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SUPPLY CHAIN CRUNCH: RESILIENCY STRATEGIES OF TOP-PERFORMING COMPANIES

supply chain crisis
Archives, Global Logistics, Global Trade Daily, International Trade

SUPPLY CHAIN CRUNCH: RESILIENCY STRATEGIES OF TOP-PERFORMING COMPANIES

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While U.S. port congestion and worker shortages have persisted for years, the continued ripple effect of the pandemic’s global supply chain disruption, coupled with the ecommerce boom and lack of retail inventory, has exacerbated the supply chain crunch to crisis levels. Throw in skyrocketing freight costs, container shortages, and the impending International Longshoremen Workers Union contract renewal and the outlook for short-term relief is well out of reach. Indeed, results from a recent benchmark survey from Descartes Datamyne indicate the supply chain crisis will continue well into 2022—tough news for those organizations without solid mitigation strategies in place.

MAJOR CONTRIBUTOR: The stuff economy

Multiple factors are contributing to the global supply chain challenges, but increased consumer demand for “stuff” is a major trigger. The pandemic has changed the economic fundamentals of consumer buying behavior, with Americans shifting away from experience-based spending (e.g., travel, events) towards stuff-based purchases focused on durable (e.g., furniture, exercise equipment) and nondurable (e.g., clothing, groceries) goods—and this buying trend shows no signs of slowing down.

According to U.S. import data, container import volume in November 2021 continued to pummel the supply chain: 34% higher volume than November 2019 and 12% greater than November 2020. In fact, only one other month in the prior two years (October 2020) had a higher container import volume. Transportation industry operators are operating at full capacity and are not expecting a decline in shipping demand from their customers well into 2022.

With TEU volume hovering between 2.4M and 2.6M TEUs monthly for the remainder of 2021 and likely continuing through 2022, capacity will be unable to keep pace with demand. The operational consequences of the global supply chain crisis—containers stacked in Asia, high container “rolling” rates, and unprecedented wait times for vessels at U.S. West Coast ports—are not going away any time soon.

STORE SHELVES ARE LIGHT

For many retailers, stock levels are precariously low as supply chain woes continue. While manufacturing and distribution capacity declined, particularly in the Asia-Pacific region, consumer demand in the U.S. grew and retailers have been unable to replenish their shrinking inventory of finished goods. In fact, the inventory to sales ratio decreased by more than 30% since 2019, according to the U.S. Census Bureau.

Going forward, many retailers are deciding to hold more inventory as a hedge against greater supply chain uncertainty. As a result, retailers will be buying more than what they need in the short-term to build their stocks to larger acceptable levels. This strategy will continue to put more pressure on supply chains and logistics operations, even after the peak holiday season ends this year.

Like retailers, manufacturers are facing similar inventory challenges, from semiconductor chips for auto manufacturing to lithium-ion batteries for electric vehicles. In a recent fireside chat with investors, Hau Thai-Tang, the Chief Operations & Product Platform Officer at Ford Motor Co., noted that “what’s different about today versus prior years is that there’s no float or buffer in the inventory.” The pandemic-driven supply chain issues have “fundamentally changed the way we’re thinking about procurement and design,” shining a light on the shortcomings of the just-in-time inventory model for capital-intensive systems with long lead times and interdependencies on other industries, Thai-Tang said.

supply chain RESILIENCY: technology & data lead the way

Forward-thinking companies have recognized that the global supply chain crisis is more than a short-term problem, with the majority believing that bottlenecks could get worse over the next few years. So how are businesses coping with the supply chain crunch? Descartes’ benchmark survey examined the supply chain resiliency strategies of carriers, logistics providers, importers, and shippers from around the world to uncover how organizations are responding to the supply chain challenges.

The survey revealed that top-performing companies—logistics providers and importers alike—have pinpointed ways to navigate the chaos. Investment in technology is their primary strategy to keep the business moving forward in the face of ongoing and severe supply chain disruptions. Specifically, top performers favored global trade intelligence solutions to help them rapidly identify new suppliers, markets, customers, and trade lanes to optimize their existing supply chains.

