for brokers to be bonded is meant to protect the companies that depend on them. This is why surety bonds for freight brokers protect the parties with which the brokers contract instead of the brokers themselves. If you do not secure and maintain a BMC-84 freight broker bond, you will not be able to operate your freight brokerage since you will not be able to secure or renew your operating authority.

Which Parties Are Involved in a Freight Broker Surety Bond?

The three parties that are involved in a freight broker bond include the following:

• Principal – The freight broker seeking the bond to secure or maintain its operating authority license

• Obligee – The governmental agency requiring the bond, which is the FMCSA

• Surety – The surety company issuing the surety bond

How a Freight Broker Bond Works

A freight broker must find a surety company to issue a bond so that the broker can secure an operating authority license from the FMCSA. The surety company will go through an underwriting process before agreeing to issue the bond. It will review the broker’s credit and financial history, ensure that the broker has sufficient working capital to cover the maximum bond amount and check its history for past problems.

The bond functions similarly to a person’s credit score. If a broker has a history of multiple claims or past unpaid claims, the surety company might deny the application for the BMC-84 bond. If it does agree to move forward with issuing the bond, the freight broker bond cost will be much higher than if the company had instead established a good operating record.

The principal must pay a percentage of the maximum bond amount upfront to secure the bond. This cost might range from 1% of the total bonded amount for freight brokers with good credit and reputations to 15% for those with poor credit or with marks on their records.

Freight broker bonds expire, but they can be renewed. Since a freight broker must also renew its operating authority annually with the FMCSA, it must maintain its surety bond and renew it if it is getting ready to expire. A surety company can also terminate a bond when the principal has unpaid claims and refuse to renew it.

While freight broker bonds are not insurance and do not protect your business, they are a necessary part of operating a freight brokerage in the US. You cannot secure or renew your operating authority to broker freight between shippers and carriers within the US without having a valid freight broker surety bond.

Since your history with your bond could potentially harm your business reputation and your ability to continue operating, it is critical for your company to establish a good record and to meet its obligations if any claims are filed against your surety. Establishing a good history by complying with the law and meeting your contractual obligations can help your business to be more successful.

pasta imports
Archives, Global Trade Daily, News

The UK Ramps Up Imports of Stuffed Pasta and Couscous

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IndexBox has just published a new report: ‘United Kingdom – Stuffed Pasta And Couscous – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

UK imports of stuffed pasta and couscous grew by +15.8% y-o-y to $525M last year. Italy, China and France provide approximately 77% of the total volume imported into the UK. All these countries have significantly expanded their exports of stuffed pasta and couscous to the UK. Germany emerged as the fastest-growing supplier in terms of import value in 2020.

UK Imports of Stuffed Pasta and Couscous

In 2020, approx. 316K tonnes of stuffed pasta and couscous were imported into the UK, growing by +16% on the previous year. In value terms, pasta and couscous imports soared by +15.8% y-o-y to $525M (IndexBox estimates) in 2020.

In 2020, Italy (209K tonnes) constituted the largest supplier of pasta and couscous to the UK, with a 66% share of total imports. Moreover, pasta and couscous imports from Italy exceeded the figures recorded by the second-largest supplier, China (22K tonnes), tenfold. France (14K tonnes) ranked third in terms of total imports with a 4.3% share.

In value terms, Italy ($266M) constituted the largest supplier of pasta and couscous to the UK, comprising 51% of total imports. The second position in the ranking was occupied by China ($42M), with an 8% share of total imports, and it was followed by Germany, with a 7.7% share.

In 2020, the average annual growth rate of value from Italy totalled +18.6%. The remaining supplying countries recorded the following average annual rates of imports growth: China (+7.0% per year) and Germany (+23.0% per year). Germany emerged as the fastest-growing exporter of stuffed pasta and couscous to the UK.

In 2020, the average pasta and couscous import price amounted to $1,664 per tonne, therefore, remained relatively stable against the previous year. Prices varied noticeably by the country of origin; the country with the highest price was South Korea ($3,819 per tonne), while the price for Italy ($1,271 per tonne) was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Germany, while the prices for the other significant suppliers experienced more modest paces of growth.

Source: IndexBox Platform

inventory
Archives, Global Logistics, Global Trade Daily, Warehousing

Top 3 Performance Indicators to have in an Effective VMI

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To ensure effective inventory management, a supplier must have quality Vendor Managed Inventory (VMI). But how do you evaluate such software before purchasing and implementing it? What metrics should you look for?

