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Third-Party Logistics Providers Need Data Analytics to Save Money

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3pls, Archives, Global Logistics, Global Trade Daily

Third-Party Logistics Providers Need Data Analytics to Save Money

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Logistics data analytics can provide an invaluable competitive edge to third-party logistics (3PL) providers. 3PLs face a rapidly changing market. Supply chain disruptions and the rapid growth of e-commerce mean they must be ready to adapt if they want to continue providing high-quality services for their customers.

Data analytics allow 3PLs to uncover new insights to improve decision-making and provide cost savings.

How 3PLs Can Leverage Logistics Data Analytics

Today, businesses of all kinds have access to more information than ever — and a range of analytics tools that can extract deep insights from large data sets.

Almost any business can benefit from data analytics, but 3PLs are in a particularly good position to use these tools. These companies can secure a few significant advantages by using them.

1. Improved Risk Management

Modern 3PLs face various risks. The right data makes it easier to take a proactive risk management approach, making better decisions regarding carrier selection, freight tenders and the business partnerships the 3PL will establish.

Better data can also make it easier to identify potential risks and their potential impact. Identifying these threats can make a proactive risk management approach easier to implement and more effective — potentially providing significant cost savings.

Some 3PL tools even utilize advanced technology like AI to improve supply chain resilience and risk management. 3PLs can use them to uncover insights that less advanced analytics technology wouldn’t be able to find — securing a valuable competitive advantage.

2. Lower Transportation Costs

Data collected from the supply chain can make it easier to visualize and manage daily operations. 3PLs can use data dashboards and similar tools to centralize the information they gather and provide it in an easy-to-understand format for managers, supply chain specialists and key decision-makers.

3PL team members can then more easily track key KPIs — like cost per unit, order accuracy and processing time. Analytics tools will also help the 3PL identify relationships between business practices and these KPIs, making it easier to spot operational bottlenecks and inefficiencies.

3. Stronger 3PL-Client Relationships

Data from the supply chain and logistics operations can make it much easier to analyze and respond to changes in the global supply chain market. This information can also make 3PLs a better business partner to their clients. The right shipping and logistics analysis allows a 3PL’s associates to secure a valuable competitive advantage.

One recent study of the 3PL market found that interest in robotics and data analytics is rising fast among shippers. More 3PLs are adopting data analytics technology, and these tools may become critical for strong client relationships. Clients may look elsewhere if a business can’t offer a tool its competition can.

Data Analytics Can Provide Major Cost Savings

Many of the advantages data analytics provide can help 3PLs save time and money. Managing risk reduces the chance that an unforeseen hazard will cost a 3PL significant resources.

Lower transportation costs can reduce one of the biggest expenses for a 3PL — and allow the company to pass cost savings on transportation to its clients.

Better relationships with clients can provide steadier business for a 3PL, potentially decreasing costs associated with marketing and client relationship management.

3PL Data Analytics in Practice

Various 3PL data analytics approaches exist. These data analytics strategies offer benefits throughout an organization by providing workers with better information that can streamline operations or be passed onto business partners and clients.

Supply Chain Visibility and Transparency

Low supply chain visibility can make accurate predictions about availability, shipping times and processing speed much more difficult.

New data-collection and organization tools allow 3PLs to develop a much deeper understanding of how products are moving through the supply chain and how effectively current shipping partners are managing their operations.

Supply chain management tools may also lay the foundation for IoT-powered tracking and transparency. The right Internet of Things (IoT) tracking devices will let 3PLs monitor goods continuously as they move through the supply chain. These devices can provide information about a shipment’s current location, speed and shipping conditions.

This information can make it easier to track goods and predict shipping speed or delivery timing.

IoT supply chain monitoring may be especially valuable for 3PLs that offer cold chain management services. The same IoT device can track a shipment’s current location and temperature. It can immediately alert drivers and managers of an excursion, allowing them to respond quickly to prevent product spoilage.

Data-Driven Resource Planning

Enterprise resource planning (ERP) is an essential investment for any 3PL. It makes it much easier for managers to effectively understand and react to the business’s current resource planning needs.

Resource planning tools — along with software like warehouse management systems (WMS) and contact management systems (CMS) — can make managing essential business resources much easier.

These systems can also automate many administrative processes, like the generation of customer reports, helping to streamline client communication and business management.

KPI Dashboards and Data Visualizations

New data analytics tools allow 3PLs to centralize and organize information by using data dashboards. For example, KPI dashboards can provide managers and executives with a snapshot of current operations, performance and overall business health.

Strategic inventory dashboards can offer a real-time view of how inventory moves through the supply chain, making it easier to identify possible process issues.

Most logistics data analytics tools marketed to 3PLs offer a great deal of customization, so these tools can be adapted to fit the organization’s needs. They can provide information on different KPIs, prioritizing certain types of data and generating customized reports for clients, business partners or regulators as needed.

Using Logistics Data Analytics to Save Money in a Changing Market

The right analytics tools allow 3PLs to streamline their operations, save money and build stronger client relationships. Data dashboards, supply chain visibility tools, and systems like ERPs or WMSs can make it much easier to manage essential processes, automate work and make more informed decisions.

Early adopters of data analytics will secure a competitive advantage over other 3PLs, making them a more valuable investment for their clients.

