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INTERMODAL IS HOT: HOW SIX CITIES ARE MEETING LONG-HAUL CHALLENGES

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INTERMODAL IS HOT: HOW SIX CITIES ARE MEETING LONG-HAUL CHALLENGES

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How hot is intermodal right now? Total volumes rose 20.4% year-over-year in the second quarter of 2021, according to the Intermodal Association of North America (IANA) Intermodal Quarterly report. 

International containers gained 24.8% from 2020; domestic shipments, 15.7%; and trailers, 18.5%, according to the Calverton, Maryland-based association’s report, which also found that intermodal volumes not only grew for the fourth consecutive quarter in Q2, but the double-digit gain was the largest quarterly increase since Q3 of 2010 as well as the sixth quarter with a double-digit growth rate in the history of the data. 

“What is noteworthy is the breadth of the gains,” said Joni Casey, president and CEO of IANA, before September’s IANA Expo in Long Beach, California, where the Q2 surge was a source of industry optimism. “With one or two exceptions, the three market segments showed positive performance in all of IANA’s 10 regions.”

Trans-Canada led with a 29.6% total growth increase, followed by the Southeast-Southwest at 28.9% and the Midwest-Northwest at 26.6%. The Intra-Southeast likewise posted a 25.9% increase; the South Central-Southwest, 24.5%; and the Midwest-Southwest, 21.8%. The Northeast-Midwest came in at 20.9%.

“Freight volumes are expected to slow but experience steady q/q growth into 2022,” forecasts the 2021 Second Quarter Intermodal Quarterly report. “For 2021 as a whole, truck loadings are forecasted to be 7% higher than 2020 levels.”

Freight demand pressures, the end of consumer stimulus infusions and unemployment supplement and the ongoing surge in small new trucking companies have complicated matters, according to the report. “Intermodal remains highly competitive with trucking due to very high rates and tight driver supply. 

This situation will likely continue at least into early 2022, however, could be affected by a quicker stabilization in the trucking market, as reflected by a peak in truck spot metrics.” 

Managing the ups and downs of intermodal transport is greatly assisted by the IANA, whose roster includes more than 1,000 members from railroads, ocean carriers, ports, intermodal truckers and over-the-road highway carriers, intermodal marketing and logistic companies, and suppliers to the industry. (Learn more at intermodal.org.) But at the hyper-local level, economic development corporations (EDCs) also play a role in keeping freight trains rolling. Below are six cities meeting intermodal challenges with the help of their EDCs.

MILLERSBURG, OREGON

The Albay-Millersburg Economic Development Corporation estimates that 81% of the exported agricultural products from the Mid-Willamette Valley of Southern Oregon are loaded onto ships at the Seattle and Tacoma ports, with the remainder exported from ports in Long Beach (8 percent) and Oakland (3 percent), California. 

Complicating the flow of produce is traffic congestion near Portland, Seattle, Tacoma and farther down Interstate 5 into California.

However, like an oasis of calm sits Millersburg, which allows agricultural producers in the region to consolidate their products efficiently and avoid bumper-to-bumper nightmares altogether. To that end, the Linn Economic Development Group (LEDG), which is an affiliate of the Albay-Millersburg EDC, is constructing the Mid-Willamette Valley Intermodal Center (MWVIC) in Millersburg.

The town of around 2,000 people just happens to be where the Union Pacific Railroad mainline, BNSF’s Portland Western Railroad and I-5 come together. The MWVIC was made possible by passage of the state’s Keep Oregon Moving legislation, which appropriated $25 million toward development.

The intermodal center will include a main office, parking lot, space for about 100 trucks to park overnight, amenities for truck drivers, capabilities to handle domestic and international containers, track space for inbound and outbound trains, a 60,000-square-foot storage warehouse and docks to support reloading and transloading onto rail, with capacity for longer-term storage of product.

Agricultural producers and train operators are not the only beneficiaries of the project. Shippers will now have the option of choosing the best transportation alternative for each individual load. The LEDG estimates that under full utilization, private transportation cost savings will total $2.1 million per year.

But the public should turn out to be the biggest winner. Reducing the number of trucks on the highways would lower maintenance costs, reduce congestion, improve air quality and decrease carbon emissions—while the MWVIC at the same time increases jobs and local spending. 

ALLENTOWN, PENNSYLVANIA

The Norfolk Southern Allentown Rail Yard is among the railroad’s largest facilities, but only a few of the 200 manufacturers in the Pennsylvania town transport goods by rail. The Allentown Economic Development Corporation would like to change that. Saying of the yard “we’re very fortunate to have it,” Scott Unger, executive director of the Allentown EDC, says he and his team are pulling out all the stops to increase rail usage.

Pennsylvania’s Bureau of Rail Freight administers a special grant program called the Rail Freight Assistance Program that provides financial assistance to companies that are interested in bringing a railroad spur directly to their property for freight shipments. The goal of the grant program is to preserve and stimulate economic development through new and expanded rail service.

Also hoping the state incentive program lights a fire under local manufacturers is the R. J. Corman Railroad Co., LLC, which owns 11 Class 3 short line railroads in the Mid-Atlantic and the South, as well as the R. J. Corman Allentown Rail Yard.

“Products that are ideal for transloading include palletized commodities which can be loaded and unloaded in a boxcar,” explained John Gogniat, director of Commercial Development for R. J. Corman. “In addition, products such as lumber or steel that can be unloaded with a forklift are ideal candidates. That said, we are open to entertaining any potential commodity and will develop a mutually desirable solution for its loading and unloading.”

Gogniat notes that Allentown’s strategic location provides access to Philadelphia, Scranton, York, Harrisburg, Wilmington, New York and beyond.

WILKES COUNTY, NORTH CAROLINA

The North Carolina Department of Transportation’s Rail Industrial Access Program also uses state funds to help construct or refurbish railroad spur tracks required by a new or expanding company. Program funding is intended to modernize railroad tracks to ensure effective and efficient freight deliveries.

Many companies taking advantage of the incentive are located in Wilkes County, which was established in 1777 and is still known today as a mecca for outdoor recreation, small-town living . . . and a big business mentality. 

Consider the Yadkin Valley Railroad, which offers Wilkes County businesses rail access to ship their products into the Ronda and Roaring River areas. Operating out of the Winston-Salem area and hauling 11,500 carloads per year with freight, Yadkin joins G&O’s short line railroads, which offer connections to CSX and Norfolk Southern, in figuring into the logistical operations of Charlotte Regional Intermodal Facility.

Wilkes County Economic Development Corporation will point businesses to other local and state incentive programs to improve rail access—dependent on the applicant’s potential to create new jobs and invest capital in the region. The aim is to get companies to locate or expand in North Carolina versus another state.

