Here is a quick summary of some of the most talked about transportation, supply chain and logistics topics from September 2015:
Diesel Prices Fluctuating. The US average retail diesel price dropped 4.7 cents a gallon in early September – this was the 14th straight week of declines. The diesel average has shed .40 cents since Memorial Day. The week of September 14th, after a week of price increases, the price of diesel fuel fell by 1.7 cents again.
Infrastructure Causing Congestion, Traffic. According to the Texas A&M Transportation Institute, American motorists are stuck in traffic about 5% more than they were in 2007. Overall, Americans experienced 6.9 billion hours of traffic delays in 2014. Trucks account for about 18% of urban congestion, but represent only 7% of urban travel. DOT said Americans drove more than 3 trillion miles in the past 12 months.
#NTDAW. Canada celebrated National Trucking Week from September 6-12. America celebrated National Truck Driver Appreciation Week from September 13-19. It’s important to recognize the importance of these individuals and this industry.
XPO to Purchase Con-way. XPO Logistics agreed to buy Con-way Inc. for $3 billion – the highest price ever paid for a US trucking company. Last week’s announcement was the latest of transport-related acquisitions.
PLS Logistics Services Named One of Pittsburgh’s Coolest Office Spaces
CRANBERRY TOWNSHIP, PA – September 23, 2015
PLS Logistics Services (“PLS”), a leading provider of technology enabled transportation management and freight brokerage services, was recognized as one of Pittsburgh’s coolest offices by the Pittsburgh Business Times.
Throughout the month of September, the Pittsburgh Business Times is showcasing the most inspiring and attractive office spaces in and around Pittsburgh. PLS has nine branch offices nationwide including the two remarkable office locations in the Pittsburgh area – Cranberry Township and the South Side. PLS’ other offices are located in Jacksonville, FL, Tampa, FL, Houston, TX, Dallas, TX, Philadelphia, PA, Phoenix, AZ, St. Louis, MO.
“PLS’ investment in our office space reflects our work hard play hard culture. Our offices have been designed to encourage teamwork and open communication,” says Greg Burns, Chairman, President and CEO of PLS.
PLS has 9 current locations and anticipates reaching twenty locations across the nation by 2018. The broad office network leverages PLS technology, carrier and shipper base while providing PLS employees the opportunity to relocate across the nation.
With more than 600 employees nationwide, PLS Logistics Services provides transportation management and freight brokerage services across all industries using all major freight modes. The PLS carrier network consists of over 20,000 trucking companies along with Class-1 railroads and major barge companies. To learn more, visit www.plslogistics.com or call (724) 814-5100.
The mining, oil and gas industries have the most complex supply chain challenges. Exploration tends to be in remote locations with no transportation infrastructure, and typically requires bulk equipment and an extensive safety policy. Any shipping disruption results in significant loss for an industrial company.
“If an oil rig goes down as a result of not having the proper materials in place, it can mean the loss of $1 million every day,” says Brian Murphy, director of business development in Menlo Worldwide Logistics in his interview to Inbound Logistics.
Expert logistics providers can effectively help manage such complex supply chains to avoid disruptions. When is the right time for shippers to seek logistics help for mining, oil and gas operations? Check this list for specific indications:
Logistics costs rise. New exploration sites in remote locations increase distances between the exploration site, suppliers and refineries. Transportation to and from remote locations results in higher costs and longer delivery times.
Inventory surplus. Oil, gas and mining companies usually hold too much inventory due to inefficient inventory management and unreliable delivery from suppliers.
Unreliable service. With no long-term partnership implemented, industrial shippers can experience inconsistent freight service during individual moves. It becomes hard to plan shipments, which leads to supply chain disorganization.
Lack of visibility. Not all companies are ready to invest in a costly transportation management system, but without it they experience less visibility and control. Poor visibility results in inventory surplus or shortage, decentralized decisions and inability to control freight movement.
Expedited shipping. Inconsistent transportation schedules make supply chains vulnerable to disruption. Shippers are often forced to use expedited delivery, which increases freight costs.
