A Holistic Roadmap for Uncovering Your Transportation Network Savings

Shippers are continuously looking for ways to reduce their transportation costs. Yet, transportation doesn’t lack when it comes to complexity with its many moving parts. Add in the need for smart resources, strong industry experience and quality skills needed to ensure that transportation networks are optimized, and inefficiencies can easily creep in. By looking holistically at a transportation network across an enterprise, shippers may find that unexplored areas can bring about unexpected savings. Likewise, inefficiencies through common practices may also be brought to light and therefore given the opportunity to be corrected and improved.

Unsure where to start? Here are a few steps a shipper can take to begin to maximizing transportation operation efficiencies, and possibly uncover potential cost savings:

  • Gain a complete view of your transportation management: Take a step back and holistically view your enterprise-wide network of freight flows (inbound, outbound and interfacility) for all modes. You may elect to opt-out on certain modes in the optimization scenarios, but get a clear view of the big picture first, before making that decision.
  • Switching the focus: Optimizing transportation networks doesn’t mean controlling every piece of freight on every lane. Rather it is aimed at the best overall solution for improving supply chain performance and reducing total landed cost. Often this may mean actively and continuously collaborating with vendors and suppliers to pick the right mode and carriers.
  • Tune into “Expressive Competition”: Superior operating performance, service and cost characteristics are achieved by mapping the flows of freight you can identify in your own network and overlaying that with available carrier capacity. The only way this can effectively and efficiently be done is through “Expressive Competition,” which is achieved by exposing your freight flows to the population of carriers with available capacity. Those carriers will tell you – by their selling behavior – what lanes and volumes that fit into their networks. This amplifies operating efficiency and reduces costs for everyone.
  • Turn data into information: Compile a baseline of what your costs are “as-is” today, and then what they could be in the “to-be” model through redesigning and restructuring the network. This is the core of transportation portfolio management.

In addition, avoid common pitfalls such as sub-optimizing specific modes of transportation, which can cause missed opportunities for savings. Lastly, upper management should take into consideration the overall network impact of the margin versus the impact of sales which, pending the commodity, could easily double or triple.

Watch the video below to hear Brooks Bentz, President of Supply Chain Consulting at Transplace, expand on the steps above and how to take a more nuanced perspective when viewing the big picture of transportation management to maximize shipper savings.

Click  here to learn more about Transplace Supply Chain Consulting and managing transportation networks.

Which factors do you find most challenging in optimizing your supply chain network?

Think Holistically About Your Transportation Network

If you’re looking to the future and strategizing on how to run a more efficient, cost-effective transportation network, the key is to think holistically. Keeping these six steps in mind will help. 

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By following these basic steps, you can wring the maximum value and performance from the network you must operate in meeting customer and corporate demands. Getting it right at the outset is commendable—maintaining it is vital.

For more information on building a better transportation network, visit here.

 

Top Issues Facing Carriers Today

John Lower2By: John Lower, Director of Strategic Carrier Management, Transplace

It’s certainly no secret that there have been a number of regulatory concerns in the trucking industry over the last 5-10 years. This regulatory activity, including HOS adjustments and the electronic log mandate, has very altruistic intentions regarding safety and environmental improvements. However, it has also had a direct impact on the costs and productivity of motor carriers which has translated into a tightening of available capacity for shippers.

Additional Concerns and Raised Costs

Changes to HOS rules, electronic logs, and other regulatory items on the docket have a direct correlation to capacity and, as a result, are getting the majority of the press. There are also a number of lesser well-known initiatives that have the potential to simply increase a carrier’s cost structure, including:

  • Insurance Requirements: One of the major recent concerns is the minimum insurance requirements for many carriers being raised from $750,000 to potentially up to $2 million, which could definitively impact a carrier’s cost structure.
  • New Medical Examiner Rules: These rules will require carriers and drivers to be examined by a DOT certified medical examiner, directly raising the cost of physicals.
  • National Clearinghouse for Driver Drug and Alcohol Testing: Carriers will have to access this database at the time of application in order to vet a potential driver candidate – and then continue to do so on an annual basis to audit those driver results. Industry analysts project that this could end up costing carriers over $175 million a year.

