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On top of all disruptions, we now have a pallet shortage

According to DAT Freight & Analytics:

Due to record-high lumber prices, there’s a disposable pallet shortage, which further stresses already strained supply chains.

The cause for the high lumber prices?

Low interest rates and urban flight are fueling the housing boom. According to the National Association of Homebuilders, the unprecedented spikes in lumber prices have added nearly $36,000 to the average price of a new single-family home, and nearly $13,000 to the price of a multifamily home since April 2020.”

DIY backyard projects also soared during the pandemic. The frenzy bit deep into the 2020 summer lumber inventory, resulting in a historic lumber shortage.

While pallets are used in many sectors, the produce industry is especially impacted now that its peak harvest season.

In a recent letter to members, the United Fresh Produce Association who represent the full breadth of the produce supply chain, highlighted a multitude of issues impacting pallet availability including:

- A lack of pallet availability and rising pallet prices add to the stress of already squeezed supply chains

- Pallet costs are up 400% due to several factors, including high demand and rising lumber costs

- Wood pallets increased 8% in April (up 14% this year) in the latest Producer Price Index — the largest increases recorded in the last decade.

- Pallet manufacturers are competing for raw materials with the home construction industry, which has boomed in recent months

The shortage of lumber and wood products has increased the cost of raw lumber 200% to 350% and is making the cost of wood pallets increase incrementally

- Repositioning pallets is a challenge with a strained trucking capacity — not enough trucks and drivers are available to move the pallets from one location to another

- Pallets may be circulating in the supply chain, but not necessarily in the right place at the right time

- Dwell time is up for non-perishable inventory, which indicates pallets may be sitting longer at warehouses or loading docks.

Growers need to keep the pallet shortage in mind as they meet the escalating demand for produce. For carriers and brokers, the pallet shortage will also increase loading delays. We may even see hand-stacking cartons and bags of produce like we did in the days before pallets.

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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.

LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on LinkedinFacebook, and Twitter.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

By: DAT Freight & Analytics

June 17, 2021

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What Is Supply Chain Automation and How Can It Benefit Your Business Operations?

According to Supply Chain 247:

If your factory is the heart of your organization, then your supply chain is the veins and arteries and your operational efficiency depends on everything being connected to deliver a reliable service.

Supply Chain Automation

Today, many organizations have built operational efficiencies based on a patchwork of legacy systems, with gaps between applications leaving a disconnect in the supply chain, which can lead to inefficiencies, lack of visibility, and general uncertainty.

Supply chain automation provided by a low-code automation platform can automate tasks within the end-to-end supply chain and connect systems for a 360-degree view of operations.

What is Supply Chain Automation?

Supply chain automation is the use of digital technologies to improve efficiencies, connect applications and streamline processes within supply chain operations.

It usually incorporates intelligent technologies such as Digital Process Automation, Robotic Process Automation, Artificial Intelligence, and Machine Learning.

What Are the Benefits of Supply Chain Automation?

There are multiple benefits that can be seen when supply chain automation software is introduced to operations. Here are the four primary benefits:

1. Automate menial, manual tasks

A connected supply chain supported by automation technologies provides the opportunity to free employees from these menial, manual tasks.

“Supply chain management processes contain various documents such as delivery order, dock receipt, bill of lading (B/L), sea waybill, etc,” states AIMultiple.

“Employees in the supply chain department continuously store and process these documents for various reasons, yet, this is a time-consuming, manual task that inhibits businesses to reach operational excellence.”

These tasks are often carried out on pen and paper by employees in the warehouse, taking up valuable time and often leading to human error when recording and submitting information. The benefits of automation, both in and out of the warehouse include increased efficiency - manifested by increased fill rates and decreased cycle times, as well as increased warehouse throughput time, reduced labor and operational costs, elimination of human error, and improved inventory management.

The benefits of automation were realized by Bizagi customer, adidas. The largest sportswear manufacturer in Europe needed to transform its supply chain across 400 factories. Using Bizagi and an agile methodology allowed for less development, more efficiency, and cost reduction. They created standardized, reusable processes to deliver automation across departments.

These automated processes eliminated manual tasks and reduced operational costs, such as eliminating a million emails per year through system integration. They also halved factory onboarding time and sped up the two-month sports asset contract approval cycle to just one week.

2. Transparency and visibility of operations

Traditional supply chains often face unpredictable lead times and lack the transparency to know how inventory is progressing. Digital technology means that now even the everyday consumer is used to being able to see where their online delivery is in its journey from the warehouse to their front door. So why shouldn’t businesses expect the same visibility earlier on in the supply chain?

The reason for the lack of transparency in the past couple of decades has been due to poor connectivity. As more systems and applications were introduced to increase efficiency, they created silos and left gaps between systems, which meant that information could not be passed between them and it was hard to follow the status of a process end-to-end.

low-code automation platform can connect all systems and create a centralized location for your employees to access information, providing complete process visibility and orchestration. This provides real-time data to employees, not only giving them up-to-date status updates but also allows them to act with certainty when executing tasks that rely on important information.

