Monthly Archives: October 2016

5 Trending Transportation Updates: October 2016

  1. Uber’s Plan for Long-Haul Trucking. Uber Technologies acquired Otto, a self-driving truck startup. The goal is for Otto-branded trucks and trucks equipped with Otto technology to begin hauling freight next year. The Uber-Otto freight move model includes technologies like navigation, mapping and tracking. Uber is aiming to establish itself as a freight hauler and technology partner for the $700 billion-a-year trucking industry. On October 20, Uber reached a landmark milestone by completing the first ever commercial cargo run for a self-driving truck.
  2. Robots to Replace 1.7 Million Truck Drivers. About a dozen states have created laws that allow self-driving vehicles to be tested. According to the LA Times, trucking will likely be the first type of driving to be fully automated; long-haul drivers spend most of their time on the highway, which is the easiest type of road to navigate without human intervention. There are 1.7 million truckers in America, and another 1.7 million drivers of taxis, buses and delivery vehicles. 

     

  3. Container Line Consolidation Means Higher Rates. The top 5 ocean carriers now control approximately 54% of the world’s container ship fleet. Drewry acknowledges that economic principles suggest that fewer competitors should mean higher prices. Although, as industry concentration increased, freight rates dropped to historical lows.
  4. October Imports Spike Ahead of Holidays. According to SupplyChainBrain, ports covered by Global Port Tracker are expected to see 1.65 million TEUs in October, a 6% increase from last year. The National Retail Federation is predicting $655.8bn in holiday sales.
  5. Tonnage Sees First YOY Drop in 2016. September’s truck tonnage, down .7%, reflected the sluggish freight market. Shipments in trucking, rail, air and barge freight dropped 3.1% year-over-year and 0.4% sequentially. “The spot-market data is showing us that as we move into Q4 things will start to look better and more consistent. As we move in 2017, you should see potential for a more stable growing marketplace,” says Jon Starks of FTR.

 

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Shippers: Don’t Believe These 4 Myths about TMS Software

  1. A software as a service (SaaS) transportation management system (TMS) solution doesn’t add value, is expensive, and doesn’t present ROI for years.
  • A TMS sanctions effective and fast decision making. It has a customizable interface, streamlines operations, reduces carrier overhead charges, optimizes routes, and has track and trace features.
  • A TMS identifies supply chain pain points and logistics challenges that might have been disregarded.
  • The SaaS model of TMS software requires little to no IT or monetary investment, unlike traditional software. SaaS solutions don’t require costly upgrades. With a SaaS solution, the shipper’s organization pays for what is used.
  • Implementing a TMS creates immediate ROI because it takes away the manual processes. A TMS enables better processes, delivering better customer service at a lower cost. In a 2011 ARC Advisory group survey, 40% of respondents felt that TMS software offers a strong ROI, and that if they were to give up their TMS and go back to manual processes, their total freight spend would increase.

 

  1. For centralized TMS software, you can’t partner with a 3PL.
  • When shippers use a 3PL in tandem with a TMS, shippers can greatly benefit. The 2016 Third-Party Logistics Study shows that 73% of shippers indicate they are increasing use of outsourced logistics services this year, which compares to a figure of 68% reported in 2015.
  • A 3PL provides different levels of partnership – some companies choose full service solutions and some companies use 3PLs for tech support or spot moves.
  • Partnering with a 3PL lets shippers focus on their core competency while 3PL experts form accurate logistics practices and monitored freight moves.
  • The 2016 Third-Party Logistics Study reveals that 73% of shippers interact with their 3PL on a daily or hourly basis, while 80% of 3PLs responded similarly.