Pure operating cost increases like those mentioned above leave a carrier little opportunity to mitigate through improved operating efficiencies. Carriers continually seek opportunities to lean their operation but much of the low hanging fruit has been picked in the last several years. This means that is likely these costs will eventually be passed to the shipper and subsequently the consumer as part of the permanent market supply chain and distribution cost.

How Are Carriers Addressing These Challenges?

Carriers have made significant strides in improving the efficiency of their networks through improved planning and operations which has helped mitigate some the negative productivity impacts represented by regulatory activity. Early adopters of in-cab technology are benefiting from improved data which increases awareness of the availability and efficiency of the drivers within their network.

Carriers are also becoming increasingly disciplined in their bidding and freight acceptance practices. We conclude from bid results and feedback that carriers are discriminating and no longer willing to accept freight that does not meet profitability goals, has “unfriendly” driver characteristics or cannot be serviced efficiently. Many carriers are shrinking their service areas in order to find additional efficiencies – they can accomplish this by discovering where they may have overextended themselves and becoming more selective as to where they’re sending their drivers. Regionalizing networks improves driver at home time and addresses some of the lifestyle challenges typically associated with a one-way, long-haul network model.

In the past, shippers have had more leverage due to an abundance of capacity being available in the market, and carriers had to compromise. Now, due to the many challenges they are facing, carriers are being selective and strategic about what shippers they choose to work with. Carriers are much more intensely protective of their drivers – as the cost of losing a driver is just too high given today’s driver shortage issues – detention and dwell time is one of the most important aspects they look at when choosing a preferred shipper. In order to be a preferred shipper to carriers, shippers need to understand what drives carrier efficiency, what’s going to make the driver more efficient and ultimately, what’s going to make the entire network more efficient for all involved.

Want to hear some other ways that carriers can overcome regulatory challenges? Check out the video to hear more from me on this important topic!

We’re Thrilled to Announce the Launch of Transplace Supply Chain Consulting!

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Today marks the official launch of our new supply chain consulting practice! We’re excited to announce that with this new and rapidly expanding practice area, we’ll be able to bring seasoned supply chain professionals with deep functional expertise in transportation and logistics directly to our clients— with the end goal of facilitating and empowering those clients to improve and optimize their end-to-end supply chain, transportation and logistics performance.

The movement of information and financial resources is as critical in the supply chain as the movement of product, and our supply chain consulting practice works with clients in developing an integrated suite of solutions and processes for optimizing their supply chain/transportation/logistics networks. Many of our clients already know that supply chain pain points are always related to one or more of the following factors:

  • Business Practices and Process Capabilities, and Skills
  • Transportation Network Optimization and Capacity Management
  • Enabling Decision Support Technology
  • Supply Chain Visibility/Agility/Flexibility

And Transplace Supply Chain Consulting provides advisory and execution services in all four areas by delivering a broad, yet focused, spectrum of service capabilities, including:

  • Supply Chain Optimization: We work closely with customers to develop an end-to-end, integrated solution across the entire transportation strategy for continuous improvement and enhanced efficiency.
  • Transportation Optimization: By providing analytics, process redesign, methodology, tools and technology, we can optimize complex transportation networks to improve supply chain performance.
  • Sourcing and Procurement: Through careful assessing of current sourcing practices and procurement processes across all categories of indirect spend, our supply chain consulting team works to optimize controlled spend, perform category management and build capabilities for continuous improvement.
  • Asset Management:
    • Our team handles envisioning, designing and blueprinting solutions to efficiently utilize asset capacity, as well as optimizing the use of those assets in transporting and delivering product efficiently and effectively.
    • In addition, we focus on improving asset utilization, particularly in specialized fleets such as dedicated contract carriage, electric, gas and water utility fleets.
  • Business Intelligence and Analytics: By providing BI and analytics we are able to manage and monitor supply chain performance and analyze operational and service issues, as well as monitoring compliance and adherence to operating plans and budgets.
  • Enabling Technology: Determining the optimal network design, as well as the supporting technology stack, our team can help enable and improve operational execution, visibility and compliance.