Inventory Management

In a buyer/supplier relationship, the retailer and vendor are often jointly involved in inventory management, an approach called collaborative supply management. In the context of VMI (Vendor Managed Inventory), the delivery of goods to warehouses and stores is the vendor’s responsibility – they are required to deliver goods based on customer needs.

To successfully manage supply operations and ensure good processing speed, suppliers must keep track of their inventory levels. By getting up-to-date data on stock levels in warehouses and stores, suppliers can cover demand for goods and prevent costs and shortages.

The objective/goal: To have the right amount of goods at the right time, thanks to an adequate assessment of needs.

Demand Forecasting

For the most accurate supply management, suppliers make their forecasts based on the preliminary trends that VMI generates. To improve efficiency, the management tool should quickly and easily forecast demand. Additionally, the tool should provide the ability to check the reliability of the forecast at the end of the cycle (day, week, month) to assess future supplier needs.

For example, the software has predicted that customers will have demand for 200 security lockboxes. At the end of the cycle, we should be able to verify that all of the predicted items have been sold.

The objective/goal: Make the necessary changes in the next delivery cycle so that we don’t have to rely on chance.

Service Rate

Typically, retailers use a collaborative inventory management model when they intend to achieve an optimal service rate.

The objective/goal: no shortages and always meet store demands.

By sharing inventory management responsibilities, retailers aim to meet store demands while reducing inventory. Therefore, to optimize service rates, suppliers must be prepared to ship items coming in from different delivery points every day.

In a vendor-controlled supply chain model, a quality VMI solution is a key element in ensuring effective collaboration between all parties in the relationship. Only with fine-tuned inventory management and reliable demand forecasting is it possible to achieve optimal service rates. Which is simply necessary to build a successful vendor-implemented inventory management model.

Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.

This article originally appeared here. Republished with permission. 

Envirotainer
Archives, Global Trade Daily, News

Envirotainer’s CryoSure® Transforms Low-Temperature Shipping

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The future of cryogenic shipping is now met with a sustainable and revolutionized option thanks to Envirotainer – a leader in secure cold chain solutions for intercontinental shipments of pharmaceuticals bringing more than 30 years of expertise to the industry.

“For many years, the strategy of Envirotainer has been to extend our offering through new innovative products and services and to expand into new segments. This technology fits perfectly into our circular business model and is going to be an important part of our offering going forward. The unique, premium quality, and completely reusable technology matches perfectly into Envirotainer’s global footprint”, says Fredrik Linnér, Chief Business Development Officer at Envirotainer.

The company announced the release of four models representing its latest solution for pharma-related shipping known as the CryoSure® platform (X1, X2, X5 and X11). This platform offers multiple competitive capabilities and elements including  -70oC performance. Particularly beneficial for longer shipments, the CryoSure® technology addresses risks resulting from delays and human errors, ultimately providing safer, sustainable, and more reliable pharmaceutical shipping to benefit patients.

“This new CryoSure® technology takes pharma transportation to the next level by mitigating most if not all risks currently faced when shipping pharma products below -70°C. It is a game-changer and is going to revolutionize this part of the market”, says Mattias Almgren, CryoSure® Platform Executive at Envirotainer.

“Envirotainer has been leading the way ever since the beginning of the temperature-controlled shipments and it is with great pride that we today announce the launch of CryoSure®. We believe CryoSure® fills a substantial gap in the cryogenic -70°C shipment market and significantly improves patient safety”, says Peter Gisel-Ekdahl, CEO at Envirotainer.

Added benefits provided by CryoSure® include duration of three weeks, heat resistance, ease of use, and is known as the most sustainable solution currently on the market.

To learn more about CryoSure®, please visit: https://www.envirotainer.com/cryosure

rug imports
Archives, Global Trade Daily, News

Turkey, India and Vietnam Benefit from Rising American Carpet and Rug Imports

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IndexBox has just published a new report: ‘U.S. Carpet And Rug Market. Analysis And Forecast to 2025’. Here is a summary of the report’s key findings.

Last year, the U.S. ramped up imports of carpets and rugs by +11% to 796K tonnes. In value terms, imports reached $2.9B. Turkish, Indian and Chinese supplies comprise approximately 79% of American carpet and rug imports. In 2020, most of the import increment was provided by boosting purchases from Turkey, India, Egypt and Vietnam. Vietnam became the fastest-growing exporter of carpets and rugs to the U.S.

American Carpet and Rug Imports by Country

In 2020, carpet and rug imports into the U.S. expanded rapidly to 796K tonnes, surging by +11% compared with 2019 figures. In value terms, carpet and rug imports rose by +1.9% y-o-y to $2.9B (IndexBox estimates) in 2020.

