Monthly Archives: March 2015

Shippers Turn to Intermodal for Savings

ProsConsMode

Choosing the best transportation mode is a crucial step in shrinking time and cost of moving freight between a shipper and a point of purchase. There are pros and cons to each mode of transportation, depending on the type of freight being moved, and there is an optimal route for every shipment.

 Shippers are now turning to intermodal transport for their freight because of intermodal’s advantages. Some shippers are even locating or relocating their DC sites near railways for easy, cheap access to intermodal transport. If you’re unsure what the best method, or combination of methods, for your shipments are here are some pros and cons of each: 

1) Road 

The most basic and historical transportation mode.

Pros:

  • Broad and flexible road network enables point-to-point service and connects specific activities
  • Relatively small capital cost, especially on short distances
  • Quick implementation of new technologies into industry infrastructure
  • High competition creates low prices and many carrier options
  • High speed of vehicles enables same- or next-day delivery option

Cons:

  • Noise and environmental pollution
  • High probability of accidents and breakdowns
  • Growing driver shortage and stressful working conditions for drivers
  • Limited capacity due to size and weight restrictions imposed by government and technical limits
  • Congestion, often hard to forecast, which results in delivery delays
  • Probability of freight damage due to careless transportation that depends greatly on each carrier/driver liability

2) Railroad

Ideal transportation mode for bulky freight and long distances.

Pros:

  • Environmentally friendly (compared to other modes)
  • Long-distance routes are cost-effective
  • Strict timing schedule with minor congestion probability
  • Suitable for bulky freight and raw materials, carrying capacity is high and elastic
  • Safest form of transport, highly protected from bad weather impact

Cons:

  • Lack of flexibility due to limited routes that cannot be adjusted quickly and easily
  • Not widespread enough to provide full coverage across country
  • Cannot provide door-to-door delivery, so requires intermediate loading and unloading that costs lots of time and labor
  • Lack of competition and monopoly ownership due to huge costs of creating construction and maintenance

3) Air

The fastest yet most expensive type of transportation.

Pros:

  • Fast
  • Small possibility of freight damage due to airport handling and storing regulations
  • Ideal for perishable goods with strict expiration date
  • Often is used for quick 24-hour or 48-hour delivery, and additional costs are passed to consignee

Cons:

  • Capacity is small, resulting in high transportation costs
  • Unsuitable for vast majority of bulky and heavy freight types due to custom, security or capacity restrictions
  • Strictly limited routes and timetable
  • Additional costs caused by loading/unloading, handling, airport taxes and intermediate delivery
  • Environmental pollution and dependence on fuel prices

4) Ocean

Effective for large freight amounts of non-perishable goods and for enterprises within cities with water access.

Pros:

  • Less expensive than other modes, especially for large cargo volumes
  • Cost doesn’t fluctuate greatly depending on size and shape of cargo
  • High capacity lets shipper spread costs among other numerous shippers
  • Can service large amounts of bulky freight at once

Cons:

  • Inflexible routes and timetables
  • Very slow and not suitable for perishable goods or fast delivery
  • Limited number of ports
  • Possible delays due to bad weather

5) Intermodal

Intermodal transport can be effective for just about any large shipment.

Pros:

  • Secure and quick delivery thanks to standard container usage for all transportation modes
  • Combine benefits of different types to create best-suitable solution for specific type of freight and delivery
  • Less labor for handling of loading and unloading
  • Reduce air pollution and transportation costs

Cons:

  • Possible delays due to factors from each mode and loading/unloading setbacks; shipment cannot be time sensitive
  • Not suitable for small shipments
  • Sometimes, dock dues can be applied that increases total cost of transportation
  • Unable to provide consistent service level 

Demand for intermodal transportation is on the rise. Wal-Mart, Home Depot, and many other large companies have relocated their massive DC centers to be nearer intermodal hubs. As trucking capacity shrinks, shippers are trying to avoid the high prices of motor freight carriers. Intermodal transport has proved to be a valuable solution and will continue to grow in popularity. 

What Should I Read Next?