Truly optimizing a supply chain requires an end-to-end, integrated and unified system of technology, processes and people. We are thrilled to be able to bring tools and processes rooted in hands-on operations and deep functional experience to enable faster, smarter decisions.

Click here to unlock the Transplace world of supply chain consulting, and be sure to check back here to learn more about this exciting development for Transplace from Brooks Bentz, President of Supply Chain Consulting.

Do you have processes in place to evaluate your end-to-end supply chain?

 

Transportation TIP List – June 2015

After celebrating America’s birthday last weekend, it’s only fitting that many of the stories making our TIP list this month have to do with upcoming legislation, growth and progress in North America. From laws focusing on improving infrastructure to an update on the expanding Panama Canal and the growing use of technology all on the horizon—these advances in the transportation and logistics industry will have a definite long-term impact on the USA.

Read on for the top transportation stories that shined bright this past month:

  1. New Transportation Bill Could Finally Solve America’s Infrastructure Problem: Seventeen lawmakers in Congress have introduced legislation to provide federal transportation funding in the long-term. “The Bridge to Sustainable Infrastructure Act,” as it’s being touted by supporters, would require Congress to make the Highway Trust Fund financially sound for at least ten years.
  2. White House Threatens to Veto Transportation Funding Bill; Opposes Restart, Size and Weight Provisions: The White House announced that it would veto a fiscal 2016 transportation funding bill, citing concerns over its funding levels and objections over several trucking provisions. The White House and several Democrats have been critical of provisions in the bill.
  3. U.S. Test of Technology Linking Trucks, Vehicles Advances: “Platoons” of electronically tethered trucks could deliver significant fuel savings for carriers and help improve truck driver retention and safety, but there’s still much testing to be done.
  4. Value of Goods Trucked Between U.S., Mexico Rises: The number of trucks crossing the U.S.-Mexican border is on the rise, but the value of the goods those trucks carry is rising even faster. It’s a sign of the increasing importance of U.S.-Mexican trade and cross-border trucking to U.S. importers and shippers of more valuable industrial and consumer goods.
  5. Panama Canal Expansion Will Unleash Huge Supply of Tonnage for All-water Services: The expansion of the Panama Canal early next year will make an enormous quantity of container ship tonnage available for services that transit the canal, wiping away current capacity restrictions that restrict usage to only small (and inefficient) ships.
  6. House Win Revives Obama’s Pacific Trade Pact: U.S. lawmakers approved legislation key to securing a hallmark Pacific trade deal, partly reversing a defeat that came up the previous week before, in a boost to President Obama’s goal of strengthening U.S. economic ties with Asia.
  7. Global CEO Survey: Transportation & Logistics CEOs Capitalizing On New Technologies: Transportation and logistics CEOs are clear about the disruptive impact of the forces reshaping their industry landscape, and they’re actively exploring new ways to compete. Most importantly, they’re focusing on adopting digital technologies to create value in new ways and developing diverse and dynamic partnerships.
  8. ‘Data Explosion’ Predicted to Unlock Unused Trucking Capacity: Truck drivers may be legally permitted to drive 11 hours a day, but do they? Trucking technology provider PeopleNet reviewed data from more than 200,000 onboard computers used to log driver hours and concluded many drivers don’t even come close to that limit.
  9. 2015 Rail/Intermodal Roundtable: Big Investment is Paying Off: Faced with service issues and declining performance metrics, rail and intermodal providers are keeping investment levels at record highs as they continue to work through the current challenges to get back to pre-recession performance levels.
  10. 4 Way Retailers Can Improve Supply Chain Management: Retailers and their suppliers are under more pressure than ever before to deliver more goods to more destinations faster. To stay competitive, retailers need to know where things are at all times so they can redirect shipments, rebalance inventories and respond to new demands on the fly.:

What North American transportation and logistics stories sparked your interest this month?

We’re Celebrating 15 Years!

This week ushers in the start to the second half of the year, and also marks an important milestone for our company that we’re very proud of reaching: our 15th year anniversary. Over the last 15 years, we’ve seen the transportation industry change and evolve.