The survey found that high-performing companies were investing in HTS and HS classification and landed cost calculation software to analyze the financial viability of new trade networks. It also found these companies were relying on denied party screening solutions to vet new trade chain partners, from suppliers and customers to logistics companies.

Investment in global trade data solutions enables international businesses to re-evaluate their supply chains rapidly and constantly, a process critical to minimizing delays and boosting resilience. In the current supply chain crisis, organizations that fail to adopt this strategy as best practice risk losing market share to more agile competitors.

looking ahead

The forward outlook is a good news/bad news story of economic and employment growth driving increased pressure on global supply chains. While the most recent employment numbers were shy of the Federal Reserve’s robust autumn predictions, the continued opening up of business will drive job growth and consumer spending, which will continue to exert pressure on global supply chains.

With the latest forecasts pointing to current supply chain bottlenecks persisting through 2022, companies involved in international trade must find ways to build supply chain resilience. One of the most effective strategies for retailers and other importers is to leverage global trade intelligence solutions. By expediting trade data analysis to determine the most expedient and cost-effective routes and modes of transport, global trade data solutions can help companies optimize global supply chains to build market differentiation, bolster customer satisfaction, and come out the other side of this crisis in good shape.

potato
Archives, Global Trade Daily, News

U.S. Doubled Frozen Potato Imports in the Past Decade

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IndexBox has just published a new report: ‘U.S. – Frozen Potatoes (Prepared Or Preserved) – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

American preserved frozen potato imports increased from 695K tonnes in 2010 to 1.1M tonnes in 2020. In value terms, imports expanded from $653M to $1.1B over this period. Canada supplies 85% of the total volume of imports. In 2020, Belgium emerged as the fastest-growing supplier of frozen potatoes to the U.S., reaching a 10% share of the total imports.

American Frozen Potato Imports 

Over the past decade, preserved frozen potato imports into the U.S. grew from 695K tonnes to 1.1M tonnes. In 2020, imports increased by +8.8% against 2019 figures.

In value terms, preserved frozen potato imports expanded from $653M in 2010 to $1.1B in 2020. Last year, import value expanded by +8.9% y-o-y (IndexBox estimates).

In 2020, Canada (914K tonnes) constituted the largest preserved frozen potato supplier to the U.S., accounting for 85% of total imports. Moreover, preserved frozen potato imports from Canada exceeded the figures recorded by the second-largest supplier, Belgium (105K tonnes), ninefold.

In 2020, the volume of supplies from Canada grew by +3.3%. Imports from Belgium and the Netherlands increased by +61.9% y-o-y and +44.7% y-o-y, respectively.

In value terms, Canada ($946M) constituted the largest supplier of preserved frozen potato to the U.S., comprising 86% of total imports. The second position in the ranking was occupied by Belgium ($97M), with an 8.8% share of total imports.

The average preserved frozen potato import price stood at $1,000 per tonne in 2020, standing approx. at the previous year. Average prices varied noticeably amongst the major supplying countries. In 2020, the country with the highest price was Belgium ($1,000 per tonne), while the price for Canada ($1,000 per tonne) was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Belgium, while the prices for the other significant suppliers experienced more modest paces of growth.

Source: IndexBox Platform

Canadian Institute
Archives, Executive Education, Global Trade Daily, Imports/Exports

Latest from the Canadian Institute and the American Conference Institute: U.S. Export & Reexport Compliance for Canadian Operations

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The Canadian Institute (CI) and the American Conference Institute (ACI) invite you to attend the 11th Annual Forum on U.S. Export & Re-Export Compliance for Canadian Operations in Toronto, ON + via Livestream on January 25–27, 2022!