 

  1. I can’t use my preferred carriers, automate rules or use all of the data generated.
  • Carrier connectivity is a major benefit of using a TMS: shippers have access to a broad network of carriers, including their preferred carriers, and shippers have the opportunity to become a carrier’s choice through simplified communication and coordination. With such direct access to a carrier network, there is substantial ROI, since you’ll be able to find capacity whenever you need freight moved.
  • Logistics Management Research shows that TMS users achieve an average cost savings of 7.5% when they use preferred carriers, better procurement negotiations, and put low-cost mode selections to work.
  • Automation is another benefit offered by TMS technology. With automation, you will avoid making costly errors. Automated rules enable a shipper to select applicable accessorial fees, auto-filled BOL information and access to your scheduling.
  • Only 20% of the data accumulated by structured sources is easily digestible. Taking TMS data and turning it into something actionable reveals profitable results. The information is a key benefit of a TMS and helps companies predict complex situations. Even using a small percentage of the data collected will give companies the opportunity to cut costs, compare lanes and rates, find ways to improve supply chain processes.

 

  1. Real-time data and visibility are just buzz words.
  • Real-time data and shipment visibility are real benefits of transportation management systems. To achieve visibility that provides real-time data, companies must blend all systems and pay attention to the transportation and production details.
  • Implementing real-time data and visibility let companies understand their processes better, while reducing costs, and forecasting accurate demand. The software allows shippers to frequently run reports, receive instant notifications of disruptions and analyze historical and present data on costs and performance.

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PLS Logistics Services Remains One of the Nation’s Fastest Growing Companies

PLS Logistics Services Remains One of the Nation’s Fastest Growing Companies
PLS RANKS FOR 3RD CONSECUTIVE YEAR ON INC. 5000 LIST
Cranberry Township, PA – October 25, 2016

PLS Logistics Services (“PLS”), a leading provider of technology-enabled transportation management and freight brokerage services, was recognized on the 2016 Inc. 5000 list of America’s fastest-growing private companies. The prestigious ranking represents the most successful private companies in America.

5000_color-stackedThis is PLS’ 3rd consecutive year on the Inc. 5000 list. Only a tiny fraction of the nation’s companies has demonstrated such remarkably consistent high growth. This year, PLS is number 4975 on the list. Greg Burns, President and CEO of PLS said, “To be recognized as part of Inc. 5000’s fastest growing companies for 3 straight years is an honor. Our growth would not be possible without the dedication of our employees and the strong support of our shipper and carrier partners.”

The ranking is based on growth and revenue over the past 3 years. PLS continues to expand as an industry leader; counting 8,000 active clients, a 25% increase over the prior year and opened branch offices in San Antonio and Charlotte. Recently, PLS has increased its TIA surety bond to $1,000,000, well above the industry requirement of $75,000. Noted Burns, “In a challenging year for transportation, it is most gratifying to achieve yet another year of record revenues and is a strong testament to our regional and end-market diversification.”

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 and barge, air and ocean. The PLS carrier network consists of over 45,000 trucking companies along with Class-1 railroads and major barge companies. PLS has been recognized as a top 25 freight brokerage firm. To learn more visit www.plslogistics.com.

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Caitlin Orosz, Content Marketing Manager
724. 814. 5194, publicrelations@plslogistics.com

Shipper Strategy: Factors That Will Influence 2017 Transportation Management

Future_Transportation.jpgBy 2017, the US population is expected to rise to 332 million, a 70% increase from fifty years ago. Population growth in cities is placing a strain on existing transportation systems and creating demand for more transportation choices. Industries and consumers depend on the consistent, timely flow of goods and services. The mounting volume and availability of information and the rapid development and adoption of technologies is transforming all aspects of life – including transportation.

According to a recent Transport Topics article, economist Diane Swonk said that 2016 was probably the weakest year for US growth since the Great Recession ended. The economy is moving in the right direction, but slowly. Flatbed loads have inflated by 6.6% compared with the same time last year. Refrigerated truckloads have grown, only by 0.7%, after booming by 14.3% in 2015. 

What factors and trends will impact your transportation strategy next year?

  1. Regulations
    Government trucking regulations will have a serious impact on transportation rates, trucking capacity and overall economic productivity.
    The ELD Mandate will affect about 3 million drivers and is effective in December 2017. About half of the trucking industry has already installed ELDs, but if the remaining half doesn’t put in the device, they’ll be forced to exit the industry, resulting in a major loss of capacity. Even though ELDs have constructive implications, the mandate could create logistics headaches by taking away capacity and increasing rates.