Turkey (275K tonnes), India (224K tonnes) and China (127K tonnes) were the main suppliers of carpets and rugs to the U.S., together accounting for 79% of total imports. Egypt, Vietnam, Canada and Mexico lagged somewhat behind, together comprising a further 14%.

In 2020, supplies from Turkey (+71K tonnes), India (+15K tonnes), Egypt (+10K tonnes) and Vietnam (+20K tonnes) increased significantly. Vietnam recorded the highest growth rate of the volume of imports, expanding supplies to the U.S. from 12K tonnes to 32K tonnes last year.

In value terms, India ($904M), Turkey ($899M) and China ($377M) were the largest carpet and rug suppliers to the U.S., with a combined 75% share of total imports. These countries were followed by Egypt, Vietnam, Mexico and Canada, which together accounted for a further 12%.

Source: IndexBox Platform

telematics
Archives, Global Trade Daily, Software

What Contractors Need to Consider When Purchasing Equipment Telematics

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Telematics can be an invaluable tool for contractors who want to track and monitor key assets more effectively, like heavy equipment and vehicles. The rise of smart technology and other Industry 4.0 tech has made these systems more accessible and powerful, encouraging contractors to invest.

However, implementing telematics can be costly and time-consuming, and not every system will provide the specific benefits a fleet owner or logistics professional needs. Knowledge of these factors will help any contractor make more informed decisions when purchasing telematics for heavy equipment.

Feature Considerations

System features are one of the most important factors for contractors wanting to purchase telematics equipment. Not all providers offer the same options, and pricing for equipment and devices can vary significantly depending on what a particular contractor needs.

More complex telematics systems can also be more expensive to purchase and maintain. If a contractor just needs the ability to track assets in real-time, functionality beyond GPS- or RFID-based tracking may make the system more expensive while not providing much additional value.

These are some of the most common telematics systems and the ones a contractor is most likely to need:

1. Real-time location tracking: Most systems offer GPS-based tracking that allows fleet managers to monitor the location of assets in real-time.

2. Alerts: Automatic notices trigger when customizable conditions are met — like assets moving after work hours or faster than local speed limits or scheduled maintenance alerts.

3. Asset and driver data reports: In addition to real-time reporting, most systems will also offer reports or dashboards that sum up recent events and patterns of usage. Contractors can use this information to track driver behavior, asset performance or machine health.

4. Asset diagnostics: Telematics systems can integrate directly with important vehicle or asset systems like engine control units (ECUs), providing them with access to data from sensors and monitoring devices. This allows the system to provide important information on vehicle health and performance to system owners — alerting them automatically when faults are detected or maintenance is needed.

5. Customer service: Dedicated customer support lines provide assistance with telematics system operation, troubleshooting and maintenance scheduling.

The specific data points that asset telematics will track can vary from system to system. Providers may offer monitoring for a wide range of data, including information on seatbelt usage, emissions, dashcam footage, fuel consumption, fuel efficiency, idling and performance.

Selecting a telematics system that offers the features a contractor needs will help them avoid overspending or selecting one that isn’t a good fit.

Contractors should also consider synergy and integration with existing technology. A business that takes advantage of IoT monitoring may want to investigate how the two systems could share data or be configured to supply information to the same dashboard.

Businesses that take advantage of digital twins may want to investigate how additional data provided by telematics may allow them to more accurately model construction sites, buildings or business operations.

Purchasing vs. Renting Telematics for Fleet Management

Often, telematics providers offer the option to either purchase or rent the equipment. While buying a system comes with some advantages — permanent ownership of the hardware and more control over telematics maintenance — renting may be a better option for some contractors.

As with construction equipment, renting can be an effective way to close asset gaps that emerge when systems fail, require maintenance or need replacement.

Suppose a rented telematics device stops working or needs maintenance. In that case, a contractor may be able to more easily procure a replacement or even request one from their provider while the rented equipment is being repaired.

Professional vs. Self-Installation

If a contractor isn’t purchasing new equipment with telematics systems that come pre-installed, they, their team or a third party will have to connect it to each asset they want to track.

This installation process can be involved and time-consuming. Any mistakes the contractor makes can negatively impact the telematics system’s performance or damage components.

Also, the asset in which the telematics system is being installed will be unavailable during this time. Troubleshooting can cause it to be unavailable for longer.

Professional installation is generally less risky but will be more expensive. The cost will typically depend on the system’s complexity, the number of vehicles or assets, and the contractor’s location — installation service rates can fluctuate significantly from region to region.

As with self-installation, the contractor will also need to prepare for significant downtime and loss of productivity while the system is installed.