Featuring Keynote Speakers and Canadian and U.S. Government Officials from:

-Global Affairs Canada

-Bureau of Industry and Security (BIS) – U.S. Department of Commerce

-Directorate of Defense Trade Controls (DDTC) – U.S. Department of State

As the only comprehensive event for the export and reexport community in Canada, don’t miss new, practical sessions, including:

CHINA — The Latest Expansion of MEU, MIEU, CCMC — and More: How Canadian Industry is Putting Theory Into Practice

Adapting Your Export and Reexport Program to Rapid Geopolitical, Regulatory and More Changes: How Industry is Revisiting Policies, Procedures and Processes

Canada’s Permit Timelines and Latest ECL Amendments: What They Mean for Export Compliance and Technology Transfers

The Latest Know-How for Preventing Export and Reexport Violations: Managing the Continued Effects of COVID-19 on Compliance, Cybersecurity and Data Protection

Third Party and Supply Chain Due Diligence: Vetting Prospective Business Partners, Mitigating New Risks and Updating Your Contingency Plan

PLUS! Practical Case Studies on CHINA: Real-World Takeaways on How to Resolve the Biggest Licensing and Compliance Conundrums.

Gain best practices from leading exporters at: Airbus Bombardier, Cesaroni Technology, Collins Aerospace, Irving Shipbuilding, Pratt & Whitney Canada, Rolls Royce Canada, Top Aces, Tremco, and more!

View the Full Agenda and Register Now to take advantage of early-bird rates!

SAVE 10% with Global Trade Magazine Code: D10-856-856BX01.

Online: https://bit.ly/3kEgKx2

Email: customerservice@canadianinstitute.com

Phone: 1-877-927-7936

manufacturing companies
Archives, Commentary, Global Trade Daily, Special Reports

Three Surprising Ways Marketing Can Solve Manufacturers’ 2022 Challenges

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Manufacturing businesses small and large have had their hands full with the fall-out of the pandemic, and while it seems the worst of the crisis is now behind us, companies will continue to grapple with how to keep both customers and employees on board despite supply chain issues, intense competition, and labor shortages.

What’s sometimes overlooked is that the marketing function can help solve three of manufacturers’ biggest challenges in 2022—if the C-suite doesn’t limit marketing’s role to lead generation.

Here are three ways marketers can help manufacturing businesses navigate the many disruptions they will continue to face next year, in ways that extend far beyond product promotion.

Supply Chain Related Communications

Up until this year, the markets were very rarely rocked by supply chain disruptions. The Wall Street Journal did not even have a logistics beat in the last few decades. In 2021, everything changed when COVID-19 caused labor shortages, disrupting the supply chain of a vast amount of finished products and base materials—just when demand for manufactured goods surged.

So how should companies communicate about delayed or canceled deliveries to their customers? One way is for marketers to segment the client database and then decide how the different tiers need to be serviced. When demand outweighs supply, choices need to be made on who will receive what, when. One useful approach is to distinguish between client segments based on profitability and potential. For each segment, decide how various customers and customer types will be prioritized. Include a comprehensive plan on how client communication will look across all channels.

Another way marketers can help companies navigate through supply chain issues is by deciding to not manage supply, but rather to manage demand. This can be done through turning down the promotional activities for a series of products that are running short or use targeted price increases to affect demand.

Customers can and will understand more than some managers may expect, but they need sensible and consistent information. For information to make sense, it needs to be based on a coherent and methodical approach to client service in a disrupted market. Customers time and again have expressed appreciation for timely communication even with “bad news” as it helps them with plans and projections.

Value Proposition

Manufacturing companies pride themselves on their legacy and track record. Claims regarding longevity and past success have a place in marketing communications. But having served your customers for many decades with products that work, is table stakes, and not something companies can use as meaningful differentiators or the basis for building customer preference.

Many businesses can still make a lot of progress in differentiating themselves successfully through a better understanding of what it is that their customers value. Insights gained through a customer survey or set of interviews (AKA Voice of Customer or VoC), as well as through consultations with sales and customer service about how purchase decisions are made, who makes and who influences those decisions and what features are important, are vital inputs for messaging that will resonate with the prospect. These insights are invaluable to company messaging and differentiation. Marketers are trained to facilitate these conversations, collect and analyze the data, and then develop and communicate a value proposition that credibly differentiates a company from its competitors.

Another category of differentiators pertains to purpose where marketers can help tell the unique origin story of the company and convey a message on purpose that extends far beyond specific product features.