Read : 2016-2017 Trucking Regulations Aggravate Economic Trends

  1. Globalization
    Transportation connects industries; it’s the key to globalization. Today, about 1/3 of world trade consists of shipments between branches of multinational companies. Technological advances have expanded the global marketplace, highlighting the need for a transportation system that is international in reach. Faster and cheaper transportation systems allow multinational corporations to build facilities across the globe while maintaining scheduled deliveries.
    According to the US Department of Commerce, in the last 25 years, US imports and exports grew from $726 billion to $2.6 trillion. The Bureau of Transportation Statistics reports that the transportation sector represents 11% of the overall US GDP and accounts for 1 in 7 jobs in the US economy.
  1. Smart Cities
    A smart city addresses urban issues like traffic congestion through technology-based solutions. Smart cities’ transportation data is derived from multiple devices that identify speed and traffic volume, then provide traffic analysis. With a smart city, there will be more intelligent transportation management solutions so carriers can be redirected to a less congested route, traffic flow will be optimized and responses to road-incidents will be improved. Research firm IDC predicts that by 2017, at least 20 of the world’s largest countries will create smart city policies to prioritize funding and document operational guidelines.

Read : A Fully Automated Transportation Industry is Closer than You Think

  1. Safety & Autonomy
    US self-driving truck sales are forecasted to reach 60,000 by 2035, estimates IHS Automotive. That would amount to 15% of sales for trucks in the big, Class 8 weight segment. Recently, Uber acquired self-driving lorry startup Otto, and it plans to put the company to work in the long-haul freight business in 2017. Otto’s technology allows existing trucks to be fitted with self-driving technology which can handle driving on US highways.
    Self-driving trucks are able to operate 24/7, permitting much faster delivery at much lower costs. There’s significant potential for autonomous trucks to increase safety and efficiency.
    In 2011, 32,367 people lost their lives and an estimated 2.22 million people were injured in motor vehicle crashes. In the US, almost 90% of all large truck crashes in 2012 were caused from driver error like fatigue, speeding or alcohol use. Automated vehicles will help infrastructure.jpgeliminate risk and could decrease the number of accidents involving commercial vehicles.
  1. Infrastructure & Environment
    Total GHG emissions in the US increased by 21% from 1990 to 2011, with over 60% of the total increase attributed to the transportation industry. Today, the US transportation network accounts for 30% of US greenhouse gas emissions. President Obama signed into law the FAST Act to fund surface transportation programs. The FAST Act injects $305 billion into the federal transportation budget from 2016-2020. The Nation’s road network includes more than 4 million miles of public roadways and approximately 605,000 bridges. In 2010, this network carried nearly 3 trillion vehicle miles of travel.
  1. Economic Competitiveness
    Economic and job growth continue to grow at a moderate pace. The transportation sector contributed approximately $1.466 trillion, or 9.7% to GDP in 2011. Nearly 54 million tons of freight worth more than $48 billion currently moves through the US transportation network each day. Freight tonnage is expected to increase by 45% by 2040, requiring additional capacity for highways, railroads, ports. Freight transportation is an integral part of our economy, with over 44 million jobs directly dependent on the industry. Failing to make strategic plans to improve could hurt the country’s growth: one study estimates that roadway congestion delays cost shippers approximately $10 billion each year.

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Source: FY 2014-2018 DOT Strategic Plan

Will Cuba be the Next Major Transportation Hub?

Cuba_Shipping.jpgFor cargo shipping, focus is on the Cuban port, Container Terminal Mariel (TC Mariel) which opened in January 2014. The Obama Administration has made it easier for container services to add Cuba as a port of call since they’ve reopened embassies and ended a 54-year diplomatic standstill with the country. In May 2016, the first US cruise ship docked in Cuba since 1978 – opening the door to more travel and business with Cuba, but there are still limitations on trade in goods and services – the US trade embargo is still in place.