“The North Carolina Railroad Company partners with the state’s economic development community and railroads on initiatives designed to drive job creation, freight rail use and economic growth,” reads an EDC release. “Through NCRR Invests we evaluate requests for investments to address the freight rail infrastructure needs of companies considering location or expansion in the state.” 

But Wilkes County does not live by rail alone, as the EDC also trumpets a location that is close to major freeways and interstates, two international airports (Charlotte Douglas and Piedmont Triad) and three major East Coast ports (Wilmington, North Carolina; Norfolk, Virginia; and Charleston, South Carolina). 

NEW YORK, NEW YORK

An ambitious program was born out of congestion, pollution and unconnected cargo transportation options in the Big Apple. Freight NYC aims to expand the use of rail and water to move food, building materials and other goods that are normally trucked in from outside the five boroughs.

“Freight NYC will better equip New York City to meet 21st-century demand by modernizing the city’s freight infrastructure, reducing truck traffic and improving air quality, while creating nearly 5,000 good-paying jobs in the process,” says James Patchett, chief executive of the New York Economic Development Corporation. “This plan is a win-win for our environment and economy.”

The city would invest as much as $100 million in the program that would include a 500,000-square-foot distribution center on the site of the Brooklyn Army Terminal, adjacent to the New York New Jersey Rail carfloat hub, as well as a new air cargo center near John F. Kennedy International Airport in Queens.

Private participation in a $20-30 million barge terminal on five acres of land owned by the city in Hunts Point, a major distribution crossroads for produce in the Bronx, is also part of the multimodal plan. 

Small rail freight yards on a line through Brooklyn and Queens, where goods would be transloaded to smaller vehicles for final delivery, is also envisioned.

DECATUR, ILLINOIS

When you think of the granddaddy of rail operations in the Midwest, you think of Chicago. That’s part of . . . heck, the main problem, according to Nicole Bateman, president of the Decatur Economic Development Corporation and executive director of the Midwest Inland Port. The Windy City is not only the nation’s busiest rail freight gateway, it’s the third-largest intermodal container/trailer port in the world, following Singapore and Hong Kong, according to the Illinois Department of Transportation.

What comes to mind when you think about freight, Singapore and Hong Kong? Congestion. As such, shippers on both ends of the supply chain need alternatives to Chicago—which is where Decatur (as Bateman’s fingers cross) comes in. 

Located 160 miles southwest of Chicago, Decatur is now being propped up by its EDC and the Midwest Inland Port as a distribution transportation center, which is fed not only by four railroads but easy access to interstates and airports. The port association is utilizing public-private partnerships to capitalize on Decatur’s geographic location, while the EDC seeks to make the city Illinois’ designated downstate freight transportation hub as a way to relieve rail and highway congestion in Chicago.

Users of the Midwest Inland Port have experienced savings in freight transportation costs and significant reduction in transit times, Bateman recently told American Shipper.

SEGUIN, TEXAS

Talk about strategic locations, Seguin sits alongside Interstate 10 and the banks of the Guadalupe River, with San Antonio a mere 35 minutes to the west, Austin only 55 minutes north and Houston about 2 ½ hours to the east.  

Besides the easy access to I-10, Seguin also connects to State Highway 130, which it bills as “the safe, fast and reliable alternative to congested Interstate 35 in Central Texas.” Two international airports (San Antonio and Austin-Bergstrom) and two deep-water ports (Houston and Corpus Christi) are an hour of so away.

But perhaps the biggest jewel in the close proximity crown is Union Pacific’s San Antonio Intermodal Terminal (SAIT), a $100 million state-of-the-art facility designed to support the growing intermodal volume in southern Texas. The expansive facility is designed to handle 250,000 annual container lifts as it serves markets across South Texas.  

If that hasn’t sold you, allow the Seguin Economic Development Corporation to work its magic. The EDC helps guide businesses through the maze of available loans, grants and tax breaks from the city, county and state. To hear the EDC tell it, finding applicants should be no sweat considering Seguin’s “easy access to four of the United States’ largest consumer markets, allowing manufactures to get their products to millions of consumers, all within a five-hour drive.”

online
Archives, Global Logistics, Global Trade Daily, International Trade

Invest in New Technology to Handle the Surge in Online Fashion Purchases

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Increase in online fashion purchases

To say that e-commerce has experienced a veritable explosion during the Covid-19 pandemic is nothing new. This is not limited to North America, countries all over the world are experiencing huge increases in online markets. According to a 2021 Spain online fashion report, the e-commerce channel has gained 2.7 million customers in Spain and penetration now reaches 43.4% of the resident population.

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Online fashion sales have risen from 9.3% in 2019 to 19.4% in 2020, while 13.6% of consumers have purchased online or plan to do so. This spectacular rise in a business segment, that had already been growing, does not mean that Spain will catch up with other more developed countries. On the contrary, all countries, even those that had advanced the most in e-commerce, have experienced spectacular growth. The case of the UK is a good example because it was already considered an advanced and mature market, nevertheless, it has experienced a boom during the pandemic. According to a recent survey conducted by McKinsey and Dynata, in the UK, fashion e-commerce is expected to represent 50% of the UK market by 2022, compared to the already very high 35% today. In the UK, online market penetration reached 75% in 2020 and is likely to rise to 85% next season.

It is not a narrowing of the gap that separated Spain from other fashion markets, but everything points to the fact that we are facing a real market transformation that affects all countries, regardless of their level before the pandemic. The new buying patterns of consumers, which were already apparent, have become a normalized preference in one year, and in some segments, even dominant.

71% of fashion executives worldwide expect their online business to grow by more than 20% this year. Industry players are therefore facing a decisive moment in which they will need to make important and relatively quick decisions if they want to stay on board a train shows no signs of stopping.

Invest in technology to respond to market demands

The online shopper has become accustomed to standards of excellence and values. Precisely those standards that make logistics management in the fashion sector more complex such as availability of sizes, safety and predictability of delivery, ease of return and omnichannel sales experience with stores. A whole range of requirements that are impossible to manage without the use of appropriate technological tools, both for warehouse management and for transport, integration with systems and logistics management in general.

Many retailers are already investing time and money to improve their digital platforms and develop their online strategies, such as the warehouse management system, or WMS, that even have specific packs to meet the needs of online commerce in which stock management, visibility, traceability, and real-time control are no longer very convenient options but unavoidable requirements.

