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The Top Best Practices for Carrier Management

carrier

The Top Best Practices for Carrier Management

Carrier management software in the fuel industry has come a long way. Its primary mission has always been to assign, manage, and review shippers and carriers. One year after the pandemic gripped the world– we are starting to see some trends and best practices emerge that enhance the overall industry.

Prior to the global crisis, many traditional carrier and logistics management systems still relied on manual activities, including paper systems, where shippers and freight carriers lacked access to real-time data, reporting and dashboards. The latency and lack of visibility amounted to higher costs and lack of efficiency. The old, outdated information made decision-making impossible. One of the biggest issues was that carriers could not plan accordingly for fluctuations, or other issues that might arise in an already unstable world of economic unrest, a global pandemic, an oil crisis or other fuel supply chain disruptions.

Many operators recognized the need for real change and to implement digital transformation. Changes to carrier management systems and platforms needed to occur in order to easily keep track of fuel surcharges, contract negotiations, on-time deliveries, fuel inventory and various other critical data. This also included receiving up to the minute access to information about hidden freight damage, driver courtesy, professionalism, and other relevant customer service standards.

Through the implementation of advanced technologies and data systems, shippers and carriers can have significant advantages — opening up new possibilities for collaboration, proactive planning and a potential overhaul to their freight management system. In an industry where every penny matters, there are several best practices for addressing carrier and logistics management – some technology-related, and some not. Let’s take a deep dive into some of them.

1. Invest in software: A good logistics solution can help predict demand and propose what quantities of each type of fuel should be delivered to each station; ensure that tanks don’t run out of fuel; make sure there’s product in each tank, and maintain a balance between products with high and low sales volume. A software platform can help you reduce friction and remove the barriers between operational groups with a single, connected solution. It can also provide one version of the truth by giving retailers, wholesalers, and carriers access to the same system and the same data.

2. Gain real-time visibility: Real-time visibility gives carriers all kinds of advantages such as access to load or freight boards. A load board is an online marketplace where truck owner-operators, shippers, and freight brokers can post and search for loads to keep freight moving. If operators have extra capacity, and somebody has a scheduled load that they need to get picked up, and you’ve got capacity, you can jump on that load board and get a hookup and then haul that load of fuel. Real-time visibility also allows you to know where your fleet and fuel are at any time – making it easier to tag team on other issues that might arise and manage issues such as inventory, forecasting, sourcing, and dispatching.

3. Know the news: What is happening around the world can often significantly impact carrier management. A natural disaster, such as a snowstorm in Houston, could impact the timing that fuel is being delivered when operators can buy or get deliveries, or even what prices fuel is being purchased. Just a few months ago, Texas fuel marketers reported adequate supplies of gasoline but slow distribution as severe winter weather gripped the state. The icy roads and below-freezing conditions led many fuel marketers to keep drivers who were responsible for the last leg of fuel distribution safe.

4. Understand safety: Know the safety requirements that are designed to allow a carrier to haul loads. Operators need an appreciation that there’s a huge legal liability for hauling fuel. The average load of fuel is about 7,000 gallons. That is a lot of fuel, and if safety measures are not followed, this could cause a lot of damage. Carriers that are hauling and delivering fuel need to make sure to put fuel in the tank in the right way, fill out the paperwork correctly, and have general respect and appreciation for how complex and dangerous their job can be. Using tools such as electronic logging devices (ELD) will help manage and monitor driver and fleet compliance, simplify driver workflows, increase safety and provide real-time visibility to streamline operations. This keeps drivers safe, keeps the fleet compliant, and keeps the business efficient. Dashcams also provide safety for drivers — improving driving behavior, guarding against accidents, and providing valuable evidence if an accident occurs. Using built-in artificial intelligence and infrared can detect road hazards and driver distractions too.

5. Communicate often: Have regular meetings to review the data so improvements can be made if necessary. Regular meetings with carriers, not just when things are challenging or if issues arise, can help address issues that might come up, such as frustration over an awkward tank placement at one location or difficult deliveries in a congested, big city like New York. There might be extenuating circumstances at some locations, but with open communication, solutions can be figured out together. About 15 years ago, many organizations owned their own drivers, carriers, and tanks. That has since changed. Now, the majority of fuel delivery services are contracted. Having a close relationship with the third-party delivery service is critical to success.

6. Identify Strengths: Figure out what a carrier does very well such as inventory management for difficult sites (e.g. tight delivery windows, split deliveries, etc.), and celebrate those strengths. Use the experience to inform and coach other carrier relationships. Maybe a carrier has smaller trucks and can fit into those tight urban locations. Through identifying these issues, a transparent relationship can be formed.

7. Update score cards: Create and maintain a carrier scorecard. Carrier scorecards outline how a carrier performed over time. If a carrier missed the delivery window, picked up the wrong product, didn’t get the paperwork in on time, or missed paying the bank, it can all be captured in one place. That way, an operator has all the complex information about that carrier in one location, and it is simple to determine what carriers are working out and which ones need to be replaced. It is critical to know how your carriers are performing because this can impact customer satisfaction, branding and costs. All of these issues can potentially cause substantial lost dollars for an organization. The score card can also help an operator understand what they need to improve to make the delivery and the relationship more successful.

In Conclusion: The relationships with your carriers are critical to the success of your business and can clearly impact your bottom line – especially as the industry continues to move more towards working with third parties. We believe the entire transportation industry should have access to high-quality, data-driven technology to develop carrier excellence. Technology and communications can be the foundation of all of these best practices.

3PLs

THE TOP CHALLENGES 3PLs FACED DURING THE PANDEMIC—AND THEIR SOLUTIONS

Prior to the COVID-19 pandemic, companies were increasingly relying on 3PLs to manage their supply chains, largely thanks to the steady rise in e-commerce and the impact of the digital marketplace on traditional brick and mortars. However, no one could have predicted the disruption of 2020, as retailers scrambled to move an unprecedented amount of goods quickly and safely in response to consumer demands. In fact, the Institute for Supply Management reports 97 percent of companies have been impacted by supply chain issues caused by COVID-19.

The pandemic forced companies to reevaluate their entire supply chains almost instantaneously to successfully adapt and meet the demands of the changing environment. Because of this, the use of 3PLs rose to the forefront for many brands in 2020 as they looked for strategic, critical guidance to best meet the challenges of the day.

Approximately one year into the pandemic, now is an optimal time to reflect on the top challenges that faced 3PLs during this period and the solutions that will continue shaping our industry in 2021 and beyond.

Problem: Pre-Pandemic Labor Shortages Escalated

The labor shortage is not a new challenge, but one that was exacerbated by COVID-19. Pre-pandemic, the steady rise in e-commerce was creating significant labor issues. In fact, CBRE reported e-commerce created demand for an additional 452,000 warehouse and distribution workers in the U.S. between 2018-2019.

On the transportation side, the driver shortage is ranked as the No. 1 industry concern, according to the American Transportation Research Institute. This is largely due to the higher-than-average age of the existing workforce (46 years old) and the subsequent impact upon exiting for retirement without having younger recruits to fill the void.

With these challenges already facing our industry, the pandemic took them to new heights as more workers were needed to accommodate the massive uptick in shipping volumes due to e-commerce. COVID-19 also presented new considerations, such as rising wage pressures due to the pandemic’s economic, political and public health challenges, as well as older drivers opting for early retirement out of safety concerns.

Solution: Incorporate Automation Advancements 

Automation is increasingly being utilized as a solution to help manage labor shortages. From a warehouse perspective, this means more frequent use of automated guided vehicles, goods-to-person robotics picking, and automated racking and shelving techniques to improve efficiency and cost-competitiveness.

GEODIS recently conducted a beta test at a distribution facility in Indianapolis to pilot the increased use of robotics in its warehousing efforts. Using 21 robotic units that offered an autonomous and smart-picking solution, a leading women’s apparel brand saw a 100 percent increase in operational efficiency. This is just one example of how automation can increase efficiencies and address labor market concerns. 

While automation has largely taken off within warehousing, we expect to see strides moving forward to specifically address driver shortages. 2020 was filled with exciting advancements in this realm, and we will continue to see innovative solutions like autonomous vehicles and drone delivery enter the market at a greater rate.

Problem: Capacity Shrank While Demand Surged

In 2020, the traditional peak season came and never left from a volume perspective. But while demand surged, capacity evaporated. As more than 50 percent of air freight is transported via cargo holds of passenger planes, capacity plummeted as flights were cancelled. For ocean freight, the lack of goods primarily out of Asia created a ripple effect that was felt globally. All the while, road shipments faced capacity issues due to skyrocketing e-commerce orders coupled with ongoing labor shortages.