Purposeful Employee Engagement

Branding is not just an external exercise. A company’s internal brand is at least as important. Defining the value proposition for employees is often overlooked and undervalued. This leads to turnover and poor retention, and hinders employee recruiting. Studies consistently show the high costs associated with onboarding and training new employees.

In many manufacturing companies, the HR function may not be well equipped to manage the complexities of employee engagement that businesses currently face. There is a part of the workforce (the white-collar one) that will work remotely, so that needs to be managed in terms of making sure people stay productive but also engaged with the brand. Marketing can especially help with the latter. With remote working more prevalent than ever, it is important for employees to understand the company’s brand promise and each employee’s role in helping to fulfill that promise.

With a labor shortage in the manufacturing sector, employees can demand more from their employers than they have in the last few decades. For some, the pecuniary aspect will be important, others will prioritize flexibility. Accommodating this is either costly (the first) or impossible to achieve for blue-collar workers (the latter). There is, however, something else to which many employees attach great value, and that can be achieved at no cost—a sense of purpose. Just as with a VoC program, a Voice of Employee (VoE) program can help employers better understand what will motivate and incentivize their associates.

Employees want to know and feel they are contributing in a meaningful way to producing a product or service that helps customers solve important problems. Marketing can help develop and implement purposeful employee communication which will help not only retain employees, but also attract new talent.

Bottom Line

Manufacturing companies will continue to have their hands full managing the fall-out of an unprecedented health crisis. They will have to successfully manage supply chain disruptions and seize opportunities to differentiate themselves. They can use their efficient approach to the current crisis, and their purpose to communicate a credible and purposeful brand that will bolster their hiring and retention of talent. Marketing can play a critical role in each of these areas when allowed to go beyond lead gen and product promotions.

_____________________________________________________________________

Bob Sherlock and Dennis Bailen are Partners and CMOs with Chief Outsiders, the nation’s fastest growing executive-as-a-service company.

Maintenance Inspections
Archives, Global Logistics, Global Trade Daily, Trucking

What New Fleet Managers Can Expect From Maintenance Inspections

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Managing a fleet can be a fulfilling experience, but it also includes a lot of responsibility. New managers must understand and anticipate these responsibilities so that they can operate legally, safely and efficiently.

One of the many considerations new fleet managers must keep in mind is the need for regular maintenance inspections. While anyone in the industry understands that regular maintenance is important, the specifics may be less clear.

With that in mind, here’s what new managers should expect in this area.

Why are Maintenance Inspections Necessary?

First, it’s important to understand that regular maintenance checks aren’t just recommended but mandatory. The Federal Motor Carrier Safety Administration (FMCSA) requires all motor carriers to regularly inspect, repair and maintain all of their vehicles. Failure to do so can result in hefty fines and other legal damages.

Apart from the legality of the situation, these inspections can help fleet managers minimize operating costs. Failing to inspect some components can lead to costly repairs and replacements, so it’s best to catch any potential issues early when repairs are more straightforward.

These inspections are also a critical part of vehicle safety. Without them, drivers may unknowingly be putting themselves and others at risk, as equipment failures can cause accidents.

How Often Do You Need Maintenance Inspections?

Fleet managers should also know how often to perform these inspections to optimize their schedules. Since every vehicle carries unique maintenance needs, the FMCSA leaves some room for interpretation in this area. Fleets must perform inspections at least annually, but some emergency systems, like emergency doors, need inspections every 90 days.

For optimal performance and safety, inspections should be more frequent than the minimum requirement. Diesel vehicles require work less frequently than their gas counterparts, which can help save costs, but it’s still best to check them regularly. What this schedule should look like varies between use cases, but going by miles driven may be more effective than going by time.

What Should Maintenance Inspections Include?

When it comes time for the actual inspection, fleet managers should keep a few factors in mind. First, they can choose to either perform the inspection themselves or have a qualified third party do it. The former option may be more cost-effective, but it also requires a knowledge base and reporting system that smaller companies may not have.

Whether fleet managers perform their own inspections or rely on a third party, they should look for a few specific factors. Here’s a closer look at these specifics.