Lack of time. Oil, gas and mining companies find it difficult to concentrate on business development, because lots of time and effort is spent on logistics operations management and resolving numerous transportation challenges.
The top functions that oil, gas and mining companies outsource are:
Yard and dock management
Track and trace features
A risk-free way to discover the potential of a 3PL partner is to receive a transportation opportunity assessment. Shippers provide data on freight volume, current rates, shipping locations and other information for evaluation.
The supply chain is always moving and prone to disruptions, which can make consistent delivery difficult. You want customers to trust that you’ll meet their expectations, but disruptions are often out of a company’s control. Your customer won’t care what the problem is; they will only view delays as poor service.
What is the best way to drive consistent freight transportation?
A scalable TMS with advanced reporting features is necessary for any shipper that wants to provide dependable service. A TMS provides shippers with freight visibility and control over all parts of transportation operations, and, will cut costs by up to 30%.
There are different types of TMS software, including: premise, hosted and SaaS (Software as a Service) models. The SaaS model has become an industry favorite and is the type of TMS that will be most beneficial in driving consistency in transportation.
A SaaS TMS is quick and easy to implement. This means very little downtime when switching systems, no upfront investment in technology, no costly upgrades, and faster ROI after implementation. The speed at which these systems can be implemented means your company can continue to provide consistent service throughout the implementation process.
SaaS TMS systems are flexible and accessible, supporting shippers with a systematic place to ship freight, get real-time information and detailed reports at any time. For example, if a shipper has a backlog of inventory and needs to move it all at once, a SaaS TMS would be able to handle the unusually large shipment, while other systems may not be ready for that volume of freight so suddenly. A SaaS TMS is dependable software that can find capacity at a moment’s notice, enabling shippers to provide consistent service at all times.
The most important benefit of a TMS, in terms of consistent shipment delivery, is visibility into transportation processes. Shippers will benefit from access to current and historic data which helps identify trends, supports smart decisions and finds solutions to existing problems. With real-time data, you can fix supply chain disruptions as they occur. Some systems will even give you the ability to implement accurate predictive analytics to prevent disruptions before they even happen.
This type of insight and control over transportation processes will allow you to provide consistent levels of service in freight transportation.
New technological advancements, changes in regulations and shifting shipping trends have made the transportation industry an exciting, and often challenging, environment to work in. Truck drivers especially are noticing new trends in the industry – from same-day delivery expectations to automated vehicles and a proposal to lower the age minimum of drivers.
Some of the other trends affecting truck drivers include:
Driver Shortage. The industry employs 4 million drivers, and still there is an unwavering shortage. Trucks move almost 10 billion tons of freight every year, and as freight volumes increase with strong customer demands, the driver shortage is likely to get worse before it gets better. So, how can carriers attract new drivers?
Encourage new drivers to join the industry .
Provide thorough orientation and training programs.
Create fair salary and payment structures.
Clearly defined and outlined schedules.
Driverless Vehicles. The “Inspiration Truck” debuted in May in the hopes of mitigating driver fatigue and stress. This truck still requires a human driver to take control during irregular situations.
Grouping vehicles into platoons is a method of increasing capacity on the roads. This method is expected to help fuel economy and safety. Drivers using vehicles that platoon would likely need a special license because new skills and responsibilities would be required for this technology.
Fleets are encouraged to reduce environmental impact by making alterations to performance. For example, drivers should reduce idle-time to save fuel costs, and bring the vehicle’s highway speed to 65 mph in order to reduce CO2. Looking for ways to lower emissions and be environmentally friendly is increasingly important.
The DOT released a report which exposed how badly the US needs infrastructure funding. Politicians have proposed fixes, which have proven to be short-term. Our nation’s truck drivers are operating on roads that are crumbling and bridges that are past their 50-year lifespan.
Overall Supply Chain. Retailers and manufacturers are moving distribution centers closer to their customers and taking advantage of the omni-channel approach. Shippers are looking for optimization and efficiency – and transportation plays a huge role in creating better practices – whether that means choosing intermodal transport or using a JIT inventory system, drivers should prepare for the immediate demand of products.
