The year 2018 was challenging for shippers in all industries, including chemical, due to capacity constraints in the marketplace that inflated costs. The convergence of high costs, limited capacity, emphasis on timely delivery and demand for greater supply chain visibility, made it a problematic year for shippers and carriers alike. So, what happens after a year like that?Continue reading “5 transportation Procurement & Benchmarking Trends to Keep Costs Down in 2019”
A freight broker is very different from a third-party logistics (3PL) provider that offers freight brokerage services. In more ways than one, a 3PL can offer a speedier and more reliable route for solving urgent shipping issues than a broker and support you through a trusted network of high-quality carriers. Understanding the difference between 3PL freight brokerage services and freight broker services will help you make a more educated choice when you need something shipped fast.Continue reading “The 3PL Freight Brokerage Basics”
Small and large trucking companies find themselves in a changing industrial, political and economic climate that’s having adverse effects on overall performance and bottom-line earnings. Let’s explore the particulars of the issue, then learn how to combat the challenges with a single decision.
- An aging workforce and a high turnover rate have led to a severe driver shortage. The problem won’t be easily solved as low national unemployment makes replacement hires difficult, while an aging workforce means the problem will only intensify.
- Even with fewer workers, carriers still have to do more work: the ELD Mandate and the Food Modernization Safety Act have increased regulations and liabilities, leading to a drop in productivity and distance traveled.
- And even though these challenges demand increased spend, the price of doing business is already skyrocketing. A spike in insurance has created anywhere between a five to double-digit cost increase for carriers, and the price of fuel has increased by 50 percent since 2016.1
- Despite these challenges, consumers expect superior service, demanding delivery transparency and refusing to pay extra for anything less than two-day shipping, while the increasing cost of technology demands greater spend overall.
This series of challenges can seem like an impossible knot to untie. Trying to solve one issue might only make another issue worse. But it’s possible to meet all these challenges with a single decision—partnering with a 3PL.
A 3PL provides the solution by efficiently and comprehensively tackling these challenges. With a 3PL, trucking companies benefit from
- enhanced scalability
- next-level technology
- greater access to resources
- reinforced financial stability
- increased safety
To find out how a 3PL clears away the obstacles facing modern carriers, review the infographic, Carrier Roadblocks and Ways to Bypass the Barriers.
The economy, the weather, new industry regulations—it seems as though today’s shippers have had everything going against them, including nature itself, as they tried to navigate 2017 and move on to see success this year. And these issues have only compounded to cause a truck capacity shortage that has caused even more damage to shippers’ bottom lines with effects that continue to impact business.
So where has the capacity crunch come from and how can shippers take steps now to come out on top as we enter 2019? A steadily climbing economy, increasing holiday sales, colder temperatures, an aging driver force and the introduction and enforcement of the Electronic Logging Device (ELD) Mandate have all led to a shortage of drivers and a loss in trucking capacity, which together make shippers unable to effectively meet the increased demand for their services and effectively bleed into other aspects of the logistics industry. Shippers can start to address these changes by working to strengthen their relationships with carriers, by obtaining private or dedicated fleets for captive, reliable capacity and by converting truck shipments to other modes of transportation, such as intermodal transportation or rail. It’s also a smart idea to start tapping into the resources of 3PL carrier networks to gain access to more carriers and better rates.
The infographic below provides a great overview of the main causes and tangible effects of the capacity crunch hitting shippers in 2018 and helps reframe the situation with more details on the four ways shippers can take action to protect their bottom line in the years to come. If your organization is taking a bit hit from these market forces, take time to consider the four strategies you can employ to fight the capacity crunch and invest in your long-term success.
Are you interested in chatting more about capacity crunch or capacity management services? Contact CLX Logistics today to learn how our vast carrier network can alleviate your capacity issues.
CLX Logistics is pleased to announce that Smile Train, an international children’s charity that provides corrective surgery for children with cleft lips and palates, was selected to receive its $2,500 donation.
The contribution comes after the Company’s holiday-initiative that engaged community members to vote for a receiving organization. Nominated non-profits included Smile Train, Doctors Without Borders, Wounded Warriors, Penn State IFC/Panehlleneic Dance Marathon, Kencrest and Rafiki Kids and Ministry.