As omnichannel driven demands become the norm, with resulting customer satisfaction harder to achieve, supply chain professionals need to leverage advanced WMS technology to keep their operations nimble, efficient, and scaling – especially in these volatile times. Given Generix Group’s completeness of vision and ability to execute, as recognized once again by the Gartner analyst community, their Solochain WMS is well-positioned to help companies needing a modern, flexible, and agile solution that can easily adapt to their changing needs. Contact us to learn more.

This article originally appeared here. Republished with permission.

IoT
3pls, Archives, Global Logistics, Global Trade Daily, Software

KEEP AN EYE ON IoT: THE FUTURE IS NOW WHEN IT COMES TO TECH’S ROLE IN SUPPLY CHAIN MANAGEMENT

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The Internet of Things is a revolutionary technology of today. If implemented optimally, it can bring about immense benefits in different industries including transportation, retail, healthcare, finance and supply-chain management. For processes like forecasting, management and oversight applications, IoT can assist fleet managers in improving the operational efficiency of distribution along with adding transparency to the decision-making process. 

IoT can play a vital role in improving supply chain management, with its main applications in tracking and monitoring processes. Additionally, IoT can be applied to other processes.

TRACKING LOCATION IN REAL-TIME

The IoT can help provide real-time data of a product’s location and its transportation environment. It can be tracked at all times and you can get real-time alerts if anything goes wrong during transportation and can monitor the delivery of raw materials and ready goods.

With environmental sensors, shipments can now be tracked for internal conditions such as the inside temperature of the vehicle, humidity, pressure and other factors that can potentially adversely affect the product.

C.H. Robinson ties its recognition as a challenger in the 2021 Gartner Magic Quadrant for Real-Time Transportation Visibility Platforms to the Eden Prairie, Minnesota-based global logistics company’s solutions such as Navisphere Vision. Delivered by C.H. Robinson’s TMC division, Navisphere Vision’s IoT device integrations allow shippers to monitor and immediately mitigate issues when freight is impacted by shock, tilt, humidity, light, temperature or pressure.

Recognition is great, but to expand on C.H. Robinson’s newer capabilities, the company has announced it will invest $1 billion in technology over the next five years or double its previous investment. 

“Several major events over the past year have emphasized the vital importance of supply chains, but also highlighted their fragility in some cases,” explains Jordan Kass, TMC president. “The companies who will excel in the years to come will be those with real-time visibility into their supply chains. The ability to consume, combine and analyze data from the growing number of integrations and data points will be essential for building a resilient, competitive and profitable supply chain.”

24/7 20-20 VISION

IoT devices help managers in making decisions about product arrivals and increasing delivery forecast precision. Not only does it help predict final delivery date, but it also assists in mitigating risks before they can occur. 

With real-time location trackers, warehouse employees can track the exact aisle for specific parcels. When paired up with artificial intelligence, it also allows for automated vehicles to retrieve a particular package without any human supervision. And tools such as smart glasses assist the warehouse workers and ensure that they spend lesser time in completing their task. Furthermore, IoT gathers data which allows for continual improvement and increased efficiency as the process continues. 

“Faced with the acceleration of e-commerce and new consumer demands, the automatization of logistics warehouses is an essential response to handle growing flows in an ever-shorter timeframe,” says Philippe de Carné, executive vice president, Business Development, Innovation & Business Excellence at global supply chain operator GEODIS, which has about 50 automated sites worldwide.

“The arrival of increasingly autonomous intelligent robots and a constant search for competitiveness are paving the way for increased automatization,” notes Antoine Pretin, vice president of the GEODIS Engineering Group. “Such solutions provide great leverage to improve performance and assist in order preparation in e-commerce warehouses, reducing repetitive tasks, but also gaining quality and reactivity.”

MORE BENEFITS IN SUPPLY CHAIN MANAGEMENT

IoT devices help plan and change transportation routes by considering any accidents or delay-causing occurrences along the way. Thus, it allows for optimal path while developing contingency planning and getting to the cause of delays. 

In terms of increasing operational efficiency and reducing operating costs, IoT SCM platforms exponentially increase the speed of supply chain efficiency. The IoT helps reduce feedback cycle, allows quick decision-making, mitigates risks and improves goods-locating efficiency in the warehouse. 

Connected platforms are easily accessible and faster than on-premise systems. With a cloud-based IoT system in place, supply chain managers can ensure that all concerned stakeholders can access important information. Furthermore, a connected IoT service can give insights for particular scenarios, thus helping the workers throughout the supply-chain process. 

IoT also gives a detailed insight to supply chain managers on goods turnover. This assists the managers and retailers estimate how many units of each product they need for shelving. It also increases accuracy by avoiding human error and helping in the identification of packages, while also avoiding financial overheads that are otherwise incurred in the form of time and money. 

Bethesda, Maryland-based aerospace and defense contractor Lockheed Martin recently signed an agreement with SyncFab, a Silicon Valley distributed manufacturing platform, to streamline supplier capabilities across Switzerland. How? SyncFab will provide Lockheed Martin with direct access to its parts procurement and secure supply chain platform that connects Original Equipment Manufacturers to members of Swissmem, which represents Switzerland’s mechanical and electrical engineering industries. 

“SyncFab is honored and privileged to work with Lockheed Martin in our mission to expand access and digitally transform Swiss Industrial Supply Chains in partnership with Swissmem,” said SyncFab founder and CEO Jeremy Goodwin, who bills his company’s platform as the first Supply Chain Blockchain solution for parts suppliers and buyers. 

The platform works as a “matchmaker” between OEMs and SMEs, enabling SMEs to compete for long-term supply chain opportunities with large international companies. This platform has already helped mechanical engineering and electronics firms in the U.S. provide products and services to large OEMs, including electronics, aerospace, automobile, medical technology, and renewable energy.

Other top defense suppliers such as Thales, RUAG and Mercury have joined the SyncFab platform consortium as has the Cleveland, Ohio-based National Tooling and Machining Association (NTMA) and its more than 1,400 SME supplier members.

IoT also allows for sorting data and determining patterns to indicate potential reasons for improving or hindering the profitability of the goods. It helps supply chain managers and retailers segment the goods according to the target audience. Thus, businesses can better understand which product is preferred by which particular segment of customers. 

Perhaps the one to put it best about IoT’s growing and important role in supply-chain management is Bill Berutti. He’s the CEO of Troy, Michigan-based Plex Systems, whose cloud-based Smart Manufacturing Platform assists with manufacturing execution, ERP, quality management, supply chain planning and management, tracking, Industrial IoT and analytics. 

“Smart manufacturing isn’t something that will happen years down the road,” Berutti says. “It’s real, it’s imperative and it’s happening now.”

__________________________________________________________________

A Certified Information Systems Security Professional (CISSP) specializing in network and IoT security, David Smith has written for Cybersecurity.att.com, Staysafeonline.org and Eccouncil.org. Learn more at thesmartcardinstitute.com.