Transparency not only benefits employees but also customers as they can easily get an overview of how their order is progressing through the supply chain. Traceability is now essential for customer satisfaction and a low-code automation platform can provide appropriate visibility.

3. Agility to respond to the unexpected

If 2020 taught us anything, it’s to expect the unexpected. For some organizations, the COVID pandemic meant scaling operations back and operating on a bare-bones basis. For others, it meant ramping up production and shipping capabilities to meet increased demand.

Using a low-code automation platform provided the benefit of adaptability to respond to unforeseen circumstances, which is built-in when you connect information and data across your organization.

“Low-code platforms let technology teams build enterprise applications substantially faster to meet rapidly changing business objectives,” reports BM Magazine.

“To respond quickly to business needs, using low-code platforms with an API-driven approach can help you to create auto-responsive apps for websites, tablets, and smartphones at the desired speed.”

4. Ensure regulations are always met

Diminishing risk and meeting compliance standards are particularly hard in a post-COVID world. Even more so for manufacturers and suppliers with global sites observing different regulations, ranging from health and safety to best business practices. Auditing is then required to prove these standards have been met.

Establishing business processes that are then executed, either in part or fully, by automation technology can help improve both risk management and the overall supply chain management. All stakeholders can ensure best practices are followed while integrating compliance for effective and risk-averse operations.

Documenting and automating workflows is the ideal way to ensure specific requirements are met, and that operations can be agile enough to evolve. Additionally, the real-time visibility brought to the supply chain by a low-code automation platform can help organizations to mitigate risk and ensure compliance by identifying issues as they arise and preventing them from escalating further.

Connectivity and Automation

Connectivity and automation bring the efficiency and agility that so many supply chain operators crave. If you would like to find out more about how a low-code platform can help transform your supply chain, download the ebook, The Essential Guide to Automation in Manufacturing.

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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.

LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on LinkedinFacebook, and Twitter.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

By: Supply Chain 247

June 17, 2021

SHIPPERS
SHIPPERS
North America supply chain reshoring will not happen, report says

According to American Shipper:

Companies are unlikely to reshore their supply chains from Asia to North America between now and 2025 due to high production costs, concerns about the business climate in Mexico, and fears of the loss of access to close-by markets of billions of consumers, according to a report released Wednesday by the Economist Intelligence Unit (EIU), the business intelligence operation of London-Based The Economist Group.

The conclusion goes against the widely held belief that businesses selling into North American markets would shift their supply chains from Asia in an effort to counter the massive and continuing supply chain disruptions caused by the COVID-19 pandemic. However, the EIU report said that as pandemic-related concerns fade with more people getting vaccinated and countries reopening, the emphasis on business resiliency that was a key discussion point during 2020 and in the early part of 2021 will fade with it.

Andrew Viteritti, the EIU’s commerce and regulations lead, said in a Wednesday interview that most multinational firms with long-standing Asian operations will return to their pre-COVID-19 behavior of basing supply chain decisions on operational cost-effectiveness and maximum revenue opportunities rather than on the need to establish supply chain redundancies. This means, for the most part, a continued reliance on low-cost Asian production, Viteritti said. 

Shifting production and distribution operations thousands of miles is a costly and complex investment, and relocating supply chains to North America would deprive businesses of cost-effective means of penetrating Asian markets with consumers possessing more disposable income than ever before, Viteritti said.

Production of critical supplies like personal protective equipment and medical supplies may be reshored for national security and public health reasons, Viteritti said. However, the notion that businesses will leave Asia in droves is far-fetched, he said. The return to the status quo is likely to become clear once the current supply chain disruptions, largely a byproduct of the pandemic, begin to dissipate and supply-demand scales return to balance, he said.

Ironically, the report was accompanied by a chart that projected Canada and the United States as the highest-performing countries through 2025 across seven metrics of international business. Canada and the U.S. had the highest and second-highest overall scores, respectively, among 11 countries analyzed by the EIU. China ranked eighth overall.

North America boasts a deeply integrated marketplace, a large free trade area, short-distance travel times and new opportunities for policy integration under the United States-Mexico-Canada Agreement (USMCA) on trade, Viteritti said. Still, those qualities won’t be enough to move the reshoring needle in a substantial way through mid-decade, he said. 

In particular, worries about Mexico will prevent North America from becoming a realistic substitute for reliable and established Asian production, according to the report. With the exception of the category of “foreign trade and exchange controls” where it scored very high, Mexico scored poor to slightly above average across the other six EIU metrics. It ranked ninth overall among the 11 nations surveyed.

Mexico’s lowest reading came in the category of “political effectiveness,” a reflection of market concerns that Mexico is adopting a more protectionist stance toward international trade. The country also scored low in the category of “private enterprise policy,” which may reflect an adversarial approach to business in general. Mexico’s labor costs are lower than in the U.S. and Canada, though it is an open question as to whether that will be enough to encourage foreign investment in the continent. 