As the winning organization, Smile Train will undoubtedly put the donation to good use as $1,000 can provide cleft surgery to four children while fifty dollars can cover the cost of an overnight hospital stay.
CLX Logistics thanks all participants and looks forward to the aid this will offer to multiple children.
In 2015, trucks were responsible for transporting 64% of the tons and 69% of the value in the United States, according to a federal report. Considering that a majority of our society’s goods are transported this way, it’s safe to say that trucking is an essential part of many businesses’ supply chains.
To ensure the safe, timely and cost-effective delivery of goods – from chemicals to industrial products to automobiles – consider conducting a comprehensive review of your freight management process.
To get started, click to download our infographic which defines the six core values or key performance indicators (KPIs) that can help guide the assessment of your freight management performance:
- Freight costs
- Efficiency & productivity
- Route guide compliance
Next, once you’ve identified the right KPI from each of the categories, be sure to incorporate them into your daily business routine. Adjust your reporting to reflect more valuable measurements, like an analysis of service defects, carrier compliance and shipping transit times.
Lastly, use these insights to diagnose your areas of improvement. Is your customer satisfaction suffering? Are you spending too much time or money on a certain task or criteria?
The solution may be incorporating Software as a Service (SaaS) into your business model. This approach is not a new one. In fact, “vertical-specific software represented the largest segment of the worldwide software market in 2014 with $114 billion in revenues,” according to a Gartner report.
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Moving forward, 85% of small business executives are willing to spend more on business software solutions in the next five years – will you be one of them?
If you’re interested in learning more about how CLX Logistics can cut costs for you, view the Helly Hansen freight management case study here.
By Cosmas Hoefnagels for Talking Logistics
As digitization continues to modify the global supply chain landscape, its unprecedented data sources and solutions will lead to not only the demise of disparate information systems, but to the rise of true, end-to-end, supply chain visibility. For suppliers and mid- to large-sized companies, supply chain visibility serves as the foundation for strategic decisions and tactical improvements across the entire transportation network. It is through the establishment of supply chain visibility that supply chain insights, outside the four walls, will be garnered and leveraged as actionable data that supports supply chain optimization.
Today, companies have varied interpretations of “visibility,” largely due to evolving business demands and globalization trends. To an international 3PL in 2016 however, supply chain visibility (SVC) is known as the capability to monitor and register movements through a transportation network. This functionality then leads to supply chain insight which allows companies to learn about operational performance, strengths and weaknesses of a supply chain configuration, changes in supply or demand and customer service capabilities and cost.
While some industries have already achieved this ideal state of transparency, businesses in the chemical industry for example, that are better known for well-developed IT infrastructures or plant operations and less for the adoption of advanced supply chain concepts and optimization, are begetting one key question: how do we approach and achieve end-to-end supply chain visibility, and ultimately benefit from the network-wide insights it will offer? To these companies we say, follow these five steps.
1. Define Your Unique Corporate Goals and Objectives
Much like any other strategic initiative or company-wide process change, leadership must start with the end in mind. Consider the ways rich data collection can help shape your supply chain towards lower cost and optimal performance. The most common goals of supply chain visibility include the following, but as your company completes this exercise, be sure to include quantifiable metrics:
- Reduce business and supply chain risk
- Improve lead times and performance
- Identify shortage and quality problems along the supply chain
2. Augment and Set Visibility Tools In Place
The first tangible step towards achieving SCV is to get the basic visibility tools in place. These tools include sophisticated IT platforms such as enterprise resource planning (ERP) software; electronic data interchange (EDI); or transportation management systems (TMS). For companies with existing supply chain technology, it is likely not necessary to collect new data, but to take a fresh look into a data warehouse through unused add-on and field functionalities. For international companies with multiple locations or scarce technology, it is often a best practice to seek the expertise of an experienced 3PL provider to recommend and integrate the ideal platform into your supply chain.
3. Track, Trace and Collect Data from Key Partners
Configure your visibility tools to establish data collection among key partners, such as suppliers, service providers, contract manufacturers and customers – all of which are focused namely on supply chain logistics functions. As data is collected from these primary and secondary parties, be sure to also integrate it with your global track and trace strategies to deliver cross-functional insights that can deliver return-on-investment.