DOT inspections
Archives, Global Logistics, Global Trade Daily, Trucking

What Fleet Managers Should Know About DOT Inspections

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Operating a trucking company typically means covering a lot of variables, from vehicle depreciation and traffic jams to driver sick days, broken-down equipment, conflicts with business partners and everything in between.

One thing fleet managers definitely cannot afford to overlook in this list of responsibilities is the importance of DOT inspections. What do fleet managers need to know about DOT inspections, and how can they prepare for the next one before it arrives?

What Are DOT Inspections?

First, what are DOT inspections, and why are they so important?

State troopers or other enforcers, working under the authority of the Federal Motor Carrier Safety Administration (FMCSA) carry out surprise roadside inspections to ensure both truck and driver are in good working order.

The goal of these inspections is to keep truckers and other motor vehicle operators safe on the road. An inspector is tasked with determining whether a truck and its driver are following all of the applicable rules and regulations designed to prevent oversights and accidents.

The Six Levels of DOT Inspection

There are six levels of DOT inspection a truck and its operator may be subject to. Which one is carried out depends largely on the whims of the inspector. Drivers will never know what level of inspection to expect until they’re stopped, so it’s essential to be familiar with all six.

Level 1

Level 1 inspections are as comprehensive as they are commonly performed. There are 37 steps to complete for a Level 1 inspection, assessing both the driver and the vehicle as well as addressing the presence of any illegal cargo.

All of the truck’s systems will be inspected, from the brakes and electrical to the steering, seatbelts, and everything in between. The driver will also be assessed to determine whether they’re under the influence of drugs or alcohol.

Level 2

Level 2 inspections are nearly as thorough as Level 1, though inspectors are not required to go underneath the vehicle to ascertain its condition. The driver assessment to look for the presence of drugs and alcohol remains the same, however.

Level 3

Level 3 DOT inspections focus solely on the driver. The inspector will review all pertinent paperwork, such as driver’s license, medical examiner’s certificates, and skill performance evaluations, to determine whether the driver is in compliance with all applicable FMCSA regulations.

As with the first two levels, the driver will also be assessed to determine if they are under the influence of alcohol or another controlled substance.

Level 4

Level 4 inspections are not as common as some of the others, since they’re used for one-time examinations. They’re useful for tracking violation trends or other data, and they often don’t take up a lot of time for either the driver or the inspector.

Level 5

Level 5 inspections are the same as Level 1 inspections with one major caveat: the truck is the only thing being inspected. The driver does not even have to be present for this level of inspection, which frees them up to perform other tasks while their vehicle is being inspected.

Level 6

Level 6 inspections are only necessary for vehicles tasked with hauling radioactive materials. The Enhanced NAS Inspection for Radioactive Shipments is the same as the standard Level 1 inspection, but it pays special attention to any radiological emissions.

Once the truck and driver have passed inspection, the truck is marked with a clearly visible nuclear symbol that is removed once the delivery reaches its destination.

Preparing Vehicles for a DOT Inspection

Getting ready for a DOT inspection is a two-fold proposition: it involves preparing both the vehicle and the driver. First, let’s take a closer look at getting fleet vehicles ready for inspections.

By far the easiest way to pass a DOT inspection is to be prepared. This can entail but is not limited to keeping the vehicle in tip-top shape, keeping it clean, and ensuring all required and recommended maintenance is carried out in a timely manner. Understand the systems that will be inspected and address any problems promptly.

Fleet managers may wish to seek out a DOT Inspection Certification as well. While this will not prevent an inspection from occurring if there is an obvious violation to address, it can help streamline the process a little bit in some situations.

Keeping the vehicle clean may not be a requirement for DOT inspections, but it can ensure the inspector is focusing on the details of the inspection rather than becoming vexed because of the state of the truck.

Preparing Drivers for a DOT Inspection

Drivers are the other part of the equation when it comes to successfully preparing for a DOT inspection.

Driver inspections tend to require a lot of paperwork. Inspectors will go over everything from the driver’s commercial licensing, to their medical card, waivers, daily logs, and hours of service. They will also assess the drivers to see if they are under the influence of drugs or alcohol, and will verify any HAZMAT requirements.

Start by ensuring all of the driver’s paperwork is up to date. Then keep a copy of all the necessary paperwork in a folder in the cab — as well as backups located elsewhere in case something happens to the originals. A lot of this information, such as the daily logs and hours of service, can sometimes be accessed digitally, depending on how the fleet is set up. Fleets that haven’t switched to digital data collection for hours of service and daily logs may wish to consider doing so to speed up the inspection process.

Make sure your drivers are always polite and professional when dealing with inspectors. It’s always a good idea to treat these individuals with professional courtesy, even and perhaps especially if they’re flagging a violation.

Don’t Fail an Inspection by Lacking Preparation

DOT inspections might be a hassle, but they are an unavoidable part of operating a trucking fleet. The easiest way to fail one of these inspections is to go into them entirely unprepared. As long as the fleet is operating properly, all violations are addressed as quickly as possible, and drivers and fleet managers are working to keep themselves and other drivers safe, then passing these inspections with flying colors should be easy.

They say that failing to plan is planning to fail, and that is a rule to live by when it comes to preparing for DOT inspections.

cyber
Archives, Global Trade Daily, Software

Security and EDI, the Trojan Horses of Cyber Attackers

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If no one is safe from a cyber-attack, then the multiplication of EDI flow increases the vulnerability of a company. Indeed, EDI flows with less protected subcontractors can be privileged entry points for attackers. The choice of a reliable and certified EDI provider is becoming more and more necessary. 

SMEs, the weakest link in cybersecurity

When it comes to cybersecurity, small businesses are the weakest link and the ones that attackers are targeting, so that they reach larger targets. Faced with this phenomenon, some companies use rating companies to estimate the security level of their suppliers and eventually select them according to their score. This approach is extremely costly and is nevertheless reserved for a few large international companies.

A study conducted by cybersecurity firm BlueVoyant shows that of the 1,500 companies surveyed, 77% of CISOs and CIOs report a complete lack of visibility into their vendors’ security. At the same time, 82% have experienced at least one data breach in the past 12 months. This lack of control over third-party security can be explained by the fact that a company’s cyber resources are obviously focused on securing their own information systems. Some companies send a security questionnaire to their partners to assess their practices, but the average company has about 1000 partners, which limits the company’s ability to control them. Cyber threats and protection systems are constantly evolving, and even systems that may appear to be the most mature, such as EDI (Electronic Data Interchange), are not always the most secure.

