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C.H. ROBINSON AND SAS JOIN FORCES TO UNLOCK NEW ERA OF DYNAMIC BUSINESS PLANNING FOR RETAIL AND CPG COMPANIES

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Archives, Global Trade Daily, News

C.H. ROBINSON AND SAS JOIN FORCES TO UNLOCK NEW ERA OF DYNAMIC BUSINESS PLANNING FOR RETAIL AND CPG COMPANIES

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Today, leading global logistics company C.H. Robinson and world-renowned data analytics company SAS announced a partnership to rewrite the way global supply chains work as they become increasingly more complex. Until now, supply chain demand planning and shipping execution often worked in autonomous siloes without connection, digital integration, or real-time visibility. This partnership will solve that problem by creating a first-of-its-kind offering: an end-to-end supply chain solution that integrates inventory and demand signal data with real-time transportation data. Steering a supply chain from a centralized operation like this will allow companies more fluid adjustments in scheduling, carriers, and responses to changing consumer demand while inventory is still moving on the ground.

Retail and CPG (consumer packaged goods) companies in North America will benefit first from this integration, although it is designed to eventually fill the gap between business and logistical planning across all industries.

“The C.H. Robinson and SAS collaboration uses data and analytics to solve a gargantuan supply chain problem: agility,” said Brian Kilcourse, retail and CPG analyst at RSR Group. “As 2020’s shortages illustrated, COVID pushed retailers and consumer goods companies over the supply chain cliff. The C.H. Robinson-SAS partnership combines data from retailers and consumer goods companies with logistics and transportation data to build faster, more resilient, cost-effective shipping methods that honor traditional models while clearing a path for needed innovation.”

According to SAS’ Richard Widdowson, Vice President of Global Retail & CPG Solutions, the future winners in transforming retail supply chains will be those who change their mindset from long-term planning to agile planning by effectively leveraging data to make adjustments in real time. “Powered by SAS and mobilized by C.H. Robinson, this partnership helps companies see their supply chains in a new light,” Widdowson said. “It will help make opportunities and challenges visible as they happen so our customers can accomplish more – even during a disruption of pandemic proportions.”

Within an integrated data loop, SAS triggers a demand plan which feeds into C.H. Robinson’s dynamic transportation procurement tool. In turn, that connects into the world’s largest supply chain management platform, Navisphere, to provide real time visibility of inventory, which then links back and informs SAS’ Intelligent Planning suite. This means a retailer or maker of packaged goods, for example, can connect its corporate demand plans to products and freight on the move. They then can better react to real-time changes in demand, such as surge in consumer interest, and real-time changes in transportation factors, such as inclement weather.

“By establishing this unprecedented information loop, we are transforming the procurement process and giving companies the information advantage and flexibility needed to better compete in today’s rapidly evolving transportation marketplace,” said C.H. Robinson’s chief commercial officer Chris O’Brien. “Rather than relying solely on an annual transportation contract event which frequently becomes out of sync with real-world variables, we can build a more dynamic procurement plan that can flex based on real-time changes in product demand and the transportation market. More than ever, supply chain agility, based on real-time data, can be a competitive advantage for companies.”

“Our work with C.H. Robinson and others at the MIT FreightLab has shown that the freight transportation industry needs innovation in procurement and demand-planning to reduce cost, minimize risk, and increase the level of service for shippers,” said Chris Caplice, Executive Director of the MIT Center for Transportation & Logistics (CTL) and FreightLab. “This partnership helps move the industry forward in the right direction of a more responsive and agile transportation procurement solution.”

For more information on the SAS and C.H. Robinson partnership, or to request a demo of the integrated tools, visit CHRobinson.com/SAS.

_______________________________________________________________

About C.H. Robinson

C.H. Robinson solves logistics problems for companies across the globe and across industries, from the simple to the most complex. With nearly $20 billion in freight under management and 18 million shipments annually, we are one of the world’s largest logistics platforms. Our global suite of services accelerates trade to seamlessly deliver the products and goods that drive the world’s economy. With the combination of our multi-modal transportation management system and expertise, we use our information advantage to deliver smarter solutions for our more than 119,000 customers and 78,000 contract carriers. Our technology is built by and for supply chain experts to bring faster, more meaningful improvements to our customers’ businesses. As a responsible global citizen, we are also proud to contribute millions of dollars to support causes that matter to our company, our Foundation and our employees. For more information, visit www.chrobinson.com (Nasdaq: CHRW).

About SAS

SAS is the leader in analytics. Through innovative software and services, SAS empowers and inspires customers around the world to transform data into intelligence. SAS gives you THE POWER TO KNOW®.

backorders
3pls, Archives, Global Logistics, Global Trade Daily, Warehousing

3 Pros and Cons of Backorders in Ecommerce

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With the 2020 tumult disrupting global supply chains and increasing consumer reliance on online shopping, there’s a growing interest in ecommerce backorders as a way to safeguard revenue. Uncertain availability means businesses can face listing a product as either unavailable or on backorder. While backorders may seem to be a smart path because it contains potential profits, businesses may also be putting customer lifetime values at risk.

So, let’s look at the pros and cons of three critical areas governing backorders to help ecommerce businesses determine if they’re a smart path forward.

Inventory optimization potential

Backorders give you one way to maximize your revenue and inventory, even when limited space is available. It is often considered when ecommerce stores hit a growth spurt.

The Pro

Relying on backorders can help you sell a product without needing to carry a large stock volume at every moment. Companies can accrue backorders and then fill them once reaching a specific volume, making it easier to run operations in a smaller location. This can be a way to generate revenue while also minimizing rental or building purchase costs. Fulfillment may be slower, but overall expenses are generally lower.

