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3 Reasons Why it’s Going to Take Longer to Unravel the Current Global Logistics Mess

logistics
Archives, Global Logistics, Global Trade Daily, International Trade

3 Reasons Why it’s Going to Take Longer to Unravel the Current Global Logistics Mess

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If you’re involved in global shipping or even a consumer who recently purchased furniture or other bulky items, you’re well aware of the sorry state of global logistics. The pandemic and its knock-on effects have created global shipping chaos and driven astronomical shipping costs. While we are all enduring the consequences, the big question now is when will global logistics return to normal? Will it happen after peak season this year? I am less optimistic about a quick turnaround. Here are three data points that highlight why I believe the current situation will drag on longer than anticipated.

Inventories are way down and retailers want to hold more of it in the future.

The pandemic created a unique situation. Manufacturing and distribution capacity declined, but consumer demand didn’t. Retailers have seen their inventories cut as consumers continue buying, but they cannot replenish their stocks. According to the US Census Bureau, the inventory to sales ratio is down more than 25% since the beginning of the pandemic (see Figure 1).

The chart also shows a general decline over 2 decades in the inventory to sales ratio, which is a testament to retailers and their logistics partner continually improving their supply chain performance. That trend is about to change as many retailers are deciding to hold more inventory as a hedge against greater supply chain uncertainty. So, what does that mean? Retailers will be buying more than what they need in the short-term to build their stocks to larger acceptable levels. This will continue to put more pressure on supply chains and logistics operations—not reduce it—even after the peak season ends this year.

Figure 1: Retail Inventory to Sales Ratio

Inflation is up, but still viewed as manageable and history says it can go higher before stunting demand.

The Federal Open Market Committee (the Fed) just released its revised forecast for inflation. The forecast did rise by 1% to 3.4% for the year; however, that is more than manageable and unlikely to suppress consumer demand as longer-term inflation is being forecasted at 2%. In addition, if inflation were to go higher, that wouldn’t necessarily mean that US import volumes would decline and take pressure off the current situation. The last time inflation breached 5%, as it did in May, was in August 2008 when it reached 5.8%. As you can see from the US maritime import chart (see Figure 2), import volumes continued to increase.

Figure 2: US Maritime Import Volume

Source: Descartes Datamyne

The economy continues to reopen and the Fed expects robust job creation through the fall. This is a good news/bad news story. As states continue to relax or eliminate COVID-19 related restrictions, parts of the economy such as restaurants, tourism and other service industries will return to more normal capacity, increasing demand for goods many of them import. The Fed is also predicting robust job growth into the fall. The continued opening up of business will drive job growth and consumer spending as those hit hardest by the pandemic have more cash to spend. Again, more pressure on global supply chains.

The protracted situation means that short-term plans that increase costs but get goods to market may make more sense than waiting for the global shipping situation to get better on its own. However, retailers and other importers should evaluate their supply chains now for the alternate sources and paths their goods take to get to market. This evaluation should take into account the impact that highly concentrated and congested trade lanes have on the risk to fulfilling customer demand. For example, the concentration of manufacturing in countries such as China and the use of ports like LA/Long Beach. We can see today the delays that are happening and it won’t take much to see additional delays at some level with disruptions in the future. Now is the time for importers to engineer the risk out of the supply chain.

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

DIGITIZATION HELPS SHIPPERS ADDRESS CHALLENGES, CAPTURE OPPORTUNITIES

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For today’s shippers, these are unprecedented times. Importers and exporters were clearly challenged by a supply chain that met with disruptions unlike any others previously experienced. Now, in the “post-pandemic” period, where things are slowly starting to return to what many are calling the “new normal,” shippers still face challenges but also opportunities. The key to regaining control over supply chain operations and remaining competitive is in knowing how best to mitigate the challenges and capture the opportunities. You can be sure that digitization will play an integral role in addressing both goals.

Shippers Facing New Challenges, Opportunities

It is true that the global supply chain is far more resilient and agile today than it was as recent as a decade ago. The pandemic, however, has disrupted what was steady progress in advancing the supply chain. Most significantly, it prevented the movement of raw materials, components and goods due to national lockdowns and the cessation of various modes of transportation.

The lack of transparency and information only exacerbated the challenges shippers faced in attempting to conduct business and protect their supply lines. Those businesses that did have some degree of visibility into their supply network fared much better than those left in the dark not knowing what materials they would receive and when, how their production lines might fare, and if they could deliver any orders and if so, during what time periods. Even major natural disasters such as earthquakes, hurricanes and tsunamis caused less uncertainty.

These are undoubtedly distinct times for global trade and commerce. While boundaries between B2B and B2C began eroding some time ago, the pandemic has introduced what will be long lasting, if not permanent, changes to how trade is conducted worldwide. The Amazonified business that wants its shipments now and in smaller quantities has added to the challenges and complexities, further straining even the more efficient supply chains. The need to coordinate more efficiently across the supply chain, keep operations agile and flexible, and maintain a workforce capable of adapting to the changing environment are among the primary challenges facing today’s shippers.

According to a Forbes Insights survey, 65 percent of logistics, supply chain and transportation executives acknowledged the need to revamp their existing models and add flexibility to their business operations so that they can ensure delivery across multiple channels, reduce operational costs and meet the heightened and changing demands of today’s consumers. This revamping of the supply chain will not only help shippers address the new challenges they face but also help them position their companies for new opportunities.

It’s not all doom and gloom. As the expression goes, “Necessity is the motherhood of invention.” The calamitous effect of the pandemic on the supply chain also gave shippers pause to consider how they could improve their operations. Specifically, it introduced new opportunities to identify and access the right clientele for their companies, reduce costs through better exception management, and optimize their operations. It also presented an opportunity to plan better for the future, and other potential disruptions and disasters, by leveraging digitization and prescriptive analytics. By understanding these advanced technologies, shippers can position themselves more opportunistically and to better sustain future disruptions and uncertainties, whether caused by a global pandemic, geopolitical uprising or natural disaster.