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Archives, Global Logistics, Global Trade Daily, Trucking

Insufficient Weather Information Can be Costly

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Hurricane Ida hit Louisiana in 2020 with 150 mph winds before moving up the East Coast to drop a record amount of rain on New York City. In its wake, the Category 4 storm caused severe flooding and destroyed just about everything in its path, with the cost to insurers estimated by leading risk management analytics firm RMS to be between $31 billion and $44 billion.

Hurricanes don’t just destroy properties though – they also destroy infrastructure and disrupt freight transport, especially by truck and rail. The damage from weather events is pervasive, but advanced weather data analytics that combine legacy and new datasets can improve the understanding of storm threats. With more data to inform analysis, those affected can better prepare to prevent losses and destruction that cause prices to rise, particularly those related to ground transport.

Immediately after Ida, digital brokerage platform Transfix reported that dry-van spot rates, or the cost of space in an enclosed trailer, rose 5 to 8 percent out of Memphis, about 5 percent out of Georgia, and up to 15 percent out of Louisiana and Mississippi. Freight rail operators suffered gridlock from the storm, as well as crews that had to wait for floodwater to recede before starting repairs. Freight cars were then rerouted or ran under limited service until the railroad network was fully operational.


 

Any slowdown in transport or increase in rates likely results in an increase in the prices consumers pay for those goods being transported. While some of these increases are inevitable, given enough information and forewarning, freight carriers can plan accordingly for these events, especially since few areas within the U.S. aren’t affected by Mother Nature.

Weather Events Disrupt Supply Chains

High winds and tornados disrupt trucking as they can push a high-profile vehicle out of its lane or in the worst case, flip it over. Flashfloods can wash away railroad tracks and potentially cause derailments. Rain and fog lead to decreased visibility for locomotive engineers and truck drivers, cutting speed by as much as 25 percent. Snow and ice can make roads impassable and tracks brittle. A wildfire destroys everything in its path, including roads and rails.

Infrastructure damage frequently causes disruption to, and in the worst-case halts, supply chains. While these slowdowns certainly can create compounding issues downstream in the manufacturing, wholesale, and retail sectors, transportation businesses are typically the first to suffer financial tolls ranging from penalties for missed deliveries to loss of equipment and freight damages.

The estimated annual cost of weather-related delays to trucking companies range from $2.2 billion to $3.5 billion, according to the U.S. Department of Transportation. There are about 700 railroads operating in the U.S., and North America’s largest freight rail operator, Union Pacific, suffered about $100 million in losses from wildfires and heavy rains that caused disruption over the company’s 32,000-mile network in 2021.

Extreme weather events are becoming more prevalent as weather patterns are changing, and they’re becoming more costly to all. Since 1980, the U.S. has experienced over 300 weather and climate disasters that have had overall damages exceeding $1 billion, for a total cost exceeding $2 trillion, according to the National Centers for Environmental Information (NCEI). The numbers have trended upward over time, with an average of about 16 events each year from 2016 to 2020 and 18 events topping $1 billion occurring in 2021 just through October 8. This number doesn’t include the tornados that tore through Mississippi in December or the Colorado wildfires that closed out the year.

Developing advanced planning and forecasting tools to aid in deciding whether cargo should go or not requires data that’s more timely, frequent, and accurate than what’s readily available today. However, recent advances in satellite-based weather observation systems and big data processing enable substantial progress towards a better understanding of storms.

More Data Makes a Difference

While technology can’t change weather patterns, it can be used to create innovative solutions for determining where a storm is, how severe it is, and where it’s going. The current weather forecasting systems gather an insufficient amount of actionable data that can be analyzed in real time. If only a few datapoints are available, for example, forecasting models must interpolate data to fill in the gaps. Given more real-time observations, the forecast accuracy can be vastly improved.

Less densely populated geographic regions typically have the fewest weather data collections – yet these open spaces are where many of the country’s major highways and rail corridors run. Gathering data across these zones utilizing satellite-based observation platforms can augment limited ground-based radars. Data from multiple sources provides more accurate predictions of weather events before they transpire, as well as their severity and movement as they’re ongoing.

There are a variety of methods used to gather weather data, including ground-based radar, sensors, and instruments; weather balloons; and aircraft-mounted radar and sensing equipment. These technologies don’t provide the same insight as some satellite sensors and cameras, though. Clear Weather visual systems aboard satellites capture a view of the ground during clear skies, and the tops of clouds during storms. All Weather technologies, such as passive microwave sensing, are capable of penetrating through clouds to gather information inside the storms to collect critical data, such as water volume, temperature, and precipitation type.

Weather information from any source is useful when it comes to understanding weather fronts, but the right detail helps create a more complete picture. Microwave-sensing technologies give unique insight into weather patterns that provide clarity as to the severity of a weather event. Despite its value, there are only 11 operating microwave sensors in orbit today, making the ability to see and predict fast-moving storms very limited when the satellite is only able to provide data for a region in the U.S. every three to six hours.

Align and Analyze for Better Forecasts

Quickly putting all the pieces together to gain better understanding of what’s happening now and forecasting what will happen as conditions change is no simple process. This process requires a significant amount of computing power to align and combine disparate datasets for a multidimensional representation of weather at a specific location and time. With a high-definition cohesive picture of the weather, traditional forecasts can truly become nowcasts.

The broadest view of the weather with the most forward-looking data comes from satellites though, and until recently, the few in orbit were flown by governments with multi-billion-dollar price tags.