The Con

Using backorder techniques to minimize your inventory on hand – such as setting a threshold of orders before you restock – gives your audience more time to find alternatives and ask for refunds. If the threshold is too high, you run the risk of losing revenue and getting hit with bad customer reviews that may harm future sales opportunities. If the threshold is too low, you can end up buying regularly but making a few customers wait for each cycle, which can cause unnecessary frustration and lower customer lifetime values.

If just-in-time fulfillment is a compelling option for your company, crunch the consumer data you have and run tests. See how long people are willing to wait for your goods, and if you can fill things consistently enough to avoid buyers becoming upset.

The revenue question

Ecommerce backorders also provide companies with a chance to generate ongoing revenue. However, this comes with a risk to operations if you can’t secure it. That depends on a mix of your supply chain speed and customer service capabilities.

The Pro

Backorders allow companies to maintain revenue even when there is a disruption to inventory or restocking. Generating ongoing revenue can keep the lights on during delays, ensuring that you meet all customers’ demands.

The Con

The potential con of backorder revenue is that it is precarious. You can’t really consider it “won” until goods are delivered. If you establish backorders and rely on this revenue but then face a wave of cancellations because of delays, you may end up short and face a rising debt.

Banking on revenue from backorders puts ecommerce companies in a risky position if they are not financially secure based on in-stock products and orders they can currently fill.

Space in your space

Growing ecommerce companies often face crunches for space if they’re not using warehousing and backorder services from a 3PL. When products are in demand but space is limited, some companies feel they need to rely on backorders to protect revenue. This can be beneficial but does come with other risks.

The Pro

Backorders allow ecommerce companies to utilize some of their existing warehouse and floor space best. If you stock a good after an order or only have room for small batches, backorders allow you to accrue sales continually while working in minimal space. Organized businesses can use cross-docking techniques to fill orders rapidly once goods come in, minimizing processing, and other times. When products take up a large amount of space or a warehouse us pulling double duty for other activities, backorders add flexibility to space management.

The Con

On the other hand, backorders can create significant space concerns and constraints if not appropriately managed. A high sales volume followed by many order cancellations can mean companies have too much inventory for their space. If products are perishable or easily damaged, disruptions in backorders can lead to more spoilage or damage, harming revenue potential.

Ecommerce backorders also increase the need for space as companies try to manage fulfillment. Pre-staging orders can be necessary if you have a large volume of orders waiting on a backordered product. However, that requires space for prepared boxes, room for pickers and packers outside of typical areas, and storage for things like tape and filler.

Space constraints will drive backorder considerations. The critical thing to remember is that you’ll still need room to manage fulfillment and backorder support only delays that need at best.

How well do you communicate with customers?

Success with ecommerce backorders depends significantly on your ability to communicate. Not only does a backorder need to be clear on sales pages, but support teams need a consistent way to explain backorders to customers. You’ll need to provide updates proactively and alleviate frustrations to protect payment.

Most ecommerce companies that support backorders see an increase in customer service demands. Hiring additional team members should be part of your revenue consideration. Also, existing customer service needs to have a strong enough reputation that you can withstand any angst that comes from backorders.

Avoiding cancellations, maintaining order volume, and securing positive reviews will depend on how well your service team explains the value of backorders to your customers.

___________________________________________________________________

Jake Rheude is the Vice President of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others. 

Cainiao
Archives, Global Trade Daily, Imports/Exports

Cainiao Smart Logistics Announces New Container Booking Service

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Cainiao Smart Logistics announced the launching of a new container booking service this week. Known as an extension of Alibaba Group, Cainiao’s booking service sets the bar higher for a quick turnaround in booking confirmations, maximizing cost savings, and access to a wider global network of ports and participating countries.

“In the face of the current global container shortage and surging shipping prices, Cainiao is committed to leveraging our technology and logistics ecosystem to provide a one-stop port-to-port shipping solution for exporters and importers,” says James Zhao, General Manager of Cainiao Global Supply Chain.

According to the information released, merchants can expect a booking confirmation just two business days following order placement. Considering the usual turnaround for booking can range from a week to a month, this significantly expedites the process for the industry. Both air and sea freight bookings will be available through the service along with competitive compensation in the event of booking delays and/or missing a departure date.

More than 200 ports in 50 countries are connected through the service including China ports in Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Hangzhou, Yiwu, and more. Additionally, those that utilize the new booking service can enjoy a significant price decrease on a cross-border port-to-port shipping fee, as Cainiao’s fee is reported to be up to 40 percent less than market rates, offsetting the market increase in shipping costs due to the container shortage.

According to the China Container Industry Association (CCIA), the increased turnaround time has some waiting up to 100 days versus 60 days for containers due to the capacity cuts in international markets, specifically in the U.S. and Europe. Pair this with the spike in freight costs, there’s no doubt this new booking service will serve as a reliable solution for the industry.

“By working closely with airlines and cargo companies, we aim to safeguard the entire cross border line haul network and instill greater stability into sea and air freight shipping,” Zhao concluded.

platforms
3pls, Archives, Global Logistics, Global Trade Daily

Collaborative Supply Chain Platforms: Vectors of Customer Satisfaction?

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By providing visibility into the operations of the company, suppliers, and providers, a collaborative platform applied to the Supply Chain enables different stakeholders along the supply chain to better work together. It’s a great asset to control costs, but also to improve customer satisfaction. To what extent is this possible? How can collaborative platforms improve the company’s mission? Generix Group takes stock of the strengths in collaborating to better meet customer expectations.

 

An optimal shopping experience

With the rise of digital commerce, consumers have increased their demands for products and services. To meet these new needs, distributors and online retailers are now required to adapt in terms of SEO and logistics services. Faced with this challenge, collaborative platforms are the solution to help companies to keep the promise made to their customers.