Other concerns are the ongoing bilateral squabbles between the U.S. and Canada, and whether President Joe Biden’s push to encourage purchases of U.S.-made goods squares with foreign firms’ desire for truly free and open markets, the report said.

The EIU builds its intelligence model from a broad array of data sources. Created in 1946, it is one of the world’s most respected business intelligence operations.

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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.

LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on LinkedinFacebook, and Twitter.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

By: American Shipper

June 17, 2021

DRAYAGE
DRAYAGE
Ship Orders Surge as Carriers Rush to Add Capacity

According to The Wall Street Journal:

Global shipyards that were retrenching and consolidating in a faltering maritime market barely more than a year ago are now flush with new orders, boosted by efforts by shipping lines to add capacity to meet resurgent consumer demand in Western economies.

Orders for new container ships in the first five months of this year were nearly double the orders for all of both 2019 and 2020, according to London-based maritime data provider VesselsValue Ltd., with the biggest gains going to shipyards in South Korea and China.

The order tally has been so strong that some yards have stopped giving quotes for new vessels and are trying to renegotiate existing orders for more than 20 ships as the price of steel plates used to build vessels has doubled since the end of 2020, according to people involved in those deals.

The resurgence in ordering is being driven mainly by container ships as Western retailers such as Walmart Inc. and Amazon.com Inc. scramble to restock after a year of supply-chain disruptions from the coronavirus pandemic.

The rush to replenish depleted inventories, along with congestion at major ports in North America, Europe and Asia, has left cargo space hard to find and sent freight rates soaring. That has spurred big profit gains at operators like A.P. Moller-Maersk A/S, CMA CGM SA and Hapag-Lloyd AG , as well as triggered moves to renew and expand their fleets.

“They are making bucketloads of money and when that happens, owners invest in new ships,” said Peter Sand, chief shipping analyst at Denmark-based shipping trade body Bimco.

“Orders have doubled so far in 2021, nearly reaching the total tonnage ordered for all of last year. I won’t be surprised if there is another wave of ordering.”

The strong orders are in contrast with the past couple of years, when a long downturn in maritime trade left a dwindling backlog of orders at shipyards and forced some to consolidate.

Data from London-based shipping broker Braemar ACM Shipbroking show that in the first five months of this year, ships totaling capacity for about 2.6 million containers—measured in 20-foot equivalent units, a standard maritime measure—are on order, putting the business on track to surpass an annual record of 2.8 million containers’ worth of capacity ordered in all of 2007.

“It’s been our busiest period in years and it’s very much about container ships,” said a senior executive of South Korea’s Hyundai Heavy Industries Co. , the world’s biggest shipbuilding facility in terms of capacity. “The orders are mostly for bigger ships with all the extras to emit less, which is good for margins. We are almost out of slots to build new ships until late 2023.”

“I’ve never seen such demand in 20 years,” this executive said.

South Korea’s three big yards—Hyundai Heavy, Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. —account for more than a third of all shipbuilding orders for all types of vessels.

The other shipyards with big shares of global orders are China State Shipbuilding Corp., China Shipbuilding Industry Corp. and Japan’s Imabari Shipbuilding Co.

In the first five months of this year, 208 container ships worth $16.3 billion were added to the global order book, compared with 120 ships valued at $8.8 billion for all of last year and 114 vessels worth $6.9 billion in 2019, according to VesselsValue.

The South Korean shipyard executive said the boxship orders are mainly for vessels that can move around 14,500 containers and behemoths with a capacity of more than 20,000 boxes that are mainly deployed on Asia-Europe trade lanes.

An executive at one of China’s big state shipbuilders said owners of roughly two dozen ships are being asked to pay more if they want their vessels delivered because of rising steel prices.

“If the yards adhere to the original contract, they will be delivering the ships at a loss,” said this executive. “A big cargo ship needs around 25,000 to 30,000 tons of steel and that’s an additional $15 million on average from last year in terms of cost. There are at least 22 ships on order that are being renegotiated at big Asian yards.”

Steel can account for up to 30% of a vessel’s cost, depending on the type of ship. Tankers and dry-bulk movers need more steel than container ships. A very large crude carrier now costs around $100 million, up from $85 million last October.

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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.

LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on LinkedinFacebook, and Twitter.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

By: The Wall Street Journal

June 9, 2021

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Top Five Supply Chain Management Best Practices

According to SupplyChain:

1. IDENTIFY RISK

It is very beneficial for project managers or risk managers to carry out assessments of risk regularly. The events of Covid-19 have highlighted some key issues that supply chain leaders should become aware of as they plan for the future. There are various risks along the supply chain, especially for large logistics companies. Some of these include:

- Health and safety risks.

- Crime incidents involving transport vehicles.

- Regulation changes.

- Cybersecurity threats.