The capacity constraints in the parcel delivery network were particularly a shock to the system for many in 2020, which was largely a byproduct of this acceleration in e-commerce. According to Transportation Impact customer data, parcel volume was traditionally 60 percent commercial and 22 percent residential prior to COVID-19. During the pandemic, this ratio drastically flipped with 40 percent being commercial and 46 percent residential. While delivery networks were previously accustomed to moving a large amount of goods with fewer stops, the process was reversed and created an immense strain on the current infrastructure.

Solution: Rethink Delivery Strategies

Due to the capacity constraints we saw in 2020, 3PLs will need to incorporate more diverse delivery strategies moving forward. For example, a solution for small parcel delivery issues is to build an expansive network that includes multiple international providers. By building and leveraging the network, it provides 3PLs the opportunity to identify the best small parcel provider to use in real time for its customers based on current capacity and shipping needs.

Air cargo delivery will be an interesting area to watch moving forward, as we continue to provide solutions that will help us solve 2020 challenges. Because of the increase in e-commerce, 3PLs will have more strategic control over flight patterns. For instance, GEODIS recently expanded AirDirect services to add a weekly flight from Shanghai to Guadalajara. 

Problem: Unpredictable Buying Patterns

In 2019, online retail sales in the U.S. amounted to $343.2 billion. By 2024, this is projected to skyrocket to $476.5 billion. 

The pandemic led to unpredictable buying patterns as consumers shifted away from brick and mortar stores to e-commerce platforms. While top e-commerce categories prior to COVID-19 were consumer electronics and apparel/accessories, the pandemic created an entire new demand for the type of goods being purchased online. In particular, demand for essential items such as groceries and health products grew in numbers we hadn’t seen before.

One of the biggest challenges of the pandemicand one that will remainwill be anticipating consumer buying patterns moving forward. Brick and mortar sales will increase as vaccines are more widely distributed, and we will see a new ratio of in-person to e-commerce shopping. The convenience factor of buying online is here to stay, but the question remains what the scale will be.

Solution: Accelerate Digital Technology

While it’s impossible to pinpoint consumers’ future buying patterns, the adoption of new technology by 3PLs will help brands build resilience. For instance, providing real end-to-end visibility will be imperative moving forward. By offering a robust “control tower” that integrates complex operational systems across all modes of the supply chain in one streamlined view, companies can best track and trace shipments, strategically manage inventory, and overall receive transparency that leads to faster and smarter decision-making.

Additionally, we will see innovative technology that offers solutions to move products closer to the end customer. For example, GEODIS recently released a new digital platform, City Delivery, that enables retailers to deliver goods directly to consumers from the closest retail store in just a few hours thanks to a combined delivery network of traditional carriers and private individuals. We will continue to see new technology that revolutionizes last-mile delivery, particularly in the urban environment, as e-commerce buying trends continue in some capacity.

Looking Ahead

No one knows what challenges lie ahead, but 2020 offered lessons to 3PLs we will take with us moving forward. Due to the pandemic’s spotlight on supply chains, we expect companies will increasingly leverage 3PLs as strategic, solutions-minded partners that will help protect and enhance their operations in the face of any challenge. By incorporating lessons learned during the pandemic, we will be best equipped to provide the solutions needed to support their growth moving forward.

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As president and CEO of GEODIS in Americas, Mike Honious is responsible for freight forwarding, transportation management, business development, strategic management office, legal, accounting & finance, human resources, engineering & technology, ProVenture, shared service center and IT. He previously was the COO of GEODIS in Americas, and before starting with the company 15 years ago, he held several senior level operations positions at Gap, Inc. 

warehouse

Faster, Safer: How the Warehouse has Changed Post-Pandemic

Challenges took a new meaning for logistics operations that require more than the traditional approach to developing protocols and workflows. In 2021, the warehouse is not what it was one year ago. The pandemic put a direct spotlight on the importance of keeping workers–and partners–safe. Adhering to implemented protocols are more than a formality in the new normal and can be the very things that keep a business open in the long term. In the short term, warehouse managers have no choice but to stay diligent in securing the safety of their business by putting their employees’ safety first. 

We talked with Edgardo Hamon, managing director with Dachser Mexico, about how the warehouse has changed and how handling these new challenges successfully can sustain employee wellness and ongoing operations post-pandemic. 

“The handling of materials requires interaction between people and maintaining clear rules of social distancing, not only with the collaborators we have on the day-to-day, but also with the carrier that arrives every hour into our warehouses,” Hamon says. “It becomes an additional challenge to keep a strict process to maintain the correct functionality of the warehouse, and of course, avoid any possible risk to our teams. Strict protocols and sticking to them are critical, such as sanitizing our facilities twice a day, consistent washing of the hands and wearing masks.” 

Dachser is no stranger to the work-from-home dynamic, either. Hamon explained that when it is needed, employees stay at home to secure business continuity—and the warehouse keeps running. 

“We implemented the home office process with success, and we believe it is very efficient to continue with this process as it provides a good solution,” he explains. “Whenever it is needed, people remain at home. We do this to make sure the team stays safe and operations are continuously flowing.”  

Technology continues to serve as a key driver for success when securing strict workflows between workers. For Dachser, technology equals transparency and visibility to ensuring protocols are met and partner relations are sustained.

Dachser’s global warehouse management system, Mikado, serves as a major resource for maintaining a seamless day-to-day process while securing opportunities for expansion. Mikado organizes Dachser’s operational team while promoting social distancing and maximizing efficient workflows. 

Hamon cites Mikado as a primary tech resource that ensures safe operations while solving pandemic-induced challenges. This system is a key driver behind Dachser Mexico’s most recent facility expansion that launched in October. Dachser’s bonded warehouse facility in Parque el Marqués at Querétaro will offer 4,000 square meters of warehouse space with an accommodating electrical substation.

Mikado supports operations beyond warehousing, providing solutions for other sectors, including manufacturing. Systems such as Mikado enable companies to move forward amid the pandemic in expanding operations to better serve customers and maintain a competitive advantage. This further emphasizes the importance of reliable, agile technology post-pandemic.

“Dachser believes strongly in the value of technology as it relates to enhanced efficiency and cost reduction,” Hamon says. “With the continuous further development of our IT systems and their worldwide rollout, we have built up a homogeneous IT landscape characterized by stability, integrity as well as adaptability to new challenges in the logistics business. And, of course, the ability to integrate the IT technology into our day-to-day operational platforms. This makes a big difference in remaining competitive.”

What does all this mean for customers? Customer retention post-pandemic has become more of a challenge than ever before. Hamon explains that customers are experiencing a significant financial impact, creating a greater demand for competitive cost-effective options while increasing demand for space. So, not only are warehouse managers working to implement protocols and keep employees safe, but they are also competing to retain customers, drive down costs and meet demand for space at a competitive price. 

“Customers are always looking for more competitive prices in the market,” Hamon notes. “This puts industry players in a difficult situation to compete and provide the best price. At Dachser, we adapt ourselves as much as possible to meet demand and support the customer needs.”

In addition to the most cost-effective options, customers are now demanding agile and quick solutions. If the logistics arena was not high-speed before, it is now. 

Logistics has taken a new form that quickly eliminates paper processes and traditional methods of management. Automation is now a major differentiator as customers vet the fastest and most efficient providers to meet their needs, rather than an option. In the new normal, customers simply cannot afford the risk associated with manual processes and their potential inefficiencies. Dachser recognizes this and cites the power of automation for meeting market demands and providing adaptable solutions. 

“These last few months have made it clear that the supply chain needs to evolve into a stronger, more agile and adaptable system that can respond quickly to challenges and implement solutions,” Hamon says. “This is where we strongly focus nowadays, providing intelligent solutions to our customers. We adapt to their needs, offer flexibility and dive deeply into their processes to identify their needs. This allows us to maintain a competitive advantage over our competitors–globally and regionally. Adapt to the needs of our customers and market situations to provide the best solutions.”

For now, the brunt of COVID-19 has been felt across the supply chain, allowing companies to understand what it takes to continue operating with boots on the ground. However, the team at Dachser predicts additional market shifts are on the horizon, citing the Amazon effect for changing the course of market responses. Hamon explains that logistics players must prepare for a more dynamic delivery flow to meet customer demand in the new normal and beyond. 

“Customers will continue to request faster deliveries and the industry should be prepared. In the future, the industry will see the need for smaller trucks that provide faster deliveries to meet customer demands, and the successful deployment of technology solutions to receive materials faster. If you have reliable technology in place, you can offer these kinds of services to customers, so they receive orders faster. These dynamic solutions will be critical in the near future.” 