March Transportation News Round Up

 

We’ve rounded up the top 5 news stories from March that are impacting the transportation industry.

logistics-industry-professional

  • Delays from the Snowy Winter: More than 70% of the nation’s roads are in snowy regions. Winter weather is finally fading, but the snow storms caused major shipping delays.
  • West Coast Begins to Clear Ports: Congestion at the busiest West Coast seaports began to unwind after a February 20 resolution to a long labor dispute. Officials have declared it will take as long as 3 months to clear the backlog.
  • Pool Created to Tackle West Coast Shortage: 3 of the largest intermodal chassis owners said they have begun operating a pool at the nation’s 2 largest Western ports to improve trucking operations. While chassis use is being pooled, each of the company’s providing the equipment will set their own rates and terms.
  • Truck Market is Great, Besides Shortage: Truckload fleets are experiencing a truly great environment; good economy, high rates, low fuel prices. Except there is still a driver shortage, which is affecting everyone.
  • Smart Containers Coming: The industry’s first smart containers are coming. With this improved technology, a supply chain manager can learn in real-time the containers location, temperature, regulatory status and more. 

The EPAs “Green” Transportation Initiative

SmartWay-1

The SmartWay Transport Partnership, launched in 2004, is an innovative collaboration between the U.S. Environmental Protection Agency (EPA) and the freight industry, designed to reduce greenhouse gases, non-renewable resource consumption and transportation costs.

The program is an initiative to voluntarily reduce environmental impacts from freight transportation. Participating companies, with the help of SmartWay, use EPA-tested tools to assess their current freight operations and identify technologies and strategies to reduce their carbon emissions.

SmartWay partners demonstrate to customers, clients and investors that they are taking responsibility for their emissions.  They are committed to corporate responsibility, sustainable business practices and reducing their carbon footprint.

Since 2004, SmartWay Transport Partners have:

  • Saved $16.8 billion dollars in fuel costs
  • Saved 120.7 million barrels of oil (the equivalent of taking over 10 million cars off the road for an entire year)
  • Reduced CO2 emissions by 51.6 million metric tons
  • Reduced NOx emissions by 738,000 tons
  • Eliminated 37,000 tons of particulate matter

Carriers, shippers and 3PLs have a lot to gain from joining the SmartWay Partnership.  Participants not only reduce their environmental impact, but save money on transportation while doing so.  Program-qualified tractor trailers can save between 2,000 and 4,000 gallons of diesel per year. 

Buyers and consumers are taking environmental impact into consideration when purchasing goods.  People notice when a company starts to get serious about “Green” initiatives, especially in a pollution-heavy industry like transportation.  A company that reduces their carbon footprint shows that they care about the community they are involved in and will take great lengths to satisfy customer desires. 

PLS contributes to SmartWay’s goal of reducing emissions of carbon dioxide, nitrogen oxides, particulate matter and non-renewable resource consumption. We accomplish this goal by working directly with our freight carriers to consistently improve their environmental performance.

We believe it is our social responsibility to help reduce transportation pollution by initiating conscientious practices with our business partners. It is our goal every day to help our customers achieve the most cost and fuel effective methods for moving their products.

Continue Reading, “Supply Chain Disruption – 3 Future Solutions”

The Secret to Meet Demand

DCAutomation

Seasonality affects almost all businesses. Supply production is rarely affected by seasonal factors, however demand for products is subject to the season’s fluctuation. Seasonality can be explained by philosophies, customs, weather and/or holidays.

Planning ahead to successfully meet demand means accounting for seasonality. Your supply chain must be ready for the projected surge and the inevitable fall of demand. Partnering with a 3PL is a great option for companies as they can find the necessary capacity at the right price for a shipper.

Conducting a freight bill analysis will evaluate your past/current transportation costs and identify ways to reduce inefficiencies and drive productivity.  A quality 3PL partner will run this analysis for you, and work with you to create a custom solution based on your business.  Outsourcing your supply chain management to a 3PL can provide strategic advantages such as:

Dependable Source

  • Large carrier network
  • Improve your bargaining power
  • Faster service, more control

Save Money and Time

  • Eliminate costs (warehouses, technologies, staff)
  • Lower risks
  • Improve time

Dedicated Account Team

  • Insight and visibility
  • Current technology and data
  • Advanced reporting

Balanced and Flexible

  • Transition between demand
  • Utilize capacity

Effective Optimization

  • Meet needs
  • Make adjustments
  • Find effective methods

 What to Read Next:

Why You Need to Consider Expedited Shipping

Expedited

Expedited shipping is the process of transferring freight faster than normal. Whether your freight is perishable or you’re on a time schedule to meet customer expectations, expedited shipping service has the ability to guarantee delivery requirements.