Qualified Inspectors

The FMCSA outlines some requirements for who can perform these maintenance inspections. These qualifications are fairly straightforward for most of the inspection process. Employees or third parties must have knowledge and proficiency in the necessary methods, procedures and tools, but the FMCSA doesn’t define what that specifically entails.

Brake inspection qualifications are more rigid. Brake inspectors must either complete a state, Canadian province or union-sponsored apprenticeship program or have at least one year’s experience in brake maintenance.

When looking for third-party inspectors, fleet managers should look for these qualifications or, ideally, higher standards. Similarly, if fleets inspect their own vehicles, they should require employees to meet these qualifications.

Parts and Accessories Necessary for Safe Operation

Fleet managers should also understand what specific components and systems they should check. The FMCSA says maintenance inspections must cover “parts and accessories which may affect safety,” which can apply to most parts of a vehicle. Inspectors can refer to the FMCSA’s extensive list of parts for reference, but the most important areas to cover are fairly evident.

Engines, steering systems, brakes, seatbelts, wheels and the like all fall under this scope. Some of these parts will require more regular inspection than others, so fleets should schedule inspections of varying depth. As for how often to inspect each area, it’s safest to go by the manufacturer’s guidelines.

Emergency Features

Vehicles with some extra emergency features need to undergo additional inspections, too. Many buses, for example, have systems like emergency doors, pushout windows and lights marking these features. If fleets have any vehicles with these types of systems, they need to check them every 90 days to ensure they work properly.

These emergency features can mean the difference between life and death in some scenarios, so the FMCSA takes them seriously. Fleet managers should likewise pay close attention to these systems, ensuring they receive more maintenance and inspection than other parts. If there’s anything wrong with them, fleets should repair or replace them as soon as possible.

Driver Vehicle Inspection Reports

Driver vehicle inspection reports (DVIRs) are another important part of maintenance inspections. These are reports that drivers write up at the end of each driving day that identify any potential issues they’ve noticed. Fleet managers likely already collect these records, but they must save them and ensure they meet standards to satisfy the FMCSA.

According to FMCSA guidelines, DVIRs should cover:

-Brakes

-Steering mechanisms

-Lighting devices and reflectors

-Tires

-Horns

-Windshield wipers

-Mirrors

-Coupling devices

-Wheels and rims

-Emergency equipment

Drivers can look at other parts and accessories, too, but these are the only required factors. If DVIRs report any issues, fleets must resolve them before operating the vehicle again.

Thorough Records

No matter what the specifics of a maintenance inspection look like, fleet managers must keep thorough records. Every time an employee performs a check, the company should record it in a safe, accessible place. If the fleet faces an audit from the FMCSA or needs to check the maintenance history to inform a repair, these records are crucial.

The FMCSA requires fleets to keep DVIRs for at least three months and records of annual and roadside inspections for at least a year. That will quickly add to a lot of storage, so fleet managers should consider using an electronic system for recording and organizing this information.

Fleets should also record any repairs they have to perform on vehicles. To help keep things organized, all reports should include vehicle identification information like the make, model, year and serial number.

Maintenance Inspections Are a Crucial Part of Fleet Management

Maintenance inspections can account for a significant portion of fleet operations. New fleet managers must understand these factors to prepare accordingly, enabling efficient, safe and compliant operations.

Every fleet’s maintenance inspections will look slightly different, but these general guidelines apply across every fleet. Managers should take these guidelines, then apply and adjust them to their specific situation. They can then meet relevant regulatory requirements and keep drivers safe.

antwerpxl
Archives, Executive Education, Global Trade Daily, News

AntwerpXL Postponed to October 2022

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AntwerpXL, the award-winning breakbulk and heavy lift event, has been postponed from December 2021 to 4 – 6 October 2022.

The decision has been made in consultation with the community due to the announcement on Covid restrictions by the Government in Belgium last week. The situation looks likely to continue for the weeks ahead, directly impacting Easyfairs’ ability to serve the industry in the best possible way.

AntwerpXL, which during its incredible first edition attracted key visitors and exhibitors from across the industry’s biggest, best and most innovative players, will be held at the Antwerp Expo in Antwerp, Belgium in October 2022.