EDI, a secure technology, but not safe from attackers

By design, EDI flows are secure: the protocol ensures the integrity and traceability of exchanges. The data itself is encrypted, which guarantees its confidentiality and integrity, but EDI flows can potentially be exploited by hackers to infiltrate the information system of a company or its EDI provider, or to divert data indirectly.

Since the 2010s, EDI network flows initially carried by the specialized X25 network have given way to IP and Internet connections. In the same way, the use of EDI has expanded, especially among SMEs, thanks to the development of Web-EDI type solutions, accessible to all. Any company can communicate EDI data via a simple Web browser and this democratization increases the risk of computer hacking.

The ecosystem, a concept too often underestimated by companies

For example, a supplier who links his computer to a client, so he can obtain a list of addresses, will open a connection between the two platforms. By attacking the supplier, the cyber attacker opens a breach towards the client’s company.

While it is appropriate for the supplier to protect its customers, it is also up to the client to qualify the trust it places in the supplier. Intrusion attempts are polymorphous: if identity theft is the most frequent case, companies must generally limit the flow of sensitive data communicated within their ecosystem.

The support of all EDI formats and protocols on the market is the first criterion for choosing an EDI solution. The platform must support EANCOM, EDIFACT, XML, UBL, HL7, JSON, PDF or X12, but also offer interfaces with ERP and business software packages such as SAP, Microsoft, Oracle or Sage. Finally, the EDI provider must obviously have interoperability capabilities with all the countries with which the company will have to exchange. But nowadays, you must also choose your EDI provider according to its maturity and its investments in cybersecurity.

The role of the EDI provider has evolved; it has become a key player in protecting companies from these attacks and the company itself must ensure the seriousness of the protections put in place by its EDI provider before connecting to its service.

Certifications and standards are a way to ensure the seriousness of its processes. An ISO 27001 certification appears as an essential criterion in the selection of an EDI provider. It is up to the provider to ensure that the data flow is not subject to a “Man in the Middle” attack. It is also the provider who stores the data exchanged between EDI partners. This storage must therefore be encrypted to ensure that, even if an attacker manages to penetrate the defenses in place, he cannot exploit the data exposed to his attack. Asymmetric encryption is the most secure solution to protect data, but some players are now turning to Blockchain technology to further increase the security level of their EDI.

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.

potato
Archives, Global Trade Daily, Imports/Exports

World Potato Trade Slips Under $5B

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

Global potato exports dropped from $5.1B in 2019 to $4.3B in 2020. France, the Netherlands and Germany constitute major potato exporters worldwide. In 2020, the average potato export price amounted to $327 per tonne, decreasing by -6.3% y-o-y. Belgium, a country with one of the highest per capita potato consumption figures, remains the world’s largest importer. Over the last year, most importing countries have reduced their potato purchases. By contrast, Belgium, Spain, the U.S., Uzbekistan, Ukraine, the Czech Republic and the UK boosted their imports. 

Global Potato Exports by Country

Global potato exports shrank to 13M tonnes in 2020, dropping by -11.3% compared with the year before. In value terms, potato exports plummeted from $5.1B in 2019 to $4.3B (IndexBox estimates) in 2020.

The biggest shipments were from France (2.3M tonnes), the Netherlands (2M tonnes) and Germany (1.9M tonnes), together recording 48% of total export. It was distantly followed by Belgium (1M tonnes), comprising a 7.7% share of total exports. Egypt (561K tonnes), Canada (530K tonnes), the U.S. (506K tonnes), China (442K tonnes), Kazakhstan (318K tonnes), India (298K tonnes), Spain (285K tonnes), the UK (279K tonnes) and Pakistan (276K tonnes) occupied a relatively small share of total exports.

In value terms, the Netherlands ($826M), France ($684M) and Germany ($374M) were the countries with the highest levels of exports in 2020, with a combined 44% share of global exports. Canada, China, the U.S., Egypt, Belgium, the UK, Spain, India, Pakistan and Kazakhstan lagged somewhat behind, together accounting for a further 39%.

In 2020, the average potato export price amounted to $327 per tonne, falling by -6.3% against the previous year. There were significant differences in the average prices amongst the major exporting countries. In 2020, the country with the highest price was China, while Kazakhstan was amongst the lowest.

World’s Largest Potato Importers

In 2020, Belgium (3M tonnes), distantly followed by the Netherlands (1.6M tonnes), Spain (0.9M tonnes) and Germany (0.7M tonnes) were the main importers of potatoes, together achieving 43% of total imports. Italy (618K tonnes), the U.S. (501K tonnes), Uzbekistan (409K tonnes), Portugal (378K tonnes), France (331K tonnes), Ukraine (285K tonnes), Russia (241K tonnes), Malaysia (236K tonnes) and Canada (233K tonnes) followed a long way behind the leaders.

In value terms, Belgium ($595M), the Netherlands ($345M) and Spain ($314M) were the countries with the highest levels of imports in 2020, together accounting for 28% of global imports. The U.S., Germany, Italy, France, Russia, Portugal, Canada, Malaysia, Ukraine and Uzbekistan lagged somewhat behind, together accounting for a further 30%.

Most importing countries have reduced their purchases over the last year. Belgium, Spain, the U.S., Uzbekistan, Ukraine, the Czech Republic and the UK were among the few countries that increased their imports in 2020.

The countries with the highest levels of potato per capita consumption in 2020 were Belarus (608 kg per person), Belgium (522 kg per person) and Ukraine (474 kg per person).

Source: IndexBox Platform

warehosue
Archives, Global Logistics, Global Trade Daily, Software, Warehousing

Yard Management Software-The “Black Hole” of Warehouse Management

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The massive uptick in e-commerce orders combined with a persistent labor shortage has pushed more companies to rethink the way they manage their yards. A link in the supply chain that’s often referred to as a “black hole” because it lies where the TMS picks up and the WMS leaves off, the yard was once a place where problems were solved by adding more employees and arming them with clipboards and handheld radios.

This approach doesn’t work anymore.

Not only has labor become more expensive and harder to come by, but manual approaches fall short miserably when measured up against technologically advanced, automated yard management systems (YMS).

A collaborative tool for scheduling and managing the warehouse or distribution center (DC) yard, YMS helps logistics team members anticipate and plan loading and unloading flows right down to the smallest detail. It also supports on-time delivery and optimal resource use; synchronizes warehouse operations with yard events; and helps maintain a smooth flow of vehicle movement in and out of the yard.

“The global supply chain has been growing more complex and sophisticated over the past few years, and now that the COVID-19 pandemic has forced the adoption of more agile and streamlined processes,” SupplyChain reports, “there is a greater emphasis on the importance of digitization and technological solutions.”