 

Meet needs with a wide variety of options

Accustomed to having diverse and competitive offers, customers today want to be able to choose between multiple products that meet their needs. The logistical challenge for businesses is to offer an extensive product catalog, based on a wide range of suppliers. What is the final goal? – Responding in a diversified way to customer requests and retaining the customer by offering a large selection of products.

Supplier repositories can double or triple, while product choices may grow to five or ten times the number of references. The collaborative portal will therefore automate a large number of operations to avoid a significant increase in management costs.

Most products will never go into storage but will need to be delivered directly by the supplier. Logistics collaboration portals will enable this type of process to be implemented at a lower cost while coordinating cooperation between stakeholders such as customers, suppliers, logisticians, carriers, and service providers.

 

Share product availability

To have an optimal shopping experience, customers need to be reassured at all stages of their order and, if necessary, be able to return a product easily. Faced with these requirements, customer information is a real asset for retailers who must be able to track all logistics operations related to the supply and return of goods. What is the goal here? – To inform consumers in real-time about the stock of available or returned products. With the collaborative platform, collecting stock data throughout the distribution process is made simpler.

 

Describe product features extensively

To be sure that products meet their needs, consumers need to know specific characteristics such as dimensions, composition, features, etc. With a collaborative platform, vendors can collect this data from suppliers more easily and make it available to consumers.

 

Improved visibility of B2B and B2C logistics operations

 

With a collaborative portal, companies can get a consolidated view of the logistics operations carried out at every stage of the Supply Chain including providers, warehouses, and carriers. The collaborative portal ensures the traceability of all operations conducted by each step in the process. Once available, this information can be sent to the final customer to inform them of their order processing (preparation, delivery tracking, etc.).

A B2B customer can benefit similarly from reliable information about their purchases. Informed throughout the supply process, they can improve operations planning and task management.

 

Introducing value-added services

 

Product customization

Through this consumer-friendly mode of consumption, brands can satisfy the need to customize products requested by their customers, while maintaining originality.

 

Delivery scheduling

Through this innovative service, consumers are given the opportunity to select a delivery date and time from a calendar based on their availability. Flexibility and comfort are key.

 

Returning goods

The return of goods is critical in an online purchase and has become an undeniable method of attaining customer loyalty. It contributes to a positive customer experience and can generate upsell when returning to a physical store. For delivery drivers, it’s also a great opportunity to increase the volume of services.

 

By granting further visibility of all logistics operations, collaborative platforms provide numerous advantages for the various Supply Chain stakeholders. These include reducing costs, improving service quality, enhancing general performance, and increasing customer satisfaction. Want to know more? Download our e-book “How and why collaborative platforms have become essential to the Collaborative Supply Chain.”

 

DOWNLOAD THE E-BOOK

 

This article originally appeared on GenerixGroup.com. Republished with permission.

packaging
Archives, Global Shippers 101, Global Trade Daily

Product Damage – Carrier Issue or Packaging Issue?

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We recently had a customer that requested our expert opinion on why a product they shipped became damaged. Was the damage because of carrier handling or that the packaging was not designed to survive the carrier’s supply chain?

It was an interesting question that we have seen previously with other customers. In this article, we are going to dive into some of the details as to how to answer this question!

Know your Supply Chain

The first step in developing a packaging solution is understanding the supply chain through which your product is shipped. This directly impacts the packaging design and testing protocols required to verify a concept. A product shipping on full truckload (FTL) on a company’s existing fleet in comparison to less than truckload (LTL) requires completely different packaging solutions. Too often do we see a customer using the same concept that works shipping FTL but is damaged in an LTL environment and the blame is put on the carrier.

A few questions that are helpful when evaluating a supply chain are outlined below:

-How is the product stored and handled internally prior to shipment?

-What machinery is used to transport the packaged product?

—Fork truck? Hand truck? Clamp truck?

-If palletized, does the pallet allow for the available machinery to be utilized without special attachments or modifications?

—Example: Fork truck tine extensions

-How many hubs will the packaged products go through if shipping LTL?

-What hazards are to be expected during shipping and handling?

—Vehicle vibration, forklift handling, horizontal and vertical impacts, drivers clipping curb, etc

Understand Your Packaging Budget

All companies seek to have 0% damage during shipping but there is a balance between product damage and packaging-related costs. It is important to build an expected budget around packaging material, freight, and labor costs. Investigating a $100 packaging solution when the product margin only allows for $10 is an incorrect path to explore. Having this information upfront narrows down the choices allowable for your specific product.

Designing to the APE System

Creating a packaging design meant to survive an FTL or LTL supply chain can be broken down into what BoldtSmith Packaging references as the APE System. Below is a breakdown.

Allow: This references allowing the expected hazards to occur and design the packaging to survive these hazards. For example, we know that shipping a 48”x40” pallet with a flat top surface has a high likelihood to have products stacked on top of it through an LTL supply chain. Knowing this is an expected hazard and allowing it to happen requires packaging needs to be designed to survive this. Pushing back on the carrier when another pallet is stacked on top of your product is not understanding the expected hazards in an LTL environment.

Prevent: This references preventing damage that have a high likelihood of happening to create product damage. For example, it is to be expected that a pallet that has the product overhanging 2 inches will likely be impacted by another product/pallet or forklift. For this reason, underhang is utilized to prevent this being an issue from creating product damage.

Eliminate: This references eliminating the expected hazards to occur. For example, a 96”x48” pallet is used to ship a product that is extremely heavy on one end and light on the other. This poses two issues with handling. The pallet cannot be a 4-way entry stringer pallet due to the risk of the pallet tipping over when lifting from the openings on the 96” dimension. Also, the pallet should only be lifted from the heavy end, for this reason, the pallet would only have an opening on that side. This essentially turns the pallet into a 1-way entry and eliminates the forklift operator from unintentionally causing damage.