Sophie McKimm, Event Manager of AntwerpXL, says: “After the success of the inaugural event, we know how valuable holding an event in person is to the industry. In an industry survey, over 82% of respondents choose a live exhibition similar to previous years as their preferred format for a future event, once safe to do so. We are confident that, with the new dates we will achieve great success!”

Jacques Vandermeiren, CEO of Port of Antwerp, says: “We were all looking forward to meeting each other live again at this Christmas edition. After all, the breakbulk community relies strongly on interpersonal relationships and the COVID situation has been testing us for a long time now. As difficult as this decision was, it is best for everyone’s safety. Easyfairs can count on our continued support to reunite the breakbulk community in Antwerp on 4 – 6 October 2022.”

XL Connect, AntwerpXL’s 1-2-1 meetings program, will continue to facilitate networking online from 7 – 9 December 2021. Those looking to connect with industry peers and enable business can still do so by registering for the 2021 event. Once registered you will receive your personal link and more information on how to book your meetings on this networking platform.

AntwerpXL provides all-year-round knowledge and resources, feeding into a platform for the industry to come together, networking with people from across the industry and find the products and solutions needed for their businesses. For more information about the event, visit www.antwerpxl.com.

_________________________________________________________________

About AntwerpXL

AntwerpXL is a three-day exhibition and conference for the breakbulk and heavy lift industry. Industry leaders will meet to stay ahead of the competition, network and gain new business at the Antwerp Expo in Antwerp, Belgium on 4 – 6 October 2022. Find out more at www.antwerpxl.com.

About Easyfairs

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

For further information, please contact:

Rikki Bhachu, Head of Marketing, Easyfairs

Rikki.bhachu@easyfairs.com

+44 (0)20 3196 4282

Bruna Rodrigues, Marketing Executive, Easyfairs

Bruna.rodrigues@easyfairs.com

+44 (0)20 3196 4396

sugar
Archives, Global Trade Daily, Imports/Exports, International Trade

Brazil’s Sugar Exports to Reach the Highest Level with Doubling Supplies to China

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

From January to August 2021, Brazil’s exported 23.7M tonnes, which was 26% larger than in the same period of 2020. This year, China’s sugar purchases from Brazil have doubled, reaching 4M tonnes. Shipments to Algeria, Nigeria, Saudi Arabia, Malaysia, Canada, and the United Arab Emirates have also grown sharply. Last year, sugar exports from Brazil hit record 27M tonnes, jumping by +67% y-o-y. In value terms, exports constituted $7.4B. China, Algeria and Bangladesh were the largest importers of Brazilian sugar in 2020. 

Brazil’s Sugar Exports by Country

From January to August 2021, Brazil’s sugar exports reached 23.7M tonnes, up 26% from the same period in 2020. In value terms, exports exceeded $5.8B over eight-month of 2021. It is expected that sugar exports from Brazil will hit the last year’s record by the end of 2021.

This year, soaring supplies to China, Algeria, Nigeria, Saudi Arabia, Malaysia, Canada, and the United Arab Emirates provided the most export increment. China’s sugar purchases rose twofold against the same period of 2020, reaching 4M tonnes by September 2021.

In 2020, the amount of sugar exported from Brazil skyrocketed to 27M tonnes, jumping by +67% compared with 2019. In value terms, sugar exports skyrocketed by +70% y-o-y to $7.4B (IndexBox estimates) in 2020.

China (4.7M tonnes), Algeria (2.4M tonnes) and Bangladesh (2.3M tonnes) were the main destinations of sugar exports from Brazil, with a combined 35% share of total exports. These countries were followed by India, Indonesia, Nigeria, Morocco, Malaysia, Saudi Arabia, Iraq, the United Arab Emirates, Canada and Egypt, which together accounted for a further 51%.

In 2020, the most notable rate of growth in terms of shipments, amongst the leading countries of destination, was attained by Malaysia, while exports for the other leaders experienced more modest paces of growth. Malaysian sugar purchases from Brazil grew fourfold in physical terms.