Digitization Delivering Enhanced Decision Making

Digitization’s most valuable deliverable is in facilitating accurate decision making and, in turn, improving operational efficiencies. While improved efficiency means better coordination across the supply chain, more precise decision-making translates into a more agile and flexible corporate culture. Through this more nimble culture, customers receive a value that previously didn’t exist, which positively impacts the company’s bottom line. These two outcomes go hand in hand with an engaged workforce that understands the criticality of the digital transformation and, in parallel, benefits from it by accessing a better toolbox containing valuable data that helps them perform better.

Moore’s law, which has been empirically proven to be accurate for more than 50 years, states that computing power roughly doubles every two years, while the cost of doing so comes down. Assuming the trend continues over the near future, we should expect that new opportunities afforded to shippers will continue to be amplified since they all depend closely on how well we record, process and make sense of data –which together defines digitalization. These three things are also the key drivers for shippers looking to position themselves for today’s market opportunities.

Where Digitalization Succeeds, Manual Processes Fail

In Gartner’s “Weathering the Supply Chain Storm Survey, 2020,” participants were asked to select which of these terms–highly resilient, moderately resilient or not resilient–best described their supply chain networks. As for how Gartner described each term, it was as follows:

Highly resilient – good visibility to the supply network; recognize the need to increase flexibility/resilience as a necessary investment for the network; are able to conduct scenario planning for trade-offs in the network; can shift sourcing, manufacturing or distribution within the network fairly rapidly

Moderately resilient – good visibility to the supply network, hard to justify making an investment to modify supply chain footprint; focus more on managing disruptions once they occur than investing in resilience

Not resilient – dependent on existing sourcing, manufacturing, and/or distribution footprint, and need to find other ways to compensate for changing conditions; have yet to invest in analytics to support network decision-making

Here’s what Gartner learned: Only 21 percent of those surveyed said their supply networks were “highly resilient,” 62 percent said “moderately resilient,” and 14 percent said, “not resilient.” While just in time (JIT) systems of the past helped improve operational efficiency, they did not address the “what if” scenarios such as those introduced by the pandemic. That’s where resiliency comes in. Resilient shippers are better able to pivot and adapt to supply chain disruptions, whereas those without the prescriptive analytics and transparency that digitization provides cannot. Unlike manual processes and JIT systems, digitization supports better planning, adapting, and reacting to new “what if” scenarios.

There are also other differences in manual processes versus digital processes. Manual processes are human dependent and therefore not scalable. To get a unit of output, one must insert a certain input. Even if manual processes are made more efficient, they are still limited by human capabilities. In contrast, digital processes by default are scalable.

Consider this example: A talented member of a shipper’s company is hand stamping holiday calendars being sent to each client. The number of hourly shipments is limited by the human capacity to stamp, box, and ship each calendar. Conversely, a digital calendar can be sent to a significantly larger group of customers at a fraction of the time. As illustrated, there are finite benefits provided from manual processes that are resource-heavy, prone to human error, and non-scalable.

Making Shippers and the Supply Chain More Resilient

Through digitization, shippers can benefit from advanced platforms that are fully-connected, fully-integrated, and facilitate their ability to better cope with supply chain challenges and capture new business opportunities. The most future-proof of today’s new digital supply chain platforms give shippers the opportunity to quickly access automated rate quotes, fast bookings, and real-time tracking of their shipments. These platforms enable them to quickly view delays or disruptions through an online supply chain map and issue customer notifications promptly

This not only streamlines manual processes like back and forth phone calls and/or emails but also supports a higher level of customer communications and service quality. This real-time access to information increases shippers’ overall resiliency while decreasing their costs of doing business. Advanced reporting capabilities, paperless document sharing, and storage further support shipper’s more cost-effective operations. Ultimately, this resiliency will pave the way for the shipper’s long-term viability.

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Matt Goker is the CEO of Quloi, a Garden City, New York-based technology firm focused on providing quantified logistics solutions that leverage Artificial Intelligence (AI), machine learning and deep logistics expertise to transform and optimize the supply chain.

4Pl
Archives, Global Logistics, Global Trade Daily, Trucking, Warehousing

The Role of the 4PL Lead Logistics Providers in Supply Chain Logistics Management

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As the business sector continues its development and improvement, new challenges arise for businesses that are part of this domain. Logistics management is a complex process that ensures that every product the consumer needs is on the market. However, supply chain logistics management includes all the processes that contribute to the transformation of raw materials into final products. And these processes include manufacturing, transportation, storing, inventory, purchasing, and planning, says a study by EssayWritingLand.

Experts from professional writing services on business management topics underlie the fact that many layers of logistics are involved in the supply chain logistics management.

The Layers of Logistics

There are five layers of logistics involved:

-First Party Logistics (1PL) – this is something characteristic of businesses that have their own logistics department that takes care of the entire supply chain logistics management

-Second-Party Logistics (2PL) – it describes those companies that decide to subcontract a specific part of the supply chain logistics, such as transportation or production; this is usually a short-term collaboration

-Third-Party Logistics (3PL) – this describes third parties that are outsourced by businesses to provide logistics or/and transportation services; these service providers are often the link between the manufacturer and the business

–Fourth-Party Logistics (4PL) – 4PLs are outsourced to offer more than logistics and transportation services; they are involved in the logistics and tasks management, taking care of the entire supply chain.