No matter what changes occur in the industry, truck drivers keep our products and economy moving. In the spirit of National Truck Driver Appreciation Week, we would like to applaud truck drivers and show our support of their hard work. #NTDAW
In July 2013, the Federal Motor Carrier Safety Administration (FMCSA) implemented some significant changes to the way drivers record their hours on duty. The 3 main changes included were:
Drivers have to include two 1:00 am – 5:00 am time intervals within the required 34-hour restart period
Drivers can only restart once per week (168 hours)
Drivers are required to take one 30 minute rest break during every 8 hours of driving
What Happened to These Regulations?
Since then, things have been complicated. In December 2014, Congress suspended the HOS regulations, except for the 30 minute rest break, after much complaint within the industry and an apparent lack of evidence that the rules improve safety without hurting productivity. Congress required FMCSA to conduct a cost and safety analysis of the HOS regulations to see how it affects efficiency for carriers. The suspension will be provoked upon completion of the study, or September 30th, whichever date is later.
There are three major factors that will come into play for the outcome of the HOS regulations: the release of the FMCSA study, the 2016 funding bill for transportation, housing and urban development (THUD), and the infrastructure/highway/transportation bill. The THUD bill will pay the operating costs of the U.S. Department of Transportation (DOT), while the infrastructure bill will pay the actual cost of construction and repair for roads and bridges.
FMCSA has put a lot of work into this study but it is unlikely it will be finished before September 2015. Sometime between November 2015 and January 2016 would be more likely. If Congress doesn’t directly address the HOS rules in the THUD appropriations or the infrastructure bill, the HOS rules suspension will be lifted immediately, regardless of the study’s results.
THUD Appropriations Bill
A THUD appropriations bill was passed through the House on June 9th, 2015. This bill includes language that would keep the HOS rules suspended. The potential bill says the suspension will be extended if the FMCSA study did not show “statistically significant improvement in all outcomes related to safety, operator fatigue, driver health and longevity, and work schedules in comparison to commercial motor vehicle drivers who operated under restart provisions in effect June 30, 2013.”
The infrastructure funding bill could also play a role in the future of HOS regulations. There’s a current highway bill with funding through October 29, 2015, but several members of Congress are working on a long-term bill. This long-term bill could include language to either extend or remove the suspension of HOS requirements, but it’s not clear whether this is their intention or not. There is no requirement that the rules be addressed in the infrastructure bill.
As of now, there is nothing authoritative or conclusive on the safety and productivity effects of the most recently proposed HOS rules. However, this doesn’t mean the rules haven’t changed since the suspension.
What are the Current HOS Rules?
There are still a few Hours of Service rules in place, which can be found on the FMCSA website. Here’s a summary of the rules that still apply to commercial motor vehicle operators:
11 Hour Driving Limit
A driver cannot drive for more than 11 hours after 10 consecutive hours off duty.
14 Hour Work Limit
A driver cannot operate a vehicle after being on duty for 14 hours, following 10 consecutive hours off duty. Off duty time does not extend the 14 hour period.
A driver can only drive if 8 hours or less have passed since the end of their last off-duty or sleeper berth period of at least 30 minutes.
Sleeper Berth Provision
Drivers using the sleeper berth provision must take at least 8 consecutive hours in the sleeper berth, plus a separate 2 consecutive hours either in the sleeper berth, off duty, or any combination of the two.
What to Expect with HOS Rule Changes
With the likelihood that the FMCSA will not publish their report before September 30th, the HOS regulations will revert back to the ones implemented on July 1st, 2013, regardless of the study’s findings. From there, depending on the reaction of the industry to the effects of the changes, Congress will either step in and suspend the rules again for further research, or allow the changes to permanently take effect.
In either situation, it’s important to know the current regulations and follow them as closely as possible to ensure safety on the road. Failing to comply with government mandates can lead to large fines and even have drivers taken off the road. If the HOS rules are reverted back to the ones implemented on July 1st, 2013, expect to see them strictly enforced.