Now, commercial satellite providers are putting more sensing equipment into orbit, and each new satellite sensor in orbit collects data that adds to forecast certainty and enables preemptive actions to reduce losses and impacts.

Being able to move goods predictably and safely is a key component of supply chains. Transportation companies need to be able to properly assess how infrastructure is affected by weather and the resources needed to make repairs or delay transport. Accurately planning for these events can prevent losses. Just getting trucks off roads and planning rail network actions before a storm could save big dollars, and having the right weather data drives the right decisions.

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Archives, Global Trade Daily, International Trade

China’s Supply Chain Slows Down as Global Trade Shows Resilience

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One of the biggest economic hits of the COVID-19 pandemic was the complete disruption of the global supply chain. With entire economies shut down as lockdowns spread worldwide, global trade activity screeched to a halt, and the supply chain has yet to recover fully. 

Lockdowns in China, which affected many major industrial and manufacturing regions, caused trade activity to fall by 50% in the first months of the pandemic. With factories closed, massive shortages of crucial components like computer chips rippled throughout industries across the globe. Problems with staffing at major ports, along with a spate of severe weather issues, further compounded the supply chain crisis.

Because China enforced a very stringent zero-Covid lockdown policy early on in the pandemic, it was one of the first to recover. However, a new report suggests that the Omicron variant is once again straining the supply chain in China. New lockdowns are in place, and no matter how brief they may be, they will certainly cause further disruptions for companies still struggling to refill their depleted warehouses. Unfortunately, this is happening just as the rest of the world sees restricted supply chains recover. 

Zero-COVID policies create negative trade activity

Much focus on China in recent months has been on trade bans arising from China’s treatment of the Uyghur ethnic minority population and the country’s shifting approaches to dealing with public blockchains and cryptocurrency. But another very significant issue has been building in the background. Namely, a new round of infections is making China’s zero-COVID policy kick in, confining millions to their homes and shutting down large manufacturing facilities.

It is worth briefly reviewing China’s policy and how it affected the global supply chain in 2020. Early on in the pandemic, China initiated its zero-COVID policy. Within two weeks of the first death in China, the government began shutting down large cities across Hubei province, including Wuhan, the epicenter of the pandemic. The scale of the action was so large that the World Health Organization called it “unprecedented in public health history.”

The first services affected were public transportation – bus and train stations, airports, and major highways leading into and out of Hubei province all closed. Soon residents were confined into their homes, with only a single household member allowed to leave the house every two days to get essentials, such as groceries or medicine.

According to numbers the Chinese government reported, the zero-COVID policy was remarkably effective. Despite having a population of over 1.4 billion, China recorded fewer than 100,000 cases and 5,000 deaths in the first year of the pandemic (compared to 27 million cases and 370,000 deaths in the United States over the same period). Indeed, China’s policies were so effective that it ranks 120th in total cases out of 225 countries and regions reporting data and 84th in total deaths.

However, the zero-COVID policy also had a significant negative effect, both for China and the rest of the world. Indeed, what came next started a chain reaction that battered industries worldwide. 

Three weeks after the lockdown began, China shut down all non-essential industries in Hubei, including non-essential manufacturing. Chinese trade activity soon plummeted, losing almost 50% in a single month. 

Unfortunately, Hubei was and is a major manufacturing center in China, supplying steel, display screens, and automobiles. But perhaps Hubei’s most significant product is computer chips which are a critical component in many other products. So as Chinese supply dried up, other companies soon found themselves unable to fill orders creating a spiral of declining supply despite growing demand from consumers who were filling their time at home by shopping online.

The supply chain stabilizes throughout 2021

After falling drastically in 2020, trade activity rebounded quickly. China, in particular, regained its footing swiftly, seeing significant activity gains by the end of 2020, although it still had issues with transport. Everyone else fared less well, with growth just beginning to reassert itself around the fall of 2020, right before a new wave of COVID hit, causing further lockdowns.

The past year saw the supply chain stabilize for many countries as businesses had proper strategies in place and trade activity began to recover. According to Tradeshift’s recent Index of Global Trade Health, many regions were edging towards pre-pandemic activity levels, with the United States experiencing a surge that put it well in front of its earlier numbers. The Euro Zone remained below pre-pandemic levels but was clawing its way back.

Figure 1: Global trade activity 2020-2021

(courtesy of Tradeshift Index of Global Trade Health Q4 2021)

However, at the end of 2021, more bad news arrived in the form of the Omicron variant. Its effects would be felt quickly. But would the lessons learned throughout the early stages of the pandemic help prevent another meltdown?

New lockdowns in China create new disruptions

In 2021, China nearly met its zero-COVID goals, with only around 10,000 infections and two deaths through to the end of November. However, in December, things began to change. The far more transmissible Omicron variant began to take hold, and within two months, China had more new cases than it had seen in the previous year. Not surprisingly, they responded by once again initiating strict lockdowns in the Zhejiang, Henan, and Shaanxi (Xi’an) provinces, again major Chinese industrial centers.

The effects are already visible and pronounced. According to Tradeshift’s report, Chinese trade activity declined 10% in Q4 2021, marking the lowest activity level since the onset of the pandemic. Given how badly Chinese supply chain issues affected the rest of the world in 2021, there is naturally concern that the current Chinese downturn will spread rapidly. Fortunately, there are some signs that the rest of the world may be better able to handle the downstream issues this time.

What does the rest of 2022 hold?