A professional installer can likely work faster than someone without telematics experience, but all installations will take time.

Equipment Telematics System Security

The growing threat of cybercrime means contractors should also consider how telematics may make their businesses less safe. These systems generate so much data and are typically connected with other essential components, making the overall network more challenging to secure.

Contractors should consider how they’ll keep their telematics secure and how their provider addresses safety issues.

When shopping for a new telematics system, contractors should ask about the importance of security in the provider’s design process. They should also ask about how data is kept safe at the device firmware level, while it’s in transit and when it’s stored in the cloud.

Contractors should also ask about the steps they can take to keep their telematics systems and business networks secure. Providers may be able to help end-users configure them in a way that protects these systems from an attack.

Keep These Considerations in Mind When Buying Telematics

The potential benefits of a telematics system make the technology a good investment for contractors. However, not every one is the same. Varying features and payment options mean companies should carefully consider available offerings.

Contractors wanting the simplest and cheapest system should consider a rented telematics solution that primarily offers GPS tracking. Businesses in need of analytics, behavior tracking and other complex solutions may need more expensive systems. Researching needs and options before investing in telematics will ensure the system is the right choice.

AntwerpXL
Archives, Executive Education, Global Trade Daily, News

AntwerpXL 2021 Conference Program Unveiled!

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 The conference program for AntwerpXL, the award-winning breakbulk, roro, and project cargo event, has been unveiled.

The conference, which will take place on the last two days of the show (8 and 9 December), will give delegates a unique depth of insight from the industry’s best and brightest exploring the global trends, challenges and opportunities that will shape the industry’s future.

Day one will open with a networking breakfast hosted by Flows, offering delegates an opportunity to connect and chat with some of the biggest names in the industry.

Following that, a session on digitalization will cover the digital platforms of the present and near-future, acquiring and integrating new digital tech, and the impact of digital on the industry. This will feature Karel Van den Berghe, CEO of GLOBIS Software, Steven Schutter, Marketing Manager of NxtPort and Valentin Carlan of the University of Antwerp, and will be moderated by Peter Bouwhuis, President and CEO of XELLZ Group.

The afternoon sessions will kick off with a talk from David Kershaw, Editor of Heavy Lift & Project Forwarding International, on recruitment and developing a recruiter brand in a time when the battle for talent is very real. Following this will be an in-depth innovation exploration from Arjun Haring, Researcher at the Jheronimus Academy of Data Science, and a talk from Robin van Emden, AI Researcher at SPEED, on AI and its applications in the breakbulk industry.

Closing day one will be a session on connections, rail and barge, led by Katarina Stancova, Senior Mobility Advisor at the Port of Antwerp and featuring experts including Peter Larose, Head of Projects at Conti7.

Day two will begin with a forecasting session on managing the needs of breakbulk and project cargo shippers in a multipurpose shipping market, delivered by Kyriacos Panayides, Managing Director of AAL Shipping, and featuring experts including Dominik Stehle, COO of United Heavy Lift.

Next up is a session on sustainability and future fuels moderated by Matthew Moss, Head of Maritime at KTN, with Wim Dillen, International Development Manager at Port of Antwerp, Maja Felicia Bendtsen, Chief Business Officer Bulk at Port of Roenne, and Margaret Dunn, Editor of Tank Storage Magazine.

Lunch will be hosted by Christa Sys from the University of Antwerp and Philippe Fierens, Managing Director of ExSeCo Belgium who will be joined by the AntwerpXL 40 Under 40 – the breakbulk industry’s most promising professionals under the age of 40 – to discuss how we can attract the next generation of breakbulk professionals to the industry.

The conference will close with a forward-looking panel on challenges and opportunities moderated by Andrew Dawes, CEO of Arise Ports and Logistics. This will include Bert Biermans, Manager Projects at Sotramar & De Keyser, Albert-Jan Ars, Commercial Manager of Katoen Natie Port Operations, and Catrien Scheers, Ambassador of Fast Lines.

Rikki Bhachu, Head of Marketing at AntwerpXL, says “This conference program brings together all of the best minds within the breakbulk industry for two days of in-depth discussions about its future. This is an opportunity for delegates and exhibitors to gain some insight, and share their thoughts, knowledge and ideas with the best in the business. You really don’t want to miss this!”

The full details of the conference program can be found online on the AntwerpXL website: www.antwerpxl.com.

__________________________________________________________________

About AntwerpXL

AntwerpXL is a three-day exhibition and conference for the breakbulk and heavy lift industry. Industry leaders will meet to stay ahead of the competition, network and gain new business at the Antwerp Expo in Antwerp, Belgium on 7 – 9 December 2021. Find out more at www.antwerpxl.com.

