Getting the Most from Logistics Partners
The success of your logistics outsourcing relationships depends on good 3PL management. That’s right, the things YOU, as the shipper, do or don’t do directly impact 3PL performance and the return you realize on outsourcing relationships.
Here are a few suggestions for getting the most from your 3PL relationships.
3PL management starts before you outsource
3PLs depend on data to accurately assess the logistics challenge and price the business. Unfortunately, many proposal requests lack the necessary operational detail to accurately price the business and determine the impact of recommended changes. Regardless of the time pressures you may be under, if you have not crunched the data it’s best to delay the proposal request until you have.
Establish the relationship
Once you’ve selected the right partner, it’s vital to create a foundation for success.
Specifically, nail down the following three things:
The 3PL warehousing and transportation activities you want your partner to perform
The operational performance you expect and exactly how that will be measured
The payment terms and how costs will be calculated
Leave any of these things unclear and you open the door to billing disputes and debates about services – absolute relationship killers.
Another sound 3PL management practice is to assign the right resources to manage the relationship. One of the biggest reasons that outsourcing relationships fail is a failure on the part of the outsourcing party to assign proper resources to manage the partner. While logistics outsourcing relieves you of certain day-to-day logistics execution tasks, it actually adds management requirements in other areas.
Drive breakthrough performance
To get the most from your 3PL, you must empower them and give them the context they need to contribute strategic thinking. That means sharing long-term business strategies.
Sure this requires a high degree of trust, but once shared this information can trigger insights and suggestions that can drive breakthrough performance. These strategic ideas have the potential to deliver far more financial impact than an incremental percentage point improvement on a particular operational metric.
For larger companies with numerous 3PL partners, it’s becoming increasingly common for the shipper to convene a meeting that brings all partners together to share ideas and best practices that could be implemented across the entire network. While some 3PLs may feel uncomfortable with this, the enlightened ones will see no problem sharing their own client-specific innovations with competitors. It sends a clear message that the interest of the customer comes first.
Common Logistics Management Problems Solved By A TMS
As a business leader, one of the more pressing questions you may have about your logistics is how to get the most out of the resources you allocate to managing your supply chain. A transportation management system would be the answer. These systems update and customize technology that links all supply chain functions to add value to the entire operation and provide you with full visibility. If you’re not happy with the way you currently handle things, or if you see gaps in shipping processes or auditing that desperately need improvement, your best bet is to outsource logistics management by partnering with a third-party logistics provider (3PL) that brings with it a modern TMS.
Maintaining Accurate Shipment Tracking
With user-friendly modules at the ready regardless of carrier selection, customer service and tracking teams can have full access to automated and up-to-date shipment information through a TMS. Because customer service will be able to give immediate status updates to customers over the phone, this system will help improve overall customer satisfaction and business perception. A TMS will serve as an extension of all company service teams, as electronically uploaded files are at the ready for financial and management personnel as well as clients and other added users.
Reducing Freight Spend and Internal Resources
Large transportation costs and additional staffing can directly compromise real growth for many companies, but bringing in software that helps to streamline the supply chain can greatly reduce these extra expenses. A capable customer service software such as a TMS will prevent the need for hiring additional staff that would have been needed to get the job done. Carrier rates won’t be a surprise, as the TMS will ease selection processes and help you keep track of critical documents and bills.
A state-of-the-art TMS that integrates with regular company operations will clean up your supply chain and a logistics solution provider that offers continual product updates and training will guarantee that you’re always able to have complete control over your logistics.
Future 3PL Factors to Consider
A growing number of companies are starting to rely on 3PL services to handle their cargo. For example, a majority of companies in the computer industry rely on 3PLs. The industry has changed considerably since even as close as ten years ago. Now, new factors such as sustainability, new regulations, and rapidly advancing technologies are once again changing the relationship between clients and logistics companies.
The new Compliance, Safety, Accountability (CSA) program made by the Federal Motor Carrier Safety Administration has made the recruitment and training of professional drivers, along with maintenance, more complicated. Many providers are fighting against the CSA, citing unfair regulations created from the safety measurement systems that come from the program.
There are many factors that are increasing supply chain complexity in slowing down the growth of the global 3PL market. Providers of these services need to expand services or find way to streamline the costs involved in the process. This in turn will enable more businesses to move their supply chain function to 3rd party logistics companies, and continue the positive trends that are happening today.