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Born in Mexico City, Edgardo Hamon graduated in Business Administration from the Technological University of Mexico. He has worked for the past two decades in the logistics industry, starting as a sales executive working with clients in the pharmaceutical, automotive and technology industries. He joined Dachser as National Key Account Manager Automotive in 2011, and he later became Intra Americas Business Development Manager before being promoted to his current role as Managing Director of Dachser Mexico.

3PLs

GLOBAL TRADE’S TOP 3PLs OF 2020

We’ve been saying it for years: The world is becoming an increasingly global place. We can get nearly anything on Earth in less than a few days, but someone has to get it to us. That’s where third-party logistics comes into play.

This year has thus far been a year unlike any other, thanks to the COVID-19 pandemic. With supply shortages and more people shopping from home out of safety concerns, we’ve relied heavily upon third-party logistics (3PLs) to bring us much-needed supplies. In fact, in an economy where many businesses are struggling to survive, many 3PLs are holding their own due to the coronavirus.

But it’s not enough to just be a 3PL—even during a pandemic. Logistics customers are demanding more from their 3PLs. In a world of Amazon Prime, they want their shipments to arrive faster, and for less money. They want to manage their inventory with the touch of a button, right from their smart device. They want personalized service that is tailored to their individual business needs, and to feel like even though they are one of many customers, they are important, no matter how big or small their account is.

The following 3PLs embody all of the characteristics mentioned above. From the smallest family-owned establishment to the largest global providers, these 50 companies work tirelessly to ensure the best customer experience possible, from start to finish.

A.N. Deringer

The largest, privately-held customs broker in North America, A.N. Deringer was founded in 1919 by Alfred Neel Deringer. For more than 100 years, the St. Albans, Vermont-based company has offered services ranging from customs brokerage to warehousing, distribution and customs compliance consulting. A.N. Deringer ranks fifth overall for the quantity of entries field, and has won the “Best Places to Work in Vermont” designation from 2017-2019.

Transamerica Express

The group-member-owned 3PL has more than 40 years of combined experience in the industry. With over 120,000 carriers under contract, Transamerica Express can offer customizable solutions to everyone from small businesses to larger, Fortune 500 companies. The rapidly growing concern was ranked highest in Inc.’s 500 “Nation’s Fastest-Growing Companies” list in 2019 and 2020.

Sunset Transportation

Founded in 1989 by Jim Williams, Sunset Transportation’s flexible business model serves mid-market businesses with a variety of logistics solutions. The company recently celebrated its 30th year by instating a new, cross-border Mexico/U.S. solutions program and upgrading to a new 45,000-square-foot headquarters. Sunset Transportation was ranked No. 8 on Inbound Logistics’ Top 10 3PL Providers list in 2019, their second time making the top ten.

ODW Logistics

Founded as Ohio Distribution Warehouse Corp. in 1971 by Bob Ness and John Berend, the company started out serving only the Ohio area. ODW Logistics has since expanded beyond the Buckeye State and across the nation, offering supply chain solutions for hundreds of companies of all sizes.

FW Logistics

FW Logistics began in 1949 as a food grade storage facility. Today, the 3PL offers a full range of logistics services, including warehousing, trucking, logistics and fulfillment. Specializing in everything from dry storage to hazmat storage, the company boasts 7 million square feet of warehousing strategically located throughout the United States.

R2 Logistics

R2 Logistics prides itself on offering real-time visibility and a full suite of logistics solutions. The company has no automated phones, and customers are easily put in contact with account executives and support staff. R2 Logistics uses cutting-edge logistics technology to streamline processes and has a strong network of preferred partners to help ensure customers are getting the services they need, when they need them.

Dependable Global Express (DGX)

DGX consists of five integrated divisions which work harmoniously as a single shipping resource. Offering customized freight solutions to their customers, DGX can handle every step of your 3PL journey in one convenient package. They use state-of-the-art software to present customers with comprehensive reporting and real-time shipment tracking.

Flat World Global Solutions

Founded in 2006, Flat World Global Solutions offers customizable, contract-free solutions to clients of all sizes. Their customer service and cutting-edge technology keep Flat World Global Solutions lean, allowing them to grow quickly and maintain a high client retention rate—even without contracts. Flat World Global Solutions earned the distinction of Vendor of the Year from a top-10 client, and they have won a St. Louis Post Dispatch “Top Places to Work” designation in both 2018 and 2019.

McLane Global

With facilities nationwide, Houston, Texas-based McLane Global has been offering food grade logistics and transportation for more than 120 years. Today, McLane Global provides full 3PL services from manufacturing through last-mile delivery. McLane Global does not believe in a one size fits all approach, and each customer receives services tailored to their individual needs.

MD Logistics

Focusing on the life-science pharmaceuticals and retail and consumer goods sectors, MD Logistics offers highly specialized service to customers under these umbrellas. Founded in 1996 by Dave Kiebach and Mark Sell, MD Logistics works with the customer to customize services to their unique needs. MD Logistics offers Foreign Trade Zone services within a cGMP temperature-controlled environment, as well as dedicated or shared call center services and inventory tracking services that are cutting edge.

Kenco Logistics

The largest, woman-owned logistics company in the U.S., Kenco Logistics was founded in 1950. Today, it is a fully integrated 3PL provider, with more than 200 clients, 90 distribution facilities, and 30 million square feet of space. Kenco Logistics prides itself on customer service, which despite its size remains as personalized as a small operation. Kenco Logistics is the winner of a General Mills Supplier Diversity Award, as well as a Top Woman-Owned Transportation Company Award by Women in Trucking.


FLS Transportation Services

Founded in 1987, FLS Transportation has grown from just a few employees to the largest freight brokerage firm in Canada. The company differentiates itself from the competition by offering 3x support. This ensures customers have one point of contract and three support teams backing them. They also boast a .001 percent claims rate, a testament to their rigorous employee training program. FLS Transportation Service offers a full suite of logistics management products that can be customized to meet their customers’ individual needs.

Choptank Transport, Inc.

A full-service 3PL, Preston, Maryland-based Choptank Transport, Inc. serves North American and many other locations around the world. Their cutting-edge transportation management system and award-winning training program ensure their clients receive the highest level of customer service. Choptank Transportation also prides itself on keeping current with freight laws, so that they can advise customers about the transportation of their cargo in record time.

Holman Logistics

Seattle, Washington-based Holman Logistics offers food-grade warehousing, paper product manufacturing logistics support and more. They work with such clients as Hills Pet Nutrition and Kimberly Clark, offering tailored solutions to clients of all sizes. Holman Logistics is the recipient of the 2018 Operational Excellence Award from General Electric, and Kimberly Clark’s 2014 Service Excellence Award.

Nolan Transportation Group

Founded in 2005, Nolan Transportation Group serves more than 7,000 North American customers, with over 30,000 independent transportation companies comprising their network. The company treats all of its clients as partners and works with them to achieve their goals. Their recent success stories include assisting Crate & Barrel with their domestic over-the-road supply chain, a project which earned them accolades from the retailer’s director of Global Transportation. Says Brad Voelpel of hiring Nolan Transportation Group: “I can stand here today saying it has been one of the best moves we have made within our domestic network. The NTG team’s entire focus is on customer service, providing visibility on every single move while ensuring we remain competitive in the marketplace.”

Romark Logistics

Founded in 1954, Romark Logistics serves many pharmaceutical, retail, food and beverage customers across the globe. Providing a full range of B2B and B2C options, Romark Logistics works with their customers to provide customized 3PL solutions at a competitive cost. Their tagline “Personalized Service … Always” is a guiding force behind the company’s operations, inspiring them to strive harder to ensure customer satisfaction in everything they do.

Transplace

Frisco, Texas-based Transplace is the largest managed transportation services provider in North America. Transplace prides itself at being at the forefront of TMS technology, utilizing their own proprietary cloud-based TMS system as well as AI and machine learning and predictive analytics to increase efficiency and ensure customer satisfaction. They work with their clients, not just at start up but throughout the entire relationship to constantly improve and streamline processes, saving the customer valuable time and money.

ALOM

A WBENC Certified Woman-Owned Business, ALOM has been providing third-party logistics for 23 years. Heavily focused on customer service, ALOM provides each client a dedicated account manager who oversees all aspects of their accounts, including inventory, BOM and logistics. ALOM has 19 locations around the world and is the winner of the 2020 MultiChannel Merchant Top 3PL Award as well as the 2019 SDCE Supply Chain Green Award.