About Easyfairs

Easyfairs organises and hosts live events, bringing communities together to visit the future.

The company currently organises 200 events in 14 countries (Algeria, Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom) and manages 10 event venues in Belgium, the Netherlands and Sweden (Antwerp, Ghent, Mechelen-Brussels North, Namur, Gorinchem, Hardenberg, Venray, Gothenburg, Malmö and Stockholm).

Easyfairs employs more than 750 people and generated revenues exceeding €166 million for its financial year 2018-2019.

Easyfairs strives to be the most adaptable, agile and effective player in the events industry by employing committed individuals, deploying the best marketing and technology tools and developing strong brands.

In 2018 Easyfairs was named Belgium’s “Entrepreneur of the Year®” and earned recognition as a Deloitte “Best Managed Company” and a “Great Place to Work”.  For the second year running, Deloitte has conferred “Best Managed Company” status on Easyfairs in 2020 and also saw AntwerpXL win “Best Event Launch” at the AEO awards.

The company is ranked 17th in the list of the world’s leading exhibition companies.

Visit the future with Easyfairs and find out more on www.easyfairsgroup.com.

For further information, please contact:

Rikki Bhachu, Head of Marketing, Easyfairs

Rikki.bhachu@easyfairs.com

+44 (0)20 3196 4282

 

Catherine Chin, Marketing Manager, Easyfairs

Catherine.chin@easyfairs.com

+44 (0)20 3196 4396

financial
Archives, Banking, Global Trade Daily, International Trade

How Executives Can Increase Their Company’s Financial Efficiency

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As the world becomes increasingly interconnected, opportunities for logistic companies expand. While this is good news, it also means competition within the industry is rising. If supply chain businesses want to stand out from competitors, they must increase their financial efficiency.

Many investors and potential business partners use financial efficiency metrics to determine a company’s economic health. Consequently, financially inefficient businesses may miss out on valuable strategic opportunities. Partnerships and investment aside, an efficient company is a more successful one.

Here are seven ways executives can increase their company’s financial efficiency to attain these benefits.

Automate Back-Office Tasks

Most businesses have repetitive, manual tasks that take time away from more valuable work. According to one study, more than 40% of workers spend at least 25% of their time on these tasks. Since these inefficiencies are so common and so impactful, automation can bring considerable rewards.

Many of these inefficiencies are in back-office operations like data entry, scheduling, and approvals. These tasks are also easily automatable through robotic process automation (RPA) solutions. By implementing these tools, companies can free their employees to focus on other, more important work, accomplishing these goals sooner.

RPA is also often faster than humans at these repetitive tasks. As a result, companies will improve the efficiency of these back-office processes as well as the more valuable manual operations.

Increase Fleet Visibility

Another common source of financial inefficiency in logistics companies is a lack of visibility. Fleet operations are prone to disruption, and when businesses can’t predict or see them as they unfold, these disruptions can have far-reaching consequences. In contrast, increasing visibility can help respond to developing situations faster, minimizing delays and costs.

Many companies now track fleets with GPS systems, but businesses can go further, too. Internet of Things (IoT) sensors can monitor and communicate data like location, driving patterns, maintenance info, and product quality in real-time. With this timely information, fleet managers can see issues as they arise, leading to quicker, more effective responses.

Faster reactions lead to better customer service, less disruption, and sometimes avoiding serious delays entirely. Businesses’ financial efficiency will rise as a result.

Address Accounts Receivable

Accounts receivable turnover is one of the most popular metrics for financial efficiency, so businesses should strive to collect debts as quickly as possible. In the delay-heavy and prone-to-disruption world of logistics, that can be complicated. However, a few options can help.

One way to improve this ratio is to provide multiple payment methods for clients. This allows customers to use whatever best suits their needs, leading to quicker reactions from them. Similarly, payments will be faster when customers can use a process they’re already familiar with.

Another way to improve accounts receivable turnover ratios is to employ automation. Automated billing, reminders, and processing services are abundant today and can streamline the process for both companies and their clients. Employing these solutions while providing multiple payment methods will ensure businesses collect outstanding payments as quickly as possible.

Refinance or Consolidate Outstanding Debts

Outstanding debts are another common obstacle to financial efficiency. Having debts is normal for a business, but that doesn’t mean companies shouldn’t continuously reevaluate their loans. Periodically addressing these to see if there’s a way to refinance or consolidate them can help cultivate financial agility.