2. ACQUIRING SKILLS

As digital transformation becomes a critical focus for supply chains, companies aim to acquire more skills to manage sophisticated supply chain systems. Predictive operations systems are becoming more popular as the development of AI and machine learning manages menial tasks, which allows personnel to focus on the wider operations and procurement tasks. However, managing these systems requires new skills like any new system.

3. USING BIG DATA

Data analytics and business intelligence is a big trend in 2021. Many supply chains are moving towards big data usage, which is definitely important for keeping up with the industry. But only around half of supply chains are using technology to their advantage, despite them understanding its long-term benefits.

4. COMPETITION AND FINANCIAL MANAGEMENT

Competition in the supply chain involves maintaining supplier relationships, understanding the need for fast operations and providing personnel with the equipment and skills to carry out their jobs. 

A particularly attractive financial strategy for supply chain companies in 2021 is cost reduction. As the use of big data widens, businesses can focus their attention on reducing production costs and tackling much-needed price negotiations.

5. COLLABORATION

Collaboration happens throughout every stage of the supply chain process, from sourcing and negotiations to product or service delivery. Providing the tools for personnel to collaborate will streamline each process. The Industrial Internet of Things (IIoT) is an excellent example of how a digital ecosystem can be used to monitor and collaborate in manufacturing and can even be used to manage robotics

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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.

LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on LinkedinFacebook, and Twitter.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

By: SupplyChain

June 9, 2021

SHIPPERS
SHIPPERS
5 Tips To Navigate Sustainable Logistics

According to Forbes:

Last week I bought t-shirts and shoes from a well-known online fashion store in Europe. The very next day, I had three different tracking codes for my parcels which would be delivered on the same day, at different times. From a consumer perspective, it is impressive to see how fast big supply chains work. But from a sustainable logistics perspective, it seems more like our world is drowning in a sea of packaging waste and smothering the carbon emissions for the cost of rapid delivery.

Does it really have to be like this?

The answer is definitely not. Finding cost-effective sustainable solutions today is much easier for businesses compared to the past. Especially in the post-COVID-19 world where society became more conscious about the responsibility to the environment, we hear everyday news about corporations stepping in the game of being carbon neutral from design to operate. In this alignment, achieving sustainable logistics operations should and must not be an exception.

What practices can businesses apply to increase sustainability within logistics operations? Here are five tips to consider.

1. Harness data for end-to-end visibility

I don’t know if it is just me but whenever leave home for 5 minutes, the delivery guy will turn up in the same time slot! Are they hiding around the corner waiting for me to leave? Recently, I discovered one logistic provider that enables me to live-track the truck which carries my parcel and gives me the chance to change the delivery time up until the last hour. This helps the driver to plan the route to simultaneously lower last-mile carbon footprint, and eliminate a wasted trip, not to mention putting less stress on the customer.

Placing the data at the heart of supply chain operations enables businesses to work more efficiently and effectively. Improving freight collaboration, material, and goods tracking with an open logistics ecosystem connects business partners to manage logistics operations better by monitoring the transport methods in real-time and identifying the best alternatives. Also, businesses can eliminate the risk of empty milages by loading vehicles to optimum capacity, which is both environmental and profit-friendly.

2. Get closer to the customer with pop-up warehouses

Think about a quick win-win-win solution for businesses, consumers, and the environment at the same time. The answer is pop-up warehouses.

Last-mile delivery emissions associated with e-commerce are increasing, and logistics providers are under pressure to find ways to reduce the carbon footprint, which is one of the key measurements of truly sustainable supply chain logistics.

Setting up a pop-up warehouse brings the businesses closer to customers; which means it is an excellent way to reduce last-mile emissions. It helps businesses reduce delivery time and cost; as well as gives more flexibility to mitigate supply chain disruptions.

You can not only using the warehouses for storing inventory close to the demand but also combine on-site retail and pick-up point to cut down the shipping cost completely. Plus, considering the fact that the cost of renting a small warehouse is less than the shipping cost from centrally located facilities, it is a great way for businesses to optimize the supply chain operations while helping the environment.

3. Use alternative vehicle or fuel technologies

Looking out of my window, every day I see delivery vans driving to my neighborhood. Most of those delivery trucks use diesel as a fuel source since it is an affordable option. Not that gas engines are good for the environment, but compared to gas engines, diesel trucks increase the carbon footprint by exhausting %13 more CO2.

Using lower carbon fuels such as biofuel instead of fossil fuels, replacing the old trucks with eco-friendly vehicles would be the measures taken toward ecological and social sustainability goals. There is a wide range of eco-friendly solutions in the market which challenges traditional ways. Sea shipping, eco-friendly train solutions, hybrid or electric vehicles are available green alternatives.

Also, the emissions associated with the distribution facilities can be eliminated via clean energy-powered electricity, solar systems, and water recycling systems. One of the vertical farming companies, &ever, is helping the world minimizing the carbon footprint while producing sustainable and soil-free food. By changing the traditional way of farming, they use 85% less water and can grow 18 cycles a year instead of having 7 cycles a year. Protecting the planet and feeding the world in the most sustainable way possible can be the most profitable path if you take smart steps.