There seems to be good reason to believe that the supply chain issues that arose following China’s initial lockdowns are finally easing in a meaningful way. But the rise of the Omicron variant, the uncertainty surrounding potential new variants, and the new spate of lockdowns in China are leaving many uneasy. 

Tradeshift’s founder and CEO, Christian Lanng, is one of those who is holding his breath about the next few quarters. Indeed, he believes everyone should be working now to build more robustness into the supply chain, reinforcing its ability to withstand large-scale disturbances. He predicts:

“At some point in the next 12 months, an event will unleash disruption that will once again test the resilience of global supply chains. Experts now expect a major shock to hit supply chains once every 3.7 years. Heading into the third year of a global pandemic, our index suggests businesses have learned a number of lessons which are enabling them to become better problem solvers in the face of fresh challenges.”

So the bad news is that we are not out of the woods quite yet. But the good news is that we have become much better at finding our way out quickly and with as few scratches as possible.

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Archives, Global Logistics, Global Trade Daily, International Trade

Supply Chain 2022 and Beyond. Just-In-Time or Just-In-Case?

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Over the course of 2021, a growing number of headlines have predicted or even called for the demise of ‘Just-In-Time’, the system that evolved from Toyota’s approach in the 1970s with the aim of minimizing inventory and increasing efficiency. The underlying argument is that businesses would have fared much better during recent supply chain disruptions had their supply chains been less lean. Much of the advice is to increase ‘safety’ or ‘buffer’ stock, now being coined the ‘Just-In-Case’ approach.

Financial Sustainability

The phrase Just-In-Case rolls off the tongue and resonates with companies and consumers in the middle of unprecedented supply chain challenges. But any interpretation of Just-In-Case as a broad increase in buffer stock to reduce the risk of out-of-stocks or production stoppages is likely to create challenges in working capital, free cash flow, and product obsolescence.

‘Risk-adjusted’ Inventory

It is not that Just-In-Case or Just-In-Time are wrong but there is a time and place for each. The risk caused by lifesaving medical equipment being out of stock is very different from having two, not four choices of shirts to buy. Different products with different margins or different clients with different demands should change the equation. The risk to inbound supply changes, and so should buffer stocks. One size does not fit all. The time, place, and amount of buffer stock should dynamically take supply and demand risk into account. Companies that can harness data and analytics to dynamically and predictively ‘risk-adjust’ inventory levels will gain a significant competitive advantage in 2022 and beyond.

Redefining Visibility

At the core of the ability to ‘risk-adjust’ a supply chain is visibility and goes far beyond real-time visibility to assets. It is end-to-end, dynamic and predictive where possible and it includes visibility to strategic, operational, and real-time risk. Companies who achieve this visibility will more fully utilize assets, workforces, and inventory reducing unnecessary buffer stock and creating the agility to react to changes in supply and demand, becoming more resilient. This should not require new platforms and processes but an adaptation of those that exist.  Sales and Operational Planning is a good example. In mid-2020, Jim Rice of MIT’s Center for Transportation and Logistics described how adaptations to S&OP practices and platforms can be a potent defense against the effects of extreme fluctuations in supply and demand.

The willingness and ability to extend this visibility to upstream and downstream trading partners – transparency – will further increase capacity, agility and resilience.

Data and Analytics

Whether for strategic design or operational planning and execution, the tip of the spear is data and analytics. Companies that can leverage data and analytics to assess strategic and operational risk to design and operate supply chains that are resilient, agile, sustainable, and financially viable will have an enormous advantage in 2022 and beyond. We call this the ‘Risk Adjusted Supply Chain’.

Expect board members and executives to have read the headlines about the demise of Just-In-time. So be prepared to deploy data to ensure that the pendulum does not swing too far the other way.

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David Shillingford is the chief strategy officer for Everstream Analytics. Everstream Analytics monitors up to 1500 potential supply chain disruptions every day and delivers actionable insights to increase the resilience and agility of its clients’ supply chains, protecting revenue and reputation.

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3pls, Archives, Global Logistics, Global Trade Daily

7 Ways to Update Your Supply Chain Strategy for 2022

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

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

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

Importance & benefits of a good supply chain strategy

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

Keeps costs and service quality in balance 

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

Higher efficiency rate  

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

Encourages business development  

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

7 ways to better your supply chain strategy for 2022

Higher visibility 

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

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

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

Increased resiliency 

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

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

Optimized logistical networks 

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

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

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

Better risk mitigation 

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

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

Digital supply chain adoption 

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

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

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

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

Reliance on real-time data

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

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

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

Increased disruptions 

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

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

Implementing an agile approach to supply chain transformation

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

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

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

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3pls, Archives, Global Logistics, Global Trade Daily

WHY AND HOW BIG DATA IS A GAME CHANGER FOR THE SUPPLY CHAIN

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In its 2013 report titled Big Data in Logistics, DHL proclaimed that “The logistics sector is ideally placed to benefit from the technological and methodological advancements of Big Data” and predicted “huge untapped potential for improving operational efficiency and customer experience and creating useful new business models.”

Today, the transformation of logistics to a data-based model is no longer a futuristic fantasy. The ability to create a digital ID, carry it through the supply chain, capture all transactions along the way and implement action against that data has now become a reality. Intelligent identification solutions exist to optimize item-level data captured at the beginning of a product’s journey, enabling full inventory visibility and accuracy, as well as enhanced routing speed for all partners along the supply chain. With product-level data, supply chain execs are empowered to analyze and make intelligent real-time decisions with the ebbs and flows of demand.