The US Office of Foreign Assets Control broadened allowances for US vessels carrying certain agricultural or otherwise approved cargoes, extending them to non-US vessels. “Cuba does have the potential to act as a transshipment hub for US cargo, in a similar way to how Freeport, Bahamas does now,” said Drewry.

Cuba’s Mariel container terminal has modern facilities, including the ability to handle refrigerated shipments and weigh trucks leaving or entering the terminal. The terminal is located 27 miles from Cuba’s capital Havana, just 90 miles from Florida.

TC Mariel has plans to be a major transshipment hub. In May 2016, TC Mariel’s General Director, Charles Baker, described growth at the terminal, its short- and long-term expansion plans and strategy to diversify beyond domestic cargo into transshipment. China does more than $10 billion worth of trade with Cuba each year. 

In 2014, the Cuban container terminal handled 230,000 twenty foot equivalent units (TEU). In 2015, throughput at Mariel grew 35%, reaching 330,000 TEUs, and has been up 29% in the first half of 2016 as a result of Cuba’s tourism trade. In early 2015, it was reported by Seatrade-Maritime News that 51% of the terminal’s movements were imports and 49% were exports. The terminal is targeting to hold about 85% of the country’s exports.

The US Department of Commerce’s Bureau of Industry and Security is now allowing vessels to transport approved cargo originating in the US to Cuba and then sail to other counties with any remaining cargo that had also been loaded at a US port.

TC Mariel aims to be the first port of call for megaships passing through the newly expanded Panama Canal. Baker suggests dropping off cargo in TC Mariel and sending it to Gulf ports to attract shippers by improving transit times. He says, “to ship to Mobile Alabama, you’ll have to wait for the vessel to sail in and out of Houston and New Orleans before it gets there.” Baker continues, “When we talk to the carriers and the ports, they recognize the advantages of our geography, but they also recognize very clearly that the US embargo stands in the way of the opportunity we have.”

Cuba could be an ideal location for cross-docking or resorting and distributing cargo from large ships to smaller vessels headed for the US ports. Cuba’s shipping facilities have potential to be a key shipping hub for the region.

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Source: WSJ, JOC, JOC

3 Technology Applications to Advance Your Supply Chain

SaaS_Technology.jpgThe fast e-commerce environment, which is increasing competition, and the initiative to use data to analyze trends and operational efficiency are contributing to the demand for hi-tech logistics solutions. Technology is the key driver to an organization’s supply chain efficiency and success. Shippers are familiar with transportation management software (TMS) systems that give them a competitive edge. New tools like mobile apps, cloud-based software and big data provide shippers immediate, enhanced visibility that breaks silos and generates communication, collaboration and efficiency.

  • Mobile
  • SaaS
  • Big Data

Mobile

Mobility is an obvious advantage. With mobile, different parts of the supply chain can communicate instantly. Wireless data transmission, voice controls and robotic procedures are a huge progression in logistics. Handheld devices like smartphones and tablets have amplified the practicality of mobile tech options for supply chain operations.

According to the 2016 MHI Annual Industry Report, 36% of respondents said mobile technologies had the potential to either provide competitive advantage or disrupt supply chains. Mobile devices provide close, concerted networks within supply chains that can’t be discounted.

SaaS

SaaS, or cloud-based software, provides advantages for companies because it has a low installation cost, fees based on usage, reduces IT expenses, and can scale use based on business needs. SaaS software is extremely accessible, bringing shippers and carriers together to create network collaboration. The most talked about advantage to SaaS applications is that it allows smaller companies to gain access to types of software that were previously beyond their means. Oracle’s CEO recently said he thinks 80% of all applications will be cloud-based by 2025.

Big Data

The budding applications of big data cannot go ignored; accurate demand forecasting, real-time and historic visibility and specific metrics of performance and cost data. As big data collects information from various sources, shippers can identify efficient patterns, disruptive trends and any inadequacies or added costs.