Testing

After the designs are created, testing needs to occur to verify the design and materials can survive the intended supply chain. This thorough investigation can be broken down into two categories.

Lab Testing: Utilizing a lab gives a great baseline using an established testing protocol such as ISTA 3B for an LTL supply chain. It is recommended after passing one of these protocols to complete a more thorough verification by completing ship tests.

Ship Testing: Completing ship testing provides the data to have a high confidence level in a specific packaging design. Some of the hazards that occur during shipping are difficult to replicate in a lab environment and for this reason, ship testing provides additional data. It is recommended to be onsite prior to the product shipping and also onsite when the customer receives the product.

It is recommended to create reports and documentation for both lab and ship testing. This information can be sent to the carriers if damage does occur. This provides evidence to the carriers that the design was created and verified to survive the intended supply chain.

Conclusion

It is easy to point the finger at a carrier if your product is damaged during shipping and certainly unexpected hazards do occur. However, it is important to follow the outlined system in how to create and test a packaging solution that allows your carriers to be successful.

_________________________________________________________________

Dustin Smith is the Co-Founder and CEO of BoldtSmith Packaging.  BoldtSmith Packaging is a recognized leader in packaging design, testing, and optimization. Dustin can be reached at Dustin.Smith@boldtsmithpackaging.com

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

2021 Logistics & Transportation Forecast: Here’s What to Prepare for in the New Year

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The US-China trade war, COVID-19, regulations and compliance, economic disruptions, and more all contributed to a hectic year for players in the global logistics and transportation arenas. It’s safe to say that 2021 will inevitably require a new level of innovation and predictions compared to how operations used to be. Sophisticated forecasting and agility take on a new meaning for proactive measures to prove successful in the new normal. With the hope of 2021 on the horizon, Deepak Chhugani, founder and CEO of Nuvocargo, the first digital freight forwarder and customs broker for US/Mexico trade, lists what he considers to be some of the most significant events to prepare for in 2021 and how shippers, manufacturers, and other industry players can prepare.

-Mexico is now the USA’s #1 trade partner, according to the US Census Bureau’s 2019 report. The China-US trade war, as well as the COVID-19 pandemic, are driving more US companies to establish new supply chains and we anticipate explosive growth as Mexico becomes the new China. Companies are nearshoring and moving their US supply chains closer to home in favor of Latin America and more specifically Mexico. The automakers especially should continue to see a big boom and reliance on Mexico as it favors homegrown manufacturing. The auto industry will continue to see a shift, in particular the Bajio region of Mexico, which is flush with trucking capacity.

-Digitization, software, and giving shippers and carriers efficient tech tools are critical as technology continues to disrupt this industry. COVID-19 has forced the traditional and analog logistics industry to adopt technology as its primary way of doing business. Everyone is working from home, switching in-person and paper processes with digital transactions and signatures. Digital freight forwarding technology can help businesses ease this transition from offline to online and empower them with tools to smoothly transition towards more digital and modern ways of managing their cargo and supply chains.

-Changes to the global logistics industry (trucking, maritime, and others) that inherently impact the cross-border world is mainly the result of the United States-Mexico-Canada Agreement (USMCA) and tariff schedules. The expectation was that the USMCA would increase annual US exports to Canada and Mexico significantly.  As exports increase, that results in more cross-border truckloads between the US and Mexico which will lead to more capacity crunches as several trucking players have exited the marketplace in recent years and volumes will only increase. This should also increase reliance on cross-docking shipments to leverage trucking capacity on both sides of the US/Mexico borders.

-Politics will also play a role in 2021 as we can anticipate a Biden administration will bring more stability and predictability to trade relationships, especially after the recent signing of the new North American Free Trade Agreement USMCA. An expected increase in US government spending and a policy refocus on middle and lower classes could also prove beneficial to Mexico’s production capabilities, as additional consumption incentives are created. Finally, with the tight grip on China not likely to loosen in the near future, both countries (US/Mexico) could benefit from embracing the shift of global supply chains to bring more manufacturing to North America.

-Transportation of COVID-19 vaccinations will create more demand and we’ll see an increase in shipping, especially refrigerated cargoes and cold-chain solutions. The U.S. Department of Transportation just announced that “all of its necessary regulatory measures have been taken for the safe, rapid transportation of the coronavirus disease (COVID-19) vaccine by land and air.” As a result, there will be additional safeguards and support in place for the trucking industry. Also, the importance of freight forwarders is likely to increase as the complexity of vaccine distribution reaches never-before-seen levels. Freight forwarders’ role as the “connective tissue” of logistics will be key and will take the pressure of managing the logistics of pharmaceutical companies. On the flip side, prioritizing vaccines means that some non-essential cargo will get bumped, increasing rates and affecting businesses that are not properly prepared for this unprecedented time.

-COVID-19 and border restrictions continue to impact customer’s exporting needs as they move their freight into the US. Since most of the available equipment is retained at the border and looking to move southbound from Laredo, the export/import ratio of 8:1 continues to impact the overall capacity into specific areas such as Guadalajara, Bajio, and Mexico City which creates challenges. Companies will have to be nimble and diligent as they navigate and comply with their customer’s requirements.

freight
Archives, Global Logistics, Global Trade Daily, International Trade

EXCLUSIVE WHITE PAPER: International Freight and Trade Compliance Key Management Considerations for 2021

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Overview:

Manufacturers, Dealers and Distributors that are engaged in global trade… Importing, Exporting, Buying, Selling and distributing various products worldwide.

The ability to move goods in the international arena will make or break sales or even maintain a client relationship.