4. Optimize on-site resources, planning, and execution

Have you ever wondered how those huge containers are being carried and transported in between rail, ship, and trucks? What kind of truck is going to carry those pallets or boxes? How those containers will be moving to the next step and transported to the yard?

This is the point businesses use yard logistics to run smooth logistics operations with higher throughput and minimal environmental impact.

Yard logistics is part of the supply chain execution platform which businesses can use to strengthen the bridge between warehouse and transportation management. Efficiently planning the steps and activities in the yard helps to avoid long breaks or processing gaps in between the logistics operations; results in eliminating the waste, transport, and labor cost, and of course carbon emissions.

5. Utilize IoT for simple improvements

Did you know that driving on the highway at 80 kilometers per hour can save about 10 % of fuel? Eco-driving education is another significant way to reduce fuel consumption. It also minimizes the risk of possible damages to the driver, overall vessel, and products in it. As a part of the education, IoT and sensors can be used to monitor and collect the data on speed, fuel consumption, and breaking behavior of drivers.

Also, keeping tires at optimal pressure is an effective tool for keeping fuel consumption under control. With sensors mounted to the rim of the wheel, drivers can monitor the current tire pressure on the display. Using tire pressure sensors helps fuel consumption by up to 12 % at lower speeds, as well as extending the tire lifetime.

There are many ways to make businesses sustainable from design to operate: using sustainable materials, reducing waste, adopting clean energy resources, investing in eco-friendly technologies, and more. Implementing environmental friendly logistic solutions is one of the important building blocks of creating a sustainable supply chain in a journey to become carbon neutral.

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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.

LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on LinkedinFacebook, and Twitter.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

By: Forbes

June 9, 2021

CARRIERS
CARRIERS
Tips to minimize risk during hurricane season

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LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on LinkedinFacebook, and Twitter.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

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By: LFS Marketing

June 3, 2021

SHIPPERS
SHIPPERS
Top 3 logistics tech trends for shippers to stay competitive

According to Freightwaves:

Staying on the leading edge of technology requires time and capital investments, along with innovation and a corporate culture that values iteration. 

We recently caught up with Jim French, chief technology officer at Transplace, to get an inside view on high-impact trends in logistics tech. He says Transplace has been increasing its technology investments 25% each year for the past four years.

“We take innovation and invention seriously and encourage our employees to push the envelope on what’s possible with our advanced technologies,” French said. 

With all of the logistics and supply chain advancements now available, it can be confusing for shippers to identify high-impact technology investments that will help them stay competitive in 2021 and beyond. French offers three areas of logistics tech to consider.

Data-driven decision-making

Investing in a robust transportation management system (TMS) is one of the most important decisions for a shipper. A cloud-based TMS provides real-time clarity of transportation networks, data insights, dashboards, reporting and analytics. Having the right TMS results in 6-10% transportation cost savings within six to 12 months.1

“I realize that a TMS is not new tech,” said French. “In fact, the hottest innovations in logistics and supply chain technologies right now may not be the newest, but it’s tech that continues to get sharpened and more sophisticated. Through iteration and continuous improvements, we are refining our technology platforms and processes to provide a competitive advantage for our clients.”

For shippers with a legacy TMS, a new logistics solutions platform provides shippers access to emerging technology like real-time visibility, service prediction, service performance benchmarking, network collaboration and optimization and more. These stand-alone offerings are a quick, cost-effective way for shippers to take advantage of Transplace’s leading-edge logistics technology, intelligence and visibility to optimize supply chain operations in concert with their current TMS infrastructure. 

With the democratization of data, logistics technology specialists are able to minimize risks and spot opportunities to save costs to help shippers make smarter decisions for better business outcomes. TMS apps are making the dashboards and analytics accessible from any device anywhere in the world.

French advises shippers, “If you haven’t explored the latest upgrades to TMS platforms, make a point of finding out what’s new. For example, Transplace is leading the TMS industry by enabling ‘instant price’ quotes from multiple providers, while still allowing carriers without this capability to directly interact through the more traditional carrier portal for spot shipments.”

Contingency planning and business continuity

Expect logistics and transportation to continue experiencing volatility in 2021. In addition, retailers are demanding more visibility into the entire supply chain to avoid empty shelves. Invest in technology that boosts contingency planning and business continuity. 

Artificial Intelligence (AI) and machine learning (ML) are supporting intelligent inventory demand forecasting, production scheduling and predictive analytics. Through AI and ML, a task that could take humans days or weeks to unravel can be completed in mere minutes. More and more logistics execution will be automated, saving time and increasing efficiencies within the supply chain.

For example, Transplace upgraded its tracking portal and control tower as a central source for managing dynamic and complex planning. The display shows hot spots in addition to weather and traffic incidents to help shippers avoid disruptions in their transportation network. Combined with powerful integrations for real-time location and status updates, AI can accurately predict problems before they occur, allowing for mitigation to minimize impact.