Tucker Company Worldwide

Founded in 1961 by Jacob Tucker, the company believes what sets it apart is their people. With many clients having been with Tucker for one or two generations, it’s safe to say customers agree. The company adheres to strict operational and safety compliance standards, customizing their services to the unique needs of each customer. They also offer 100 percent visibility at all times, allowing modifications to their TMS that addresses those needs. Up next, Tucker Company Worldwide plans to debut a new, self-service customer portal to further enhance the customer experience, and the company regularly reviews client accounts upon request to ensure satisfaction.

Werner Enterprises

One of the five largest truckload carriers in the U.S., Werner Enterprises was founded in 1961 as a single truck operation. Based in Omaha, Nebraska, Werner has offices in Canada, Mexico, and China. The company provides services such as dedicated, intermodal, cross border, global services and customs solutions. The company has won numerous awards, including the 2020 Alliance Award from SMC³ and Logistics Management, Food Logistics Top Green Provider Award and Logistics Management’s 2020 Quest for Quality Award.

Knichel Logistics

A WBENC Certified Women’s Business Enterprise and Woman Owned Small Business, this family run company provides services such as intermodal, LTL, full truckload and other specialty services. They pride themselves on highly personalized customer service, providing each client a dedicated account representative and a web-based transportation management system that delivers customized reporting. A 20-year industry veteran, Knichel Logistics CEO Kristy Knichel is the Intermodal Logistics Conference chairperson and is seated on the Board of Directors of the Transportation Intermediaries Association, the premier organization for 3PL professionals in North America and abroad.

GEODIS

The global supply chain operator operates five lines of businesses around the world, including freight forwarding, supply chain optimization, distribution and express, road transport and contract logistics and transportation management. With operations in 67 countries and a worldwide network that spans 120 countries, GEODIS boasts over 41,000 employees around the world.

PLS Logistics Services

Home to the largest flatbed network in North America, PLS Logistics Services offers a full suite of transportation solutions for their clientele. Each client receives a dedicated account executive as their point of contact, and the company provides 24/7 support, transparent tracking options and custom TMS reporting. With both outsourced and managed transportation services, PLS Logistics Services allows clients the flexibility they need to run their supply chain properly.

Dachser USA Air & Sea Logistics Inc.

Dachser USA Air & Sea Logistics Inc. treats its customers as partners, offering customized solutions to suit the individual needs of each business. The U.S. arm of Kempten, Germany-based Dachser can connect with more than 400 locations in nearly 40 countries, making them a dominant presence in many of the major markets across the globe. The company’s own Dachser IT program provides industry-leading, in-house solutions for clients of all sizes.

Americold

Americold prides itself on being the only 3PL to offer automated picking in cold storage with multiple tenants. Their use of robots provides on-time, in-full accuracy 99.5 percent of the time, allowing for minimal contact and a pick cycle time of under two hours. Americold has their own proprietary inventory management system, i-3PL Supply Chain Control, which allows customers to manage their inventory from any smart device, from anywhere.

NFI Industries

One of the oldest and largest family owned 3PLs in North America, NFI offers a flat organizational structure that allows the company to work quickly and nimbly. Clients are assigned dedicated account management teams that provide personalized service and continuously look for ways to improve supply-chain efficiency, including the use of robotics and automation in their warehouses. A company that cares about sustainability, NFI Industries operates electric trucks and was one of the first providers to use Class 8 battery-electric Freightliner eCascadias. And NFI uses Kalmar Ottawa Electric T2E Terminal Tractors in its California distribution centers.

Pilot Freight Services

Founded in 1970, Pilot Freight Services credits its 50-year history with always putting the customer first. One of the International Air Transport Association’s “Top 25 Air Forwarders in the World,” Pilot’s domestic and international operations frequently work hand-in-hand to achieve customer solutions. The company is the recipient of numerous awards, including Logistics Management’s Quest for Quality and Top 50 U.S. & Global 3PL designations.

AP Moeller – Maersk

Founded in 1904 as Dampskibsselskabet Svendborg (The Steamship Company Svendborg), today the Danish company Maersk has a dedicated team of 80,000 employees and operates in 130 countries around the globe, including its U.S. headquarters in New Jersey. The integrated transport and logistics company also has a standalone energy division. Maersk offers businesses of all sizes customizable solutions, with services available on all major trade lanes, including air, land, rail and sea. Maersk recently added Eco Delivery, a service that uses biofuel to reduce carbon emissions.

UTXL

Serving North America, UTXL aims to be the “safest, most reliable and cost effective” 3PL provider. The company offers a full suite of services and has been a federally licensed broker for more than two decades. They have provided services for everyone from the smallest of small businesses to Fortune 500 companies. With a focus on “Safety, Service, Systems and Savings,” UTXL offers customers unparalleled customer service.

Phoenix Logistics

A 3PL supplier to government and Tier 1 prime customers, Phoenix Logistics has locations to serve both U.S. coasts located in Arizona and Florida. Phoenix Logistics offers customers real-time, cloud-based tracking for supply-chain management. They work tirelessly to overcome challenges and bring their customers vital delivery infrastructure such as IT, transportation, energy and medical.

C.H. Robinson

One of the world’s largest 3PLs, C.H. Robinson has $20 billion in freight under management and processes 18 million shipments each year. The company serves 119,000 customers and 78,000 contract carriers around the world. C.H. Robinson has its own innovation department, C.H. Robinson Labs, where the company is constantly developing and testing customer solutions to streamline processes that put the customer first.

ArcBest

With more than 13,000 employees, ArcBest offers services ranging from LTL via ABF Freight, ground expedite through Panther Premium Logistics, household moving via U-Pack, and vehicle repair under FleetNet America. The company’s main focus is always the customer, ranging from the smallest operations to the largest and most complicated supply chains. ArcBest was recently named the No. 2 employer in Arkansas by Forbes and Statista Inc.

Global Gateway Logistics

St. Louis, Missouri-based Global Gateway Logistics recently made headlines for delivering more than 2 million pieces of PPE to their local community with the help of global partners, in an effort to stop the spread of the COVID-19. Global Gateway Logistics offers services ranging from international air freight, international ocean, rail transport, ground transport, analysis consulting, hospitality logistics and customs consulting.

Axle Logistics

The Knoxville, Tennessee-based 3PL, which is among the fastest growing in the industry, provides safe, reliable, advanced logistics services for companies throughout North America. Axle Logistics’ freight brokerage and transportation management operations support shipper needs for truckload, less-than truckload (LTL) and intermodal as well as integrated warehousing and distribution services. The 3PL recently expanded its engagement with Trucker Tools, deploying its Smart Capacity predictive freight-matching software. The added services build upon its current use of Trucker Tools load tracking, which has helped Axle increase tracking compliance among truckload carriers from below 30 percent to 80 percent.

PITT OHIO

PITT OHIO, which prides itself on having one of the best safety ratings in the logistics industry, is the recipient of numerous safety awards, including the American Trucking Association’s President Trophy. The family owned company offers services including small package, truckload and LTL, which is the company’s legacy service. PITT OHIO works with their customers to create custom solutions to their logistics challenges, providing quality service every step of the way.

CaseStack

Founded in 1999, CaseStack offers collaborative supply chain management services for CPG’s retailer logistics programs and cloud-based supply management products. CaseStack’s platform works to combine LTL deliveries to reduce shipping costs and improve delivery performance, while their cloud-based program allows CPG companies to manage their accounts, improve forecasting and sourcing, and much more.

Ruan

Founded in 1932 by John Ruan, what started as a gravel hauling company in Des Moines, Iowa, now boasts more than 300 operations nationwide, with 6,000 team members and 10,000 trailers. Placing a high precedent on safety, Ruan was the first transportation company in the U.S. to develop a safety program, and it is their commitment to safety, performance, customer satisfaction, people, improvement and teamwork that drives the company to this day.

Echo Global Logistics

Echo Global Logistics was founded in 2005 with the goal of simplifying transportation management. Its user-friendly, proprietary technology enables vendors, partners and clients to operate more nimbly, adapting to changes with real-time visibility. The company’s expansive coverage allows your merchandise to get to its final destination when it’s needed—no matter the means.

Kane Is Able

Kane Is Able works with consumer goods manufacturers who sell through ecommerce, retailers and grocers to improve supply chain efficiency. The company’s employees work as an extension of your business, helping to ensure that you get the best service for your logistics dollar, round the clock. The company employs Lean and Kaizen methodologies to constantly improve performance, which translates to a better experience for their customers.

Hub Group

Founded by Joyce and Phil Yeager in a “one-room, windowless office,” Hub Group has grown from its modest beginnings to become an award-winning 3PL specializing in customizable multimodal solutions. Hub Group attributes its success to providing the services that its customers need at a fair price. They offer LTL, FTL, expedited, intermodal and international freight services with the goal of long-term growth.