The ability to deliver products on a timely and loss-free basis is a critical component to the companies operating with a global footprint.

This “white paper” created for the readers of Global Trade Magazine addresses “Six Steps” to follow to help reduce risk and cost in the area of international shipping, freight and logistics.

Supply Chain Spend in 2021

We should all keep in mind that the Covid-19 Pandemic of 2020, brought significant increases in logistics costs and supply chain spend, along with limitations on service both domestically and internationally.

This is likely to continue heavily into the 2Q, second quarter of 2021 with a residual impact lasting till December 2021.

Those engaged in budgeting supply chain costs should plan for increases in excess of 25%, as much as 50% and continued delays to midyear 2021.

Demand, capacity, pandemic disruptions fears along with greed will continue to be driving factors.

Warehousing, distribution and all related costs have and will continue to escalate, with limitations on space and capacity.

The Six Steps

The following six steps originate from the authors 35 – year experience in moving freight all around the world and in assisting corporations with global logistics that are cost-effective and reduce risk to themselves and their clients’.

1. Chose the Best INCO Term

2. Insure the Shipment

3. Chose the Right Freight Forwarder and Carrier

4. Track all Shipments Proactively

5. Understand the Total “Landed Costs”

6. Be Trade Compliant!

Choose the Best INCO Term

The INCO Term, established by the International Commerce Commission is followed by all countries belonging to the United Nations for goods that pass through international borders.

INCO Terms typically get updated every ten years as was demonstrated this January 2020.

There are 11 Options in the 2020 Edition.

The seven Incoterms® 2020 rules for any mode(s) of transport are: 

EXW – Ex Works (insert place of delivery)

FCA  – Free Carrier (Insert named place of delivery)

CPT  – Carriage Paid to (insert place of destination)

CIP –  Carriage and Insurance Paid To (insert place of destination)

DAP – Delivered at Place (insert named place of destination)

DPU – Delivered at Place Unloaded (insert of place of destination)

DDP – Delivered Duty Paid (Insert place of destination).

Note: the DPU Incoterms replaces the old DAT, with additional requirement for the seller to unload the goods from the arriving means of transport.

The four Incoterms® 2020 rules for Sea and Inland Waterway Transport are: 

FAS – Free Alongside Ship (insert name of port of loading)

FOB – Free on Board (insert named port of loading)

CFR – Cost and Freight (insert named port of destination)

CIF –  Cost Insurance and Freight (insert named port of destination)

The INCO Term is a term of sale between a seller and a buyer that picks a point in time in the transaction where risk and cost is transferred from one party to the other.

It does not address other contractual concerns, such as payment method, title and details of marine insurance.

What it really does is advise an exporter till what time and place in a transaction is it responsible for cost and risk to …. And conversely where the importer picks up on.

Depending upon the INCO Term utilized … the risks and costs could be dramatically impactful for either the seller or the buyer.

We recommend that all operations, purchasing and sales personnel for the readers of Global Trade Magazie learn at a very detailed level all they can about INCO Terms and more specifically how to best leverage the term to reduce risk and cost in their transaction.

The author is available to the readers of Global Trade Magazine with any questions. (tomcook@bluetigerintl.com)

Insure the Shipment

The typical importer and exporter never worry about loss or damage until it occurs.

And at that point, everyone from the forwarder to the carrier is blamed for the occurrence.

Freight will always get lost or damaged at some point in time, when you ship frequently and all over the world.

It is very important to make sure that you first identify through the purchase or sales contract who has risk of loss or damage. What INCO Term is being utilized? How payment is being made?

Once the risk is understood … then marine cargo insurance should be acquired … on an “All Risk”, Warehouse to Warehouse” basis with a reputable international cargo insurance underwriting company.

Additionally, some loss control elements need to be considered to mirror the insurance policy that considers:

-That the freight is packed, marked and labeled well

-A responsible forwarder and carrier is utilized

-Freight needs to pass through the system quickly … delays at border pints open the door for loss and damage

-Freight needs to clear customs … thoroughly, legally, following all import regulations and timely … all that will mitigate the potential for loss and damage

Chose the Right Freight Forwarder and Carrier

As an extension of your shipping personnel the Forwarder and Carrier take responsibility to move your freight through the global system.

They need to do this:

-Timely

-Safely

-Cost-Effectively

Choosing the right company who is qualified, experts in pet products distribution becomes some very important criteria to make sure the shipment, the freight and the logistics moves your package to your customer’s satisfaction.

Blue Tiger International with over 35 years’ experience has developed some very key relationships with an array of freight forwarders and carriers and can assist you in making sure you have all the necessary information to make the best choices.

Other organizations like the NCBFAA, AFA and TIA … all freight trade associations can produce members who specialize in the Global Trade Magazine Industry Vertical.

Track all Shipments Proactively

Making sure the shipments arrive on time and in workable condition is the guarantee of customer satisfaction, long term relationships, less headaches and greater margins.

This can be a service your freight forwarder or carrier provides, but it needs to be clearly identified in that vein and it must be done proactively … through every step of an international shipment.

Depending upon distances involved, countries of export and import, choices of mode and carrier … some freight can travel 12,000 miles, through 4-5 carrier handoffs, via several customs authorities and in several modes of transit.

All these convolutions can create exposure to loss, damage or delay. All three concerns we want to avoid. They lead to loss of revenue, customer dissatisfaction and lots of stress within your organization.

To mitigate this concern you need to structure a proactive system to “track and trace” all your international shipments through all the convolutions, hand-offs and modes of transit.

Many “track and trace” systems can be electronic and advise you through web portals, emails and other electronic means on all your shipping activity.

The benefits of proactively in lieu of a “reactionary” mindset will pay off in spades over the course of time and client relationships.