Many logistics companies may have outstanding vehicle loans, for example. These ongoing payments can easily fade into the background, but refinancing them can save $150 per vehicle per month in some cases. That seemingly small change frees up extra monthly revenue that companies can then put towards something else.

Alternatively, some companies may want to consolidate some of their debts. Doing so can make it easier to manage them and lower interest rates. Businesses may then be able to pay them off sooner.

Improve Cross-Department Communication

One aspect of the business that may fly under the company’s radar is communication between departments. When things get lost in translation moving between teams, it can lead to mistakes or take more time to achieve the desired goal. These mistakes and delays hinder financial efficiency, so improving communication can increase it.

Communication barriers cost $62.4 million annually in lost productivity on average. Consequently, companies should strive to remove barriers to effective collaboration, especially between different departments. Using collaborative software, holding frequent meetings, using instant messaging apps, and similar steps can do that.

When teams can communicate efficiently, confusion-related errors will decrease. Similarly, cross-department projects will have shorter completion times thanks to easier collaboration.

Reorganize Inventory

Inventory turnover is another aspect of financial efficiency to address. The longer items sit in warehouses or distribution centers, the less agile a company is. While logistics businesses may not be directly involved in the sales side of this issue, they can take steps to improve inventory inefficiencies.

Like fleets themselves, most inefficiencies in this area come from a lack of visibility. When organizations don’t know exactly where every item is at all times, it can take time to retrieve the correct one. Similarly, this lack of transparency can lead to confusion and errors that require correction down the road, leading to delays.

According to one survey, 34% of businesses have shipped items late because they sold out-of-stock items. Warehouse management systems, IoT tracking, and RFID tags can all help keep better track of inventory levels, avoiding mistakes like this. Logistics businesses can then pass these benefits along to their partners, creating positive ripple effects.

Train Employees More Thoroughly

One risk factor that can affect financial efficiency in any department in any business is human error. Even small mistakes can lead to considerable disruptions over time as more employees make them. Many may suggest automation as an answer, but that isn’t applicable in every circumstance and isn’t always necessary.

The solution to this problem is to put more emphasis on employee training. Organizations should look for common mistakes and, as trends emerge, emphasize these points in training. Periodic refresher courses over high-value or complicated processes can help too.

When workers better understand how to perform their jobs correctly, they’ll also work faster. More thorough training will boost confidence, leading to less second-guessing and higher efficiency.

Financial Efficiency Is Critical for Any Logistics Business

As the logistics market grows increasingly crowded, businesses must improve their financial efficiency to stay competitive. Higher efficiency will lower operating costs, attract investors, and open new strategic opportunities. These seven steps can help any business increase its financial efficiency. Companies can then become as agile and profitable as possible.

polystyrene
Archives, Global Trade Daily, News

China’s Polystyrene Production Expansion to Be Delayed Amid Energy Crisis

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IndexBox has just published a new report: ‘China – Polystyrene in primary forms – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2021-2022, China plans to add a new production capacity for styrene and polystyrenes. This could turn China from the world’s largest importer of those products into an exporter. Completion may be delayed due to electricity disruptions caused by increasing energy prices and regulations to reduce CO2 emissions. Despite the ban on single-use packaging, consumption of polystyrene in China will steadfastly grow, driven by a high demand for plastics in the construction, automotive and other industries.

Key Trends and Insights

China is the largest consumer and importer of polystyrene in the world. In 2020, the country imported 1,36M tonnes of primary polystyrene (nearly 20% of overall global imports) worth $1,43B.

According to industry publications, in 2021-2022 new factories for polystyrene and ABS plastics are expected to launch with a combined capacity of over 3.5M tonnes, including new facilities for the companies Sinopec Gulei, Zhejiang Petrochemical и Shandong Lihuaya. If these projects are completed, China may turn from a styrene importer into an exporter as the new capacity would surpass 2.8M tonnes or the current level imports (IndexBox estimates).

The energy crisis in China could delay the completion of these projects. Beijing’s environmental protection policies have led the provinces to limit energy consumption to stay within yearly quotas. They are also diminishing manufacturing operations, including at chemical factories that use coal for power generation. To decrease greenhouse gas emissions, China must limit coal usage, but this will cause costs to increase for energy-intensive production methods.

Despite the ban on single-use polystyrene tableware and packaging in China, demand for this polymer will consistently rise. The majority of the product is used for producing Styrene-butadiene, ABS and other forms of plastics for the construction, electronics and automobile industries. Rapid developments in these sectors will drive demand for polystyrene.

China’s Imports of Polystyrene in Primary Forms

In 2020, imports of polystyrene in primary forms into China expanded to 1.4M tonnes, increasing by +3.8% on the previous year’s figure. In value terms, polystyrene imports dropped from $1.6B in 2019 to $1.4B (IndexBox estimates) in 2020.