4. Analyze Performance and Manage Expectations
With your data collection and visibility needs aligned, your company should leverage dashboards and scoreboards to not only monitor KPIs, but the bigger picture which includes enterprise-wide and outside the four walls workflows. For example, leverage your technology to track workflow events from purchase order to fulfillment and provide access to people beyond the primary addressees, such as trading partners and suppliers. This expanded accessibility is the key to fostering outside the four walls visibility, allowing data to be analyzed from myriad perspectives. The outcomes of knowledge-sharing at this level will strengthen relationships, drive new applications, improve contract negotiations, mitigate bottlenecks and uncover additional, unforeseen improvement areas.
5. Optimize from End-to-End with Business Intelligence
Upon analyzing the performance of your supply chain against different perspectives, your company will gain usable intelligence to improve basic operational measures and develop alternative supply chain strategies. This actionable data can be used to not only anticipate changes to supply and demand, but to remodel the supply chain and calculate alternative configurations and delivery networks, including inbound shipments and consolidation opportunities. Furthermore, once a well-fitted information system has been established, it is time to develop and adhere to regular evaluations and reviews to ensure continuous improvement and optimization is firing, and integrating, on all cylinders.
In a recent Kewill survey, more than one-third of organizations indicated they are planning to broaden workflow visibility outside the four walls. With almost half of the organizations surveyed seeking greater visibility and insight, it is palpable that digitization is not just challenging businesses to progress, but inspiring companies to adopt alternative approaches to supply chain optimization. So, while leaders may “start with the end in mind” to set their organization up for success, there are just as many organizations discussing the benefits of “first things first”— and that is supply chain visibility.
By Walt Heil for Talking Logistics
For the last couple of decades transportation management systems have revolutionized supply chains, helping companies streamline their logistics processes, achieve greater visibility into their operations and save significant dollars on transportation.
But even as more and more businesses get wise to the advantages of a TMS, many large, multi-national corporations have remained on the sidelines, unwilling to believe in the existence of a truly global TMS that could meet the needs of complex, widespread companies. Unfortunately some of this doubt that still pervades the marketplace today stems from outdated notions about the on-premises deployment models of yore – not the cloud-based systems that are growing in popularity and now make up sizable chunk of the market.
So allow us to play “Mythbusters” and shatter some of these long-held stereotypes about global TMS implementations.
Myth #1 – Deploying a TMS on a wide scale is too slow and too costly
There’s a perception among large multi-national corporations that there isn’t a TMS in the marketplace that they could get set up within a workable timeline and for a reasonable cost. And it’s hard to find supply chain managers with the moxie to go to their senior leadership and say, “We want to purchase a global TMS, but it’s going to take a couple of years to roll out and a few more after that to realize a return on investment.”
But that kind of slow, years-long ROI was based on the traditional delivery model of an on-premises TMS with perpetual licensing, where you have to buy all the hardware and invest in capacity and serious IT support – and then undertake a complex configuration process. Those days are over. There are alternatives out there today that take advantage of the Cloud and software-as-a-service [SaaS] models to deliver a quick implementation and tangible results in a compressed, easily digestible timeframe [12-18 months].
Myth #2 – TMS providers don’t offer a truly global solution.
Until recently SaaS-based TMS providers struggled to deliver a truly global offering. A lot of the issues centered around localization, which isn’t easy. You go from Europe to the Americas to Latin America to APAC with your transportation needs and there are all sorts of very specific requirements, whether tactical, operational or strategic. But we’ve entered an era where some SaaS providers are offering solutions that satisfy most of those localization requirements.
The biggest catalyst for global TMS use comes from companies hungry to expand their business analytics and understand their costs, how they’re touching their customers, and how they’re interacting with their suppliers. This simply can’t be done if you’re just taking a regional approach. There’s no way to meld different data streams from different systems in different parts of the world into a single platform and get consumable information out the other end.
But with a global TMS on a SaaS platform, you can connect your procurement relationships with suppliers and the costs all the way through your network and your customers – and then tie that data back to a single platform to get real business intelligence with a global perspective. That’s the big win. That’s where companies are getting really excited because then they can take a much closer, harder look at where they can drive costs out of their supply chain and where their inefficiencies are.