We base our success on being a passionate and values-driven organization that’s determined to deliver both rapid return on investment and consistent value to our customer base. We take this opportunity to thank our customers and our talented employees for letting us grow and thrive over the last 15 years. We look forward to what the next 15 will bring!

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To learn more about Transplace, visit www.transplace.com

Congratulations to Our 2015 Carrier of the Year Award Winners!

Last month at our Shipper Symposium, we took some time to recognize a few of the transportation service providers that are the best of the best with our Carrier of the Year Awards. We’re always excited to be able to present these awards, as they recognize those providers with strong, collaborative relationships, consistent high performance and truly exemplary on-time service.

The selection criteria for these awards are data-centric, based on companywide quantitative data as well as survey feedback from supported customers. Some specific areas that are important in the selection process include on-time service, tender acceptance, claims and EPA SmartWay partnership. Additionally, ease of doing business factors such as responsiveness and customer service are also key elements under consideration.

This year, we recognized a total of 19 service providers in a number of various categories and these stellar companies represent the top one percent of our carrier base across all lines of business.

Keep reading to find out the winners of our 2015 Carrier of the Year Awards!

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Congratulations to all of our winners!

Click here to learn more about our Carrier opportunities.

Shipper Symposium Snippets: 2015 Edition!

We definitely think that luck was on our side for the 13th Annual Shipper Symposium! This year, we wanted to bring together some of the brightest minds in the industry and showcase some of the boldest transportation strategies. And considering how many leading industry experts, analysts, academics and practitioners gathered at the Four Seasons in Dallas in early May, we certainly did just that! We had an amazing time connecting our customers and partners with each other, as well as listening to a number of insightful speakers discuss both strategic business solutions and current trends that have a worldwide impact on the transportation of goods.

We walked away with many great ideas for a strong transportation future. Since we learned so much from the speakers this year, we wanted to share some of the key moments that really got us thinking.

The infographic below showcases some of the standout quotes from Shipper Symposium 2015. Read on for some fantastic Symposium snippets, and let us know which one is your favorite!

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Be sure to save the date for our 14th Annual Shipper Symposium, taking place May 9th – 11th in beautiful San Antonio!

What did you think of the speakers at Shipper Symposium 2015? Which quote was your favorite?

Transportation TIP List – May 2015

With summer right around the corner, we’re seeing a number of transportation topics heating up! Over the past month, many of the top stories had to do with the trucking industry. From transportation management and autonomous vehicles to capacity concerns and fuel innovations, these stories will catch you up on the current state of trucking and let you know where it’s headed.

Read on for this month’s TIP list!

1.  Annual U.S. Trucking Revenue Tops $700 Billion for First Time: U.S. trucking companies of all types generated a combined $700.4 billion in revenue last year, fueled by economic growth that led to higher freight demand and higher rates. As an industry, trucking broke past the $700 billion revenue mark in the U.S. for the first time.

2.  First Legally Licensed Autonomous-Driving Truck in US Unveiled: Freightliner Trucks has received the first license in the U.S. for an autonomous-driving truck to operate on public highways from Nevada Gov. Brian Sandoval. Sandoval hailed the occasion as “a historic day in the areas of transportation and innovation” and a “monumental day for the human race.”

3.  Intermodal Shippers Hungry for More Service, Capacity, Pricing: Nobody wants to be the one to ask, but today’s intermodal customers are looking for more capacity, more service and more (better) pricing. Today, within the intermodal industry, fear about the future is widespread, with many worrying that 2015 may be the year that growth slows due to insufficient capacity resulting from equipment shortages and abysmal service.

4.  Intermodal Industrial Facilities Capture Investor Attention: E-commerce growth and port traffic troubles have dominated the news in the industrial sector this year, and intermodal properties have been expanding steadily to meet new demand. Thirty intermodal parks have opened since 2000, with 19 of those opening in the past seven years, and investors are now collecting premium rents for intermodal properties located near large container-stacking facilities.

5.  The Future of Manufacturing: Sensors, 3-D Printers, and Data Science: According to a new study, factories are the next fertile ground for the “Internet of Things.” Over the next 10 years, factories and manufacturing facilities will worry less about buying new equipment and more about outfitting their spaces with an array of high-tech sensors and routers.