When a company examines data, from internal and external sources, it might learn that some DCs aren’t needed. Armed with this information, the company can develop a strategy to service popular DCs more frequently, and DCs that distribute less, less frequently. With more data, comes more operational transparency. Leveraging big data enables organizations to catch pain points or adeptness that might have otherwise gone unnoticed.

What’s Next

Businesses prepared to implement technologies are positioned to succeed in efficiency.ecommerce.jpg

Increased shipment and data visibility, better cost control, stronger integration within and across businesses, improved planning, enhanced tracking and regulatory compliance are just a handful of advantages technology offers.

Other technologies are continuously being developed to meet demands of the changing market. The online atmosphere has created new practices for shipping and distribution. Access to the internet has created the desire for immediate, accurate information. Social media is helping companies provide transparency into their network. Autonomous vehicles will significantly impact capacity and how the industry deals with the driver shortage. With technology, supply chains are able to innovate, improve and provide value to their customers.

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Source: C3 Solutions White Paper

Reviewing 2016’s Intermodal Predictions & Anticipating 2017

Intermodal transportation is a hybrid system that relies on an interchangeable relationship among truck, rail and barge. Intermodal transport is a reliable mode, providing standardized transit schedules, low costs and easy access to equipment.

Reviewing 2016 Intermodal Predictions

Tony Hatch, a rail analyst at ABH Consulting, predicted that intermodal transport would surge in 2016 due to the ongoing driver shortage, its reputable, less damaging environmental impact, new, strict government mandates, and problems with the country’s eroding highway infrastructure.

Shippers, on the other hand, had low expectations for 2016 intermodal volume growth; they said they expected roughly a 1.5% increase in intermodal during 2016.

The ATA said intermodal transportation was predicted to grow at a rate of 6.6% per year until 2016. Through the end of the first half of 2016, intermodal containers and trailers were down 2.3% year-on-year.

Today’s intermodal situation demonstrates that positive forecasts for 2016 were off – traffic plunged during the first half of the year and commodities frequently moved on rail severely declined. The pressure of decreasing oil prices, the shift of import cargo from the West Coast to the East Coast, lower truckload rates and overcapacity, and a strong dollar created challenges for intermodal.

2017’s Intermodal Predictions

Next year’s intermodal predictions are positioned around growth. Technology innovations will set a standard for speed and service. According to the Association of American Railroads, rail accidents are at an all-time low and it is a direct effect of investments in new technologies. The ATA forecasts that intermodal transport will grow at a rate of 5.5% per year until 2022.

Carload and intermodal transportation will likely recover. Intermodal will gain traction when truck capacity tightens due to government mandates. Cyclical economic factors, like freight shortages in the industrial sector, will ultimately pick back up.

The Future of Rail

The ATA projected that rail transportation will see a decline in tonnage and revenue. By 2022, it may only account for 14.6% of the transportation industry, whereas in 2010, rail accounted for 15.3%.

The container terminal at dusk

The trucking industry is expected to see extremely tight capacity in 2017-2018. But, when autonomous trucks become common, there will be an abundance of capacity, generating a substantial decrease in OTR rates. So, as we move into the 2020s, being competitive with OTR transportation will only be more difficult for railroads.

Are There Benefits to Intermodal Transportation?

Shippers can take advantage of low rates, predictable pricing, and flexibility of loading and unloading goods in a dropped trailer environment.

To determine the effectiveness of intermodal for your company, analyze lanes and identify where your loads are going and where they come from. The longer the haul, the greater the opportunity for savings.

Rail transportation is energy efficient. With intermodal, moving freight costs less. Shippers can reduce their carbon footprint with intermodal; trains only emit approximately 5.4 pounds of carbon dioxide per 100 ton-miles, but trucks emit about 19.8 pounds.