4 Ways a 3PL Can Give You a Competitive Advantage
1. Strengthening your customer service department
Instantly access tracking information and images of BOLs
Instantly quote transportation costs
Satisfy customers with answers on transportation needs on the first call
2. Increasing productivity in shipping/receiving
A single platform can instantly quote transportation costs, schedule shipments with full documentation creation, tracking, and claim status
Report on inbound freight delivery to ensure proper planning of personnel
Ensure the correct NMFC class is chosen every time
Access easy density calculation built into the system
3. Improving efficiencies in your finance department
Analytical tools will allow instant access and visibility to invoice data for planning and forecasting purposes
Create actionable objectives using reports and data
4. Securing new business
Increase customer focus by providing automatic delivery status updates via email or text
Gain easy access to images of your Bill of Lading and Delivery Receipts
Demonstrate your organization is advanced in technology and ready to serve
Impact of E-Commerce on the Industry
New Logistics Technology
The traditional warehouse model is already in place to handle unpredictability, but with these newer systems and ideas being introduced, it may eliminate that unpredictable factor. Different techniques and inventions have aided in organization, overall productivity, accuracy, and efficiency.
Changes In Volume That are Less Predictable
Intake patterns were more or less predictable and, aside from holiday rushes, and tended to remain relatively stable, peaking and dropping when expected, throughout the year. Thanks to this predictability, warehouses could usually plan on any advance adaptations necessary. But unpredictable buying patterns have sprung up with consumers getting goods shipped directly to their homes. Rapid adaptations are a necessity. These fresh technologies and strategies are developed in order to help the efficiency of the warehouse.
Different transactions online result in needing more efficiency and organization. With these different technologies and strategies, and the application of them, warehousing will continue to be efficient, even when it is unpredictable.
Highway Trust Fund
What is the Highway Trust Fund?
The Highway Trust Act is a transportation fund in the United States which receives money from a federal fuel tax of 18.4 cents per gallon on gasoline and 24.4 cents per gallon of diesel fuel and related excise taxes. This act holds two accounts to budget the money to. One of these accounts is directed towards road construction, care, and other projects, the second is for mass transit. The original creation of this act was to fund the international highway system, by taxing small increments per gallon of gasoline. The tax would rise however, for diesel fuel, being it is more expensive. in 1982, the passing of the Surface Transportation Assistance Act prompted the sitting 4 cents tax to 9 cents, while also taking one of those to put into the mass transit account. When President Clinton took office, the tax was raised again to 18.4 cents, adding another 2.5 cents to both funds. Since the raise, there has been no intent in raising the tax any higher to this day.
What Will Transportation Look Like in 25 Years?
Trucking in the United States has become a big business over the years. As a result, there are countless companies that are looking to trucking and logistics for future opportunities. Companies such as Uber, Samsung, and even Amazon are joining the mix, trying to create its own form of the transportation industry. These companies that created its own technological revolution in its field, leave a feeling that one may happen in this industry as well. This leaves us with the question of what the transportation industry will look like years out? What major changes will there be?
A large focus from many other companies is automated driving, or cars that drive for you. No driver on the gas, no driver to steer the wheel, nothing. Just a vehicle driving only by itself to the destination set. Many investors see this as a thing of the future, and heavily push these ideas to producers. These heavy investors see the automated vehicle as an efficient and safe product that can do two things, have shipping quicker and exact as well as prevent anymore automotive accidents on the freeway.
Theoretically, this all makes sense. No collisions, no misunderstandings, just throw it on the back of the truck and let it ride over there without a problem. However, there is many issues that come with the idea of the "Automatic Car." For starter, its not street legal, so companies do not have any reason to start developing these vehicles, for the sole purpose of them not even being usable. Not only just the legality of it, but what about the technological mishaps? What happens if this car just decides to wire out and break down in the middle of the road? What happens if YOUR truck which is automated breaks down, gets hit, how do you cover for these freight damages? The risks outweigh the rewards by significant amounts at this time.
So to be able to predict this far ahead is just not plausible. Of course, just like in every 20 year increment, technology will advance, there is no denying it. The real question is whether or not that it will be impactful to our industry. If it is, is it impactful for the better? Or will it be for the worse?
Why Do You Need a Freight Broker?
Why do you need a freight broker ?
You need a freight broker to help bridge your gap from what you dont know to what you do know. Good freight brokers allow fill the gaps you have in your shipping needs for your vendors and customers. The help inform you of special requirements need, best carriers to use, and best routes to ship just to name a few examples
What Really is a Freight Forwarder?
What really is a Freight Forwarder
A Freight Forwarder may be defined as a multi-function agent/operator who undertakes to handle the movement of goods from point to point on behalf of the cargo owner. In more simpler terms, we are the guys who take what you have where it needs to go EFFICIENTLY. The big emphasis on the word efficiently, we never want to draw your time out for the sake of our business as well. We strive to find the right relationship with our customer to where when you need something moved last minute, we are there for you!