-Fifth-Party Logistics (5PL) – it is often linked to e-commerce, which is constantly growing. 5PLs make the shift from supply chains to supply networks and take care of their management, being involved in the strategic planning of logistics as well.

So, there are important and definite differences between the layers of logistics. 4PL, often called lead logistics providers, are important parts of businesses that want to grow and thrive. They offer more than 3PLs do, from supply chain consulting and analytics on the transportation spend or carrier performance to business planning and project management. Their expertise is not only on the transportation part of the supply chain but also on the development, growth, and strategy of the business, says a custom paper writing service.

4PL lead logistics providers are important and essential, especially when there is a complex supply chain logistics management involved. There are many entities and small businesses involved in the supply chain, from producers, manufacturers to ocean carriers, warehouse operators, and data analysts. Fourth party logistics take care of all of these, focusing also on freight sourcing strategies or freight bill auditing.

So, which is the role of 4PL lead logistics providers in supply chain logistics management?

Expert leaders of the assignment help service at an essay writing service reviews have highlighted in their last paper how businesses can benefit from the collaboration with 4PLs.

Data Analysis

One of the key elements of the supply chain logistics management is the data behind all the processes. There are a lot of resources, collaborators, and money involved in the supply chain. And knowing how businesses can make their internal and external processes and collaboration more efficient can help them meet the market demands more proactively.

Lead logistics providers do not only take care of all the processes involved in the supply chain but also offer insights on how everything is evolving. They come with data that can later be used in project management and business strategy. At the same time, this data analysis is important for change management and the operations department of the business.

Business Growth

In the supply chain logistics management is important not only the data but the process too. For businesses that are new on the market and still do not have the resources necessary for a geographical spread, lead logistics providers are the best choice. Opening another branch of a business in a new location involves a lot of money and resources. Businesses need to hire employees, rent, or buy a warehouse to store the materials and also the means of transportation for those goods.

Lead logistics providers have an entire chain of warehouses and collaborators that are spread geographically. They are important elements of the international supply chain and outsourcing their services helps businesses and companies grow and thrive.

On top of this, they also use the latest technology to improve their processes and help companies reduce their costs. And because 4PL lead logistics providers keep up the pace with the business and technology development, they are prepared to face challenges and rapidly adapt to changes or disruptions.

Conclusion

The model of fourth-party logistics or lead logistics providers becomes more and more attractive to companies that are looking to grow their services. 4PL lead logistics providers are more than 3PL; they support companies in building their business strategy and managing their projects.

4PLs come with data analysis and the latest technology that can reduce operating costs and can make them have an entire base of warehouses, producers, manufacturers, carriers, and logistics experts, which helps them to adapt to changes and handle challenges.

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This guest post is contributed by Kurt Walker who is a blogger and college paper writer. In the course of his studies, he developed an interest in innovative technology and likes to keep business owners informed about the latest technology to use to transform their operations. He writes for companies such as Edu Birdie, XpertWriters, ResumeWriterReviews, and uk.bestessays.com on various academic and business topics.
tariff exclusions
Archives, Global Shippers 101, Global Trade Daily

What Your Business Needs to Know and Do About Tariff Exclusions

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As COVID-19 continues to wreak havoc on the world economy, it’s prudent to find ways to keep your shipping business afloat by finding economic relief if and whenever possible. First off, being aware of the changing complexities of the China-U.S. trade war is essential. According to the Census Bureau’s Foreign Trade Statistics, China is one of our country’s largest trading partners, which means companies large and small are likely affected by the trade situation. Last year, the U.S. imported $452 billion from China, which made up about 14% of overall U.S. imports by value.

Section 301 of the Trade Act of 1974 allows the U.S. to impose trade sanctions as recourse for unfair foreign trade practices. In 2017, China was under investigation for issues regarding innovation practices, intellectual property rights, and technology transfer. Since then, retaliation measures have been put in place for the past couple of years and remain in effect for an indefinite amount of time. While the USTR recently announced reductions on some tariff measures and a suspension of others, about two-thirds of U.S. imports from China are still taxed an additional 7.5% to 25%, covering about $350 billion worth of product. Keep in mind, the average duty rate for U.S. imports is only 2%; thus, China’s products are incurring additional costs on top of that.

The current tariffs are extremely broad and cover many industries including food/beverage, industrial supplies, transport equipment, consumption goods, and fuels and lubricants. As of this month, the U.S. Customs and Border Protection (CBP) reports collecting $52 billion in Section 301 duties since the trade remedies took effect.

This is a hot issue for importers and we’re currently seeing more industry associations and companies pushing for relief from these measures. While the period to request exclusions from the Section 301 tariffs is now closed, it is a great time to confirm that you are doing all you can to potentially recover duties previously paid, and potentially apply on a go-forward basis the exclusions that the USTR has been granting against certain products.

How to seek relief now and in the future

Cost savings and refunds are top of mind for all, so to help provide some relief, the USTR has released many tariff exclusions shippers can apply for. The important thing to keep in mind here is that ample work is involved. It’s not just a one-time process, because you’ll likely need to continuously apply for new exemptions where applicable. Some of the exclusions being granted are product-specific whereas some are granted at the HTS classification. You’ll also want to be ready in case CBP asks for proof of eligibility. Staying organized is paramount to identify the opportunities and defend against CBP scrutiny.

Each exclusion round also has a validity period, and many of those expiration dates are coming up fast! We’re seeing the USTR opening several new short-window comment periods to consider extending previously granted tariff exclusions. This could be your chance to drop commentary to protect and extend your granted exclusions or to oppose competitors, if applicable and necessary so that your company is not left at a disadvantage.

What are the eligibility requirements?

Eligibility is simple – companies affected by the China 301 tariffs.