Myth #3 – If you want to go global with a TMS, you have to move everything in-house.
The myth here is that if you want to roll out a TMS that works worldwide, you have to take on all the transportation operations yourself. And it’s simply not true. If you’re outsourcing to third party logistics providers in certain markets, those providers can interact with a multi-tenant, cloud-based TMS just like a directly contracted trading partner can. There’s really no difference. As long as you can get the data from that 3PL into the platform and it can be consumed in the same way as data from a directly contracted carrier or an NVO can be, then there’s really no difference. This is absolutely one of the biggest myths and probably one of the biggest reasons why companies have been reluctant to undertake a global approach to transportation.
Beyond helping improve your supply chain, a TMS can serve as a powerful business tool. You just have to get past some of the myths about TMS deployments that have cropped up over the years. If you are looking at a TMS to help make your logistics operations more efficient, here are three key recommendations to consider.
- Recognize that there is now a reasonable way to deploy a TMS on a global scale – This a relatively new development over the last couple of years. Many companies looked at rolling out a global TMS years ago but came to the conclusion that it was too risky, too costly. Not anymore. You need to understand that, thanks to the Cloud, the global TMS landscape has changed for good and it’s now possible to scale easily and cost-effectively on a worldwide basis.
- Know what your core objectives and goals are. You don’t have to roll out everything at once. A TMS can be a gradual process. The key is get that connectivity established with your carriers or third party providers. You don’t have to rip the band aid off right away. You can approach this intelligently with the intention of keeping risk to a minimum via a SaaS-based system.
- Consider the bigger picture. Often companies put together a strategy based on localized, tactical objectives. They want to automate these functions here or they want better load planning or carrier selection in a particular market. But you need to think about the bigger picture. It’s a global TMS platform, after all. So you need to consider how valuable it would be to the company as a whole to have end-to-end transportation data all the way down to the SKU level. What does that mean to your company? What type of benefits are you going to be able get from that type of data? What does it mean to finance? What does it mean to operations? That’s the kind of information that can influence a company’s decision on going into a market, staying in a market, where to source inventory from, which suppliers to work with, etc. So don’t look at the decision to buy a TMS in a siloed, tactical way. Look at it more strategically from a higher level, and examine how those benefits might translate to all the other stakeholders in the business, not just transportation.
As Vice President, Multimodal Transportation Solutions at Kewill, Walt Heil brings over 20 years of experience in supply chain and transportation management operations, sales and sales leadership. Prior to Kewill, Walter led the worldwide commercial efforts for the IBM Sterling TMS solution, providing strategy and executive leadership for IBM’s global supply chain execution portfolio. Walt has managed several sales organizations and led Sterling’s supply chain execution strategy for the North American manufacturing market. Walter holds a Bachelor of Arts degree from Michigan State University and attended The Detroit College of Law.
Mike Skinner, Vice President, CLX Logistics Technologies
Without question, one of the most significant game changing technologies in the past 12 months and looking forward at the next 18 months is TMS – to which you say “big deal” and I say, “true plug-and-play (SaaS/Cloud) global TMS integrated with global trade and customs execution”. Consider the following – all in one integrated solution:
- full functionality SaaS TMS operational in large scale in all major global regions
- a fully integrated global network of carriers across all modes
- seamless integration to global trade compliance
- automated customs documentation and filing; and
- all of this deployed via a SaaS/Cloud solution
80+% of your global carriers and freight forwarders are already in the network. Customs filing is already integrated with 90% of the countries you are shipping to. All of your denied party lists are already loaded for screening. This is true plug-and-play global TMS plus global trade and customs. See more at: http://www.supplychainopz.com/2016/01/supply-chain-technology.html#sthash.4yM7EMZM.dpuf
By Mike Skinner, Vice President, CLX Logistics
Let’s face it, IT (the information technology department) is either the enabler or the gate-keeper for all-too-many of our good ideas. Unfortunately, when it comes to prioritizing IT budgets and resourcing, Logistics all too often takes a back seat to Finance, Sales, Customer Service and Manufacturing – i.e. everybody else. As a result, logistics technology projects such as a Transportation Management System (TMS) are often underfunded and/or understaffed, and therefore prone to project delays and missed go-live dates – which results in greater difficulties delivering ROI.