We always try to convey all of our information about your cargo to you as we do move it as well, especially with any problems that may occur such as time constraints. Anything that we can do to protect your cargo while it goes from one place to the other, we put all our effort into making sure it gets to the location.
Helpful Advice for Shippers, Old and New
What is some advice for a 1st time shipper? What can I do to ensure my customers are happy?
Well first, make sure you understand that Freight Forwarding is both an art and a science.
Many companies and handlers are involved in moving your cargo. Here are just a few possible examples: Trucking companies outbound, Crane Operations transferring container from truck to train, and train to ship. That’s just to get the container to the ship, then the reverse happens on the other side…it’s a REALLY rough ride, even in good weather. Not only just the loading, but making sure getting everything to where it needs to be on time as well. Everyday we plan accordingly to traffic, as well as the times alternate routes may take, so we always have a couple back up plans if something unexpected happens.
Always be organized at your best as well, because once something is misplaced or goes missing, many other problems stem off of this. This principle applies to your cargo as well, making sure its accessible at all times and making sure you're making the most out of the space in you location.
What or How can I prevent delays?
Firstly, make sure your supplier, or if you are the supplier for an export shipment, creates all of the necessary documents correctly (packing lists, commercial invoice, original bill of lading, etc) and in a timely fashion, so that all documents are provided with the necessary banks and sent to you or your consignee on the bill of lading at least 1 week before cargo arrives at the destination so that everything can be processed through customs ahead of schedule and freight can be paid along with presentation of the original bill of lading. What we try to do for our truck drivers is always have back up plans just incase an accident happens on the freeway and causes a pileup or if their is less-than-ideal weather. These precautions can help establish different customers and a positive reputation.
What is Your Plan B?
What are other obstacles you may face when it comes to moving freight? For example, When Hurricane Harvey flooded the ports in southeastern Texas. What are other obstacles besides the weather?
There is an infinite amount of reasons that could stop a deliver to be held back from business, but focusing on a couple, one would definitely be residential neighborhoods. Often enough, many regular residents are not too fond of living anywhere near large warehouses, one for decreasing property value, and two the trucks going in and out causes large traffic problems in their neighborhoods. Many freight companies have decided to follow in the communities best interests and stay at a distance, but unfortunately it sometimes just doesn't end up picture perfect.
Often enough as regular drivers, you tend to notice an increase in fuel prices, this also can be a large hurdle as well. Since most companies have a fuel charge as well. when the price of gas goes up, so does that charge, thus making business harder to find for a lower price. Almost never does the industry get a chance to control these factors, which stunts its growth.
Well, how do you even begin to adapt to these changes? Some of these can't be that foreseen, right?
Well often we try to do everything as efficiently as possible while also following the unspoken guidelines, but if worse comes to worse, our company will always find a way. If we have your cargo on our truck and traffic is at a standstill, we will get that freight to your dock at the time you need it, one way or another. A lot of times it could just be adaption to the surroundings, but we try to plan out in advance at the start of the day whats going to happen and when, then obviously how to react to it.
Power Down
Hurricane Irma ripped through Florida this past Sunday, leaving a whole lot of destruction behind it. Not only taking away just houses, but extensive damages to condominiums, vehicles, and businesses alike. With winds reaching 185 miles per hour, things like this are expected. Although, for the cities that weren't hit as hard with brunt force winds, there were other things besides the rain. These powerful winds obviously blow over objects such as trees and power poles, causing power to be very very limited. So limited in fact, that about three-quarters of the entire state of Florida was left without power as of Monday afternoon. The math shows that out of the 20.6 million people living in Florida, about 15 million of them have lost power since Irma struck the sunshine state. Not only Florida, but Georgia also had a significant amount of power outages from the star, creeping up to 1.5 million residents with no power at all. Slowly closing in on a week, crews are starting to finally be able to make progress, however the sheer damage its left is much worse then originally thought.. Places like blocked roads cause more problems then not with these linemen, causing even longer delays. With these guys working upwards of 12 hour days, hopefully the joint efforts between them and cleaning crews can create a quicker process then expected to.