In value terms, China ($1.3B), Algeria ($669M) and Bangladesh ($628M) constituted the largest markets for sugar exported from Brazil worldwide, with a combined 35% share of total exports. These countries were followed by India, Indonesia, Nigeria, Morocco, Malaysia, Saudi Arabia, Iraq, the United Arab Emirates, Canada and Egypt, which together accounted for a further 50%.

In 2020, the average sugar export price amounted to $277 per tonne, almost unchanged from the previous year. Average prices varied noticeably for the significant foreign markets. In 2020, the countries with the highest prices were Morocco ($281 per tonne) and Bangladesh ($279 per tonne), while the average prices for exports to Iraq ($263 per tonne) and Indonesia ($269 per tonne) were amongst the lowest. In 2020, the most notable growth rate in terms of prices was recorded for supplies to Morocco, while the prices for the other significant destinations experienced more modest paces of growth.

Source: IndexBox Platform

logistics transport pro
3pls, Archives, Global Logistics, Global Trade Daily

Top 7 Logistics Challenges Facing the Industry

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Few industries have as much impact as logistics. In a way, it keeps the world economy going. Manufacturers, retailers, farmers, and even service providers all depend on it. But even though it plays a significant part, there are still plenty of logistics challenges facing the industry. Today, we’re talking about the seven of the biggest ones.

Now, there are numerous reasons why things got so tough in the last couple of years. Consumers’ expectations are shifting, and technology advances and new regulations are constantly coming out. On top of that, the COVID-19 pandemic didn’t make it easier.

Of course, all these issues bring an opportunity for growth and improvement. If you can find a way to overcome the challenges, you can be sure that you’ll capitalize on that. Here’s what you should pay attention to in the following year.

1. Cutting Transportation Costs

We can safely say that this is the single biggest problem in the industry at the moment. In some cases, the transportation costs come to reach 50% of the value of the product. Still, the demand for shipping companies is rising almost as fast as the fuel price. There’s plenty of work, but it seems that there’s not enough money to go around for everyone.

Many retailers and distributors are choosing to let just one or two shipping companies take care of their complete transport. Their reasoning is simple — if you’re shipping more with one carrier, you can get better rates. And while all that is true, you have to trust one company with your entire stock. Imagine what you’d have to go through if there’s a week’s delay.

2. Meeting Consumer Expectations for Visibility

Due to companies like Amazon and Walmart, customers nowadays want to know where their shipment is at any given moment, as well as when they can expect it to arrive. And things aren’t much different if we’re talking about transport visibility in B2B. As a matter of fact, the problem is even more complex.

To meet all of their demands, you need to improve the visibility across your entire supply chain. You should be able to track each of your shipments and maintain constant communication with the drivers. However, you also need a real-time alerts and notifications system. It allows fleet managers and drivers to make prompt decisions if any issues occur.

3. The Shortage of the Drivers

The next of the logistics challenges facing the industry that we want to talk about is driver shortages. These are demanding jobs, and it seems that at the moment, there just aren’t enough drivers to fulfill the needs of the industry. There are also these government regulations that force companies into being more strict about hiring their drivers.

Hence, the recruiting process is long and expensive, and it’ll stay like that for a while. There’s not much you can do but follow the rules. On the other hand, you can optimize the routes your drivers are following and stretch the capacity that way. It’ll give you at least some leverage.

4. Getting Sustainable

Carbon emission reduction is more important today than it ever was. The public wants to see environmentally-friendly practices in the private sector, so governments have to push it.

Although this isn’t bad on its own, it’s putting a lot of stress on logistics companies. And if you’re at the front of one, you must act quickly, but luckily there are plenty of things you can do to make your logistics more sustainable:

-Adopt route and load optimization

-Upgrade your engines

-Track and report emissions

-Use alternative fuels

Going down any of these paths won’t be cheap, but it’ll pay off in multiple ways.

5. Improving Cooperation With Your Partners and Suppliers

If you want your transport and logistics company to be successful, you must talk to your partners and suppliers and get to agreements that benefit all of you. They must be satisfied with your service, and you must be happy with theirs. It sounds like common sense, but at the end of 2021, we feel like we need to stress it.