WSI Logistics

WSI Logistics was founded in 1966 in Combined Locks, Wisconsin, with just 30,000 square feet of warehouse space. Today, the company has grown to become one of the largest privately held logistics companies in America, with a network that includes American Warehouse LLC, Warehouse Specialists LLC, Material Logistics & Services LLC (MLS), Fulfillment Specialists of America, Inc. (FSA), LLC & WSI Freight Solutions and 360data. WSI Logistics offers fulfillment, transportation, import/export, warehousing and distribution, contract services and 3PL.

Logistics Plus

One of the fastest growing privately owned logistics companies in the world, Logistics Plus has annual global sales of over $300 million, with 450 employees spanning 28 countries across the globe. Logistics Plus offers services ranging from LTL, freight forwarding, truckload, warehousing and fulfillment, global trade compliance, project cargo, import/export and customs brokerage. Despite their rapid growth, Logistics Plus is still small enough to meet their customers’ unique logistics needs but big enough to solve the most complex of logistics challenges.

Mallory Alexander International Logistics

Mallory Alexander International Logistics is a full-service logistics provider offering customers over 94 years of experience in the logistics industry. The company knows that it plays a vital role in the supply chain of their customers, and it strives to ensure the accuracy that will keep their clients’ businesses running smoothly. Mallory Alexander International Logistics also offers their own proprietary MyMallory Management Portal that allows users to customize their experience and get the information they need, when they need it.

Penske

One of the most recognized names in logistics, Penske offers a full suite of state-of-the-art solutions to get your cargo where it needs to go. Penske serves a wide range of industries, from automotive to chemical, consumer goods, food and beverage, pharmaceuticals, electronics, industrial manufacturing, retail and more. With more than 35,000 employees around the world—and more than 300,000 vehicles—the company is poised to offer customers a wide array of solutions that will fit their individual business needs

Approved Freight Forwarders

Approved Freight Forwarders began its business serving Guam and is now one of the premier freight forwarders in the Pacific, connecting Hawaii, Guam and California to the rest of the world. Offering ocean, air and over-the-road transportation, Approved Freight Forwarders is the only freight forwarder with terminals on all four of the major Hawaiian Islands. Serving both individuals and business clientele, Approved Freight Forwarders has one of the lowest damage claims rates in the industry, thanks to the personalized attention they pay to each shipment.

Magnate Worldwide

One of the fastest growing companies in the logistics industry, supply chain management company Magnate Worldwide comprises wholly-owned subsidiaries that work tirelessly to offer premier logistics services, including global freight forwarding and expedited domestic transportation. With a high focus on customer service, Magnate Worldwide offers specialized services, specializing in time-sensitive, high-value shipments.

Kanban Logistics

North Carolina-based Kanban Logistics offers inbound logistics services for manufacturers, ecommerce and finished goods distribution. Kanban is certified to the ISO 9001:2015 quality standard by MCNA as well as the MCNA certificate of registration for AS9100D, the Federal Aviation Administration’s aerospace industry standard. Kanban also holds a superior rating by AIB International and is compliant with C-TPAT, an added security program. They are also a general purpose FTZ, enabling them to defer duties until products are shipped within the United States.

Burris Logistics

Pioneers in the cold chain logistics space, Burris Logistics began as a father-and-son tomato delivery operation in 1925 and has since grown to more than 2,000 employees. Burris Logistics puts a heavy focus on teamwork, with their ONEBURRIS initiative, which operates under the motto “team before self.” This guiding principle empowers the Burris Logistics team to not just work together, but to work together for betterment of their customers.

Neovia Logistics

Neovia Logistics works as a true partner to their customers, helping them grow their business. Neovia has more than 100 facilities in over 20 countries, spanning six continents. Working mainly with automotive, aerospace, technology and industrial customers, Neovia offers everything from warehouse management to inventory optimization, supply-chain technology and support, inbound logistics and much more.

Transportation Insight

Transportation Insight employs hundreds of highly trained logistics professionals across the United States. Specializing in unique supply chain solutions, the company deals with everything from domestic transportation to international logistics. Transportation Insight works with clients ranging from small businesses to Fortune 500 companies, help either find ways to cut costs and increase efficiency.

With these top 50 3PLs, you can rest assured your cargo is in good hands, affording you the peace of mind you need to get back to running your business the way it was meant to be run.

transportation

TECHNOLOGY’S IMPACT ON PHARMA TRANSPORTATION

Pharmaceutical transportation is no simple task. Particularly this year, the pharmaceutical supply chain has experienced a dynamic shift in operations amid the pandemic. Global players are challenged with the new protocols in place demanding more from shippers while navigating FDA regulations and keeping workers safe. Technology has undoubtedly played a vital role in overcoming recent challenges in the sector while supporting a custom approach for customer needs. The challenges of today are indicators of technological advancements needed for the near future in pharmaceutical goods transportation.

“COVID-19 has changed the way we fundamentally view complex supply chain ecosystems,” explains Gerry Fama, vice president, Europe Sales at BDP International. “As such, BDP’s vision for service in the pharma sector is increasingly dynamic: In a fast, and sometimes unpredictable environment, the pharmaceutical industry needs 3PL and 4PL partners who can manage new and anticipate future challenges. For this reason, BDP aspires to be a proactive partner to orchestrate the entire supply chain and to provide solutions tailored to suit customer needs.”

Fama continues, “Our engineering solution team has the ability to analyze customer needs and guide them in development projects, from the onset of the design phase to final implementation. The goal is to generate integrated solutions that allow customers to have full product visibility along the entire supply chain. Investing in technology is no longer a ‘nice to have,’ but an imperative for those who, like BDP, want to proactively anticipate the new challenges of the pharmaceutical transport and logistics market.”

Technology in today’s market must go beyond gathering data and raise the bar for preparing, transporting, maintenance and communication during each step of the process. Not every industry player will be up for the challenge, but those that do step up to the plate will position themselves in the market as leaders of change in an unpredictable environment while setting the standard for the new future in strategizing and regulation.

“In the coming years, the pharmaceutical supply chain will face new challenges that will have repercussions on all aspects of the distribution chain,” Fama says. “The new rules for the storage and transport of medicines, and the advent of serialization will condition distribution choices and logistical outsourcing strategies. The development of new commercial strategies focused on the patient, the digitalization of the channel, the adoption of the new rules for the storage and transport of medicines, together with the advent of ‘serialization,’ already require a rethinking of production and logistic processes, as well as the outsourcing choices.

“Process automation and data management using new software have proven to be successful strategies for pharmaceutical logistics management. It is essential to evaluate multiple storage and distribution solutions (automatic and digital) to operate in the drug distribution chain.”

Before changes can be implemented in transportation technology, Fama emphasizes the importance of analysis and cost when selecting logistics partners. The interesting thing about pharmaceutical transportation is the cost model originally developed by pharmaceutical companies and how this model was intended. The recent (and potential future changes) in transportation are not considered in this original model. It is imperative that transparency and up-to-date data are communicated when considering ways to modify this model to better support operations.

“The budget intended for logistics by pharmaceutical companies consists of two main cost items: warehouse (storage and preparation of goods) and transport,” Fama explains. “Given the recent regulatory developments (for example in the field of safety and conservation) and the introduction of increasingly specialized products, the weight of transport has increased in recent years, reaching about 55 percent of the overall logistics cost. This increase, inserted in a cost-saving context led by the headquarters of the main pharmaceutical companies, has not changed the average incidence on the logistics costs turnover (remained equal to about 0.5 percent) or on the profits (1 percent).

“Also, for this reason, it is essential to select a logistics partner who can assist with a detailed analysis (costs vs. benefits) before modifying any existing transport and logistics model.”

Where do regulations fit into this equation? Technology paired with pharma transportation is helpful but a tedious process in terms of compliance, depending on location and partners involved. There are ways to ensure your company’s efforts for efficient, compliant transport are on-par with regulations, such as special certifications. Not only do these certifications support the timely and safe delivery of pharma products but serve as a teaching tool for education on technical processes.

“Since 2013, the legislation, especially in air transport, has become more stringent and the European community has issued new guidelines for best practices of distributing the drug for human use (GDP),” Fama says. “These guidelines ensure that all participants involved in the pharmaceutical transport logistics chain are fully compliant. The IATA (International Air Transport Association) has created a special certification called CEIV Pharma (Center of Excellence for Independent Validators) which applies the principles of the GDP and transforms them into requirements of excellence for the air transport of pharmaceutical shipments.

“The certification aims to increase technical knowledge and increase the quality of pharmaceutical transport in the air sector and is based on the training and control by validators external to the IATA who have the task of verifying whether the companies work according to the lines GDP guide.”

