Monthly Archives: May 2015

Freight Management Today: How to Compete for Capacity

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The economy, the driver shortage, government regulations, and other factors are tightening capacity in the freight industry. As U.S. freight volume steadily increases, shippers must compete for capacity like never before.

Some transportation sectors, such as flatbed trucking, are stretched tighter than others. Experts predict there’s no telling when balance might be restored. Learn how to compete for capacity during this shortage. This whitepaper discusses:

  • How the capacity shortage came to be
  • The current state of the freight industry
  • Unique situation of metals manufacturers
  • 3 strategies shippers are using to get capacity
  • Analysis of the best strategy

Logistics Management for Mining Companies

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The logistics challenges of mining companies are unique and complex. Despite this, investments in logistics people, processes and systems often take a back seat to core investments around finding, extracting and processing minerals. Logistics costs as a percent of a mining company’s total operating costs may be small, but mining companies can uncover literally millions of dollars in hidden profits by reexamining how they address logistics challenges.

This white paper examines five freight-related challenges faced by mining companies and how 3PLs can help address them.

1st Annual Liquefied Natural Gas (LNG) Carrier Survey

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PLS has announced the results of its first annual survey of industrial freight carriers on the use of liquefied natural gas powered trucks.

To determine the potential of LNG vehicle use for industrial freight, PLS Logistics Services surveyed senior executives at 100 large industrial freight carriers.   PLS survey respondents are key decision makers at some of the largest industrial trucking companies in the U.S.

How to Overcome Shipping Disruptions in 7 Steps

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Troublesome congestion at West Coast ports in February is still affecting the US economy and expected to cost as much as 7 billion dollars to the retail industry this year. Although this was a major supply chain disruption, it’s not the only costly shipping disruption that has occurred recently. Obvious solutions like increased inventory and/or additional suppliers mighthelp, but these solutions negatively impact cost efficiency. Successful risk management becomes a tradeoff between reasonable supply chain reconfiguration and strategic acceptance of additional costs.

When facing supply chain disruptions, follow these 7 steps:

  1. Perform a complete analysis of the situation and review alternative ways of keeping the supply chain performing. It’s clear that opting for a different transportation mode could be more expensive. For example, air freight transportation instead of sea bound routes will likely add significant costs. But, understand that losing customers due to product deficit will cost even more. Be educated on the exact costs associated with alternative transportation to make informed decisions.
  2. Uncover short-term needs: transfer cargo to other ports or routes or use air transport for urgent orders.
  3. Communicate with all suppliers and carriers. With communication, shippers (and receivers) can better forecast what freight is coming, how the company will be impacted, how long a backlog is expected, and what partners are able to operate.
  4. Define alternative transportation plans both for supplied parts and finished products. This can also mean seeking new carriers or partnering with a 3PL provider.
  5. Evaluate each supplier: are there alternative suppliers for the raw material, how long will it take to change suppliers, how much will it affect cost, are there alternative raw materials.
  6. Establish inventory visibility: where and how many items are located in your supply chain, how easily can they be transported and repositioned. A well-managed TMS would be valuable here.
  7. Set up a detailed list of external factors and risk that could cause further supply chain disruptions. Determine any weak spot in you supply chain. Create a strategic supply chain design that is optimally protected against disruptions.

For a long-term strategy, shippers can reduce supply chain breakability, using one of two redesigns:

  • Segment your supply chain. A flexible supply chain can help you avoid risks with a single supplier, production line, or transportation route. Note: segmentation of facilities is more suitable for larger companies with a very high volume of production.
  • Regionalize your supply chain. If your company depends heavily on a global supply chain, natural disasters and geopolitical conflicts could impact its performance quickly and significantly. To avoid this, many companies choose regional supply chains and local sourcing and distribution, limiting disruption risks to one region.