Taiwan (Chinese) (311K tonnes), Malaysia (204K tonnes) and Hong Kong SAR (177K tonnes) were the leading suppliers of polystyrene imports to China, together accounting for 51% of total imports. South Korea, Singapore, Japan, Iran and Thailand lagged somewhat behind, together accounting for a further 36%.

In 2020, the most notable rate of growth in terms of purchases amongst the leading suppliers was attained by Iran (+71.3% per year), while imports for the other leaders experienced more modest paces of growth.

In value terms, the largest polystyrene suppliers to China were Taiwan (Chinese) ($369M), Hong Kong SAR ($209M) and Malaysia ($175M), together accounting for 52% of total imports. These countries were followed by South Korea, Japan, Singapore, Thailand and Iran, which together accounted for a further 35%.

The average polystyrene import price stood at $1,055 per tonne in 2020, waning by -13.1% against the previous year. Average prices varied somewhat amongst the major supplying countries. In 2020, the highest prices were recorded for prices from Taiwan ($1,186 per tonne) and Japan ($1,180 per tonne), while the price for Malaysia ($856 per tonne) and Iran ($863 per tonne) were amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Hong Kong SAR, while the prices for the other significant suppliers experienced a decline.

Source: IndexBox Platform

supply chain
3pls, Archives, Global Logistics, Global Trade Daily

7 Ways to Update Your Supply Chain Strategy for 2022

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The onset of the COVID-19 pandemic has changed the logistical landscape forever. There have been significant channel shifts due to renewed consumer behavior, the speed of orders, and delivery standard expectations. Amidst all this pandemonium, supply chains had to evolve years in a span of months just to keep up with this significant paradigm shift. 

Companies have moved away from low-cost supply chains and towards a much more resilient and agile framework. 87 percent of supply chain leaders are looking to invest in resilience in the coming years. As a result, the adaptation of next-gen transportation and logistics strategy solutions has made supply chains faster, smarter, and user-centric. Moreover, the logistics industry is evolving at an alarming rate and is said to reach a valuation of $12,256 billion by 2022. 

Since adroit logistics are reshaping the whole supply chain, what should you look forward to in 2022 and beyond? Read on to know more about seven different ways you can make your supply chain strategy even better!

Importance & benefits of a good supply chain strategy

In light of this new normal brought by the pandemic, it is of the essence that all companies, no matter the size, adapt a supply chain component. But why? Well, let’s delve into that for a bit.

Keeps costs and service quality in balance 

Customer satisfaction is key to the success of any business. But that might mean having goods in stock at all times. This might lead to overproduction and wastage of resources. With a good supply chain management (SCM) strategy in place, this can be avoided. The company shall save money and keep customers happy at the same time. 

Higher efficiency rate  

Data-driven SCM provides real-time data on the availability of raw materials and manufacturing delays. Hence, companies implement a ‘plan B’ instead of meeting these hurdles with empty hands. Out-of-stock inventory and late shipments won’t be an issue anymore. 

Encourages business development  

With an effective data-driven SCM strategy in place, you can analyze your past dealings with vendors. You can compare prices, quality of services, raw materials, etc., and realize improvement areas. Work on them and achieve your business goals efficiently. 

7 ways to better your supply chain strategy for 2022

Higher visibility 

Increased visibility into your supply chain’s transportation spend is a must. By doing so, you can improve on your weaknesses, control costs, and make effective, impactful data-driven decisions. In fact, 50 percent of global product-centric companies will have implemented real-time transportation visibility platforms. But why so?

Well, the answer lies in two parts. Firstly, they allow customers to track their orders in real-time. This meets the renewed customer expectations and makes the work of the customer support team a little easier. Secondly, the customer support team can deliver invaluable insights into your transportation costs and overall performance. 

Total visibility into your transportation spend is a gateway to optimize carrier selection, carrier rates, contract management, etc. Not only that, but you now have a stream of high-quality data that can help improve your business intelligence and make smarter data-driven decisions to cut costs further. 

Increased resiliency 

A resilient supply chain can be the only thing standing between a company’s success or failure. A bold claim? For sure. But is it wrong? Absolutely not. An effective, agile, and resilient supply chain management strategy can be a massive sales enabler and a significant driver to the company’s profit margin and growth opportunities. 

You need to optimize your transportation spending to understand where you are directing your money and root out all the unnecessary expenses. By controlling the costs within the supply chain, you can cut many costs and direct that money towards optimizing the areas that require improvement. Provided your supply chain management strategy is spot-on, you can make data-driven and impactful decisions and secure your place at the top of your industry. 