Near real-time data processing continues to advance through IoT devices, APIs and potentially blockchain shared ledgers. The newest tech surpasses geo-location visibility, allowing logistics plans to be adjusted to avoid delays and disruptions by the superior accuracy and timeliness of the data. The smarter, automated supply chain analytics will minimize risks, identify root causes, improve procurement performance and accelerate forecasting. With automated data processing and predictive analytics, workstreams will be more aligned across supply chain and transportation departments, as well as logistics partners.

Multi-shipper collaborations

Increased collaboration among shippers, carriers and the logistics and transportation communities will enhance agility. The newest technologies upgrade the usual digital brokerage relationships. Now supply chain professionals can improve capacity and cost management by taking advantage of multi-shipper collaborations, planned and dynamic continuous moves, LTL pools and other strategic carrier partnerships.

To be responsive to rapidly changing circumstances, Transplace developed its Network Services to support shippers with capacity challenges and demands. Network Services delivers significant advancements in multi-shipper collaborations leveraging Transplace’s $11 billion in freight under management. Through AI, ML and industry-leading technology, Network Services identifies optimization opportunities that generate significant transportation cost savings for both the shipper and carrier communities.

Transplace is also launching a set of APIs to connect carriers with its Freight Allocation Module (FAM). This is an auction and bid technology within Transplace’s logistics platform, allowing carriers to bid on lanes. These APIs will significantly shorten auction timing without compromising the ability to find a true market price in near real time. Accessible through Transplace’s API Portal, the solution is an easy, low-cost way for shippers and carriers to integrate with Transplace. 

French concludes, “Shippers should partner with supply chain experts who will tailor their solutions to meet their specific needs. The technology must be customizable and flexible to changing circumstances and business evolution.”

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LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

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By: Freightwaves

June 1, 2021

SHIPPERS
SHIPPERS
6 charts show how a pandemic upended retail supply chains

According to Supply Chain Dive:

The energy inside of stores in March 2020 was rushed, strained and infused with the weighty gaze of shoppers and workers that asked, "Should we even be here? Are we going to be OK?" At that point, a lot was up in the air. Sports, shopping, supply chains and society at large were changing — adapting — to the coronavirus pandemic.

Soon, stores temporarily shuttered as the result of lockdowns. And consumers flocked to digital buying channels.

E-commerce sales boom in pandemic

E-commerce retail sales, % of total sales

Chart: Matt Leonard / Supply Chain Dive Source: U.S. Census Bureau Created with Datawrapper

When stores closed and customers moved online, retailers looked for a way to get in-store inventory moving. Fulfilling online sales from retail locations was an obvious solution. And it was one that some companies were better positioned to tackle. Target, for example, has been perfecting its ship-from-store model for years.

"Ship from store, depending on the retailer, can be incredibly efficient," said Moody's Retail Analyst Charlie O'Shea. "And in Target's case, it is because they so locally curate their stores."

Retailers ship from store to move inventory

Count of annual or quarterly reports mentioning "ship from store"

Includes filings up until March 19, 2021

Chart: Matt Leonard / Supply Chain Dive Source: Securities and Exchange Commission Created with Datawrapper

Other retailers that largely rely on brick-and-mortar sales had to stand up infrastructure quickly to be able to handle e-commerce and ship from store.

"We expedited the infrastructure to be able to buy online and ship from store in order to supplement e-commerce fulfillment while leveraging labor that we would already have available in retail stores after they have reopened," Build-A-Bear CEO Sharon Price John said on the company's earnings call in June.

The effort might not have been enough to make up for Build-A-Bear's store network: its sales fell 23% YoY to $249.2 million for the full year 2020. But e-commerce demand was up 133% YoY.

"​We were able to support this growth through our efforts of improving throughput in our warehouse, accelerating omnichannel initiatives in ... our last-mile delivery, including buy online pick up in store or ship from store programs," CFO Voin Todorovic said this month.

Whether this strategy will stick around after the pandemic is up for debate.

"I think every retail analyst right now is kind of scratching our head trying to figure out what's next," O'Shea said, adding that no one knows what normal will look like going forward.

Retailers move to the curb

Count of annual or quarterly reports mentioning "curbside pickup"

Includes filings up until March 19, 2021

Chart: Matt Leonard / Supply Chain Dive Source: Securities and Exchange Commission Created with Datawrapper

The other option for shuttered retailers was to get customers to pick up at the curb. This simplifies the supply chain for the retailer compared to ship from store — and is cheaper for the retailer.

Bed Bath & Beyond, Dick's Sporting Goods and Hudson's Bay were among the retailers utilizing the curb as a result of the pandemic. But there are questions about how companies will shift and improve these offerings going forward.

"I think ... retailers are going to focus on this sort of whole curbside thing, trying to make that experience not just painless, but actually enjoyable," said Dave Gill, vice president of insights and analytics at Rakuten Intelligence.