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Sources: JOC, SupplyChainQuarterly

How to Use a TMS to Manage Inbound Transportation (And Gain Visibility)

Inbound freight management is multifaceted and can eat up more than 40% of the average organization’s annual freight budget, according to Aberdeen Group. Since inbound freight savings have a direct impact on an organization’s bottom line, shippers that make it a supply chain priority reap inventory efficiencies, cost containment and enhanced productivity and service.

Companies expect to receive about 34,000 inbound shipments every month, so even decidedly successful inbound freight shippers are likely to encounter glitches. 35% of shippers claim that lack of visibility is one of the biggest challenges of inbound transportation, while 37% say determining hidden costs, and 25% say data analysis and decision support are the greatest challenges. Shippers experiencing challenges with inbound freight management might not be fully leveraging available optimization logic with a transportation management system (TMS).

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A TMS has capabilities that make life easier, it can manage by exception, easily tack KPIs, optimize carriers with routes, and proactively notify you of disruptions or risk. A recent SupplyChain24/7 article explains the distinction of shippers who use a TMS when managing inbound transportation. A TMS’ biggest advantage is that it supports inbound transportation by providing shippers with visibility.

In today’s omni-channel world, control over inbound freight management requires detailed visibility on all accounts of the supply chain. Chris Cunnane with ARC Advisory Group said, “It’s really all about visibility into freight – understanding where it is and when it’s going to arrive so that you can plan effectively. With good visibility, you don’t have trucks waiting around to unload with merchandise needed to fill pressing orders while other trucks with less time-sensitive inventory are unloading. The biggest thing a TMS can provide to improve inbound logistics is that visibility aspect.”

Visibility doesn’t exclusively rely on a TMS though, to gain full visibility, shippers must build relationships with suppliers, carriers and logistics providers. These partnerships enable shippers to get real-time insights and a chance to optimize best practices.

There is a major savings potential when using a TMS. To operate efficiently and effectively, companies need visibility into their entire supply chain process – including inbound freight.

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The 3 Most Popular Uses of TMS Technology

Supply chains are increasingly complex, and companies who leverage technology find competitive rates, enhanced operations, greater flexibility, and cost reductions. Logistics providers continue to work in order to provide added value to their client’s supply chain processes. Successful 3PL relationships include committed and ongoing value through technology — access to historical and real-time reports can be used to make data-driven decisions that enable lasting results.

The industry is demanding innovation and technology while being cost conscious, and 3PLs are answering with cloud computing. Technology improvements are motivating demand for improving shippers’ transportation strategy. A TMS provides service gains, like on-time pickup and delivery and disruption notifications.

According to the 2016 results of Capgemini’s State of Logistics Outsourcing report, cloud technology is helping 3PLs and shippers reduce transportation costs, improve visibility, manage inventory and achieve regulatory compliance.

IT capabilities must be well-aligned between organizations. 93% of the 2016 Capgemini respondents agreed that IT capabilities are a necessary element of 3PL expertise and 59% agreed that they were satisfied with 3PL IT capabilities.

“TMS users can expect robust execution, end-to-end visibility, dock door scheduling, yard management, inventory replenishment and inventory strategies,” notes Rick Jordan of ICG Commerce.

  1. Visibility

60% said they are using technology to increase visibility within orders, shipments and inventory.

  1. Scheduling

48% are using the technology for scheduling within transportation management.

  1. Planning

40% are using the technology for planning within transportation management.

3PLs are monitoring the marketplace and utilizing technology to choose the most profitable and efficient shipping lanes. Technology permits continuous route optimization along with dynamic incentivized scheduling, digital confirmations and consolidated billing.

3PLs thinking about the future of the supply chain given disruptive innovations like drones, driverless vehicles and smart cities are the ones that will remain key players in the industry.

Transportation management systems support a shipper’s pursuit of lower rates. The industry is focused on innovation — Without a TMS, shippers might find it nearly impossible to consolidate transportation rates, performance and volumes across lanes. A TMS makes it possible to track data in one online portal. A TMS automates and consolidates freight invoices, so shippers don’t leave money on the table. 93% of shippers report their relationships with 3PLs have generally been successful.

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