Truck drivers are one of the most important, yet unappreciated professionals in the US. The job isn’t easy – it’s full of risks and challenges. Truck drivers deliver about 70% of all freight in the U.S. — they provide life’s essentials. Almost 80% of US communities depend solely on the trucking industry for the delivery of goods. Without drivers, there would be no food at the supermarket, no medicine in the hospitals, and no fuel at the gas station.
To honor the more than 3 million truck drivers, the ATA established National Truck Driver Appreciation Week in 1988. This year, celebrations take place from September 13-19. Carriers, shippers, industry leaders and the ATA itself will host events, award ceremonies and parties to acknowledge the hard work of America’s truck drivers.
Our country’s drivers deserve our respect for their hard work and commitment. The industry is experiencing a long-term driver shortage – probably because a driver’s job is known for tough work hours, a high level of responsibility and comparatively small pay.
Here are a few more reasons to support drivers during National Truck Driver Appreciation Week (and every week):
The average truck driver drives 112,000+ miles and spends 200 nights at work every year
Driving a commercial truck requires special skills and extra attention for monitoring the road. After hitting brakes, a truck passes the length of a football field before a full stop.
Trucking is a dangerous job with constant risk of injury and death. About 130,000 people get injured in traffic accidents every year.
Drivers often don’t have the simple comforts of home like a cozy bed, proper rest and home cooked meals.
What can people do in order to show their appreciation? Show extra caution when passing trucks on the highway. Acknowledge the hard work trick drivers do for you. Share your gratitude on social media, using the hashtag #NTDAW.
PLS Logistics partners with carriers who employ thousands of drivers. These individuals help make safe and efficient transportation a reality. We celebrate National Truck Driver Appreciation Week to express our respect and say thank you to all trucking professionals.
If your business is interested in increasing visibility, improving performance and reducing spend, then TMS technology is the tool you need. TMS software offers an assortment of benefits, including better management, simple monitoring, aggregated data and stress-free integration. By improving freight management, scheduling, operations and reporting, this technology provides superior customer service, flexibility and intelligence.
But, many companies share a common transportation challenge: decentralized TMS technology. This is a challenge because a decentralized system is usually unorganized, less productive and costly which means you’re likely to miss deadlines and inaccurately fill out BOLs.
When applying a transportation system to business solutions, one will find different levels of integration. Some companies immediately agree on full integration, giving themselves a chance to gain data that finds real results. These results are exact. The TMS is an electronic paper trail, offering the company increased ability to tweak their capabilities and collaborate. When a transportation management software is not fully integrated, the company can easily overlook problems, as visibility is limited.
Centralizing transportation management lets companies optimize opportunities and find better communication among carriers and vendors. Fully-integrated TMS software reduces mistakes, enhances operations, delivers better customer service and leads to improved decision-making.
As a leading 3PL provider, PLS has enabled many clients to fully integrate a TMS and centralize their systems. Through a centralized TMS, our clients have seen real results, such as:
More efficient supply chain process and management
Visibility across modes and routes
Quality and safety culture
Standard metrics and ERP system
Closed gaps between carriers
Bigger scope (tactical and strategic mode management, order packaging and inbound management)
Perhaps one of the most recommended steps in implementing a TMS is to fully integrate the technology to your business’s systems. If mismanaged, a TMS cannot offer the shipper’s business all the benefits that it’s intended to offer. Centralizing TMS software means improving your supply chain and logistics results through accurate reports, effective management, real-time monitoring and true optimization.
Environmentally-friendly business processes are good for the bottom line and the ecosystem. While most companies have stepped up to keep customers educated on their green initiatives, many have yet to expand those efforts throughout the supply chain.
More than 3,700 companies participate in the Carbon Disclosure Project (CDP), an independent global system for companies to measure, disclose, manage and share climate and water information and sustainable initiatives. According to a recent CDP report, 43% of respondents say they have achieved year-on-year emissions reductions, but only 28% of their suppliers can say the same.