As a global industry, 3PL professionals need to understand the promise of identity solutions and the key benefits they offer. The first step for leaders across the enterprise is recognizing that the supply chain is not a set of standalone “links.” On the contrary, supply chains should be viewed holistically to leverage advances in data infrastructure that enable a total ecosystem of item + shipping specific information across each touchpoint of a supply chain. 

The Importance of Accuracy 

Among the many advantages of assigning digital identities to products is speed—and the key to speed is accuracy. Think of it this way: The utilization of item data throughout the supply chain enables speed with accuracy. 

Consider a logistics scenario with an RFID-enabled intelligent label applied at the source of an item. As the item begins its journey, the data captured and carried in that label enables shipment verification. When the “intelligently” labeled products arrive at a facility or warehouse, the recipient can quickly confirm that what was received is precisely what was expected. 

The data contained in the intelligent labels also allow outbound verification to the store or e-commerce retailer. In turn, the same label gives the retailer the inbound verification they need to move the items directly into inventory, with data that assures its accuracy. At the end of the supply chain the retailer has confidence that they can show the customer exactly what is available.

Shipping errors are another logistics challenge that can be addressed through accurate data. Currently, up to 4% of shipping errors are due to misrouted items that must be returned to the distribution center for re-routing. Legacy operations that rely on separate processes (with the six to eight touchpoints that a product moves through) increase the chance of such errors. Therefore, there is an operational benefit to routing solutions that are based on item- or parcel-level data to allow cross-docking optimization within the supply chain that enables greater speed accuracy. Put simply, velocity increases as accuracy improves.

Moving Toward Sustainability

As the supply chain becomes more normalized post-pandemic, back-burnered sustainability goals are re-emerging, driven by consumers, regulations, and cost—not necessarily in that order. The supply chain as an industry is being specifically tasked with sustainability.

A report from the management consulting group BCG stated, “By implementing a net-zero supply chain (the state in which as much carbon is absorbed as is released into the atmosphere), companies can amplify their climate impact, enable emission reductions in hard-to-abate sectors, and accelerate climate action in countries where it would otherwise not be high on the agenda.” This report also noted that “in most supply chains, the costs of getting to net-zero are surprisingly low.”

On the consumer side, a research study from Deloitte found that “concerned consumers are adopting a raft of different measures to shop and live more sustainably. One of the most prominent lifestyle changes is “shopping for brands with environmentally sustainable values.” In fact, over a third of consumers surveyed indicated that they value ethical practices in the products and services they buy. 

The data captured and carried in intelligent labels provide real-world efficiency solutions for achieving sustainability in logistics. One of the areas in which supply chains can address carbon emissions is in the transport of goods. One factor that deters sustainability in 3PL is trucks not being loaded to their full capacity.

In fact, our own studies have shown that up to 14% more volume can be loaded into a truck by utilizing key data that consider size and weight of parcels, creates the most efficient delivery route and considers other variables such as perishability.  Clearly, such sustainability initiatives have the potential to lower costs as well.

Caution: Hazardous Materials

There is yet another issue that is becoming more urgent and that is the prevalence of hazardous materials in the supply chain. First, it is necessary to define hazardous materials. These are substances or materials that the U.S. Secretary of Transportation has determined are “capable of posing an unreasonable risk to health, safety and property when transported in commerce.”

These materials include hazardous substances and wastes, marine pollutants, elevated-temperature materials, and other materials designated by federal Hazardous Materials Regulations.

In supply chain operations, the Federal Aviation Administration (FAA) requires these items to have “Hazardous Material” markings and/or labels. There are significant financial penalties for incorrect shipping identification, including accruing fines that can amount to more than $78,000 per instance.

Among the many items on the FAA’s list are the lithium-ion batteries used in many consumer products, each of which require the special markings and/or labels and have their own specific requirements for placement in cargo. Sorting solutions that use digital product identities currently exist to alert shippers where certain items, such as these batteries, should and should not be placed.

The importance of data in logistics will only increase over time. Deploying RFID intelligent label solutions at the source of an item will carry it safely, sustainably and quickly through all of the touchpoints along the supply chain—and beyond. The future of a data-enabled logistics eco-system is here. 

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Michael Kaufmann is director, Market Development, Logistics with Avery Dennison. The company recently launched its the atma.io connected product cloud platform that gives unique digital IDs to physical objects for end-to-end tracking from the source to the customer and even beyond to take part in the circular economy. 

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Archives, Global Logistics, Global Trade Daily, International Trade

Procurement Evolved: The New Characteristics of Post-Pandemic Procurement

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The pandemic challenged every business function to change how it operates and adapt to a new normal. For some, those changes have already been reversed. But for procurement, there’s no going back.

The COVID-19 pandemic forced virtually every business function to change how it worked, step into new roles, and adapt to extremely challenging market and operational conditions. For many of those functions, those changes – while significant – were short-term, and designed to help them weather the storm.

But, for procurement teams, the pandemic has accelerated evolution for the function – one that was already well underway before COVID-19 hit. It propelled the function’s journey from ‘back office spend optimizer’ to ‘strategic value creation all-star’. And now, there’s no going back.

Over the past 18 months, leading procurement functions have stepped up to deliver business value far beyond simple cost savings and margin optimization. Not surprisingly, their organizations want them to keep delivering it.