Read these posts next:

 

May Transportation News Round Up

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Here are 5 of the most talked about logistics and transportation news stories from this month, check them out:

  • More Temporary Extensions for US Infrastructure. Law makers scramble to agree upon federal transportation infrastructure solution as the May 31 deadline approaches. Congress has only come up with (another) short-term fix. A long-term highway bill is needed to fix the Highway Trust Fund.
  • The Inspiration Truck Debuts. Freightliner debuted a partially autonomous big rig in hopes its use will mitigate driver fatigue and stress, which should help decrease truck accident statistics. Today, 90% of truck crashes are due to driver error, and in many of those crashes fatigue plays a role.
  • Trucking Revenues Reach Highest Figure in History. The $700.4 billion in profits is because of growing freight volumes, tight capacity and lower fuel prices. The revenue accounts for 80.3% of all freight transportation spending – proving that trucking is and will continue to be the dominant way goods are moved in the US.
  • Walmart Launches Fast Delivery Service. Wal-Mart’s unnamed delivery service is an attempt to compete with Amazon’s Prime shipping service. Walmart’s new, unlimited shipping service will launch in late spring or early summer. At $50 a year, invited customers can buy eligible products and expect them within 3 days or less.
  • Largest Recall in US History – Includes Commercial Vehicles. Takata, an airbag manufacturer, admitted that unsafe, malfunctioning airbags have been inserted into millions of vehicles, provoking the biggest recall in US history – 34 million vehicles, including the commercial vehicle maker, Daimler Trucks. Daimler is inspecting the potentially affected vehicles and the DOT has created a new website to provide regular updates on the status of the recalls and NHTSA’s investigation. 

The Cost of Shipping: What Customers Want

FreeShipping

Free shipping is a tactic used by e-commerce retailers to successfully increase sales. There are 191 million online buyers in the US who want inexpensive shipping plus fast delivery. The option of free shipping has a significant influence on consumer’s online purchases, but who really pays for it?

Trucking companies raise prices annually, usually between 3% and 5% to cover their expenses. In e-commerce, most rate increases, including shipping expenses, are absorbed by the retailer (the shipper).

Because shipping costsare driven by weight, product packaging, and distance shipped, the size of items shipped has a substantial impact on the cost. Retailers with heavier or denser items (e.g., home furniture) are reluctant to offer free shipping for this reason; if they do offer free shipping, they make explicit exceptions around the heaviest or largest products wherever possible (or consider additional shipping surcharges).

Free shipping without a minimum purchase can get expensive for a business, as it encourages customers to buy cheap, convenient items online one at a time. A pack of toilet paper, for instance, could cost more to ship than to purchase. One way to help tame the high cost is to offer customers slow, but cheap shipping options.

Retailers often come up with a threshold to determine the price a customer must pay to receive free shipping. Many retailers are increasing this amount due to the growing cost of transportation. A free shipping offer does entice customers to buy more in order to qualify.

Free shipping might result in unexpected costs for shippers. While the cost of delivering the package itself is the key component associated with free shipping, retailers note challenges: would-be shoppers conditioned to wait for free shipping offers, increased labor and customer service costs associated with increased free shipping orders, and greater IT costs when free shipping offers must incorporate exclusions or product restrictions.

Many retailers have found creative ways to offer free shipping. Because most retailers want to drive sales without losing margin, some executives note that they found tactics like premium shipping clubs, flat-rate shipping, and incorporating shipping into the cost of the product are particularly effective in balancing free shipping service.

Retailers interviewed said that shipping costs ranged from 5% to 20% of their total revenue, so any free shipping offer forces them to absorb an extra expense. This is particularly painful for companies that have historically viewed shipping as a profit center or have thin margins to start with.

As consumer shipping expectations continue to increase, retailers must pay attention to demand and service. Shippers are always looking for new ways to lower transportation and delivery expenses – check out these s for tips from PLS Logistics:

 

Sources:
http://www.logisticsmgmt.com/article/ups_and_comscore_study_takes_deep_dive_into_intricacies_of_online_shipping
http://www.wsj.com/articles/free-shipping-is-going-to-cost-you-more-1414003507
https://www.plslogistics.com/wp-content/uploads/2015/05/Smarter_Strategies_for_Free_Shipping.pdf

6 Innovative Solutions for Safe Transportation

SafeTrucking

Trucking companies have an undeniable commitment to provide safety and security for their fleet, drivers and others on the road. Luckily, today’s technology is designed to prevent accidents from happening and to protect all people in case of an accident.