Understand the Total “Landed Costs”

Landed Costs are the total of all the accumulated expenses attached to a shipment moving internationally.

Many of these costs are outlined as follows:

-International Freight

-Duties, Taxes and Fees

-License Charges

-Handling Charges

-Domestic Freight

-Clearance and Handling Charges

-ISF Fees

-Carrier Surcharges

-Demurrage

-Storage and Warehousing

Sometimes the landed costs can exceed the value of the actual shipment.

In order to protect margins and profits … it is critical to make sure “transactional” that you completely understand what the “landed costs” are for your shipment … then you can make sure these costs are covered in the eventual client invoicing that will follow.

Remember no one likes surprises … particularly those that have an additional price tag attached to them.

Be Trade Compliant!

It is imperative that both pet product importers and exporters operate their global supply chains trade compliantly.

This is following procedures and operational practice that accomplishes:

-Due diligence

-Reasonable Care

-Supervision and Control

-Engagement

This includes …

-Understanding the regulations

-Building internal SOP’s to comply with the regulations

-Train personnel on how to interpret and practice the SOP’s and in a regulatory manner

-Engaged in government programs that provide evidence of managing secure and compliant global supply chains, such as C-TPAT, Customs-Trade Partnership Against Terrorism

C-TPAT is a voluntary program of security created for importers into the United States managed by CBP, Customs Border and Protection … now open to include exporters from the USA.

Areas also included in trade compliance have to do with … documentation, classification (HTSUS/Schedule B Number(s), Valuation, Record Keeping, Export License Requirements, Denied Party Listing … to name a few of the operational concerns.

The penalties for non-compliance are fines, penalties and potential loss of import or export privileges. More serious areas can include criminal prosecutions.

Summary

Importing and exporting products successfully, means paying attention to detail. These six areas outlined above are a good foundation for creating a detailed and comprehensive approach to managing global supply chain responsibilities.

Our 35 years plus of global supply chain experience has demonstrated that those companies that are diligent about how they manage the freight, logistics and distribution of pet products will create the best opportunity to:

-Protect margins and grow profits

-Increase customer satisfaction

-Decrease stress and problem areas in global markets

-Better the reputation, which converts to client retention and expansion

______________________________________________________________

Thomas A. Cook is a 30 year seasoned veteran of global trade and Managing Director of Blue Tiger International, based in New York, LA and West Palm Beach, Florida.

The author of 19 books on international business, two best business sellers. Graduate of NYS Maritime Academy with an undergraduate and graduate degree in marine transportation and business management.

Tom has a worldwide presence through over 300 agents in every major city along with an array of transportation providers and solutions.

Tom works with a number of Associations providing “value add” to their membership services and enhancing their overall reach into global sourcing and in export sales management.

He can be reach at tomcook@bluetigerintl.com or 516-359-6232

port
Archives, Global Logistics, Global Trade Daily, Ocean Ports

AS GLOBAL PORT OPERATIONS NORMALIZE TO PRE-PANDEMIC LEVELS, LET’S LOOK AT 2020 AND THE FUTURE OF SHIPPING

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Global transportation in 2020 has been defined by supply chain disruptions. The year started off under the impact of the China trade wars and quickly devolved into full-scale disruption with the onset and reaction to the COVID-19 global pandemic. 

As an international freight forwarder serving over 150 countries, Suddath has been on the front lines helping customers navigate these challenges to keep their supply chains moving. Since July, we have continued to see a positive shift in the volume numbers, with port activity beginning to recover to pre-COVID-19 levels. That leaves many wondering if our industry is nearing a post-pandemic era, and what that world will look like.

Supply Chain Disruptors

To understand where we are going, we start by looking back at the beginning of the year. The industry was still feeling the full impact of the increased complexity and protection policies over global trade. Most notably, the trade war between China and the U.S. 

When the COVID-19 pandemic spread through China, where the origins were traced to Wuhan, China’s economy and manufacturing plants went nearly silent for more than six weeks, with little goods produced or shipped to ports around the world. 

According to a China Economic Update Report by the Asia Perspective management consulting firm, China’s Gross Domestic Product (GDP) fell 6.8 percent from January to March 2020, and its exports fell by 11.4 percent in the first quarter of 2020. According to the same report, during this time period, imports to China from around the world also fell by 0.7 percent. The country’s GDP had a slight recovery from April to June, with a 3.2 percent, however it was still well below pre-COVID-19 numbers. 

These declines in volume forced ocean carriers to reduce their capacity, often through the use of blank sailings or scheduled sailing that were canceled by an ocean carrier, so a vessel bypasses certain ports or even cancels full vessel rotations. Seatrade Marine News reported a total of 435 blank sailings by container lines through April 2020, as carriers continued to match capacity with decreased demand. In the U.S., we have witnessed similar results, such as the ports in South Carolina reporting 72 blank sailings between January and July with a corresponding overall decline in port volume for the year. 

Ocean carriers continue to utilize blank sailings as they try to match volume with capacity. Equipment shortages are plaguing the industry as empty containers dwell in places they are not needed and are in short supply where they are needed, such as China and the Far East. Container repositioning, or moving empty containers to new locations, is among the supply chain disruptions of blank sailings because the empties simply do not get repositioned as efficiently as they would during normal operating periods. 

Looking Up

While it is clear these supply chain disruptors still have a far-reaching impact, there are indications from the global economy that we may be headed in a better direction. Most U.S. ports had seen double-digit reductions in overall port activity from the onset of COVID-19 through June. However, things took a turn for the better in July. 

The Port of Los Angeles reported that September volumes were 13.3 percent up from the same month in 2019; in addition, the port reported the best quarter in its 114-year history. 