For time-sensitive or rushed deliveries, expedited services offer shippers customized solutions that support their timeline through guaranteed delivery. Transit speed, reduced touch points, improved visibility are just a few benefits of expedited shipping. Expedited shipping is the preferred method for shippers who have just-in-time inventory or lean inventory strategies.

Expedited service is critical for shippers with time sensitive business offers or products. Whether the cargo is specific to a season or relevant to a recent sporting event; timelines are tight, and demand will fade as the offer or event gets stale.

It’s assumed that fresh and/or fragile items are the only products that need to be distributed in a time sensitive manner. However, there are many products that require expedited delivery, including technology items, clothing and accessories, energy, manufacturing materials, books and many other items.  

Arguably, the biggest benefit of expedited shipping is the guaranteed delivery time. Shippers have precise schedules, and the guaranteed delivery outweighs the price (and risk) of poor customer service. Shippers gain knowledge of shipment metrics through advanced technology. Real-time status notifications enhance visibility. Another major benefit of expedited shipping is that it typically has fewer touch points, so there are fewer chances for damaged goods.

This fast transport method is no longer viewed as a quick fix to a supply chain error nor is it seen as an answer reserved for only the most time-sensitive deliveries. Many shippers use expedited transportation service as part of the company’s supply chain strategy. Expedited shipping lowers inventory cost and adds scheduling flexibility.

Shippers expect freight status visibility to improve supply chain success. Visibility is especially valuable for inventory, location of goods, lead time, shipment notifications and customer satisfaction.

At PLS, we offer less-than-truckload (LTL) expedited service. We optimize our carrier network to fit the distinct needs of your freight and business. We can help you find the right carrier at the right price to ensure that your expedited delivery is made on time, every time.

For more information, download our ebook, Are You Using Expedited Shippin gthe Right Way? How to Reduce Inventory and Improve Customer Experiences.

 

Sources:

http://www.inboundlogistics.com/cms/article/expedited-transport-its-all-in-the-timing/

5 Best Practices for Supply Chain Management Strategies

Importance-of-logistics-management

Implementing an operative supply chain management strategy is essential to efficiently transfer products throughout your supply chain. Customers demand their products quickly, and if your supply chain is inefficient shippers won’t be able to fulfill demand. Having a proper SCM strategy can complement and support business strategy, drive down operational costs, maximize efficiencies, strengthen supply chain partnerships, and provide clear purpose to achieve goals.

Here are 5 best practices for creating a SCM strategy:

  1. Align Supply Chain Responsibilities: In many companies, decision making power is divided which slows down operations. When this power is divided among so many people, each individual loses control of the supply chain and a high amount of communication is needed to make any decision quickly and accurately. Often, communication is absent. To advance communications, executive management, like the CFO should oversee supply chain decisions. CFOs often have the potential to heavily influence decision making, but don’t take the opportunity. With executive leadership involved in the supply chain, he or she can help consolidate the power division that slows down decision making.
  2. Collaborate Internally and Externally: Internally, everyone should be on the same page and focused on the same goals. Real-time communication will help make supply chain decisions quicker and more accurate; it will also help mitigate supply chain disruptions. External collaboration is just as important. Having a trustworthy supply chain partner proves invaluable. Often, companies share technology and information if their supply chains are dependent on one another. For example, a manufacturer may implement a formal supplier management strategy in order to better collaborate with their supplier. In this way, both businesses benefit.
  3. Take Full Advantage of Technology: The right technology will speed up supply chain operations and maximize efficiencies. Find software that’s right for your company and has the features that are critical to your business. One of the main benefits of properly implementing technology is end-to-end supply chain visibility. You must be able to see into your operations processes before you can identify inefficiencies and implement changes. Once supply chain visibility is achieved, decisions can be made quickly and surprise disruptions can be avoided.
  4. Put Value Over Price: Providing a valuable service, rather than cutting costs at every point of the supply chain, will be better for long-term business goals. It may be difficult to get company leadership on board with this idea, but putting value over price will satisfy your customers, keep business flowing smoothly, and make you a reliable supply chain partner. In the long run, the value added will trump the initial cost savings.
  5. Take “Green” Initiatives Seriously: Consumers take environmental impact into consideration when purchasing goods. No matter what industry you’re in, if you take social responsibility seriously, suppliers and buyers will notice. Shippers, carriers and 3PLs can join a program sponsored by the EPA called the SmartWay Partnership. PLS Logistics is a member of this program and has been able to significantly reduce shippers’ and carriers’ carbon footprints, all while saving them money.