Exclusions can be granted based on sourcing, impact on U.S. jobs and product type and need. Producers of goods used to combat COVID-19 can also be eligible for exclusions.

Also, tariff exclusions are retroactive to the date the tariffs were first applied, and exclusions generally expire after one year from the date of publication of the granted exclusion.

Important Reminder for Process

The customs entry and liquidation process is complicated, spanning a lengthy period. It can take up to 480 days and is broken down into these windows of time:

1. Day 1: Customs entry is filed

2. Day 1 – 300: Post Summary Correction (PSC) – can be filed to request refund prior to the entry liquidating

3. Day 300: PSC no longer eligible as entry is deemed liquidated (importer may request suspension or extension of liquidation prior to this point).

4. Day 301 – 480: Entry is liquidated, and protest must be filed to request a refund

5. Day 480+: Entry may be past protest period and is no longer eligible for a refund request via PSC or protest.

Since the process is lengthy, make sure you consider these tips when conducting your duty recovery analysis:

-Know your product (10-digit HTS codes and know the barcodes toward the products)

-Apply their qualifications

-Narrow down lists of products impacted by tariffs

-Identify which ones have exclusions granted – work with that list

-Run a report and gather import activity

-Start looking at validity dates

-Make sure brokers are applying it to the new shipments of the products

-File petitions if you want to continue to take advantage of it

Insights for the future

The trade war is not ending soon and it’s hard to unravel, but we know it’s an important issue that we can expect to see in the spotlight for the foreseeable future. Customers are advised to stay close to this and to pay attention to the advisories from C.H. Robinson and USTR.

To check for exclusion status against your products click the resources here:

1. $34 Billion Trade Action (List 1),

2.  $16 Billion Trade Action (List 2),

3. $200 Billion Trade Action (List 3)

4. $300 Billion Trade Action (List 4)

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Kevin Koch is the product development manager for C.H. Robinson’s U.S. Customs brokerage service. For the last ten years, he has served C.H. Robinson in numerous roles, from account management, business technology and process leadership, and ultimately to customs and trade compliance – where he found a strong sense of pride in the critical role that Customs brokers play today in international trade. He is a licensed U.S. Customs broker that is passionate about analyzing the macro trade trends and applying the vast knowledge and experience of the C.H. Robinson Customs and Trade Policy teams to support clients in designing and implementing solutions to strengthen trade compliance programs while maintaining keen focus on streamlining process and reducing spend. He holds a bachelor’s degree from the University of Illinois and is eager to finish his MBA in global business this year from the Lake Forest Graduate School of Management.

international shipping
Archives, Global Shippers 101, Global Trade Daily

How to Save Time and Money With Your International Shipping

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Whether you are just dipping your toes into international shipping, or you are a veteran who wants to update the firm’s processes, there is always more you can do to make your shipping practices more streamlined and efficient. After all, if you are going to compete with local players, then you need to be offering the best deal possible on international shipping. How you can do that is going to be unique to your firm, but some general practices can help.

From managing customer’s expectations of speed to optimizing your packaging, investing in cargo insurance to getting help when you need it, read on to learn how to save time and money with this guide to international shipping.

1. Balance your need for speed.

Generally, the quicker you want your shipments to be delivered, the more expensive the shipping is going to be. Therefore, it is essential that you balance your need for speed with your budget and your customer’s expectations. Customers expect reliable delivery times, not necessarily the fastest possible time, and in many cases, they are happy to wait a couple of days to bring costs down.

Therefore, your best strategy is to provide them with a variety of delivery options to choose from. That way, they can decide how much they are willing to pay and how long they can wait for their goods. Keep in mind that for most companies, the goal is to limit the number of individual shipments and instead maximize the amount of cargo shipped. This generally brings about the most efficient results.

When organizing international shipping for your customers, it is essential that you make their experience as pleasant as possible. One of the best ways to do this is by providing them with accurate shipping information that keeps their expectations in check.

2. Optimize your packaging.

One of the most overlooked ways to reduce international shipping costs is to optimize your packaging. The ideal packaging keeps your products safe and secure while also reducing shipping weight and box size so as not to receive additional charges. In order to find the optimal packaging for your goods, you need to take different factors into consideration, including a product’s height, weight, and volume.

From there, look for boxes that fit your product while leaving minimal wasted space. Additionally, choose lightweight packaging materials that still protect your items. Depending on what you are shipping, you may want to consider utilizing standard sized packaging that is provided by your freight provider, as this will remove your firm’s requirement to source custom box sizes.

When planning your packaging strategy, it is vital to think dimensionally, which means knowing the length, width, and depth, which together comprise the dimensional weight of your goods. If you are shipping in bulk, keep in mind that you want your packages to be shaped so that they can be expertly arranged to fit into the smallest size carton.

3. Invest in cargo insurance.

Just as you have insurance for your home, car, and health, it is also essential that you have coverage for your cargo. Unfortunately, it only takes one international shipping incident for your firm to feel adverse effects, which is why cargo insurance is so important. By getting this insurance, you will be covered for damaged goods, cargo theft or loss in transit, and any other unforeseen events that affect your products.

While many carriers and freight forwarders offer liability insurance, this is generally limited to a specific monetary amount and has many exclusions. Therefore, you don’t want to solely rely on this liability insurance because it usually is not enough to cover the costs of severe loss or damage. On the other hand, cargo insurance will render you a more comprehensive level of protection, ensuring you can recover the full value of lost, damaged, or stolen goods.

Having cargo insurance is highly recommended because it provides you with greater peace of mind which, in the long run, makes for a more efficient and streamlined international shipping process. The last thing you want is to be worried about your firm going under because something happens to a shipment that is out of your control. Do your company a favor and invest in cargo insurance.