So what is a logistics/supply chain manager to do in convincing senior management to give us some love – to prioritize and properly fund these projects? Let’s start with, why are logistics projects, say for instance the implementation of a world-class TMS, so important?
Why Specialized Transportation Solutions Matter
It’s pretty simple really: transportation costs account for 3-8 percent of your company’s total revenues, and transportation represents the first and final leg of your ever so important supply chain. Automating and optimizing transportation activities can drive huge savings. Providing predictability and visibility to shipments both inbound to manufacturing and outbound to customers can drive step changes in the effectiveness of the end-to-end supply chain. This has been proven over and over again by shippers of everything from yogurt to roof-top HVAC systems. These improvements matter …… a lot…… to nearly every department in your company, to your customers and to bottom lines!
The obstacles that companies tend to encounter in pursuing such improvements stem from the fact that logistics and transportation IT decisions get lumped in with decisions to buy and implement enterprise resource planning (ERP) software. ERP solutions from companies like SAP, Oracle and Microsoft offer transportation modules, which are typically sold at a steep discount as part of the whole ERP package. So in acquiring ERPs, companies are too quick to determine that Transportation’s needs will be met in the course of implementing the ERP. The problem with this thinking is that transportation activities are a lot more nuanced and complex than companies realize. During the ERP assessment and deployment, far too little time and consideration are given to addressing the complexities of actives such as: transportation contracts and rates, customer delivery requirements, load planning and optimization, carrier integration/connectivity, and freight cost accounting/settlement.
The result? Too little attention is paid to whether the ERP can actually address your company’s transportation requirements, and only the bare basics are developed and implemented. More often than not your company’s fancy new ERP might even make your job harder than it was before!
4 IT Challenges Logistics Organizations Face
Now that your company has spent many millions to implement the ERP, and your transportation requirements remain unmet, what next? Decisions to find and implement the right TMS are going to fall on you. And, although IT is a critical player in finding and deploying your TMS, IT is now entirely consumed with just keeping the ERP wheels turning for everyone else. You have some major hurdles to overcome, including:
- Resourcing: The needs of the logistics organization are often deemed lower priority than the needs of other departments, despite Transportation’s cost footprint and important touch points to customers and manufacturing.
- Business case development: Even though savings and service improvements are often significant, developing a baseline and ROI for IT projects is a complex challenge.
- Communication: Logistics managers often struggle to get senior management attention and to articulate their needs sufficiently to get attention on logistics projects.
- Capacity to staff projects: Logistics is often one of the hardest hit departments when it comes to head-count reductions, resulting in understaffed organizations that struggle to man improvement projects.
4 Steps to Getting the Buy-In You Need
So what can you do to better ensure that IT buys into the project and is held accountable for deadlines? And how can IT be made to feel like a strategic partner rather than a service provider? Here are a few ideas:
- Build a compelling ROI: Remember, over and over again shippers have delivered substantial savings from TMS implementations. Work with a TMS vendor, and engage your finance team to calculate and present the business case. TMS can pay for itself within the year, and pay large ongoing dividends.
- Engage IT early in the discussion: Once there is a business case, IT needs to be engaged in order to help identify a solution that will work. IT should be closely involved in evaluating the business case, scoping and designing the solution, and selecting the solution provider.
- Understand the project complexities: To implement a successful project, you need to be realistic about expectations and timelines. These projects are not easy – do not let technology vendors convince you otherwise. They need proper attention, professional project management, and sufficient resources in Logistics, Operations, Customer Service, Accounting, and IT.
- Demand sufficient funding and resourcing: Enough said.
The bottom line? Logistics IT projects matter. They drive big-time improvements. But they are not easy. Don’t let yours go underappreciated and underfunded.
Mike Skinner is the vice president of CLX Logistics. He is responsible for strategic development, marketing and deployment of CLX Logistics technology-based solutions and services. Skinner leverages his experience in supply-chain consulting, information systems and operations management to help shippers design and deploy world-class technology solutions in their efforts to reduce costs and improve service.