If your company needs assistance in improving supply chain management, reach out to PLS today. PLS has the experience, solutions, technology and network to help make your supply chain move more efficiently.

Download Logistics Management Best Practices whitepaper.

Managing Produce Shipments

Reefer

Refrigerated freight is a transportation method used when the cargo being shipped must be controlled by a defined temperature. Produce is one of the many products transported by a refrigerated trailer. Refrigerated, or reefer, transport should account for a trailer’s operating characteristics, the load temperature and transit temperature of the product.

Perishable foods are challenging to ship for several reasons; container equipment availability, dock scheduling, visibility and timeliness are just a few of the critical factors involved. The two biggest concerns when shipping produce are timeliness of delivery and regulated temperature. Since produce quality quickly depreciates, the trailer must remain at a predetermined temperature and deliveries must be made on time. If the transportation is delayed or the temperature does not remain within the desired setting, then the cargo is compromised.

Shipping produce doesn’t always require refrigerated equipment and cold temperatures. Trucks transporting perishables from warm climates to or through areas with freezing outdoor temperatures, might need to warm the trailer to avoid the produce freezing or chilling. Sensitive fruits and vegetables, such as apricots, avocados, eggplants, cucumbers, peaches and tomatoes must be handled with care and stored based on specific requirements. Most incidents involving produce occur because the shipment wasn’t delivered in a timely fashion, or because the temperature wasn’t controlled or maintained properly. For example, a banana will be damaged by a chill in just a few hours.

To safely ship produce, shippers must find a qualified refrigerated carrier. A reputable carrier can keep the integrity of the product through the shipping process. Shippers need a dependable carrier who can offer real-time notifications regarding temperature and location and detailed reports. Reports on crucial information like the arrival and departure times of products and dock schedules help shippers remain knowledgeable about their product. A TMS can help find data and pull reports that support shippers; a TMS monitors costs based on lane, mode and load, tracks and traces shipments. These reports reduce costs, increase efficiencies and optimize core business functions.

There is no room for error when shipping produce. Safety must be taken seriously to preserve the quality of the shipment. If you are interested in learning the recommended transport conditions, from temperature to humidity to highest freezing point, read the USDA’s document, “Protecting Perishable Goods.”

PLS pre-qualifies refrigerated shipping carriers and uses a simple, but powerful web-based transportation management system to optimize shipper-carrier relationships, monitor KPIs and track shipments. Our network of carriers spans across North America and our experts can help match you with the right carrier for your specific needs. 

Download PLS Logistics ebook “Are You Using Expedited Shipping the Right Way?”

Did You Know

In America, California harvests a majority of fruits and vegetables. The western state is responsible for the production of more than 90 percent of the broccoli grown, 99 percent of US-consumed artichokes, 97 percent of kiwis, 97 percent of plums and 95 percent of celery, among many others.

 

What to Read Next:

PLS Logistics Services Hires Dave Mabon as Chief Operating Officer

CRANBERRY TOWNSHIP, PA – March 11, 2015

PLS Logistics Services (“PLS”), a leading provider of technology enabled supply chain and freight brokerage services, today announced that Dave Mabon has joined the company as its Chief Operating Officer.

Mr. Mabon most recently served in a variety of executive leadership positions with GENCO, a North American logistics provider.  Previously, he directed sales and marketing for Kuehne + Nagel’s Contract Logistics business unit and served on their International Logistics Steering Committee.  Mr. Mabon started his logistics career with APL.

“Dave brings over 25 years of logistics leadership experience to PLS, with a strong track record of driving growth” says Greg Burns, Chairman, President and CEO of PLS Logistics Services. “I am pleased to welcome a seasoned supply chain executive to the PLS leadership team.  Dave will play a critical role in guiding our future growth and expansion plans.”

“I am excited to be joining PLS at a time when they are experiencing rapid growth and expansion. PLS’s unique scalable systems offering provides actionable data enabling customers to drive growth in challenging market conditions,” noted Mabon.

About PLS

PLS Logistics Services is a leading provider of logistics management, brokerage and technology services for shippers across all industries.  PLS handles millions of loads annually across all major freight modes: flatbed, van, LTL, rail, barge, air and ocean.  The PLS carrier network consists of over 15,000 trucking companies, Class-1 railroads and major barge companies.  To learn more, visit www.plslogistics.com or call (724) 814-5100.