4. Get help when you need it.

No matter what size your company is, what products you are shipping, or whether you are moving individual parcels or sizable cargo, there is no need to do it all on your own. After all, there are experts in these fields who have the knowledge and experience to help you reduce your costs and the number of resources you have to spend on shipping logistics.

By opting to work with an online freight forwarder, such as Shipa Freight, you are not only setting yourself up for shipping success now but also in the future. From generating an online quote to scheduling your shipments and then tracking them, an online freight forwarder provides you with all the tools you need to make your international shipping processes as streamlined as possible.

For example, as an individual, it can be challenging to locate the ports and other destinations that you need, but a high-quality freight forwarder can find them for you. Additionally, you will be personally guided by a representative throughout the process so that you can be assured that you are choosing the best options for your firm. When working with Shipa Freight, you will always be treated as a partner, not a commodity.

Final Thoughts

When it comes to international shipping, if you want to come out on top, then your firm must incorporate as many cost-saving and time-effective measures as possible. By including these steps into your international shipping strategy, you will be well on your way to having the most efficient shipping process possible.

What do you think are the most effective steps for reducing costs and time related to international shipping? What strategies does your firm use?

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As Chief Product Officer for Shipa Freight, Paul Rehmet is responsible for translating the vision of Shipa Freight into an easy-to-use online freight platform for our customers. Formerly Vice President of Digital Marketing for Agility, Paul managed Agility’s website, mobile apps, content marketing and online advertising campaigns. In his 25-year career, Paul has held various technology leadership positions with early-stage startups and Fortune 500 companies including Unisys, Destiny Web Solutions, and US Airways. Paul has a Masters in Software Engineering from Carnegie Mellon University and a Bachelor of Computer Science from Brown University. Paul is based in Philadelphia.  

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Archives, Global Shippers 101, Global Trade Daily

Shipping 101 For Ecommerce Platforms

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The ecommerce sales are set to touch 6.5 billion USD in 2021. With the ever-expanding ecommerce industry, the shipping industry is also set for an explosion. Coupled with the changes brought about by technology and dynamic user preferences impacting the ecommerce shipping field, how do you prepare to excel, then? This article will work as a beginner’s guide to tell you all about ecommerce shipping. The world of shipping will no longer be a difficult mystery.

Shipping 101

Here is how you can map out your shipping plan to streamline and organize:

1. Shipping Strategy

Creating a shipping strategy is the first step. Here are the key points you need to consider:

Shipping rates: Will you charge flat shipping rates for all your orders or will they differ from destination to destination? A customer might abandon the cart if the shipping rate is too high, and you might incur a loss if it is too low. Decide on the shipping-rate policy first. You can also increase product prices slightly and offer free shipping.

Inventory/order management: Will you manually update every order and maintain the inventory or will you automate it? Automation is recommended as it minimises the errors.

Global or local? Will you ship across the globe? Or will you ship only in your country? This question is important to answer as it will determine how much you spend on shipping, the carrier you use, the time taken for delivery, etc.

Shipping methods: What mode will you ship through? Air, sea, or land? There might be higher risk and lower shipping cost when you choose sea over land and air, but shipping by air will afford you to deliver faster. Make a list of the pros and cons of all methods to decide.

Shipping insurance: Shipping carriers offer insurance, and this can give you a great deal of security. Get the coverage, especially if you have large volumes.

2. Shipping Costs

While calculating shipping costs, these are the four points you need to keep in mind:

Shipping carrier: Shipping carriers like FedX, Aramex, DHL, UPS are popular with ecommerce companies. But if you are only going to ship locally, ask for quotes from your local carriers, the rates might be much much cheaper. Use the shipping carrier’s calculator to compare.

Source and destination countries: The distance between the source and the destination and whether both the points are in the same country will play a huge role in determining the shipping costs.

Product dimensions and weight: It is advisable to measure all your products before you list them online – every shipping carrier charges depending upon the weight and dimensions of your package.

Margin-wise: Be margin wise. Are the shipping costs too heavy on the pocket? How much profit margin do you want to keep? Shipping is a major expense, and you should never ignore the small charges.

3. Packaging and labelling

You can either source the packaging from your shipping carrier, or use it as a way for branding. With increasing awareness, sustainable packaging is much in demand, but it is also expensive. You can also offer personalised packaging or special packaging for gift orders.

Another important part is the labelling. Each order must be labelled with the order number, the addresses among other details. Doing this incorrectly might result in a mix-up.

4. Invoicing

Many countries have laws that require multiple copies of invoices to be sent with the package. One for you, one for the customer, one for the shipping carrier, one for taxation purposes etc. Invoicing can be automated too. Just invest in good virtual infrastructure.

5. Communication and tracking

Once the order is shipped, most automation software solutions send an e-mail to the customer with the tracking link. This is a very important part of the shipping process. If the customer doesn’t receive communication from your end, it not only looks bad on your company but also might result in complaints.

6. Auditing Shipments

This is the part which most ecommerce companies fail to do. And even if they audit their shipments, they do it manually. Auditing your shipments allows you to claim for refunds from your shipping carrier. There might be duplicate or incorrect charges on your shipping invoice, or the carrier might have damaged or lost your package. You can get reimbursed for it and save on shipping costs.

7. Customs

If you are shipping globally, be well-aware of prohibited items that differ from country to country. Also, the documentation should be spick and span for the package to clear the customs zone. Know about the customs fees and don’t forget to add it to your ecommerce platform, so the customer is not kept in the dark. Most shipping carriers offer information about customs declaration on their websites.

Questions to Ask Yourself Before Making a Shipping Plan

-What is your shipping budget? Will you charge real-time carrier rates for all your orders?

-Will you offer next-day or same-day delivery?

-What packaging will you use?