This recent surge in port volumes is making it more difficult for truckers to get appointments to move containers into and out of the port in the allotted time frame. South Carolina ports experienced a similar trend, with September year-over-year activity the strongest since the pandemic onset, and vehicle movements through the port show continued recovery. 

There are several factors that have contributed to this uptick in activity, including: 

-Most of the world’s manufacturers are back to business, leading to an increase in production around the globe

-The U.S. government lifted some travel restrictions for military families, with conditions, which has spurred movement around the globe

-A global decrease in blank sailing, particularly to and from Far East ports, which were bypassed earlier this year, but have become active again

The recent spike in activity bodes well for the global economy as we continue to move through the COVID-19 era. Per McKinsey & Company and Deloitte Insights, U.S. consumer demand seems high with optimism and retail sales recovering, which appears to be driving the surge in recent activity. 

The future is still very much in question as several ocean carriers are still forecasting some, albeit fewer, blank sailings in the coming months, but the seven-day Golden Week festival shut down factories across China in early October and caused blank sailings to surge temporarily. 

With the recent changes toward the better, the question becomes: Will the global economy remain strong as we continue into the next stage of the COVID-19 era, or will there be new spikes that cause another global economic slowdown, potentially worse than the last? 

It appears ocean carriers have adapted to the supply chain disruptions and are working to smooth the supply chain as numbers return to normal. While we have heard similar sentiments from other forwarding companies recently, this alone is not enough to declare us in the clear of challenges posed by COVID-19, but it is promising information.

The Future of Shipping

The future of the trade industry in the post-pandemic era is impossible to predict, however, we continue to see ports invest in development and technology to be poised to handle the growing demands of the future. 

Sustainability through technology has been a driving factor for the industry for years, and it shows no signs of slowing down. Ports are incorporating alternative power as well as investing in practices that increase sustainability and decrease their footprint to be more attractive to partners. Organizations are looking for 3PLs, ports, and steamship lines that follow sustainability best practices, use clean energy such as solar and wind, and recycle ships properly. 

With the future of COVID-19 impacts unclear, the shipping industry has more incentive than ever to focus on and invest in smart technologies that continually strengthen supply chains. 

_____________________________________________________________________

Bob Fruchterman is senior vice president, International Logistics, at Suddath, where he is responsible for all international transportation and logistics including import, export, ocean and air. He also specializes in managing commercial projects in the energy, mining and construction fields around the world.

Mr. Fruchterman has more than 35 years’ experience in the international transportation and logistics industry. He has managed everything from large U.S. government-financed projects in the former Soviet Union to shipping equipment and supplies to the Middle East in support of Operation Enduring Freedom and Operation Iraqi Freedom. He graduated from the University of Richmond with a degree in Economics.

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

Consumer-Focused Shipments Remain Front and Center in a COVID-19 World: 5 Things Your Business Should Consider

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The Coronavirus pandemic has affected the lives of many people and the world economy. Many things have changed during this period, including businesses closing down and people losing their jobs. The world seems to be too far from recovering from the effects brought by this pandemic. However, people should ensure they adjust their lives to effectively overcome the pandemic. 

Entrepreneurs should by now know how to adjust their business and ensure they thrive even in this pandemic. They should ensure they don’t take their eyes off of their customers and should ensure they understand where they stand in the eyes of customers.

They should also ensure they have a customer-focused business that places the customer experience above anything else. One way you can focus on your customer is by providing them with smooth and efficient delivery. There are things you should consider to confirm your consumer-focused shipments thrive even during the pandemic.

Before focusing on those things, you should first ensure your business has an efficient customer-focused approach. Here are some of the strategies to improve the overall customer-focused approach in your business.

Create a customer-focused culture

One thing that influences the operations of any business is the culture of that business. Business culture is the way of doing things in your business, and it all starts from the top of the organization. As your business manager, you should ensure you implement the right culture for your business to thrive.

You should ensure you create a customer-focused culture where the interests of the customers are your top priority. You should develop policies that make it easy for your employees to build a healthy relationship with customers.

Gather and share customer data with all your employees

The essential thing in your business is the feedback you get from your customers. The feedback you get will help you know the position you are in with customer satisfaction. You will know what you will need to improve and what you should continue doing. To have a better customer-focused approach in your business, you should ensure you have the right means to get feedback from your customers.

 

It would be best if you also had the means of sharing that information with all your employees. It will help all of you to work towards a common goal of satisfying your customers.

Prioritize customer retention

Most businesses fail because they fail to retain their customers. Getting new customers can incur extra costs to your business. Therefore you must find ways you can retain as many customers as possible. The first thing you should do is to identify your top customers. Once you identify them, you should ensure you keep a close watch on their long-term needs.

You should put more focus on them and ensure you satisfy them fully. When you have loyal customers, your business will still thrive even in stiff competition. You should ensure you train your employees to have the knowledge and skills of retaining customers.

Things To Consider Ensuring Consumer-Focused Shipments Remain Front And Center In a COVID-19 World

Now that you know how to improve your overall customer-focused approach, you should narrow down to consumer delivery. You should know how you will have effective consumer-focused shipments even in this time of Coronavirus. Any business needs to keep its customers happy at all times. The following are some of the factors you should consider to ensure smooth consumer-focused delivery.

  1. Eliminating information delays

One of the causes of production stalling is information delay. When your business cannot communicate effectively, there will be stalling in producing goods and services. At this time of Coronavirus, the demand for goods and services are unpredictable. You will find that there will be times that you will have a high traffic of consumers wanting one item.

When this happens, you should ensure you have ways that you can quickly reach your supply chain to adjust. When you can eliminate the information delay about the demand and supply changes, you will react quicker and incur fewer losses.