According to the Federal Motor Carrier Safety Administration, more than 90% of all truck-involved accidents are caused by a human factor. Because of this, there is a push for the development and implementation of safety technology so that drivers can mitigate risk on the road.

Imminent Risk Detection and Alert Systems

  • Active Braking Systems
    Active braking systems provide full-time monitoring of moving obstacles in the truck’s path, up to 200 meters ahead. Braking intervention occurs when the system reduces engine throttle to decrease possibility of a crash.
  • Lane Departure Warning Systems (LDWS)
    This system helps drivers control the truck’s position on a highway. Its main functions are to detect lane markers, to warn the driver when their vehicle diverges from the lane without a turn signal, and to monitor steering wheel movement.

Driver Condition Systems

  • Driver Alcohol Detection System for Safety (DADSS)
    DADSS is a promising program aimed to develop in-vehicle, non-invasive alcohol detection that will prevent drinking and driving. There are 2 technologies being explored: a breath-based system and a touch-based system. Although DADSS is still developing, its goal is to provide a fast, accurate method to detect alcohol consumption.
  • On-board Monitoring Systems
    Web-based and mobile-based monitoring systems offer constant supervision of a driver’s actions. The technology tracks a vehicle’s route, provides an in-cab visual that reflects a driver’s habits, and/or detects unsafe practices.

Prevention Systems

  • Cruise Control Systems
    New cruise control technology effectively monitors and optimizes a vehicles speed based on road curves and speed limits. Cruise control helps fuel efficiency.

Driver’s Facilities Apps

  • Truck Parking App
    Michigan’s I-94 Truck Parking Information and Management System is technology that provides timely information on parking availability to drivers. This is in response to a serious shortage of parking spaces for trucks. The system will use 3 channels: parking signs, websites and mobile-connected vehicles. There are also mobile apps for smartphones, like TruckSmart, that shows and reserves available truck parking.

Drivers are aware that technology helps them stay focused on their job – making the roads safer for everyone. As a freight carrier, using an online tool makes business more efficient. Technology eliminates time spent on paperwork and reduces the number and severity of safety violations.

 

Check out these s next:

 

At PLS Logistics, shipping operations are simplified through our transportation management system, PLS PRO, which supplies carriers with dependable loads, streamlined procedures and quick payment options.

Attracting New Drivers: 7 Smart Changes to Make

DriversCarriers

With the US economy expanding at an accelerated pace, many organizations are having trouble filling logistics jobs, especially truck driver positions. The issue isn’t new or sudden, but the pressure for trucking companies is rising as an employment peak in trucking is near, according to U.S. Bureau of Labor Statistics. Carriers are short by at least 30,000 drivers and suffer from a low retention rate.

To hire new truck drivers, transportation companies should consider these 7 best practices:

1) Encourage young drivers to join the transportation industry. It may seem like a long-term and costly policy, but setting up a program for training 18-21 year olds is a great investment in your company’s future. An internship usually includes a full year of driving with guidance from a qualified driver. With skilled young professionals you will expand the driver pool.

2) Tell the truth about the job. Nothing repels new employees like unrealistic expectations about working conditions, paying schemes and number of weekly miles. Apart from losing potential workers, you’ll spread a negative impression of your company.

3) Don’t overlook women. Maintain a company culture that values and supports women and you’ll find it’s easier to recruit and retain female drivers. Recruiting ads should also appeal to both sexes.

4) Longer and better orientation. Most turnover happens during the first 60 to 90 days. The goal of proper orientation is to provide new drivers with all the necessary information, rules, acquaintances and a progressive integration into the working process. Show new hires they are going to be treated as valuable assets and members of the team.

5) Fair paying structures. A driver cannot control external factors like bad weather or bad traffic, and when a driver is paid by the mile these factors negatively impact his/her paycheck. Besides a competitive salary, predictable and incentive based pay is important. The more experienced and productive the driver, the higher the payout. A trucking company might guarantee the minimum number of weekly miles for each driver as a first step towards predictable pay.

6) Clearly outlined schedules. Get drivers home more frequently and consistently; this will decrease turnover and increase your company’s attractiveness. Schedule visibility could be reached in several ways: rotate regional and long routes between drivers, work with shippers to create more convenient routes, and reduce wait times. 