As a result, we’re seeing a new kind of procurement function emerge from the pandemic. It’s a stronger, more empowered function, characterized by three key evolutions:

Evolution #1: From reactive damage mitigator to proactive risk expert

Procurement has always been strong in times of crisis. But, in the past, teams have been restricted by the historical pricing, demand and trend data available to them. That retroactive insight meant that procurement teams were always looking for the best ways to react to a crisis, rather than sidestepping emerging threats proactively.

Thanks to recent advances in analytics and intelligence capabilities, as well as the emergence of sophisticated insight-delivery solutions, the crisis events of the last 18 months have given us our first real opportunity to see the power of proactive crisis insight in action.

Procurement teams empowered with these capabilities were able to identify the early indicators of major supply chain disruptions and take proactive actions to safeguard against them. They shifted between suppliers, sourced from new geographies, and rebuilt entire category strategies to ensure that their companies could continue operating as conditions worsened.

But business continuity was just the beginning of the benefits seen by these teams. Because they were able to watch these trends emerging, leading procurement teams were able to map and understand the potential impacts of each crisis on the business and provide valuable input for crisis management and risk mitigation.

Evolution #2: From supply administrator to strategic innovation driver

During the pandemic, supplier relationships have been more valuable and important than ever. At the peak of the disruption, the right relationship with a strategic supplier could mean the difference between business as usual and completely halting operations.

Leading procurement teams have been building high-value relationships with suppliers for decades, but the events seen in 2020 and 2021 were a powerful opportunity to showcase their value to the rest of the organization. As a result, organizations are now more interested than ever in the other great ways that procurement teams can create value from these relationships.

Exclusive contracts negotiated with suppliers, for example, are a valuable asset for supporting innovation. Through the contracts they help create, procurement teams can build partnerships that have a huge impact on overall business strategy, bringing new USPs into the organization.

As the first point of contact for suppliers, nobody in the business knows what’s happening with those suppliers better than your procurement team. That means they’re exposed to things like new products, new materials, new capabilities, and new offerings before anyone else, all of which can be used to drive commercial, product, and innovation strategies.

The leading teams of today aren’t just filling orders and signing invoices for suppliers – they’re partnering with them strategically. Now, businesses are waking up to the implications that have for innovation, and harnessing procurement teams’ potential as innovation drivers.

Evolution #3: From data comber to action-oriented all-star

Procurement experts can spend hours sifting through data to identify trends that might impact the commodities, markets, and suppliers they depend on. That’s admirable and has delivered immense value to businesses. But today, it’s not necessarily the best use of the procurement team’s time.

In recent years, sophisticated insight and intelligence solutions have transformed how procurement teams gather, consume, understand, and act on commodity and market intelligence. And once again, the pandemic has proven to be a powerful test of how those capabilities support teams and enable value creation in times of crisis.

At a time when every second counted, procurement teams saw immense value from those solutions and put them to use to act faster and stay ahead of competitors who were facing the same challenges and choices.

Take Nomad Foods, for example. When the pandemic first struck, it used intelligence solutions from The Smart Cube to quickly understand the potential impact on key categories and adjust its supplier portfolio to keep the business on track. But, because the team was able to act so fast, they were also able to look beyond ensuring continuity and identify an opportunity to create value and reduce waste amid the disruption.

The team identified that the closure of many restaurants and hospitality businesses would have a massive impact on many food categories and create significant short-term oversupply of many ingredients. By spotting this opportunity early, Nomad Foods was able to act before competitors and optimize its category strategy at a time when many other businesses were struggling to keep their doors open.

Numerous stories like this have emerged from the pandemic. Together they’ve helped organizations understand that the modern procurement function is able to deliver the greatest value when it’s empowered with timely, actionable insights enabled via the right tools and technologies, rather than having to generate those insights manually.

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Omer is a co-founder of The Smart Cube and leads the firm’s business across The Americas. He works with Procurement and Strategy leaders at global organizations, transforming their teams to become value-driven and insight-led. Omer has more than 30 years of management consulting, global corporate and industry experience across North America, Europe and Asia. His prior roles include A.T. Kearney (North America), Warner Lambert (USA) and The Perrier Group (Asia-Pacific). Omer has an MBA from the University of Michigan at Ann Arbor, USA, and a BBA from the University of East Asia.

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Archives, Global Logistics, Global Trade Daily, Stories

HOW COVID-19 TOOK THE SUPPLY CHAIN TO A NEW PLACE

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The COVID-19 pandemic is not a one-off supply and demand disruptive event that will disappear into obscurity. It has left indelible marks on supply chain practices and practitioners. The not-so-strange thing is that many of these marks are positives. In the spirit of “never waste a good crisis,” supply chain practitioners and technologists face a post-pandemic recovery armed with a set of new systems and practices. 

Two of the most important of these new systems and practices involve supply chain agility and supply chain risk management. 

Supply Chain Agility: Supply chain agility is how well a supply chain responds to uncertainties by quickly adjusting operations (and sometimes tactics) while still meeting crucial success metrics. Agility wasn’t born in the pandemic. It came from the digital transformation of the supply chain. The combination of large volumes of real-time data from the IoT and advanced analytical techniques to mine new insights led the way for supply chain practitioners to pursue supply chain agility. However, the pandemic exponentially accelerated the adoption of supply chain agility and transformed it from a practice to a strategy. 