-Where will you ship and where will you not?

-Will there be a minimum order cost for free shipping?

-How will you communicate regarding the orders with your customers?

-Will you opt for third-party logistics?

-Will you choose automation software solutions when it comes to shipping management?

Quick Tips

-Focus on creating a great customer experience when you package and ship the product.

-Premium packaging can encourage repeat customers.

-If your shipping strategy doesn’t work, always have plan B.

Know the rules and regulations of all the states and countries you are shipping to. Some products might be banned.

Remember to one order might have multiple shipments. That’s double-triple the work.

Outsourcing the logistics and the auditing might save a lot of work, and you can let the experts handle it for you.

There are multiple variables when it comes to ecommerce shipping. Understand, plan and then execute. While shipping might seem like a not-so-important aspect of your ecommerce business as sales, it is actually a driving factor – one that can help you achieve success.

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Ana Shan is a product evangelist at AuditShipment.com, an AI-driven audit service that automatically captures more than 20 carrier errors and helps businesses save up to
16% of their shipping costs.

Archives, Global Shippers 101, Global Trade Daily

Special Report: How to Keep Shipments Moving Forward During a Global Health Emergency

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Delayed start to the new year
The coronavirus outbreak has prompted an official global health emergency that is severely affecting business operations not only in China but also around the globe. With any kind of widespread health outbreak, global importers and exporters are dealing with unpredictable logistics concerns that require a proactive approach to keep business running as usual.

It’s important to note that any cargo from the Wuhan, Hubei Province (the origin of the outbreak), and other quarantine zones, are restricted from leaving the province, which includes full container loads (FCL), less than container loads (LCL), as well as air freight. There will also be delays in factories re-opening, and a reduction of exports from China due to Wuhan residents not returning to work until February 17th, 2020 and other municipalities extending Chinese New Year until February 9th, 2020, including:

-Shanghai Municipality

-Chongqing Municipality

-Jiangsu Province

-Zhejiang Province

-Guangdong Province

-Fujian Province

The latest in air and ocean travel

In general, there has been an increased reduction in travel in and out of China. In areas where travel is permitted, strict health checks are causing significant delays at main air and ocean terminals, to ensure the safety of all travelers and workers. While the Wuhan port is closed, the other ports continue to operate. We also continue to see several airlines canceling flights in and out of China which can have an impact on cargo capacity.

Below are important considerations that will help keep your supply chain moving and better navigate any shipping challenges associated with the latest travel restrictions and schedule shifts.

Assessment of inventory levels

Having an accurate assessment of your inventory is expected, but it’s important to understand how restrictions on imports from China will impact your current inventory and regular shipping cadence. Look ahead to determine if the demand for your product may change in the next few weeks and if you have a need for expedited shipping. Starting those conversations now and establishing a plan are important as air capacity falls due to canceled passenger flights and higher demand.

Planning ahead in production

There are numerous variables to consider when planning for production. Working through these with a supply chain expert will help you be prepared and proactive as the uncertainty around the virus continues.

-What will production look like and has there been any discussion with the vendors and factories?

-How are existing inventories compared to sales projections?

-What plans are in place in case there is a shortage of workers in China or the demands are not being met within a specific window of time?

-Has there been a discussion about how the backlog will be addressed?

Backup sourcing options

When there is any kind of delayed start to production, keeping up with the workload poses a challenge, and so you may need to consider backup sources. Backup sourcing options are not always easy to find and keeping up with the sheer demand and quality controls can be a challenge. Connecting with a global supply chain expert to vet reliable options is important to ensure success.

While we may not know how long this global health emergency will last, C.H. Robinson’s global network of experts are dedicated to helping you get your shipments where they need to be. We continue to closely monitor the situation and provide updates through our client advisories as needed.

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Archives, Global Trade Daily, Stories

10 Data Science Projects E-Commerce Businesses Are Using

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Today e-commerce businesses are using data science in many different areas to stay ahead of the competition. For instance, e-commerce sites are investing funds into personalizing shopbots to enhance customer experience and recommending products to buyers based on browsing habits and previous purchases.

Selling the best products only works if e-commerce businesses can identify who wants to buy them and recommend them when these customers are ready to make a purchase. Here are some ways e-commerce businesses are utilizing data science to enhance the customer experience.

1. Retain customers

One concern for every e-commerce business is customers switching to other e-commerce websites. Customer retention is crucial if a business is to expand and grow. There are many benefits from having loyal customers, such as receiving real-time feedback from them and having them recommend products or services to others.

A churn model provides metrics such as the number and percentage of customers lost to the business as well as the value and percentage of this loss. When a company is able to identify customers who are most likely to switch to a different e-commerce site, it can take actions to try and keep them.

2. Give product recommendations

Using big data analytics offers a way to understand the shopping behavior of customers and predict patterns. For example, being able to establish which brands or products are most popular when spikes in demand for certain products occur or times of the year when customers shop more can help to determine the right strategies.

Recommendation filters for a particular user are based on past searches, purchase data, reviews read, etc. and allow a personalized view. This helps users with the selection of relevant products.

For example, if you’re looking for a mobile phone on an e-commerce site, there is a possibility that you might want to buy a phone cover too. Deciding whether this is a possibility might be based on analyzing previous purchases or data searches of customers.

3. Analyze customer sentiment

Gathering customer feedback is very important for e-commerce sites. Using social media analytics, data science and machine learning, companies can perform brand-customer sentiment analysis. Natural language processing, text analysis, data from online reviews and online surveys are just some ways to analyze customer sentiment.

If you’re running an e-commerce business and you’re studying at the same time, it’s possible to find writing services to help you, so you have more time to devote to the business and analyze all of this sensitive data.