7) Explore retention issues. Make driver turnover a strength by collecting data on drivers’ performance and using this data to make predictive analyses about the reasons behind driver turnover. Such modeling will show what exact problems force drivers to resign: not getting home often, not enough weekly miles, low pay or lack of bonuses. Use this feedback to implement necessary changes to reduce turnover and increase retention for the future.  

5 Tips for Shippers New to LTL Freight

LTLFreightPallet

Are you ready to develop a less than truckload (LTL) transportation plan? LTL shipping doesn’t have to be time-consuming or stressful. Whether you plan to ship LTL freight regularly, or if you’ll only ship a few packages a month, you will benefit from these 5 tips which explain how to avoid unnecessary costs, determine price and optimize efficiency.

  1. Fill Out the BOL Correctly. A bill of lading (BOL) works as a receipt for the goods shipped, indicates contracted details between carrier and shipper, defines a consignee, and functions as a document of title. The BOL informs the carrier how the shipment should be handled and billed.
  1. Use Pallets. Pallets make shipments easier for carriers to move. Use pallets when pieces fit squarely within the pallet’s edges, height and width of a shipment are similar, and if the individual pieces in a load exceed 100 pounds. If your freight is irregular, don’t palletize your shipments.
  1. Avoid Accessorial Charges by Being Prepared and Diligent. Accessorial charges compensate carriers for additional services and equipment beyond normal shipping procedures. Accessorial charges can be added if the shipper misrepresents the freight class, if a driver is turned away from delivery or the consignee is not present, and/or if the BOL is not filled out correctly.
  1. Understand Freight Class. LTL shipments are based on freight class. There are 18 different freight classes; lower classes represent dense freight that isn’t easily damaged and can be handled easily. Higher freight classes represent lighter, less dense freight that is fragile and difficult to move. Higher classes equate to higher rates.
  1. Determine LTL Pricing. To determine the price of an LTL shipment, 7 factors are at stake: accessorial charges, freight class, minimums, distance, base rates, weight and freight all kinds (FAK).

Looking for some help? PLS’ team of LTL shipping experts will help you control costs and reduce claims. We can leverage our network of qualified LTL carriers to ensure that your shipment reaches its destination on-time and at the best price.

For more in-depth information on LTL freight shipping, download our Complete Guide to LTL Shipping.

3 Ways Hurricane Season Impacts Your Shipments

Hurricane

The Atlantic hurricane season runs from June 1st to November 30th. Because these superstorms wreak havoc to the nation’s infrastructure, shippers should prepare for weather-related disruptions. Past hurricanes have opened shipper’s eyes, as disruptions in delivery, tracking and safety have caused significant problems.

In 2012, Hurricane Sandy triggered one of the worst transportation disasters in US history. Many New York and New Jersey ports remained open so shippers could get their containers to safe ground. Despite these efforts, more than 15,000 containers were lost and 16,000 new vehicles shipped in were flooded. Shippers lost products and realized the significance of planning for possible disruptions.

When a storm is predicted to make landfall, the transportation industry experiences:

  • Increased demand and rates on spot shipments.
  • Reduced rates by carriers who are looking to get their equipment out of the area.
  • Disrupted capacity, routes and service.

The aftermath of a hurricane often leaves shipments delayed. Shipments are stopped due to port closings, motionless commercial traffic, evacuations and road closures due to flooding, down power lines and limited communication.

The most important tips for shippers to consider during hurricane season are:

  • Current Event Information. If your shipments travel through hurricane-prone territory, follow the news and National Hurricane Center’s website for updates.
  • Plan Ahead. Shippers realize that a hurricane that makes landfall can cause destruction. These storms can interrupt business for days or weeks. Talk to carriers, suppliers and receivers about the status of your shipment and any possible delays.
  • Talk to Your 3PL. Take advantage of your 3PL’s carrier network when capacity is scarce. Your 3PL has a team of experts who can help you strategize for future disruptions and all of your transportation needs.

Preparation is essential for post-storm recovery. At PLS Logistics Services, we use our decades of experience to effectively manage, move and optimize your supply chain. As partners, we will organize solutions for any unexpected transportation challenges.