The Tremendous Positive Impact of YMS

One solution that SupplyChain says has had a “tremendous impact on the logistical side of supply chain networks” is dock and yard management. It defines dock and yard management as the “creation of systems that address all activities related to or impacting the dock and yard, taking into consideration relevant capacities, resource availability, and constraints, as well as demand and company goals.”

Once in place, YMS also:

-Ensures on-time delivery: Improve punctuality, quality and visibility, even when volumes increase.

-Makes the best use of warehouse resources: Synchronize operations in the yard with those in the warehouse. Optimize inbound and outbound operations while gaining visibility. Make the right decisions, quickly, while also reducing operating costs.

-Helps companies be the “shipper of choice” in the capacity-constrained transportation market: Automate appointment scheduling, reduce driver wait times, and track the implementation of transport specifications.

-Leverages automation: YMS plays an important role in helping organizations automate otherwise manual processes, save their human labor for more important projects and use data to plan for unexpected supply chain disruptions.

-“If companies invest in suitable dock and yard management systems, they’ll find that they can significantly reduce costs, inventory stock, and congestion,” SupplyChain adds, “while simultaneously increasing throughput, saving waiting time, and hastening the process of loading and unloading cargo.”

Accelerating the Speed of Business

When companies start processing a higher volume of orders, stock densifies, operations speed up, daily trucks come and go by the dozen, and every inch of space on the docks has to be used. When this happens, being able to anticipate the loading and unloading flows—and plan them down to the slightest detail—become table stakes for the companies operating these yards and docks.
Synchronizing warehouse operations with events in the yard has always been a critical aspect of delivering on time and maximizing resources. With longer queues of trucks to manage and regulatory issues like the hours of service (HOS) rules to consider, pressure to reduce driver wait times is intensifying.

Designed for businesses that want to best plan and optimize their yard operations in order to improve their customer service rate and logistical performance, YMS helps organizations offer the highest level of service to their customers; efficiently manage operations and take charge of unexpected events in a dynamic way; reduce operating costs, and make the best use of available resources.

A digital YMS also helps companies:

-Synchronize multi-pick and multi-drop routes and make easy adjustments in case of unexpected events.

-Reduce transportation costs through more efficient loading of trucks.

-Improve activity planning, scheduling and management.

-Reduce driver wait penalties.

-Monitor driver compliance according to transport specifications.

Integrating with Other Systems

Generix YMS also easily interfaces with WMS, TMS, automated barriers, access controls and other onsite digital tools. An application with a proven return on investment(ROI), the solution presents clear benefits for shippers that use it, including:

-The ability to manage more trucks with a limited number of doors, thus enhancing both dock and dock door productivity.

-Manage peak volumes without increasing square footage or having to move to a new site.

-Maintain excellent customer service and punctuality rates.

-Effectively operate multi-pick and multi-drop routes, thus achieving results while concurrently reducing associated costs.

-Improve carrier relations through reduced driver wait times (and measure their quality of service).

The Benefits Don’t End There

Fundamentally, Gartner’s Bart De Muynck tells Logistics Management that YMS helps solve one of the most pressing supply chain challenges for any shipper: just how efficiently carriers and other parties are using the time clock. This is particularly important in an HOS world, where drivers are limited in terms of how much time they can spend behind the wheel.

“Imagine the implications of a driver having to stay at a location for an extra three hours,” he points out, noting that this would create a 75% increase in the expected crash rate. “Truck driving is a profession that causes a high number of driver fatalities, many of which could be happening as a result of detention in the yard.”

Solutions exist today that can ensure any warehouse or distribution center operates at peak efficiency, 24 hours a day, seven days a week. From Warehouse Management Systems (WMS) and Transportation Management Systems (TMS) to Manufacturing Execution Systems (MES) and more, software platforms can deliver a wide range of benefits that ultimately flow to the warehouse operator’s bottom line.

Contact us to learn more.

This article originally appeared here. Republished with permission. 

compliance
Archives, Global Logistics, Global Trade Daily, Ocean Carriers

AN OVERVIEW ON COMPLIANCE IN OPERATIONS AND MANAGEMENT

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Shippers across the globe are sure to be confronted with new disruptions when navigating international markets–regardless of the shipping method put into place. Gone are the days when minimal compliance efforts are overlooked or passed off as acceptable. In the modern trade arena, compliance and accuracy are everything.

Tack on the pandemic, an ongoing trade war and what seems like a constantly shifting trade landscape, and compliance efforts can seem downright daunting and costly–especially to and from the U.S., according to Ben Bidwell, director of North America Customs and Compliance at C.H. Robinson.

“Former U.S. Deputy Attorney General Paul McNulty once said, ‘If you think compliance is expensive, you should try non-compliance.’ When shippers make mistakes, it can become costly and not just in terms of freight delays, but it can lead to seizure of goods and even jail time for those who are involved,” explains Bidwell. 


The C.H. Robinson executive shares that not only do shippers have to be more careful now than ever when trading across borders, but simply understanding the evergreen trade landscape and various barriers is a critical part of successful operations.

“Challenges in today’s trade market include Section 301, punitive tariffs, forced labor concerns and more,” Bidwell says. “But shippers cannot afford to forget about basics such as the U.S. Customs List of Trade Priority Issues, for example. Customs has certainly not lost sight of that list, and the importing community can’t afford to lose sight of it either.”

Different challenges require unique, strategic approaches in management. The constant shifting of these challenges depends primarily on the country in question, the products being shipped and local customs regulations. This is where automation, advanced technology and access to critical information can serve as significant game-changers for your customers and operations.

Trade & Tariffs Insights, a page on the C.H. Robinson website, “brings the latest challenges, changes and more wrapped together for importers and exporters to utilize and understand,” Bidwell says. “This resource helps shippers get the information they need–not only to remain compliant but to also keep them updated on the latest changes and potential changes that could impact their business.”

Staying informed with rock solid information is becoming ever more important, Bidwell notes.

“Visibility, access to your data and data analytics are critical in running a compliant and successful supply chain,” he says. “It equals not only results in compliance, but also duty savings, duty mitigation opportunities and overall awareness.”

C.H. Robinson’s Navisphere platform does exactly that. The data analysis tools (Carrier, Insight and Vision) capture key elements in the importing and exporting process while providing a clear path of data-backed insights and next-step actions. Navisphere leaves the guessing out of the process and enables customers to make informed decisions and cost analysis. Additionally, the different Navisphere tools serve as an extension in predictive data allowing shippers to proactively plan their next move.