Reconstruction from the Hard-Hitting Hurricanes
Irma and Harvey are finally gone, and the damage is being evaluated. Over three states, hurricanes Harvey and Irma have been beyond damaging, not just emotionally, but economically as well. Harvey brought Texas levels of rain never seen, as well as the intense flooding that no one expected to occur. If the crazy amounts of water didn't do enough damage, the wind speeds did. At landfall, Harvey brought 130 mile per hour winds, taking anything out in its path. While that was creating tragedy on the gulf, over in the Atlantic, Irma was forming. Topping off to being over 400 miles wide, larger then the length from the Georgia border to the very end of Florida. Breaching the category 5 marker of over 150 mile per hour winds, this storm brought havoc to all of Florida and most surrounding states. Now it is still too early exactly to tell how much these are going to cost, but estimates show upwards of $200 billion dollars in damages. That price tag is comparable to Katrina, which did over $200 billion by itself. These recovery efforts have been sped up thankfully from volunteers in the community as well as other government aids. Although the economic fix is possible, many others will take a lot of time to become emotionally re-established from the problems they are, and will have to face, later on during the reconstruction process.
Irma is Gone, What's Next?
Irma has finally faded out from hurricane status to a tropical depression, and damages are being surveyed, but how bad really is it? What was all affected?
Puerto Rico
Irma had a direct path into Puerto Rico at its peak performance. Totally bulldozing everything in its path, Irma completely disregarded people and places. St. Marten, Anguilla, and Barbuda bared the brunt of the storm, being completely torn apart by 150mph winds and rain. These repairs will take loads of time, as well as the economic impact and the emotional toll from the loss of life.
Florida
The Miami-Dade area was hit with similar winds as Puerto Rico, and devastated more of Florida then just there. This left over 15 million people, out of the 20 million in Florida, without any power. It has been a couple days so far, and many people are still looking at possible weeks before they see the lights back on.
Elite has taken on these conditions and are back on the road, making sure we get everything you need where it needs to be. Make sure you thank and recognize the power line workers on getting power back up for everyone.
Irma's Impacts, What is Going to Happen?
With this nasty storm coming through, this puts lots of people and places at a halt. Although the affects aren't known now, here is some possible issues that could arise from the dangerous formed storm.
Georgia Ports Authority
The Port of Savannah and the Port of Brunswick are facing a large possibility of feet of rain, due to being on the coast and in the direction of Irma. Not many good situations can come out of the location of these ports, besides the water staying in the ocean and not flooding the docks filled with cargo.
Airports
The airports located in Miami, Orlando, and Ft. Lauderdale have not been closed as of yet, but that could change very quickly as the storm approaches. Once the storm makes landfall, one could assume that the flying conditions would not be optimal for safe flights and would eventually close for the remainder of the storm.
Not only does it affect Florida, but also surrounding states that are hit by this hurricane of crazy proportions. Atlanta and Charleston airports could be in for quite the treat with the amounts of rain projected to hit the proceeding states as well.
This Hurricane is definitely set to be a big one, but wishful thinking shows it wont be THE big one.
Hurricane Irma
Just after the country is starting to recover from one of the nastiest hurricanes the gulf has seen in a long while, there has been more brewing on the east side. Over on the East coast, many know, that Hurricane Irma has rose and is not just you average hurricane. Irma has reached speeds already of 185 miles per hour, otherwise known as a Category 5 hurricane. This hurricane, as many do, is headed straight for landfall as early as today, already leading havoc through small tropical countries throughout the Caribbean. This storm is predicted to move all the way up the Atlantic coast as far as North Carolina, which can be deadly for people and for the industry itself.
The storm is predicted to hit Florida coast lines as a category 4, so not only does this bring strong winds, but also flooding, just like Houston. These floods can prevent any trucks moving through roads. If this storm follows how its predicted, a very, very large portion of Florida, and the rest of the industry could be in a very very bad situation.
The flooding of Florida would just be another devastating impact to the already recovering US. The Harvey reliefs were already running thin, now we can only imagine how it is about to look having to help this go-around. Hopefully this storm doesn't grow anymore, and hopefully can hold back some power we are already seeing once it hits land.
Harvey Has Moved On, What's Next?
Now that Hurricane Harvey has moved on and out, what comes next? How do us as logistics company respond back with whats going on?
LTL Carriers
There is soon to be massive buildup of cargo that was put on hold because of this, so companies need to start having plans and ideas set up to be able to ship these items correctly. This hurricane doesn't just affect southeastern Texas or Texas itself, this affects every state that has any of their own cargo in or out of it.
Truckload
Operations are obviously going to be impacted because of the large amounts of rainfall. This is going to delay pickups and deliveries across the state. Some of these cities include the hard-hit Beaumont and Houston, as well as Corpus Christi and San Antonio. No one has a stable time frame as to when these will be back up, because nobody can get a good estimate as to when the flood waters will wash away.
With these hurricane remains still taking punches into the country, there is no stable time frame to say when the waters will go, but the industry will be down as long as the water levels stay up.