Optimized logistical networks 

The supply chain industry has recently seen a shift to omnichannel. The logistical disruptions caused due to the ongoing pandemic have accelerated this process by a considerable extent. According to a report by Gartner, 76 percent of supply chain professionals claim to have experienced an increase in disruption events in the past three years. 

72 percent of them also stated that the impact of these events has also increased. Hence, optimizing your logistical network for agility and resilience has become vital to maintain and multiply your customer base. Due to the ongoing pandemic, most customers have adapted to online shopping or buying online and picking up at stores (BOPUS). 

Although in-store shopping hasn’t completely disappeared, this new normal demands you to constantly keep up with customer orders and restock retailer inventory. Companies seem to be juggling between global, regional, and local networks to enable quicker delivery times. Hence, 90 percent of US retailers and consumer goods companies plan to change and optimize their supply chain network to increase efficiency. 

Better risk mitigation 

Risk mitigation is essential to maintain your customer base and the integrity of your supply chain. This point can’t be stressed enough post the onset of the pandemic. Over 28 percent of companies experienced a stock shortage in the first few months of the pandemic. This can damage your brand identity and have a detrimental effect on your customer base and market share. On top of this, damages, delayed shipments, inadequate storage environments, etc., can worsen the situation. 

You need to evaluate and identify the current risks to your company, prioritize them by probability and impact, and approach them accordingly. For example, optimizing and automating freight audits can act as a potent risk mitigator, as it eliminates errors, averts delays based on discrepancies, and streamlines operations. 

Digital supply chain adoption 

Supply chains have been very sluggish in adopting digital transformation. But the pandemic has been a wake-up call. With the digitization of almost everything in sight, supply chains need to undergo complete change management to stay afloat and keep up with the changing times. 

But what is change management? Change management is a collective term for all structured processes and approaches used to prepare, support, and help organizations make a complete organizational change. Managers today need to understand its tenets and create a seamless digital transformation. This is extremely necessary as only 1 percent of world supply chain leaders have an extensive digital supply chain system in place. 

With proper change management and digital supply chain tech adoption, this number is expected to shoot up to 23 percent by 2025. But people generally misinterpret the meaning of a digital supply chain. It is not just pushing spreadsheets onto a platform. 

It refers to the development and implementation of advanced technologies cloud-based computing, IoT, blockchain, ML, AI, etc.) to drive improvements in traditional supply chains. Implementation of such technology will reduce errors, improve resource efficiency, and provide valuable insights. 

Reliance on real-time data

Organizational silos can be detrimental to the smooth functioning of your company. Employees might become more insular and distrustful of other departments, making it challenging to work with other groups. Real-time data is the only way to break down these organizational silos as they offer complete transparency within your supply chain’s transportation spend. 

According to a study conducted by Forbes, 84 percent of supply chain leaders claim that real-time data has helped them break down silos across the entire value chain. Real-time data can allow you to control cost centers, measure performance, address procedural gaps, improve decision making, and boost overall team and company performance. 

With the pandemic still at large, the remote work culture makes maintaining transparency and leveraging accurate real-time data even more critical. This is to ensure that your transportations spend management keeps running smoothly and fruitfully. 

Increased disruptions 

The first nine months of 2020 experienced a massive 4200 disruptions to global supply chains, 14 percent higher than 2019. With disruptions set to keep increasing, supply chains must adapt and evolve to survive. Investing in supply chain resilience is an absolute must for 2022. 

Also, climate change is making it more and more necessary to adopt digital solutions within supply chain management. According to a WHO, UNDP, and IPCC report, climate change has increased heat in the workplace and has reduced labor productivity by 20%. Hence, our reliance on software solutions has to proliferate to unburden human resources and prevent productivity loss.

Implementing an agile approach to supply chain transformation

An agile supply chain is a supply chain of the future. Supply chains must encompass the ability to achieve more in a shorter time, adopting new digital technologies. All end-to-end processes, such as planning, manufacturing, logistics, etc., must be backed by the latest technologies. 

A more traditional supply chain will be rendered obsolete and must undergo complete change management to keep up with the rapid digitization of the industry. Process re-engineering (radical redesign of business processes) and adaptation of software solutions to cater to the company’s specific needs will pave the way for an impeccable supply chain management strategy. 

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Hazel Raoult is a freelance marketing writer and works with PRmention. She has 6+ years of experience in writing about business, entrepreneurship, marketing, and all things SaaS. Hazel loves to split her time between writing, editing, and hanging out with her family.