More shoppers choose to pick up orders

Order for pickup as % of all buyers

Chart: Matt Leonard / Supply Chain Dive Source: Rakuten Intelligence Created with Datawrapper

Retails experienced demand for these omnichannel offerings. Grocers have highlighted the success of their curbside programs months into the pandemic.

"More than 50% of our BOPIC orders for the fourth quarter were delivered curbside," BJ's Wholesale Club CEO Lee Delaney said on the company's earnings call this month, referring to the retailer's buy-online-pickup-in-club option.

While retailers have seen benefits from the e-commerce pivot, it wasn't easy. Amazon, which had, arguably, the most mature e-commerce supply chain, struggled to keep up with demand in the early days of the pandemic, according to figures from Rakuten. (It is worth noting that these figures are an average that includes marketplace sellers for which Amazon doesn't control the supply chain.)

Amazon's network struggles to keep up

Click to ship and click to door, measured in days

The increased ship and delivery times highlight some of the labor challenges Amazon had in the early days, Gill said. The company did eventually bring on hundreds of thousands of workers to bolster its ranks.

"People that work in Amazon warehouses got sick, and went home and called in sick," Gill said. "So they actually had sort of a compounded problem in that they're trying to fulfill all this demand and their workforce, which is gigantic, was pretty hard hit by all that stuff."

Amazon's orders start showing up late

Percentage of Amazon orders arriving late

Chart: Matt Leonard /Supply Chain Dive Source: Rakuten Intelligence Created with Datawrapper

The slowdown in Amazon's network resulted in an uptick in late shipments, but the retailer has seen these figures largely recover. Some areas have already seen a return of one-day shipping.

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By: Supply Chain Dive

June 1, 2021

CARRIERS
CARRIERS
Can Mexico capitalize on US automakers’ pivot to electric vehicles?

According to Freightwaves:

The multibillion-dollar North American automotive sector, which includes one of the largest components of U.S.-Mexico trade, could dramatically change as many automakers make a substantial shift to manufacturing electric vehicles.

On April 30, General Motors (NYSE: GM) became the first U.S. automaker to announce it would build electric vehicles in Mexico. GM said it would invest $1 billion in its factory in Ramos Arizpe to produce electric cars.

As U.S. automakers pivot into the electric, autonomous vehicle era, cross-border operators say Mexico is more than ready to seize the moment.

“GM’s announcement is really exciting news for Mexico because it’s one of the very first electrical vehicles that’s going to be made in Mexico,” said Jordan DeWart, managing director at Redwood Mexico based in Laredo, Texas. Redwood Mexico is part of Redwood Logistics, headquartered in Chicago.

GM’s facility in Ramos Arizpe currently makes the Chevrolet Blazer and Equinox SUVs, along with engines and transmissions. GM aims to manufacture two electric Chevrolet SUVs in Ramos Arizpe starting in 2023, according to Reuters.

GM said it will have 30 all-electric vehicles by 2025, including the Chevrolet Bolt and Silverado electric pickup truck, Cadillac Lyriq EV SUV, GMC Hummer EV SUV and Hummer EV pickup, and the Cruise Origin.

The Ramos Arizpe plant will be GM’s fifth electric vehicle factory, joining plants in Spring Hill, Tennessee; Factory ZERO in Detroit and Hamtramck, Michigan; Orion Assembly in Orion Township, Michigan; and CAMI in Ingersoll, Ontario.

The Ramos Arizpe factory employs 5,600 workers and could expand its workforce, according to Francisco Garza, CEO of GM Mexico.

“We trust that the necessary economic conditions will be met so that eventually the complex can grow the workforce one more shift in some operations,” Garza said in a statement.

In addition to building electric vehicles in Mexico, GM plans to convert its entire portfolio of vehicles to an all-electric platform by 2035.

“GM’s announcement will bring a lot of new suppliers to that marketplace that haven’t been there before,” DeWart said. “Suppliers typically set up in Asia, in China, obviously, and even some in the U.S., but they will definitely come to Mexico to set up plants.”

Deepak Chhugani, founder and CEO of Nuvocargo, said GM’s announcement that it will build electric cars in Mexico shows that the cross-border market is only going to grow. Nuvocargo is a digital logistics platform for cross-border trade between the U.S. and Mexico.

“We think it’s proof of the thesis behind Nuvocargo, which is that bigger and bigger firms in the U.S. are finding that Mexico is a very attractive place to manufacture,” Chhugani said. “Anywhere in Mexico, whenever there are tier one companies from the U.S. setting up manufacturing, that’s attractive for carriers, because that means that they’re typically going to have larger and more predictable volumes.”

In Mexico, Ford Motor Co. (NYSE: F) recently began producing the Mustang Mach-E at the company’s assembly plant in Cuautitlan, just north of Mexico City. The Mach-E is Ford’s first all-electric crossover vehicle.