Create Visibility through Reporting

Reporting

Customized reporting capabilities provide supply chain visibility and enable process improvements. If you are working with a 3PL, access to clear, concise, timely and customizable reports should be an essential element of your partnership.  Shippers should have the ability to filter, sort and manage their data in real time to make decisions and improvements.

Reports should include:

  • Cost Summary Information
    • Month-over-month data
    • Total cost breakout, monthly cost metrics, load/mile counts
  • Fuel Detail Reports
  • Light Load Detail and Cost
  • Days/Hours to Ship Detail
  • On Time Performance
  • Loading Time by Location
  • Auto Tender Percentage by Location
  • Lane Rate Deep Dives by Lane
    • With month-over-month data
  • Carrier Participation

In addition to these more detailed, frequent reports, your 3PL should offer executive reports.  These reports should include items such as an overall business report, shipment summary, top carrier metrics, core carrier compliance and safety reports based on tracking carrier incidents and detailing safety trends.

If your company is focused on distribution service, your reports should provide information on weight, state, zone and country. Shippers can also benefit from ancillary reports, which include summaries of accessorial charges, dim details and shipment consolidation. For tracking purposes, a 3PL partner should be able to run reports on delivery performance, time in transit and shipment exception detail.

At the end of the day, real time reporting enables organizations to make intelligent decisions based on their data.  Increased visibility translates into maximized efficiency and overall cost savings related to supply chain initiatives. 

Shippers that partner with PLS Logistics Services are able to take advantage of our team of internal experts and our cutting edge TMS, PLS PRO to pull a plethora of reports. This allows our customers to make real time decisions and increase visibility throughout their supply chain. 

Check out this infographic: Supply Chain Visibility

Continue Reading: 6 Key Benefits of Inbound Freight Management

Learn more about PLS’ reporting capabilities – download the ebook How Transportation Benefits from Big Data.

Why Fuel Surcharges Don’t Match Cheap Gas Prices

Gas

The cost of oil has been falling and so have gas prices; reaching lows that haven’t been seen in over a decade.  Even though diesel fuel hasn’t seen price drops like regular gasoline, carriers are still seeing a difference in their bottom line.  However, they are not profiting as you would expect. 

The downward trend of oil prices is expected to continue.  The Organization of the Petroleum Exporting Countries (OPEC) has decided not to restrict the amount of oil production, which will make oil readily available.  It takes several months for gas prices to reflect oil barrel prices.  As oil prices drop, gas prices can be expected to drop as well. Transportation companies see the benefits of low diesel prices, but probably not as much as you think.  A few carriers are dropping their fuel surcharge, but most are keeping theirs the same.

Carriers who are dropping their fuel surcharge aren’t seeing improved revenue.  Most of the savings are passed on to the consumer and the retailer.  However, carriers are enjoying a little benefit; usually, they would have to front money while fueling up until a company pays their bill.  With low gas prices, carriers feel less pressure at the pump, not having to worry about being in the red.

Most carriers choose against lowering the fuel surcharge to match the dropping price of oil and gas.  There are many reasons for this.

The government is constantly requiring carriers to invest in new fuel-efficient equipment.  This is great for the environment, but really strains trucking companies due to the high cost of such equipment.  Many carriers who haven’t dropped their fuel surcharge use their increased revenue to invest in new equipment.  The drop in diesel prices is expected to continue in the near future.  However, two to three years down the road prices are expected to rise again, so carriers need to invest in equipment while they have the capital.

Other carriers are using their increased revenue gained from fuel surcharges to increase driver wages or recruit new drivers.  In the past year, average pay in the transportation sector has increased 2.5 percent.  Carriers are trying to keep their drivers happy and on the road.  Some carriers are using the revenue to attract new, younger drivers.  Crete Carrier, based in Lincoln, Nebraska, is advertising a 13 percent pay increase, as well as a yearly salary of more than $68,000 for qualified drivers, in an effort to recruit new drivers.  

Even though these companies have not lowered their fuel surcharge, they are not seeing the profits you would expect.  Transportation is a competitive, expensive business and these carriers are utilizing the lower price of oil to invest in future success. 

Check this out: Should Fuel Surcharges Cost Me this Much? Infographic