The chief supply chain officer of a multi-billion-dollar consumer goods company wrote during the peak of the lockdowns that for every dollar spent on supply chain agility, the return is 10x against traditional supply chain planning methods. Supply chain agility contradicts what many practitioners have been taught over the past decades. Experts have traditionally focused on efficiency and consequently pursued the lowest unit cost dream. By utilizing optimization techniques, we have sought to minimize procurement costs while absorbing larger order quantities and longer lead-times. We plan for longer manufacturing runs to drive a higher return on assets and full-container load land and marine freight to reduce transportation costs. Agile supply chains exist almost as the antithesis of efficient supply chains.

Supply Chain Risk Management: As companies emerge from the pandemic with an eye on recovery, there is a new appreciation for the role risk management plays in supply chain operations. Supply chain is essentially a decision-making game. Experts decide how much to make, move, buy, and sell. Supply chains have traditionally been driven by the financial cost of such decisions: procurement and production costs, the cost of expedited freight, and the cost of unmet orders. However, the COVID-19 crisis has taught us what should have been obvious to many, that risk trumps cost. Risk, if not properly managed, poses an existential threat to a manufacturer. So why has it been ignored, or relegated to a strategic supply chain design role?

Risk must be identified, evaluated and, when appropriate, mitigated. When making a supply chain decision regarding material sourcing or production, the risk spectrum will take its place alongside profitability in the process.

The pandemic has lifted the importance of supply chains within the boardroom. No longer just a cost center or necessary evil, supply chain is now viewed as a source of transformational and competitive differentiation. Thanks to COVID-19, thanks to toilet paper shortages, and long lines at Costco, my children now understand what a supply chain is. No longer do I need to explain what I do in my job.

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Shaun Phillips is director of Product Management at QAD DynaSys, a division of QAD Inc., which began solving planning issues for food and beverage companies from an old bakery in Strasbourg, France, three decades ago. QAD DynaSys is now a leading provider of digital supply chain planning solutions in the areas of forecasting, planning and supply chain optimization. 

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Archives, Global Logistics, Global Trade Daily, Ocean Carriers

Three Supply Chain Risk Management Lessons You Can Learn from the Suez Canal Block

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The Ever Given vessel is floating, but the ship is not out of hot water. In fact, Egyptian authorities said it will remain in the Suez Canal until they are compensated by the vessel owners for the damage, labor, and disruption caused. Although the cargo on the Ever Given is still at a standstill, other ships have been able to freely move through the canal over the past few weeks.

Even still, the effects of the Suez Canal block will continue to ripple far beyond the cargo that remains stuck on the Ever Given. The influx of delayed cargo has disrupted offloading schedules at ports, delivery schedules for shipping companies, and even orders sent directly to consumers. As an industry, it’s imperative for us to learn from this and develop strategies to minimize the impact of similar blockages should they happen in the future.

Now that we can view the incident in hindsight, I wanted to share three risk management lessons you can take away from this to create a healthier supply chain.

1. The entire supply chain can be impacted by one accident

Although the Suez Canal handles only 13% of global trade, its blockage rippled through the supply chain worldwide. The BBC reported that 369 ships were stuck waiting for the Ever Given to be refloated. Not only did all those ships have significantly delayed cargo, but the disruption created a backlog of cargo that continues to be felt today at ports, warehouses, shipyards, retail locations, and ultimately, by customers.

For an example of the negative effects this sort of delay can have, let’s look at perishable deliveries. Perishables are on tight delivery schedules that ensure the product arrives at its destination fresh and ready for purchase. Adding a week to the delivery timeframe for perishables can kill the entire supply chain. Even if the goods are still delivered in acceptable condition, they will not be able to spend as much time on shelves, resulting in a massive amount of food waste and lost profit.

The Suez Canal block has also affected supply chains through the ships that were rerouted from the canal. These ships will arrive later than expected and have a higher potential for damaged cargo as they spent more time navigating through rough seas. This may delay shipments, cause inventory shortages, and create logistical difficulties at various offloading points.

We have yet to even see the full range of effects that this mishap will have on the global supply chain, but it has proven that any incident in the supply chain ripples out to points all across the globe.

2. Flexibility is key

Congestion and disruption can always get worse. Because shippers and even logistics experts can’t always predict exactly what will happen, it’s important to have a plan for every eventuality. Planning ensures that you remain flexible and meet your goals, regardless of the obstacles faced along the way.

To remain properly flexible, you need to have a broad range of options on hand. For example, at C.H. Robinson, we assist our clients through our suite of global services. We use a diverse array of services to ensure that our clients are supported, no matter the situation. For instance, when approaching ocean shipping, we leverage full container load (FCL) and consolidation less than container load (LCL) ocean services to create a diversity of options for our customers. Not only does this allow them to choose the option they desire, it also provides them with alternatives should anything unexpected occur.

Additionally, using the insights gained from logistics technology, in particular from supply chain connectivity technology, can help you see what a supply chain error or delay will affect, making it easier to get ahead of the effects before they derail your operation.

Ultimately, this is all in pursuit of resiliency. Because there are so many moving parts in the global supply chain, it’s unreasonable to expect that each part will always be in sync. An excellent logistics plan with an excellent logistics partner combine to ensure resiliency against even the most unexpected events.