Advancing technology applications in any industry requires an honest assessment of the attainability of a seamless transition. The current market challenges create more barriers for technology to become deeply integrated into all processes. Technology is not the only answer needed for improving operations–whether that be transporting pharmaceuticals or other methods of shipping within the supply chain. Costs and risks will always be a factor, regardless of the technology at hand.

“There are few sectors that can boast such a vast technological and regulatory intervention that has improved and disciplined the most intimately operational aspects on several occasions, just to name a few, the constraints on delivery deadlines, minimum availability, exclusive transport obligation, in compliance with the rules of good distribution, to the most recent provisions in terms of drug traceability,” Fama says. “New technologies support the reduction and management of risks, for complete visibility of the global distribution chain: the timely intervention of the logistics operator manages to avoid or sometimes mitigate the unexpected costs caused by an anachronistic and obsolete management of logistics and transport.”

The focus of shipping pharmaceuticals should always be to ensure the products are not compromised or delayed in getting to the patient. The patient will always be at the receiving end of the process.

__________________________________________________________

Gerry Fama, Vice President, Europe Sales, BDP International

Gerry Fama has been in the logistics and freight forwarding industry for more than 30 years. He has held various managerial roles within some of the largest multinationals in the international forwarding sector (Emery, FedEx, UPS and Panalpina). Since 2011, he has been a member of the American Chamber of Commerce. Gerry joined BDP in 2014, developing sales roles in Europe, the Middle East, Asia, North and South America. He is currently based in Milan and can be reached at gerry.fama@bdpint.com

3PLs

10 3PLS KILLING IT WITH DISTRIBUTION LOGISTICS

The third-party logistics (3PL) industry did more than $200 billion in revenue in the U.S. in 2018, according to Armstrong & Associates. That figure is double what it was just a decade ago. Rising labor costs, tight shipping capacity and a general need for companies to cut distribution costs are all fueling the growth.

Here are 10 3PLs that are making noteworthy advancements in the world of distribution logistics.

C.H. Robinson

Already one of the largest 3PLs in the world, C. H. Robinson is in the process of acquiring Prime Distribution Services, one of the nation’s leaders in retail consolidation services. “Prime Distribution Services is a high-quality growth company that brings scale and value-added warehouse capabilities to our retail consolidation platform, adding to our global suite of services,” said Bob Biesterfeld, C.H. Robinson CEO, in January. Prime currently operates five distribution centers throughout the U.S., totaling about 2.6 million square feet. With nearly $20 billion in freight under management and 18 million annual shipments, C. H. Robinson earned the top slot in Armstrong & Associates’ Top 50 U.S. 3PLs for 2018.

Holman Logistics

Headquartered in Kent, Washington, Holman opened in Portland back in 1864. Today, it’s one of the leading logistics firms in the Pacific Northwest, though it also manages facilities throughout the nation. The company offers public and contract warehousing (with 7 million square feet of warehousing space), manufacturing logistics, plant support, transportation, collaborative logistics and order-fulfillment services. In terms of distribution, Holman handles both truckload and LTL deliveries, as well as spotting and shuttle services. Some of Holman’s biggest customers are Hill’s Pet Nutrition, Kimberly-Clark, General Electric appliances, Dr. Pepper/Snapple Group, Dole Pineapple, Kerry Foods, Cargill and Morton Salt.

Anchor 3PL

For customers that deal with hazardous materials, logistics can be a tricky, even dangerous proposition. If it’s going the 3PL route for distribution, it’s imperative that it find a company that thoroughly understands the demands of hazmat logistics. While not a large firm, Anchor 3PL operates a 140,000-square-foot warehouse that has 40,000 square feet dedicated to hazmat. Based in Salt Lake City, Anchor regularly deals with chemical and hazmat storage and distribution, works with fire and safety departments, stays on top of the thousands of legal requirements for storing and transporting hazardous materials and maintains relationships with all the regulating authorities.

Kanban

Even with the Trump Administration’s 2018 tariffs on imported photovoltaic panels, the solar industry is booming. Located in eastern North Carolina, in the heart of domestic solar energy production, Kanban is using its thorough knowledge of the industry and logistics to help customers with warehousing and distribution of solar panels. With a million feet of warehouse space, Kanban was able to both assist customers with high-volume warehousing before the tariffs took effect, and then offer solutions for companies that had to change course once the tariffs started. The company also offers logistics assistance for aerospace, food processing and automotive industries.

Cardinal Health Specialty Solutions

Moving pharmaceuticals around the country requires more than simply a cold chain distributor. In 2011, Cardinal began using a special non-toxic, environmentally friendly insulated tote to keep products between 2°C – 8°C (36°F – 46°F) during shipment. The result keeps the supply chain safe as well as prevents possible spoiled or adulterated products from re-entering the supply chain. For vaccine storage and shipment, Cardinal’s commercial refrigeration units are only calibrated using devices from the National Institute of Standards and Technology (NIST). It’s no surprise that Cardinal Health moves one out of every six pharmaceutical products in the country.

Cerasis

Since 1997, Cerasis has specialized in less than truckload (LTL) freight management. In fact, close to 95 percent of the company’s business has been in the LTL realm. Not only does this make sense for those wishing to move smaller volumes of freight, but it’s also perfect for e-commerce shipping. Cerasis is based in Minnesota but maintains offices in Oklahoma and Texas. GlobalTranz acquired Cerasis in January 2020. “Combining with GlobalTranz allows us to continue this history while providing our customers with increased service offerings and access to capacity,” said Cerasis President Steve Ludvigson shortly after the acquisition.

Expeditors

Based in Seattle, Expeditors operates 322 locations in more than 100 nations. Though it handles logistics for a variety of industries, Expeditors has considerable experience and expertise in the automotive world. Its customers include both original equipment manufacturers and tier suppliers, and it uses its sprawling global network—which includes more than 25 million square feet of warehouse space—to track items at the part or vehicle identification number level. Expeditors’ distribution services even include light manufacturing, labeling, product localization, inspection and product rework and compliance.

BDP International

Moving oil and gas around the world is complex, even in the realm of international logistics. No shipment is the same, and regulations are often changing. But BDP has long specialized in moving fuel, so it understands pricing, procurement, heavy lift and turn-key rig mobilization. In terms of distribution, the company operates facilities all around the world (including Dallas, Houston, Los Angeles and Philadelphia), and uses extensive barcode scanning technology to keep track of everything. The company even offers its own BDP Smart Tower application, which allows customers to monitor asset locations, maximize asset utilization and coordinate maintenance and repairs to keep equipment downtime at a minimum.

Qualex

In 1990, Qualex opened as a dock-to-dock delivery company for Southern California furniture makers. Since then, it’s evolved into a full 3PL firm with tightly integrated warehouse and transportation services, though it still specializes in the furniture industry. For each customer, Qualex sets up an Electronic Data Exchange (EDI), which channels replenishment orders directly into its own Warehouse Management System (WMS), making logistics practically invisible.  Full distribution services include confirmation receipts, the automatic emailing of proof of delivery, inventory status reports, installation job status and even emailed photos of product condition upon delivery.

United Natural Foods, Inc.

Since grocery profit industry margins hover around just 2 percent, outsourcing logistics is practically mandatory. With its 2018 acquisition of Supervalu Advantage Logistics, United Natural Foods Inc. (UNFI) became a leader in grocery industry logistics. In fact, it’s the largest publicly traded grocery distributor in the nation. And its warehouse facilities are cutting edge—some have radiofrequency devices that guide selectors to stock, while others are completely automated, ready to deliver aisle-ready pallets to retail stores. SuperValu also ran all the logistics for four regional warehouses belonging to Krogers, the second-largest grocery chain in the country.

global

GLOBAL FORWARDING: BIGGEST, FASTEST SAVINGS FOR GLOBAL SUPPLY CHAINS

Increasingly complex omnichannel business models are resulting
in correspondingly complicated global supply chains. Maximizing
efficiencies for time and cost in moving freight around the world
is mission critical. This paper takes a high-level look at three
opportunities for optimization: cargo consolidation, cargo risk
management, and customs management.

The multichannel retail business model, along with increasing levels of global sourcing, have created staggering opportunities for importers and exporters around the world, whether huge multinationals or small companies shipping globally for the first time.

Global supply chains are becoming longer and more fragmented,
presenting significant new issues for logistics professionals. In one
survey, 104 global supply chain executives reported that visibility
(21.1%), fluctuating consumer demand (19.1%), and inventory
management (13.2%) were their biggest challenges (1).