You should all understand the state of the market and the moment and get on the same page. If you support and help each other now, many new improvement opportunities will open up in the future.

6. Adopting New Technologies

As we already mentioned, logistics companies already need to start adopting new and innovative technology solutions. They help you increase productivity and reduce costs in the long run. And we’re already at the stage when things like warehouse management systems are becoming non-negotiable.

However, with so many options available, it’s hard to pick the right one. Don’t rush it, and consider all your unique business operations before you make a decision.

7. Grappling With the New Way of Doing Business

It’s clear to all of us that the COVID-19 pandemic brought plenty of challenges to the game. However, some of them are here to stay, and some we didn’t even see yet. Changes are happening all across the industry, and it’s difficult to predict what will be the next big thing.

So, we’ll say that the final of the logistic challenges facing the industry is that you can’t be sure what to expect. And with that in mind, making your processes as flexible as they can be is the best way to go.

_________________________________________________________________

Harper Mullins is a logistics specialist and a passionate freelance writer. At the moment, he’s working with Fit 2 Move on improving their storage and transport capabilities. He uses his free time to read every book he can get his hands on. 

vector
Archives, Global Trade Daily, News

Vector Takes “Logistics with Purpose” to the Next Level

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Global commercial shipping provider, Vector Logistics, announced its first-ever effort towards environmental wellness for client utilization this week. Carbon offsets is the main focus of Vector’s environmental service, established through the company’s partnership with the nonprofit Carbonfund.org Foundation. Not only does this enable clients to increase contributions towards a sustainable supply chain, but it also supports positive long-term effects on the industry as a whole.

“At Vector, we believe that a few caring people can and will change the world. And the truth is, we only have one world to share,” says CEO, Enrique Alvarez. “We are compelled to make clean, sustainable shipping a reality. ”

Living up to its primary value of “logistics with a purpose,” Vector selected Carbonfund.org due to its leading position in efforts against climate change and support of a cleaner business climate. Information released today confirmed that the nonprofit’s projects are always validated through a third party and vetted against the highest standards.

The carbon offsets effort is one of several options Vector will add to its environmental solutions portfolio. The company confirmed that additional options are in the works for 2022 to further support client goals in reducing their overall environmental footprint.

“Doing the right thing is a must, and there’s no time to waste. Together, we can make a difference both now and for generations to come,” Alvarez added.

To learn more and stay up-to-date on the latest solutions offerings, please visit: vectorgl.com

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“New Kid on the Block” Networking Platform Addresses Sourcing Amid Supply Chain Crisis

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Best known for bringing manufacturers, reps, and merchants together, B2B networking platform company, Factrees, announced the release of its newest platform aimed at addressing nearshore sourcing bottlenecks amid the supply chain shipping crisis.

Driven by the power of artificial intelligence, the newly launched platform provides a reliable resource library consisting of searchable U.S. manufacturers, independent sales reps, distributors, wholesalers, and retailers for customers to select for sourcing. Companies can network and connect based on product lines, territory, services offered, and business relationships.

“We are creating a sourcing community that simplifies and expedites the process of finding quality sourcing partners while reducing the dependency on word-of-mouth and tradeshow marketing for driving growth,” said Keith Williams, Factrees Co-Founder and CEO.

“Factrees is the new kid on the block,” he adds.

Adding to the platform’s appeal is the option for companies to share their experiences with manufacturers and distributors — including reviews, ratings, and the option of messaging and real-time video meetings.

“There is a groundswell of realignment between manufacturers and sales representatives,” said Ron Smith, President & CEO of Curtis Stout. “Factrees is offering valuable tools; a professional approach to connect and match all manufacturers with quality sales agents.”

Through a series of straightforward and simplified steps, companies can utilize the platform and begin connecting once a profile has been created and claimed. This process supports efforts in getting products to customers from the factory.

“I have been in the industry for 30 years. Factrees is a very creative concept supported by a very helpful web interface, said Paul Entwistle, COO Hardware Industry. “I believe those who use it will have an advantage over those who don’t.”

To learn more, visit: www.factrees.com