“Shippers can go in and see where they are paying the most in duties and taxes by country, by specific commodity, by shipper, etc.; they can see all of that data side-by-side,” Bidwell says. “This feature gives them the opportunity to make informed decisions and assist with weighing, should we look at alternative sourcing options, for example.”

Another trending issue within the importing and exporting landscape is forced labor compliance. Bidwell shares that the penalties for such compliance issues–regardless of whether the importer is aware—are costly and can lead to the ultimate seizure or destruction of the goods in addition to severe civil penalties.

“Anytime you are shipping across borders, it is important to have a compliance program in place and that your company has individuals or a team dedicated to reviewing and maintaining that program,” he adds. “C.H. Robinson has worked with thousands of companies related to this. At the end of the day, our role is to act as an extension of their team, to not only get them up to speed on what they need to be doing from a compliance perspective, but in the long-term acting as a reliable partner to ensure their ongoing compliance.”

Shippers must keep in mind that customs has eyes on their shipments and implementing proactive rather than reactive measures will greatly benefit the business in the long-term. Bidwell advises that to ensure compliance measures are met and maintained, costs are inevitable. It really boils down to when these costs are enforced.

“Compliance is an investment. It may cost more on the front-end but skipping out on that investment could cost you tenfold in the long term. As far as other supporting elements with compliance efforts, I recommend going back to the data analytics and visibility of your own data, because that information can be telling, and it allows you to identify anomalies as they occur.”

Investing in a solid compliance strategy is not just for shippers, it is a critical piece to the entire process, throughout the whole supply chain. With the labor shortage being felt in almost every industry, the logistics sector cannot afford to skip out on the creation and adherence to acceptable compliance efforts. When employees are professionally trained and informed on upcoming changes within the market, your business benefits.

“It’s about getting back to basics and not losing sight of all of the baseline compliance that comes with importing and exporting,” Bidwell says. “It is easy to get lost with all the changes that are happening with trade policy and a very volatile market. Companies must ensure that they do not lose sight of traditional basic compliance, because that stuff hasn’t gone away, and customs certainly hasn’t stopped.”

C.H. Robinson provides solutions for their customers at the local level and across the globe. Ensuring all bases are covered through customs and compliance experts enables the customer to rely on these resource experts to advise on how to ensure their supply chain is compliant. 

To learn more about C.H. Robinson’s Navisphere technology platform or other offerings, please visit chrobinson.com/en-us/technology/navisphere/.

__________________________________________________________

Ben Bidwell is the director of North America customs and compliance at C.H. Robinson. Ben joined C.H. Robinson in 2004 and became a Licensed Customs House Broker in 2007. Throughout his career at C.H. Robinson, he has consulted and resolved a wide range of customs disputes for clients involving classification, country of origin, marking violations, seizures and protests for products ranging from hospitality goods, automobile tires, apparel and textiles, toys and other consumer retail goods.

financials
Archives, Global Logistics, Global Trade Daily, Special Reports

To Really Move the Needle, You Must Move the Financial Needle First

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Today’s supply chain management and manufacturing executives live in a finance-driven world, managing profit and loss sheets, dealing with working capital issues, and collaborating with CFOs. Furthermore, the ultimate measurement of a company’s performance is often the stock price or valuation, which is why you should start every day with the same mindset and look at your business’s financials.

When you examine financials, you should always have your specific goals in mind. The market is bursting with tools that promise to increase throughput, boost sales, and solve all kinds of issues, but it’s vital to focus on your own goals and objectives. What problem do you want to solve? How can your data help reorient the material flow to free up cash without jeopardizing the business?

Ultimately, most executives have three priorities: making more sales, managing variable costs to improve margins, and keeping customers happy. When I look at financial reports, I’m really interested in seeing the inventory and the cash flow statements, because the health of supply chain and manufacturing operations is often reflected in the cash positions and inventory of a company.


Measuring Financial Health in the Supply Chain

Instead of getting straight to the nitty-gritty and doing defect analysis on every production line in every factory, it’s critical to understand where the constraints are from a demand perspective. Look at historical data to determine best-case scenario demand and worst-case scenario demand, and apply data from the end-to-end supply chain to start mapping demand and identifying capacity constraints.

The farther upstream bottlenecks are, the more value they’ll create naturally because there’s always a bullwhip effect. By eliminating them, you can either sell more products or capture more market share.

If you want to increase your bottom line, that’s the process to use. Look at financials first to map out the value chain and see where inventory is most concentrated. Then, identify opportunities to free up cash and address immediate bottlenecks by investing in capital expenditures or reorienting the material flow. Both are quicker options than, say, getting injection molding machines installed on the production floor.

Supply chain management is a delicate balance of financial and operational processes, and business growth requires the right perspective. To move the needle at your organization, prioritize these strategies:

1. Remember that cost optimization doesn’t cause growth.

Anyone with a college degree can come in and cut costs. It’s not difficult, and engineers are constantly focused on making technologies that are cheaper and faster. The issue is that a lot of the people who generated growth before the cost-cutters arrived made a deliberate effort to create excess capacity that can support a certain environment.

Everything’s about pennies and dimes these days, but instead of trying to be as cost-centric and effective as possible, a growth mindset requires you to focus on what’s selling and find out how to make your supply chain faster. The more orders you can fulfill, the more money you can earn. If you want to grow, you can’t start by cutting costs. Instead, figure out what’s selling and reorient material flow to turn that product over faster and build up your cash reserves.

2. Step back and measure your efforts.

Supply chain and manufacturing executives are incredibly busy with day-to-day operations. However, it’s important to take a step back, look at your performance data for the last three to four years, and see if the effort you’re putting in is actually leading to sales.

We live in a world where IT is integral to everything, including connecting downstream sales data with operations. This data can help generate forecasts, mitigate risk, and even produce crisis management plans for all the different scenarios that could play out. When you can look at performance data on a global scale, it can build resilience, reduce the waste in your supply chain in the form of buffers, and ultimately preserve your cash flow for growth.

3. Work more closely with the C-suite.

Don’t position yourself as a cost-centric value add. Today’s procurement and supply chain executives are all about getting the best deal, but that doesn’t really matter. It’s great if you can get the best deal, but it’s far more important if you can get customers buying more and logistics providers and suppliers moving the next products into place with the fastest turnaround times.

Executives in supply chain and manufacturing need to have the ear of the CEO and CFO and have an idea of all the levers in the business. With a holistic, end-to-end view, supply chain manufacturing executives can come up with operational improvements and confidently tell sales, “This is what we can realistically make.”

Supply chain and manufacturing executives need to quit the penny-pinching and recognize that cost-cutting measures can’t achieve the groundbreaking growth they want. Once supply chains are accelerated and product is moving off the shelves, you can start looking at the challenges that emerge on a global scale and identify different resources that could help overcome those challenges and demonstrate proven ROI.