Ford also announced in March two additional midsize electric crossovers — one Ford and one Lincoln (Ford’s luxury vehicle line) — will be built in the Cuautitlan plant. 

Joshua Rubin, vice president of business development at Javid LLC, said more electric vehicle production in Mexico could lead to increased cross-border freight. Javid is a Nogales, Mexico-based firm that helps facilitate foreign manufacturers that want to move operations to Mexico.

“As GM grows and needs additional suppliers, there is a good chance that we are going to see more companies looking to move into Mexico to nearshore their operation closer to GM’s,” Rubin said.

US-Mexico auto industry is big business

In 2020, the U.S. automotive industry accounted for about $630 billion, 3% of gross domestic product (GDP), according to a report, “State of the U.S. Automotive Industry,” by the American Automotive Policy Council (AAPC). 

“Automakers and their suppliers are America’s largest manufacturing sector,” according to AAPC’s report. “They are also America’s largest exporters. Over the past 10 years, automakers have exported more than $1.1 trillion in vehicles and parts — nearly $36 billion more than the next largest exporter (aerospace).”

The U.S. automotive industry — which includes automakers and their suppliers, as well as vehicle dealerships and auto parts retailers — employs more than 4.1 million people, according to AAPC.

Mexico’s automotive industry accounted for about $32 billion (3%) of the country’s GDP in 2020, according to the Mexican Automotive Industry Association (AMIA). Mexico is also the world’s sixth-largest producer of cars and light trucks and fourth-largest exporter of vehicles.

The Mexican automotive industry employs around 900,000 people, according to Mexico’s National Institute of Statistics and Geography.

Roy Austin, business development manager for The ILS Co., said the U.S. and Mexican automotive industries have been linked for decades. The ILS Co., based in Tucson, Arizona, is a third-party logistics provider serving the U.S. and Mexico. 

“GM, Ford and other automakers have already been in Mexico for over 50 to 60 years or more,” Austin said. “They have enjoyed a relationship with Mexico to great success.”

Ford has been building cars in Mexico since 1925, when it opened a plant in Mexico City to manufacture Model A cars, which replaced the Model T in 1928. GM opened its first plant in Mexico in 1938.

Other carmakers, like Toyota, Nissan and Volkswagen, began opening factories in Mexico during the 1950s and 1960s.

Mexico currently has 26 automotive plants across the country, including plants belonging to GM, Ford, FCA U.S., Toyota, Volkswagen, Honda, Nissan, Mazda, BMW and BAIC Group, according to AMIA. There are also more than 600 tier 1, 2 and 3 auto suppliers/manufacturers in Mexico.

Austin said since U.S. automakers already have long ties with Mexico, more suppliers and supply chains should be moving south of the border.

“I think the trend is only going to continue to grow,” Austin said. “The traffic and the complications with having shipments, vessels on the sea, this is a world that demands things yesterday. The only way to shorten the times is to have cars built and assembled closer to the U.S.”

Jorge Canavati, principal at J. Canavati & Co., said Mexico also has the engineers and qualified workforce to compete with anyone. J. Canavati & Co. is a San Antonio-based company that provides international logistics and trade consulting.

“This is a good move for GM and speaks volumes of the high caliber of the workforce and logistics in Mexico,” said Canavati, who is also chairman of the Global Chamber of Commerce, San Antonio Chapter.

“Mexico has vast experience in advanced manufacturing, which includes aerospace and of course automotive. There are very developed automotive and aerospace clusters throughout the country. The supply chain and logistics platforms, which already exist, play a key role in the manufacture and sourcing in/from Mexico,” Canavati said.

Boost in cross-border trucking and freight

While DeWart is located in Laredo now, he also worked for over 20 years in automotive logistics in the Bajío region of central Mexico in the Mexican state of Guanajuato.

Guanajuato is home to one of Mexico’s largest automotive manufacturer clusters, representing 11% of the national production of auto parts, behind only the states of Coahuila (16.7%) and Chihuahua (12.4%), according to Mexico’s National Autoparts Industry Association.

“When the big three Japanese automakers came in there — Honda, Mazda, Toyota — we saw just a slew of new suppliers pour into Mexico from all over Asia that had not traditionally been in that marketplace,” DeWart said.

GM’s Ramos Arizpe plant is located in the state of Coahuila, about 180 miles south of the U.S.-Mexico border crossing in Laredo.

“I think off the start, you’ll see GM get its supplies from factories around the world. But Mexico is so competitive to set up, that’s something that can be done so quickly now that they’ll definitely be setting up their own plants to supply the GM plant,” DeWart said.

Laredo and Otay Mesa, California, just south of San Diego, are the two busiest U.S.-Mexico border crossings for imports of assembled vehicles and auto parts. According to FreightWaves SONAR platform, freight volumes in Laredo (OTVI.LRD) and San Diego (OTVI.SAN) are up significantly compared to last year.

(Chart: FreightWaves SONAR. To learn more about FreightWaves SONAR, click here.)