3. A risk management strategy is no longer a luxury

Since the global supply chain has grown so large and so complex in the 21st century, risk management strategies have become a necessity. In most cases, customers expect that they are a given. In the case of the Suez Canal incident, none of the ships stuck behind the Ever Given ever expected that the Suez Canal would be blocked, and no one on the Ever Given expected to become lodged in one of the world’s most vital trade passages. Regardless of expectations, these accidents occurred, and everyone was scrambling to mitigate the risk.

Because no one can predict such incidents, it’s vital to have risk management strategies in place well before any issues occur. Even before the Suez Canal blockage, the importance of risk management for ocean shipping had been increasing. In February, we touched on the increase in vessel accidents over the past year. In that article, we discussed how to prepare for a vessel accident, and many of the same lessons that we imparted there apply to this situation.

Specifically, the two most important pieces of advice that carry over are purchasing maritime insurance and working with a provider with a global suite of services. We’ve already discussed the importance of working with a reputable, well-connected provider, but it bears repeating that a provider with a global suite of services can correct issues faster and more effectively than you could on your own.

Maritime insurance is something that we highly recommend purchasing whenever you engage in ocean shipping. Imagine how you might feel if you were carrying a large amount of produce that rotted while you were stuck in the Suez Canal. Even worse, imagine you were the managing company of the Ever Given, now being asked to pay up to $1 billion by the government of Egypt for the affair. If you found yourself in this situation and did not have maritime insurance, your company could quickly find itself sunk by a combination of lost revenue and damages. Even on a smaller scale, if you were shipping cargo through rough seas and a single container were lost or damaged, having insurance would save you from stressful financial headaches.

Spare yourself trouble by staying prepared

Issues like the block in the Suez Canal have a lot to teach shippers and logistics experts about the interconnected nature of global supply chains. To provide the highest possible level of service to your customers, consider the plans that you have in place for when something goes wrong in the supply chain.

Ready to protect yourself against supply chain disruptions? Connect with our global network of experts to see how C.H. Robinson can provide solutions for your business.

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Archives, Global Trade Daily, Special Reports

Your Guide to the Finding the Best CFD Broker

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More and more investors are turning to contract for difference (CFD) trading to diversify their portfolio and benefit from the possibilities it offers. But, as with any investment, the advantages also come with their risks, so it’s important to know you are trading on the best platform possible. In this guide, we will take you through how to ensure you are using the right CFD broker to conduct your trading and investments.

CFD trading explained

A contract for difference allows investors to open a position on a variety of markets, including stocks, indices, forex, and commodities, without owning the underlying instrument. Instead, the investment is based on the speculation of their price movements.

The CFD acts as an agreement between the investor and the broker, with the investor entering the CFD on a quoted price. The profit or loss is then based on the difference between the quoted price and the price of the CFD at the time of closing the position, mirroring that of the underlying asset.

These exchanges do not take place in a physical place, like other traditional forms of trading, but are traded through online CFD platforms. The prices of the CFDs are reflective of the base markets, with the organization of the supply and demand of CFDs, determined by a network of CFD brokers.

The best CFD brokers

In order to find the best CFD broker online, there are certain advantageous features that platforms can offer that you should look for before finalizing your decision and opening an account. Here’s a checklist of the benefits that the best platforms will offer you:

Leverage – This is a tool offered by CFD trading platforms, and enables investors to access larger exposure to the market, with a lesser amount of initial capital. Essentially, the value of the position in the market is based on the amount borrowed from the CFD broker, with any losses or profits reflective of that increased value.

When looking for the best CFD broker, you should ensure that they have good ratios of leverage. These ratios determine the value of your position in relation to the amount of capital. For example, a ratio of 1:30 means that a deposit of £100 is worth £3,000 of investment.

Free Demo Account – The best CFD brokers should offer you the option of practicing trade through a demo account before opening an account using real money, and this notably should be a free option for you to partake in.

Through a demo account, you have the opportunity to get to grips with the workings of your chosen market, develop your trading style and grow in confidence. You can also test out the success of any strategies or techniques before applying them to the financial market with real cash.

Risk management tools – There is usually plenty of information and tools you can utilize on a good CFD trading platform. You should be able to apply a Stop Loss or Stop Limit when opening a position in the market, or if you choose to edit your current position. A Stop Limit works in order to protect your profits, whereas a Stop Loss aims to minimize your losses, closing your position at the specific rate you have set.

A Guaranteed Stop can also be added to your position, and this applies an absolute limit on your potential losses. This however can only be used for some instruments, so it’s worth checking what your chosen CFD broker has to offer.

Access to a variety of instruments and markets – A good investor will have a diverse portfolio, so a relative CFD trading platform should have a wide range of instruments available that you can trade-in, as well as grant you access to markets around the world.

The benefits of a good CFD broker mean that you can invest in different assets and markets, all from the same account. For example, on a site such as https://www.plus500.co.uk/Trading/Forex you can monitor all the major currency pairs in the forex market and keep up to date with the fluctuations in value.

The benefits of CFD trading

When using the best CFD broker, you can gain all the benefits of CFD trading. This includes the option of using leverage, as aforementioned, as well as implementing relevant trading strategies. Since owning the underlying asset isn’t a requirement, you can open a position on both a rising and falling market, for example. If you do also happen to own the asset in question, you can open a CFD to hedge the risk and offset the losses that occur in a falling market, as well as from one market to the other.

As with any investment, always do your research into the market and assets you wish to partake in, as well as find the best CFD trading platform to embark on your trading journey.