Many factors add complexity to global supply chains, including longer lead times and lead-time variability and an increasing number of suppliers, partners, carriers, customers, countries, and logistics channels. Contrary to what you might think, global freight forwarding can offer relief for these concerns and when people, processes, and technology are leveraged, can even offer competitive advantages.

10 Approaches to Savings in the Global
Forwarding Supply Chain

EASY

1. Align shipping activities to leverage benefits of consolidation
services.

2. Minimize financial impact of cargo loss and damage by
purchasing marine cargo insurance.

3. Take advantage of transportation providers’ TMS to create
visibility and take control of the supply chain.

MODERATE

4. Develop strategies to match service modes with inventory
planning and sales forecasting.

5. Create a risk management strategy—identify and understand
risk types, probabilities, and potential costs.

6. Integrate with a single transportation provider’s TMS and
connect with suppliers and carriers globally.

DIFFICULT

7. Effectively use Incoterms® when negotiating with suppliers to
impact unit price, cash flow, inventory levels, and logistics costs.8. Actively engage with a customs professional to deploy best
practices in customs management.

9. Leverage transportation provider’s business intelligence
reporting and analytics to improve supply chain performance.

10. Utilize PO management to control the purchase order lifecycle;
go upstream to supplier order fulfillment logistics activities.

CARGO CONSOLIDATION

What it is
Few companies can fill an entire ocean or air container with their
own freight. Both ocean and air carriers require shippers to work
with freight consolidation services to accommodate small volume
shipping needs. These freight consolidators accept complementary
freight from multiple shippers, and consolidate freight all kinds
(FAK) containers for ocean shipping or unit load devices (ULD) for
air. This results in better freight rates and cargo security measures.

Why it’s important
One of the biggest areas for savings in a global supply chain is
taking advantage of space. Companies of any size can use freight
consolidation services, but it’s particularly useful if you have a lean
supply chain or operate in a just in time environment. Using logistics
efficiencies from freight forwarders, consolidators, and third party
logistics providers (3PLs), you can choose to move smaller quantities
of material more frequently. In doing so, you make a strategic
decision to spend more on consolidation shipping services and less
on inventory, storage, returns, and other costs.

Ocean versus air
Whether air or ocean consolidation is the right choice for you
depends on the required service level and transit time. Globally,
ocean is the less expensive transportation method. That cost
advantage must be carefully weighed against longer transit times, as
well as potential delays caused by adverse weather conditions, port
strikes, or other issues.

In addition, there are faster and slower ocean options. Some ocean
freight goes directly to the port of call. Other shipments can stop at
multiple ports of call, which is less expensive, but takes longer and
is more prone to unexpected disruption. Working with a reputable
freight forwarder can help reduce unexpected supply chain failures
and delays, and provide options if disruptions occur.

Air freight consolidation service is a faster, more expensive option
than ocean, but here, too, there are faster and slower options that
determine the cost. For example, if you don’t need direct service
(next flight out), choose a slower transit time at more favorable
pricing.

Best Practices for Cargo Consolidation

Choose a forwarder with:

-Sufficient freight volumes to effectively consolidate without delays and to aggressively negotiate rates with ocean and air carriers.

-Dedicated space allocations for capabilities when they are needed.

– Work in major markets with high flight capacity.

Generally, in any type of transportation, the more time there is between pickup and delivery, the less you pay. In air, for instance, use providers with gateways (vs. a hub and spoke approach)
to get cost-efficient options that meet your deadlines. Use consolidation schedules if you can for more savings.

CARGO RISK MANAGEMENT

What it is
Global shipments are exposed to risk from a wide range of human
and natural forces. Yet, global shipments are subject to a unique set
of international laws and/or treaties that limit the liability of carriers. Whether you import or export, you should understand the various types of risks that cargo could face and how you can help protect the value of the goods shipped globally.

Why it’s important
Even with proper packing, stowage, and securing of containers on
a container ship, severe weather and rough seas can cause rare but
catastrophic events like ship groundings, structural failures, even
collisions, any of which can result in loss of cargo. On average, the
World Shipping Council estimates that there were 1,582 containers
lost at sea per year between 2008 and 2016; 1,012 of these
containers (64 percent) were lost due to a catastrophic event.2 Theft, counterfeiting, hurricanes, floods, political unrest, labor disputes, documentation errors, or mechanical problems can also delay or ruin delivery of the most perfectly planned global shipment. Protecting the value of products while they are in transit across the globe can have a significant impact in protecting the bottom line.

Air and Ocean Carrier Liability

When events occur, companies are often dismayed to find that not
all risks or damages are covered by carrier liability.

Air carriers are not liable if damage was caused by:
-An inherent defect, quality, or vice of the cargo
-Defective or insufficient packing of the cargo
-An act of war or armed conflict
-An act of a public authority carried out in connection with the
entry, exit, or transit of the cargo

Even if an air carrier is held legally liable for damages, they pay the
value of the goods or 19 SDRs3 per kilogram, whichever is less.
If a ship experiences an extraordinary sacrifice or expenditure at sea,ship owners may declare general average. The concept of general average hearkens back to the days when a crew tossed cargo overboard to lighten the ship in a storm. During the emergency, there wasn’t time to figure out whose cargo should be jettisoned. After the fact, to avoid quarreling, merchants whose cargo landed safely would be called upon to contribute a share or percentage to the merchants whose goods were tossed overboard to avoid imminent peril. Today, general average declarations still mean that all the merchants with freight on the vessel are required to share in the cost of the expenditure before the goods are released.

General average is a growing risk and concern for many risk
managers and insurance experts. In recent times, there has been a
rise in the frequency and severity of extreme weather events that
have led many vessels to become grounded, causing container loss
and/or vessel damage. In addition, fires on container vessels are
more common now than in the past.

Today, when these events occur and general average is declared:

1. Ship owners have a lien on the ship’s cargo. At the time
the voyage is completed, the level of sacrificial losses will not
normally be known. Ship owners will usually call for security
from cargo interests, against which the assessed contributions
can be enforced. The amount of the claim is usually calculated
by average adjusters, appointed by ship owners. Each cargo
owner’s contribution is calculated on a percentage of the cargo
owner’s interest or commercial invoice value, ranging from
1 to 100 percent.

Ship owners have a lien on the cargo until each cargo owner’s
contribution or security is satisfied. Unless a shipment is secured
with all-risk marine cargo insurance, the cargo owner will be
required to post their contribution or security in cash before
their cargo will be released. As the frequency of general average
declarations has increased, so has the amount of the required
securities—from about 12% a year ago to about 50% today.

2. Ocean carriers are not automatically liable for loss or
damage to your cargo. The U.S. accepted the Hague Rules in
1936 through the passage of the Carriage of Goods by Sea Act
(COGSA). The rules expressly remove the ocean carrier’s liability
for loss or damage to cargo that arises from one of the 17 stated
liability exclusions. Legal liability claims are often met with
resistance by carriers.

Even if the ocean carrier is found liable at the end of a legal
process that can take months to settle, their limit of liability
under COGSA is $500 per package or customary shipping
unit, or the actual value of the goods, whichever is less. In other
words, the onus is on you to assess and minimize your
risk exposure.

Best Practices for Cargo Risk Management

-Buy the appropriate amount of marine cargo insurance for ocean or air shipments.

-Ensure the valuation clause for a given shipment defines the maximum amount an insurance company will pay for a loss. Most valuation clauses include the commercial invoice value and any prepaid charges associated with the shipment, such as freight, customs clearance, or duty. This clause can be modified to include other charges or profit margin—if requested and approved by underwriters.

-Choose an insurance intermediary with experience or specific training in international logistics and transportation insurance.

Calculating Costs to Determine Risk Exposure

The risk of lost cargo is real. Yet, without a crisis to motivate
action, most companies place risk management at the bottom of
the priority scale. The most common method used to protect the
value of goods from physical damage, theft, or other calamity is the
purchase of marine cargo insurance.

The first step you can take is to understand your risk exposure
by tying dollar values to varying types of risk. The challenge is
quantifying the potential cost. You can brainstorm to gather that
information, or can work with a logistics provider that has in-house
risk management professionals to help uncover potential liabilities
in the supply chain.

You can apply subjective probability to calculate possible losses. In
other words, you can estimate the chances of a risk event happening
and multiply it by the cost if it did happen (see below). Once the
dollar amount is calculated, the next step is to reduce the expected
loss by reducing the probability of the occurrence, or the cost of the
occurrence.

Armed with subjective probability estimates, you can effectively
buy the appropriate amount of insurance. While insurance is readily
available, it is your responsibility or the consignee’s to ensure the
coverage purchased best fits the unique exposure.