  2. Automation of routine processes

Another thing that you should consider when it comes to consumer shipments during this pandemic is automating your routine processes. At this time of Coronavirus, most consumers have had financial problems, and therefore they want the product at lower prices. To ensure you cater to your customer’s needs and leave them satisfied, you should adjust to meet their demand.  

One of the things you can do is cut some of the cost of producing the product. You can replace the human effort with machines to cut down the cost of wages. Once you do this, you will lower the costs of your business logistics. Using machines can also add value to your products making your customers view them as worthy of paying. Machines also reduce the time it takes for a product to be ready for delivery hence having smooth consumer shipments.

  3. Real-time data visibility

One of the effects the Coronavirus has brought in business is the unpredictable supply and demand changes. Real-time data visibility will help you to match the demand and supply easily. It is because you will be able to give your suppliers accurate information about all your shipments. To ensure you have effective real-time data visibility, you will have to invest in the CRM system.

  4. Unity of the workflow

To ensure effective consumer shipments in this time of Corona, you should implement a system where everyone works as one. Everyone in your business should make delivery records on the same system and use the same format or record storage. Everyone should know how to run the system and work together to provide customers with better delivery.

 5. Ensure you consistently communicate with your customers

At this time of the Coronavirus, most people have a lot in their minds and have enough to worry about. Therefore you should ensure your customers do not worry about their delivery by informing them about their delivery all the time. You would have ensured you have smooth consumer shipments hence leaving your customer satisfied and happy.

Conclusion

Considering the above factors, you would ensure that your consumer shipments thrive even in a COVID-19 world.

________________________________________

Since her teen years, Bethany Watson was always interested in writing and esports, so she decided to merge these two passions by choosing the career of a journalist who mostly writes about trends in eSports. She regularly contributes to the major media publications in the niche and serves as an editor for https://csgo-bets.org/.

augmented reality
Archives, Global Logistics, Global Trade Daily, Software

How Augmented Reality Can Propel E-commerce Growth

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One of the biggest challenges e-commerce retailers have had to deal with is finding a way for the consumers to interact with the products before purchasing. Owing to the fact that most people like to experience the product before making a purchasing decision, customers may abandon their carts. However, technological advancements have come in a big way to solve this through augmented reality (AR).

Simply put, augmented reality is a technology that needs artificial intelligence to be effective, and that creates a digital interface in the environment around a person by placing virtual objects in real-time in the real world. In other words, AR allows customers to review virtual products in their real-life environment, through computer-generated images on a screen to see how well they fit in their lives.

This technology has significantly improved the e-commerce customer experience. In fact, most customers now prefer purchasing on sites that offer this technology.  Even as you think of starting your e-commerce store, it is important to rethink the platform that you are going to use. It is also important to do SEO for your store to make sure that potential customers are finding you easily on online search engines. If you’d like to optimally leverage your SEO strategy, you can partner with an SEO company to help you customize the right strategy for your e-commerce.

That being said, these are the ways augmented reality can take your e-commerce forward.

1. It increases sales

In a brick and mortar store, people pick up multiple clothes before going to fit them in the changing booth. This gives them the chance to see how well an item fits on them. The more items that fit them, the more the chances of buying a few of them, if not all are increased.

The same situation is brought to life in e-commerce stores through AR. Customers are able to try on multiple items in a short time. For instance, a person who wants to revamp a room has the ability to see how multiple pieces of furniture fit in the room. They are more likely to purchase multiple pieces that go well together.

In addition, the ability to view a product in 3D provides many insights as compared to static 2D images. This influences the purchasing decision especially for people who prefer interacting with an item before purchasing. This shows that the conversion rate is high in a site that uses AR as compared to a site that doesn’t use AR.

2. It increases customers’ engagement

AR technology is thrilling and fun. Think of how many hours people use experimenting with Snapchat filters. Going through Instagram Stories, you can see people post different photos of them with different filters on, which is actually AR at play.

Virtual try-on is engaging. Statistics show that customer engagement increases by a huge percentage on an e-commerce platform that incorporates augmented reality technology. Someone can be hooked for some time trying on watches on their wrists or trying on different eyeglasses. The longer they stay, the more they are making an emotional connection with your brand, and the more they will be compelled to purchase something. This connection makes them loyal and repeats customers. Even if they fail to buy during their first visit, you can be sure that the high level of engagement will take them back in the future.

3. Increases brand awareness

Facebook challenges have been on the rise in the recent past. They provide businesses a creative way to market their brands in front of millions of people. Brands that have been able to leverage them have seen so much success in their marketing campaigns. With AR filters, you can start a Facebook challenge encouraging people to try on your products. Use catchy captions and hashtags and encourage people to tag their friends in the challenge. Owing to the fact that AR try-ones are fun, you stand a big chance of success with engaging AR campaigns.

One example of such a campaign was done by an Italian cosmetics company, We MakeUp, on Facebook. The company used a video showing people how to use filters to try on different shades of lipstick. The video encouraged people to try how the lipstick would look on them. The brand recorded a huge success and increased sales.

This is to say that video-only ads are engaging, but they are more successful when AR is added to them.

Case Study of IKEA

Ikea is one of the biggest manufacturers of furniture located in multiple countries across the world. What keeps IKEA on a competitive edge is their affordable prices and the easy to assemble products. So what IKEA has been doing recently to keep their advantage is that they have introduced virtual reality into their store with the aim of improving the customer experience. They have started this activity also in China, which allows users to test the IKEA products by using this VR app. Basically, they can use the app to automatically scale the products, depending on room dimensions which is highly accurate and gives users the possibility to see how products would look in the room.

E-commerce stores are slowly taking over the brick and mortar stores. However, the ability to interact with products in a physical store beats the convenience of online shopping by far. If you are to capture the customers who are still stuck on trying on products before purchasing, AR is an aspect you can’t afford to ignore.