_______________________________________________________________________

Ali Hasan R. is co-founder and CEO of ThroughPut Inc., the AI supply chain pioneer enabling companies to detect, prioritize, and alleviate dynamic operational bottlenecks. Ali has unique experience in onshore and offshore supply chain management in the U.S., Russia, United Arab Emirates, Saudi Arabia, Pakistan, Bahrain, and Yemen.

fleet managers
Archives, Global Logistics, Global Trade Daily, Trucking

What are the Best Ways Fleet Managers Can Reduce Costs?

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Effective fleet management can be expensive. To keep vehicles operational requires spending on labor, fuel costs, maintenance and telematics. Managers also must consider external factors — like driver behavior and weather — that can further impact fleet performance.

When facing tight fleet budgets, it’s important to know how simple adjustments to vehicles and driver practices can reduce costs. These are some of the best strategies fleet managers can use tWhen facing tight fleet budgets, it’s important to know how simple adjustments to vehicles and driver practices can reduce costs. These are some of the best strategies fleet managers can use to do that.

1. Track Driver Behavior

How drivers use fleet vehicles can have a significant impact on fuel economy and vehicle lifespan.

Many modern telematics systems make it easy to track events like harsh braking and idling — practices that can increase vehicle wear and tear and fuel consumption. They can even put drivers in violation of certain city ordinances. These systems can help any business reduce unsafe and wasteful driving practices.

2. Keep Vehicles Maintained and Road-Ready

Proactive vehicle maintenance ensures vehicles are ready for use and less likely to break down on the road — reducing potential downtime.

The correct care can also have a significant impact on vehicle handling and the longevity of different components.

Properly inflated tires, for example, can make many vehicles easier to control and can also help tires last longer. Under-inflated tires tend to run much hotter, according to studies on tractor-trailer tire performance, and just 20% under-inflation can decrease tire lifespan by 30%.

Because tires naturally deflate over time — and because tire pressure can increase or decrease as temperatures change — it’s not unusual for vehicle tires to become under-inflated.

The right grade of motor oil can provide similar benefits for lifespan and fuel economy.

Preventive maintenance is more expensive than repairing vehicles as problems arise, but it can help fleet managers drive down overall upkeep costs in the long run.

Advanced telematics systems can provide fleet managers with instant notification on unusual performance or behavior, allowing them to schedule inspections or repairs as quickly as possible.

For example, networked tire pressure sensors can provide managers with a real-time view of fleet-wide tire pressure readings. Data from engine control units or similar onboard sensors can alert managers when components begin to fail or flag warnings.

In the near future, these systems may also enable predictive maintenance, a maintenance strategy that uses vehicle performance data and AI algorithms to determine when care will be needed.

3. Shop Based on Lifetime Costs

It’s not unusual for a fleet manager to primarily base purchasing decisions on a vehicle’s sticker price. While price will have a major short-term impact on budgets, it doesn’t always reflect how much it will cost in the long term.

Maintenance and fuel costs, downtime, taxation, and insurance can significantly impact a vehicle’s lifetime and recurring expenses. Opting for vehicles that are more expensive but reliable and cheaper to maintain can reduce fleet costs significantly.

When buying a new vehicle, consider reviewing weight and size, vehicle maintenance schedule and customer reviews. Owners may also want to investigate the possible savings alternative fuel vehicles may provide by eliminating the need for gasoline and diesel.

Adopting a forward-looking approach to vehicle and equipment purchasing can help in other ways, as well.

For example, the construction industry currently faces rising demand for almost every type of equipment as the economy recovers from COVID-19. Demand significantly outpaces the industry’s current workforce capacity and supply of resources and heavy equipment.

After a weak year, demand for heavy machinery recovered and then hit record highs in 2021. Many machines are in especially high demand as both residential and non-residential construction starts continue to trend upwards to pre-pandemic levels.

Demand for concrete pumps is expected to rise to meet the need for new foundations and infrastructure investments. At the same time, tight supply has already caused significant price increases for skid steer loaders, tractors, earthmovers and other types of construction equipment.

Considering the state of the market and likely future demand will help managers make additional purchases in the future, when prices are higher and vehicles are harder to come by.

4. Optimize Driver Routes

Efficient route planning is one of the best ways to reduce fuel costs and keep operating expenses low. Many modern fleet scheduling and management solutions offer tools that help managers find the fastest possible route for each given job.

The tool uses information like vehicle location, fuel economy, traffic and even weather conditions to automatically schedule routes so drivers reach jobs as quickly as possible, with minimal fuel consumption.

Savings from optimized routes can add up over time, helping teams cut down on one of the most significant fleet expenses.

5. Know How and When to Right-Size

Fleet right-sizing is the process of purging underutilized or overly specialized vehicles from a fleet. These vehicles are likely not necessary for operations or can be replaced by more useful models. They can significantly increase maintenance, storage and fuel costs while they remain with a business.

The right-sizing process typically follows a few steps, some of which can help managers identify underperforming vehicles in any fleet:

1. Break the fleet down into major vehicle groups or classifications.

2. Calculate average utilization for each vehicle or machine (often a measure of business mileage over a year-long period, or hours in use).

3. Identify vehicles with particularly low utilization — typically in the bottom 25 or 50 percent.

4. Identify low-utilization vehicles that are still necessary for operations.

5. Create a list of nonessential vehicles and right-size.

Other important metrics to use alongside utilization may include fuel consumption, maintenance costs and average hours in use. These metrics can be useful when the miles traveled metric does not accurately reflect the utility of a fleet vehicle.

The right disposal practices can help to make a business’s right-sizing more cost-effective. Selling vehicles as soon as possible after they are identified as being underutilized is important due to the high depreciation rate.

A formal disposal strategy that includes gathering users’ manuals and shop guides and cleaning and removing equipment can streamline the process.

How Fleet Managers Can Reduce Fleet Costs and Streamline Operations

Operating a fleet will always be expensive, but managers can use these practices to keep expenses within budget. Because driver behavior and maintenance costs are significant expense generators, telematics systems and procedures that track and minimize these expenses will typically be a good investment.

Management practices that take advantage of route optimization software and right-sizing strategies will also ensure minimal operating costs.

As alternative fuel vehicles become more common and practical, they may also be a good investment for fleet managers. The electricity these vehicles need is often cheaper than gasoline or diesel, and fewer moving parts can make for lower maintenance costs.

_____________________________________________________________

Emily Newton is an industrial journalist. As Editor-in-Chief of Revolutionized, she regularly covers how technology is changing the industry.