CUSTOMS MANAGEMENT

What it is
Most companies choose their customs broker for the long term.
That’s because the customs broker must truly understand your
company and products. They must also know how to navigate each
country’s compliance requirements with their own specific set of
customs rules, governmental regulations, VAT, duty rate calculations, and payment plans.

Why it’s important
Even simple trade-related mistakes, such as an incorrect spelling on
a declaration, can result in fines, penalties, or even cargo seizure.
Penalties for transgressions can be severe, depending on the
seriousness of the infraction.

For example, U.S. Customs and Border Protection (CBP) imposes
fines of up to $10,000 per entry for recordkeeping infractions.
Non-financial costs, such a shipment delays, the diversion of staff
resources to correct problems, and in rare instances, the loss of
trade privileges, can be detrimental to an importer’s business.
When you work with Trusted Advisor® experts in customs, you can
learn where the most common mistakes occur and implement best
practices to avoid them. In addition, CBP can conduct a customs
focused assessment—essentially, an audit—with any U.S. importer. A
customs expert can help your company prepare before, during, and
after a focused assessment to minimize risk exposure.

Compliance programs and options that are worth investigating
Not every compliance option will fit or resonate with every business.
Discuss specific issues with an attorney or Trusted Advisor® expert
in customs compliance and learn which elements might be the most
useful. Always seek out an expert opinion.

-Customs bond sufficiency. If you import into the U.S., you must
have a customs bond, generally 10% of the duties and taxes
you expect to pay to CBP for import transactions throughout
the year. CBP can shut down all imports if they discover you
have an insufficient customs bond. Since tariffs (and duties)
are increasing substantially, existing bonds may no longer
be sufficient. Bond insufficiency will lead to additional costs
and delays if not monitored or addressed in a timely manner.

Consider the increased duty amounts well before the bond
renewal period comes up. If the customs bond will need to be
significantly higher, the surety company may require additional
documentation—including financial statements and possibly
letters of credit—before they issue a new customs bond, all of
which will take time to get into place.

-Duty drawback programs. Duty drawback programs refund
99% of certain import duties, taxes, and fees for goods that are
subsequently exported; this supports both U.S. manufacturing
and foreign export sales. Before 2018, duties might only have
been in the 1% to 2% range, and since there is paperwork to file
to get the refund, many companies did not bother with it. Today,
those 1.2% duties have jumped up to 25% in some instances,
making duty drawback programs a potential game-changer for
your business. The downside: duties must be paid up front; your
company may wait for 1 to 2 years to receive the refund under
the current drawback environment, which can become a cash
flow issue for some companies.

-Foreign trade zones (FTZs). Foreign Trade Zones (FTZ) are
secure areas located in or near CBP ports of entry, and are under
CBP supervision. Unlike duty drawback programs, companies
don’t have to pay duties when goods enter an FTZ. Instead, FTZs
enable duty deferment; the duties are paid when the goods
enter CBP territory for domestic consumption. At that point, the
importer pays the duties at the rate of either the original foreign
materials or the finished product.

-Exclusion requests. If a company thinks their product should
be excluded from Section 232 and Section 301 tariffs, they can
request an exclusion. When filing an exclusion, make certain that
the classification used is the best classification for the product.
Also, work with a trade attorney; they can help you navigate
the law and apply it to a specific product so the exclusion isn’t
rejected on a technicality.

-Changing sourcing locations. It’s not always easy to change
suppliers, but some companies are looking at it in a new era of
tariffs. Yet, suppliers for some materials are only found in China,
and even if you locate a source in another country, there can be
issues. Can they supply at the necessary level? How long will it
take to test the new supplier against specifications? The more complicated the product, the more challenging a switch will be.
Also, keep in mind that if the cargo ships from Singapore but its
origin is China, U.S. tariffs may still apply.

-Incoterms®. Incoterms®, or International Commercial Terms,
are published by the International Chamber of Commerce.
They are the rules that define the responsibilities of sellers and
buyers for the delivery of goods under sales contracts, and
they establish where the transfer of risk takes place. However,
they vary from situation to situation. For example, if a container
being moved across the ocean from Shanghai to the United
States falls overboard, who is at risk? The Incoterms® tell the
story. If the U.S. buyer purchased the product FOB (free on
board), the importer took responsibility for the risk as soon as
the freight was loaded on the vessel in Shanghai. If the same
product was purchased DDP (delivered duty paid), the shipper
would be responsible until the product reached the purchaser’s
door in the United States. You can save money if you ensure
your purchasing team understands how Incoterms® rules will be
applied to freight.

Best practices in Customs Management

-Buyers are not transportation and compliance professionals who understand Incoterms®—they choose suppliers based on favorable pricing. You can establish internal structures or education to help buyers understand how Incoterms® impact risk management and pricing.

-Rely on a customs professional to leverage U.S. Customs data. They can combine a company’s unwieldy historical shipping data into usable trade reports to reveal whether an organization is taking proper advantage of free trade agreements around the world.

GLOBAL TECHNOLOGY CAN TIE IT ALL TOGETHER

As companies large and small continue to expand internationally,
they can no longer afford to single-handedly manage the countless
details and nuances of global freight forwarding. Shortened lead
times, the use of multiple transportation modes and carriers to
deliver product efficiently across continents, and an environment
fraught with risk requires both worldwide and regional management
of cargo flows.

Many companies rely on a transportation management system
(TMS), hoping to keep their fingers on the pulse of their global
supply chain providers. However, TMS products were developed
initially to track domestic or regional truck shipments and to
automate tedious, low-value processes performed by an enterprise’s
transportation staff. Today, few TMSs can enable global visibility to
every shipment, or can interconnect disparate systems on multiple
continents to provide the level of visibility to show where products
are at any given point in time.

A truly global supply chain network has a single TMS architecture
that spans all continents. Global visibility enables your organization
to clearly see the entire supply chain. Utilization reports for multiple
services and modes (air, ocean, rail, and road) on all continents
confers specific strategic advantages:

-Continuous improvement to supply chain logistics in real time

-Access to business intelligence, crossing all freight and spend.categories to strategically understand the impact of decisions

-Access to a centralized network of multiple providers–without
integrating individually with each provider

Work with a logistics provider that offers a full suite of services,
manages service performance, consistently communicates
performance metrics, and offers strategic optimization to gain
distinct advantages in the marketplace.

A case in point: purchase order management

-Purchase order management (POM) within a TMS delivers end to end visibility throughout the purchase order (PO) life cycle. POM enables you or your provider to manage shipment windows, work
with overseas vendors to coordinate bookings, manage exceptions,
collect and distribute documents, and provide reporting at the shipment and PO/line item level.

-POM options include PO tracking and visibility, reporting, online booking, document management, check and verification process, vendor self-service, vendor management, exception management,
and PO and shipment analytics.

5 Questions to Ask a Potential Global Freight Forwarder

IS YOUR TMS TRULY GLOBAL? There should be one system architecture that works across regions and covers all types of transportation.

CAN YOU PROVIDE CAPACITY OPTIONS?
They should ship goods by ocean, air, rail, and truck,
choosing the option that best aligns with the business
need. Ask about their consolidation programs to
optimize spend, routings, and transit time performance.

DO YOU HAVE “BOOTS ON THE GROUND” IN KEY
GEOGRAPHIC REGIONS?
Your global freight forwarder should think globally, act locally.
That is, they should know global transportation, but also
have deep knowledge of the local population, infrastructure,
languages, politics, economy, customs, currencies, tax laws,
and tariffs for each country your shipping routes touch.

CAN YOU HELP ASSESS CARGO RISK?
They must adequately help you assess and mitigate cargo
risk to help protect your bottom line.

DO YOU OFFER CUSTOMS ADVICE?
They should be experts in leveraging customs information
and programs to your company’s advantage.

 

_________________________________________________

1. “What is the biggest challenge you are facing in your supply
chain?” eft Supply Chain & Logistics Business Intelligence,
April 2018. Accessed at https://www.statista.com/
statistics/829634/biggest-challenges-supply-chain/.

2. “Containers Lost at Sea-2017 Update,” World Shipping
Council, 2017.

3. SDRs, or Special Drawing Rights, refers to a basket
of currencies designed to iron out currency exchange
fluctuations in International valuations, now used to express
the limitation under the Hague-Visby Rules and the MSA
Limitation Convention.

4. “Global Trade, Trade Statistics,” World Shipping Council,
2018. Accessed at http://www.worldshipping.org/about-theindustry/global-trade.

5. “Containers Lost at Sea-2017 Update,” World Shipping
Council, 2017.

6. Larry Kivett and Mark Pearson, “Understanding risk
management in the supply chain: Using supply chain data
analytics to drive performance,” Deloitte, 2018.