Transportation and logistics companies now focus on sustainability more than ever. A gas-guzzling, emission-heavy industry like transportation is being held responsible for its environmental impact. 3PLs are responding to the need for sustainability by assisting companies in incorporating green initiatives into their everyday processes.
The U.S. Environmental Protection Agency (EPA) estimates that as much as 75% of all emissions come from logistics processes. Transportation plays a large role in this figure. When it comes to applying a green supply chain, benefits are seen not only in the environment, but in operations too.
How does a 3PL help boost sustainability? Through visibility derived from TMS data. With access to advanced reports, shippers are able to see where the most environmentally-harmful processes are located within the supply chain.
Here are 3 ways a 3PL uses visibility to drive sustainability in your supply chain:
Technology Integration A 3PL integrates technology with emissions measurement and management processes to track emissions throughout all transportation functions. Shippers receive sustainability reports that include fuel efficiency and/or emission rates.
Data Driven Performance Optimization When a 3PL has access to your transportation data, they can produce better results in sustainability. For example, if a 3PL has mode and route data, they can consolidate shipments or employ intermodal services to improve overall efficiency while reducing emissions.
Maintaining Compliance A 3PL monitors environmental performance to ensure improvement, but also to ensure compliance. Rules on emissions change based on locations and are becoming stricter. 3PL technology gives shippers insight on differing requirements and makes sure you’re in compliance before a shipment leaves the warehouse.
BONUS TIP: 3PLs are most effective at implementing sustainability initiatives when working on a long-term contract with a shipper. This is because long-term success can be prioritized over short-term profit.
More companies are evaluating their supply chain operations and costs and assessing alternative production options. Paul Polman, Unilever’s CEO pointed out, “Sustainable growth will be the only acceptable model of growth in the future.”
Shippers everywhere have faced limited capacity because of the driver shortage and shrinking numbers of trucks in the industry. These shippers must discover effective ways to handle transportation with limited resources. A shipper can learn how to be carrier-friendly or spend time searching for the cheapest freight rates, but they can also take advantage of continuous moves. Combining freight for backhaul rates isn’t a new transportation strategy, and it proves to be cost-effective and time-saving.
What are continuous moves?
Continuous moves is a freight management strategy — when one or more shippers string several loads together for one carrier, so that the truck is utilized for backhauls. The shipper identifies the closest pick-up location following the last drop-off location to build the most efficient route and decrease the number of empty miles. Carriers benefit from reducing one-way movements and empty miles, while shippers take advantage from lower freight rates. Often, the carrier is willing to drop the rate by 10-15 percent when shippers provide continuous moves.
How to use a continuous moves strategy:
Inbound plus outbound transportation: a carrier picks up freight from a supplier on the way back from the store to warehouse or DC.
Bring returned goods back to DCs: during delivery from the DC to the store, the truck picks up returns.
Simply pick-up on the way back from delivery destination: for example, a truck delivering freight from Columbus to Philadelphia, picks up a backhaul load in Pittsburgh, this load is also delivered in Columbus. If backhaul pick-up adds several additional miles for the truck, it is called a trihaul.
Repeating reverse logistics routes: for example, a water filter retailer delivers filters to clients and picks up used ones to take them back to recycling center.
Collaborative opportunities from 3PLs: increased visibility allows carriers to combine several customer loads into one truckload.
What are the pros of combining freight?
Continuous moves create a win-win situation for all participants: shippers, carriers, drivers and consignees.
Shippers find a reliable answer to the capacity crunch and receive considerable discounts from carriers. Combining freight for backhaul rates requires freight visibility and more control over transportation routes, which is great for a shipper’s supply chain efficiency.
Carriers are able to minimize empty miles. Although there are lower rates for backhaul routes, carriers still make a profit. It’s important for carriers to include all fixed costs in the final rate and calculate potential profit from the entire route.
Consignees pay less for transportation and receive consistent service with predictable delivery time.
Drivers spend less time hauling empty trucks or waiting near docks. This is a sensitive issue for the drivers who don’t get paid during waiting hours.