If you need to deliver an essay consider Dissertation Today. Use the best paper writing service such as killer papers review or even resume services.

4. Predict the lifetime value of customers

E-commerce businesses can benefit from knowing what net profit a customer is likely to bring to the company. Being able to predict the lifetime value of a customer can help with factors such as defining objectives for expenditure, optimizing marketing strategies and deciding cross sell and up sell according to customer purchases.

By using data science models to collect and classify data, e-commerce businesses can predict future buying behavior and have more understanding when formulating business strategies. They know which customers are most loyal and can decide where spending money on advertising etc. will offer the most return on investment.

5. Manage Inventory

Proper management of inventory is essential for e-commerce businesses. When customers are unable to get what they want when they want it, it’s a major deterrent to retaining them. They will simply move on to the next company that can offer this. They want to receive the right goods at the right time and in perfect condition.

The maintenance of the supply chain has become complex today and using inventory data analytics enables businesses to manage inventory effectively. Using machine learning algorithms and predictive analytics enables patterns to be detected that can define inventory strategies.

6. Detect fraud

Living in a digital world where millions of transactions are taking place consistently makes fraud detection essential. Many different forms of fraud are possible and fraudsters are becoming smarter every day.

E-commerce businesses can detect suspicious behavior by using data science techniques. Signs of suspicious behavior could include a shipping address differing from a billing address, an unexpected international order or multiple orders of the same item.

Common data science techniques to detect such behavior include:

-Matching algorithms to estimate risks and avoid false alarms.

-Data mining to address missing or incorrect data and correct errors.

-Clustering and classification to help detect associated data groups and find anomalies.

A fraud detection system helps companies to decrease unidentified transactions and increase company revenue and brand value.

7. Improve Customer Service

A customer is central to any business, especially e-commerce. Personalizing services and giving customers what they really want and need is essential to keeping them happy. Big data analytics offers businesses the potential to enhance their processes so that customers enjoy transacting online.

Natural language processing allows customers to communicate with voice-based bots and data can be stored for future purposes. When businesses know more about their customers and what they want, they are able to devise the best strategies to improve their customer service.

8. Optimize prices

Data-optimized pricing is making some retailers plenty of money. Many online retailers, such as Amazon, Home Depot, Discover and Staples, vary their pricing based on secret formulas. Cost analysis, competitor analysis, and market segmentation are all critical when it comes to pricing.

Pricing of products can impact a business in many ways when it comes to market share, revenues and profits. A key for retailers is to be able to figure out the right price and with big data analytics, they are not only able to determine that number for the market in general but also calculate it with some precision for individual customers.

9. Make online payments easy

Many e-commerce sales are made via mobile platforms and online payments must be secure and safe for customers. Big data analytics helps to identify anything that threatens the process and helps to make online shopping safer.

Various payment options make the online payment process easy and convenient for customers.

10. Determine the quality and reliability of products

E-commerce stores usually provide warranties for products that allow customers to deal with any problems at no cost during the warranty period. Analytics relating to warranty claims can help to determine the quality and reliability of products.

If manufacturers are able to identify early warnings of possible problems, they may be able to address them in time to avoid serious damage to the business.

Text mining and data mining are two techniques that can be used to identify patterns relating to claims and problems with products. The data can be converted into real-time insights and recommendations.

The bottom line

We’ve taken a look at the ten ways that data science models can impact e-commerce. There are so many e-commerce websites and many of them sell similar types of products. Data science helps e-commerce businesses to understand and analyze customer behavior and provide ways to enhance customer service.

When companies understand what they do best and who their loyal customers are by using data science, they are able to improve product designs and customer service, formulate better pricing strategies, manage inventory effectively and provide secure online purchasing and payment options.

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This guest post is contributed by Kurt Walker who is a blogger and college paper writer. In the course of his studies he developed an interest in innovative technology and likes to keep business owners informed about the latest technology to use to transform their operations. He writes for companies such as Edu Birdie, XpertWriters and uk.bestessays.com on various academic and business topics.

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Archives, Global Logistics, Global Trade Daily

Adapting Supply Chains for Increased Consumer Demand and Same Day Shipping

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Same-day and next-day shipping options are increasing, and consumers are beginning to desire expedited shipping options with minimal delay. Through new technologies, space optimization, and supply chain auditing, there are various ways companies can adapt to this demand.

There used to be a tattered cartoon taped to every dry cleaner’s cash register. There’s a man laughing — holding his stomach, actually, as the joke is so funny — with a bold face caption that reads: “YOU WANT IT WHEN?!”

Faced with minimal competition, it was a time when companies held production and delivery control, with consumers at their mercy to indeed receive their press garments at a time of the dry cleaner’s choosing.

Those days are long gone. Armed with just a digital device, consumers have numerous options in finding suppliers who can provide things whenever they desire. As such, they expect — rather, demand —products and services on their terms.

As a result, companies must either adapt their supply chains to accommodate these expectations or find themselves with diminished market share. Below are key areas that companies must address to compete in today’s on-demand environment.

Take inventory of your inventory

As a first step, perform a comprehensive audit of your entire supply chain, even hiring a third-party specialist to develop the critical assessment. Such a deep-dive look will measure delivery accuracy, on-time performance, worker productivity and even call center effectiveness, all significant contributors to the overall efficiency of your suppliers and their impact on your supply chain.

Find a better mousetrap

Once the audit is complete, it’s time to take action, which may mean making fundamental changes to your supply chain. If you’re currently operating with a hub-and-spoke distribution model, for instance, the feedback may point to achieving greater efficiencies by adopting a decentralized distribution model (and vice versa). Especially when it comes to last-mile delivery, partnering with a third-party provider can also help, providing you with the fast turnaround that your customers expect without straining your existing operations.