6.  Energy Woes Spreading to the Manufacturing Sector: A survey of regional manufacturers showed activity and expectations declined sharply over the past month, with both reaching their lowest levels since the depths of the Great Recession in 2009. One survey respondent said the near 50 percent fall of oil prices was hurting business, and factories in that region saw sharper declines as exports fell further and energy-related producers saw another drop in orders.

7.  The Tracking Trend: More consumers are opting for tracked delivery when shopping, and this trend highlights the importance of meeting the delivery service needs and expectations of today’s customers. Previously, when shopping online, consumers were limited in their choice of delivery service, but brands are realizing that in order to attract and, more crucially, keep customers, they need to offer the right delivery choices.

8.  Consumers Triggering Major Changes in Retail Supply Chains: Retail supply chains are being driven by customer demands more than ever, a logistics executive at Office Depot Inc. says, with “far more educated” consumers pressing companies toward customization, transparency and tailored delivery. As a result, these companies will have to adapt to a number of broad trends.

9.  How The Transportation Sector Is Moving Away from Petroleum: The transportation sector is moving away from oil slowly but surely. Driven by growth in the use of biofuels and natural gas, non-petroleum energy now makes up the highest percentage of total fuel consumption for transport since 1954, according to a new report from the U.S. Energy Information Administration (EIA).

10.  Successful Supply Chain Transformation Is Like a Carefully Engineered Highway Project: Supply chain transformation projects are like large highway infrastructure projects. During supply chain transformation, customers expect deliveries, suppliers to continue to deliver, competitors to announce promotions and shareholders to dial into earning calls. But during a transformation initiative, the supply chain undergoes an irreversible structural change.

What’s on your TIP List this month? Did we miss anything you thought was important?

Excellence is Part of Our Core

By: George Abernathy, President & Chief Commercial Officer, Transplace

Our company is built upon excellence. Not only do we believe in delivering it to customers, but our employees also embody it on a daily basis. It’s an important commitment we make here at Transplace – so much so, that we’ve made it a core part of our mission statement: To achieve supply chain excellence for our customers.

We’re determined to thrill our customers and exceed expectations. We accomplish this through our people, processes, technology and scale. Many of the largest manufacturers, retailers and distributors trust Transplace to manage billions of dollars of freight spend annually. This pushes us to constantly seek growth and advancement as well as partner closely with our customers to drive continuous improvement throughout their organizations. In addition, Transplace strives to go beyond just being a transactional services provider to develop deeper, collaborative partnerships with customers through our Strategic Account Management program. We make investments in infrastructure and technology, process improvement through Lean Six Sigma, and strategically important is our commitment and investment in human capital, which allows us to bring in the industry’s best and brightest supply chain practitioners as well as develop young talent through our Professional Development Program.

By establishing quarterly business reviews and a customer advisory board we’re able to solicit insightful feedback for continuously improving our processes, tools and services to provide greater benefits to our customers. In addition, we see the pay-off of our dedication to excellence through our customer renewals and expansions, new customer engagements and industry recognition and awards.

While awards and industry recognition is nice to receive, attaining one in particular means a great deal to Transplace because it’s voted on by you—our customers. This award is the Inbound Logistics annual “Top 10 3PL Providers” list, which recognizes the service providers that are “best equipped to meet and surpass readers’ evolving outsourcing needs.” We’ve been honored to have appeared on this list 12 years in a row, and last year proved to be our highest ranking ever at 2nd place.   We’re striving to keep improving our position by delivering even greater value to our customers through our unique and continuously improved offering.

We couldn’t have received this continued recognition without the excellence our fantastic Transplace team is providing and certainly without the backing from our invaluable customers. Thank you for your unwavering dedication and support.

This year we hope to make it lucky number 13 of being named a Top 3PL and snag the prime position of being recognized as the leader in the industry by Inbound Logistics. When it comes to excellence, it’s at our core and our customers can count on that.

If you haven’t already, we hope that you vote for Transplace!

Let us know what you think makes a great 3PL.

Learn more about Transplace advantages being delivered to customers by visiting https://www.transplace.com/advantages/