Get your house in order

Any fundamental change to the supply chain must include enhancements to warehouses, adopting technological advances that deliver greater efficiencies. For some, this may mean incorporating a short-interval waving warehouse management system (WMS), which allows orders to be dispatched in clusters or waves. Other advances automate the sizing and selection of cartons, which makes packing more efficient while streamlining costs.

Taking things personnel-ly

Until supply chain logistics can all be outsourced to robots, bottom-line performance ultimately depends on the availability and performance of your employees. To those ends, leverage technology to minimize labor supply disruptions, especially during holiday seasons when demand peaks. (This is increasingly important as unemployment reaches record lows, further diminishing the labor pool.) Technology should also be used for scheduling and training, which delivers greater efficiencies and even job retention, as greater scheduling flexibility leads to increased employee satisfaction and loyalty.

Consumer demand for ever-shrinking delivery timelines makes ongoing supply chain refinements no longer optional, but mandatory. Your long-term success depends on it.

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Neil Wheeldon is vice president — solutions at BDP International in The Hague, Netherlands.

digital
Archives, Commentary, Global Trade Daily

Digital Collaboration: Get ahead, fast.

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Recently at a conference for freight forwarders everyone jointly agreed: if you’re the fastest to quote, you win the customer. What astonished me was what I heard in a conversation afterwards! “We are working in shifts now, 16 hours per day, to make sure we can quote fast and win new deals,” said one of the present forwarders. I was surprised that putting in more hours to send emails back and forth is a better solution for shipping companies than digitizing collaboration and automating tasks. The banking system solved this issue years ago with the introduction of the SWIFT system: a standardized banking system that enables companies which had never worked with each other before to transfer money on a global scale at no risk. 

In shipping, we’re still way behind the curve. The newly formed Digital Container Shipping Association has taken the first timid steps to promote data standards in shipping because they believe in close collaboration between the different stakeholders. The underlying rationale for this collaboration is typically 2-fold: (a) Margins are still depressed due to overcapacity and (b) customers demand more and more streamlined services. Although costs for technology are consistently decreasing, our industry is generally considered to have been slow to adopt digital approaches. Of course, companies collaborate across company borders, mostly through emails and networks; but isn’t it extremely inefficient and unscalable, especially in times where this could be automated to be done within seconds instead of days? 

What holds SMEs back from digital collaboration? 

We have noticed that especially small and medium-sized companies are either stuck in their traditional mindset or simply don’t know how to start with digital collaboration. Why is that so and how do companies overcome this conundrum? 

Companies are afraid to share their data 

People have to overcome their traditional industry mindset first, as a highly competitive attitude makes collaboration with competitors exceedingly difficult. Most companies don’t want to share their data because they think it’s their secret and crucial for their business – but most “data” is non-sensitive. Consider container movements, position updates forecasts and contact information of local agents. Of course, crucial information about e.g., my commercial terms with my vendors should not be openly shared! However, sharing operational data means exchanging information that you can leverage to increase service offerings, internal processes and ultimately create quotations in less time. 

Even if companies are willing to collaborate, they don’t know how to get started 

Lack of existing data standards, limited capacity or scary data security questions – the list of potential challenges of data sharing is long (as for every new project!) and only a limited number of people in logistics have “been there, done that”. 

However, in the end, it comes down to what you want to achieve/solve in the first place: How do you get your customers love working with you? How do you create quotations in less time to win more business? We suggest defining your most important targets and metrics first, and reverse engineer a good solution from there. 

Now: How can you get started? 

To get started with data sharing, finding out what you want in the first place is only the beginning of a long journey. To make it a little bit easier for you, try to answer the questions below for your own business (take a screenshot or copy into a word doc): 

-What are my main pain points?

-What is particularly crucial for my customers?  

-What data describes the problem the best? 

-How well is my data organized? 

-What data is non-sensitive? 

-What additional data do I need? 

-Who has it? How can I get that data? 

-Who (of my partners) would need my data to become better? 

-Does it make sense to work with them? 

-What integrations and/or technology would that require? 

There is no one-size-fits all solution as you can see! It’s about you and your specific business model. Only after you’re able to answer these questions you can think about the next steps: design use-cases/MVPs (Minimum Viable Products), and test setups and data integrations. 

With missing IT capabilities or resources, building integrations can oftentimes be hard because you need to manage numerous data standards and interfaces. In most cases, a 3rd party technology provider can help you as a connector in the industry. Such technology companies can not only translate different data formats into one language, but they also anonymize data to increase trust and reduce perceived risks for you: You still own your data and it is 100% up to you what part of your data you want to share to reach a certain goal. Moreover, working with 3rd party technology providers has another advantage for you: they help you develop a proof of concept at low costs! 

Of course, it requires a certain level of commitment, but working with a connector lets you test with a well-defined problem and a limited group of stakeholders to develop a workable solution. For freight forwarders, it could be the integration with a selected list of carriers to enable instant online quotes/ bookings for their customers. For equipment managers it could be integrating their equipment management system with a tracking provider to automatically receive container status updates such as pickups, drop-offs, delay warnings and ETAs. 

Once the proof of concept has been demonstrated, the collaboration could then be expanded by bringing in additional stakeholders or addressing related problems with similar approaches. Being able to create quotations faster is only one challenge – several other topics including internal organization, equipment management or communication with external stakeholders can also be targeted with an open mindset and the courage to test new things. We encourage you to start right now! 

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Christian Roeloffs is the founder and CEO of Container xChange – an online platform that creates transparency on supply and demand in container logistics. More than 300 container users and owners such as Seaco and Kuehne+Nagel use the neutral online platform to find SOC containers in 2500 locations and identify partners to avoid empty container repositioning.