Transportation TIP List: This Week’s Leading Transportation Industry Trends

Week of February 19th, 2017

The celebration of President’s Day this week was the perfect time to recognize the country’s most inspirational leaders. And the holiday had us thinking about the nation’s top visionaries as we curated this week’s TIP List, which showcases trends that are influencing and shaping the transportation industry. Read on to see what’s leading the way, including stories about the future of retail brick and mortar stores, the growth of drone technology and the uncertainty of NAFTA.

  • What if Retail Traffic Declines Last Forever?: The results keep pouring in, and they don’t bode well for brick and mortar retail. Across just about every sector and virtually every time period, physical store traffic continues to decline.
  • Mexican Trucking Past U.S. Border in Crosshairs: A controversial NAFTA plank allowing Mexican truckers to haul goods deep into the U.S. is in the crosshairs as the Trump administration prepares to redo the trade agreement and a court challenge proceeds next month.
  • Making a Run for the Border: Although the future of NAFTA is uncertain and trade challenges remain, Mexico continues to attract foreign companies looking for easier access to the huge U.S. consumer base.
  • Panama Canal Sets New Monthly Tonnage Record: In January 2017, the Panama Canal set a new monthly tonnage record of 36.1 million Panama Canal tons, with the transit of 1,260 ships through both the original and expanded locks.
  • Hanjin Shipping is Declared Bankrupt: All that remains of the stricken Hanjin Shipping Co. will be liquidated after a court order confirmed the demise of the former giant that helped drive South Korea’s economic rise, but has finally succumbed to its ocean of debt.

What transportation trends do you think are leading the charge this week?

Supply Chain 2017: Important Transportation Trends and Challenges

By: Frank McGuigan, President & Chief Operating Officer, Transplace

There’s never a dull moment in the supply chain. That statement seems especially true thus far in 2017. We’re just over a month into the new year and there is already a myriad of questions about the market, the business landscape and how companies will be affected going forward. With issues such as changes to global trade deals, regulations and fluctuating capacity, we are quite certain that there will be an impact on the supply chain in 2017, and beyond, making it is vital for shippers, carriers and logistics service providers to keep a pulse on what’s going on in the industry.

The New Administration and Trade

There was a lot of talk leading up to the presidential election concerning changes that would be made to the United States’ trade agreements with other countries. And within the first week of the new administration, we have already started seeing those changes come to fruition. The U.S. pulled out of the Trans-Pacific Partnership (TPP) and has escalated talks around renegotiating NAFTA or implementing a border tax.

Pulling out of TPP was not a surprise, but it doesn’t mean that the U.S. won’t be trading with partners in Asia It just means that we won’t be signing a large and comprehensive trade pact with that region and we’ll rely on individual relationships with trading partners in that part of the globe. That might happen with NAFTA as well, but it’s far too early to tell. Right now, it appears that we’re examining all of our trade agreements to see if there are better deals out there for the U.S.

While some of the rhetoric is disconcerting, I don’t anticipate a significant near-term impact. Mexico and Canada are our two largest exporting partners, and those relationships create a significant number of jobs in the U.S., so maintaining trade relationships is in the best interest for everyone involved.

So as we’re all eagerly watching to see how the process takes shape, supply chain leaders are beginning to think about the potential impact of tariffs on their goods and evaluating their networks. They’re considering questions such as: Could my current supplier network be exposed? Do I need to reengineer my supplier network? What are the corresponding logistics issues that would accompany the reengineering of my supplier base?

While it will likely take some time before there is any immediate impact on U.S. logistics networks, it’s prudent for shippers to be proactive and walk through “what if” scenarios if tariffs come into play, or more manufacturing comes back to the US.

The Impact of Regulations

Regulatory change has been at the forefront of the transportation industry in recent years. Whether it’s CSA, HOS, ELDs, and now obstructive sleep apnea, these issues seem to leave more questions than answers. While we can all align in the pursuit to make the transportation industry safer, we must also recognize the overall impact of these regulations on the industry. Can carriers afford the change? Will drivers and carriers leave the market? What is the impact to capacity?

While the new administration appears to be pro-business, it remains to be seen what stance they will take related to transportation. As in previous years, it’s important for shippers to keep an eye on the regulations and proactively plan for the potential impact they could have on productivity and capacity. It is important to look at strategies to diversify your carrier base or modal mix to be able to adjust to changes in capacity.

Shippers have benefited from lower fuel costs and abundant capacity over the last 18 months, but many indicators suggest that there is a tightening of capacity in the coming year. If the economy and industrial production, specifically, continues along the trend line that we saw in Q4 2016, we can expect capacity to tighten and place upwards pressure on rates.

Technology Innovation is Enabling Visibility and Optimization

Innovation in logistics never stops. While autonomous trucks and “Uber of Trucking” companies have dominated the headlines, the exact impact has yet to be seen. We will actually have a chance to monitor the service and cost impact of some of these innovations in our network this year, so stay tuned. Last, though driverless trucks are likely closer than we think (plus/minus 5 years), it is too early to understand how they will be used and the resultant impact on the transportation networks of our shippers.

While there is an appetite for information on those emerging trends, shippers are placing even greater focus on expanding the capabilities and functionality of their transportation management system (TMS). Specifically, gaining real-time visibility of shipments and access to real-time data and reporting. Shippers want to see live performance on what is going on in their network – both inbound and outbound. This is especially true in service intensive industries, where visibility is critical for effective planning, communication and inventory management.

Regional control towers provide shippers the level of visibility – across North America or globally – that enables them to really “see” their network and make data-driven decisions regarding inventory, mode, lane, carrier selection and cost. Understanding all of those modes and hand-offs enables network optimization, effective procurement and with a greater level of data and engineering, the best possible service-cost logistics network.

Now is the Time to Plan Ahead

Although we are planning for measured capacity tightening, we don’t expect the market to take significant twists and turns this year. And with the uncertainty around the exact impact that changes to trade agreements and regulation will have on the supply chain, if you haven’t already, now is the time to evaluate your supplier base and transportation network and collaborate with your strategic partners in order to ready your supply chain for a period that will be leaner than it has been over the last 18 months.

How has your organization proactively planned for possible transportation challenges in 2017?

Transportation TIP List: This Week’s Industry Trends You’re Sure to Love

Week of February 12th, 2017

With Valentine’s Day taking place yesterday, sweets, greeting cards and roses are just a few of the highlights that Cupid has in store for this week’s loving holiday. And along with all of those charming holiday gifts, this week’s TIP List is here to embrace the latest transportation industry trends. With stories on recent transportation regulations, the future of the TMS market and much more, we’re sure you’re going to love all of the articles below!

  • Trump Reg Rollback Could Derail Switching Rule:The Trump administration’s recent regulatory rollback has thrown into question the future of a long-standing push by shippers seeking to move their freight from one rail line to another nearby network.
  • A Sneak Peak Into the Future of the TMS Market: Alternative solutions for a traditional TMS, including the use of LSPs, transportation execution systems and “free” TMS, are just a few factors that could inhibit the long-term future of the TMS market.
  • Diesel Price Holds: The price of diesel fuel remained flat during the week ending Feb. 6, dropping by just four-tenths of a cent. The average price of a gallon of on-highway diesel is now $2.558 nationwide following the fourth consecutive week of falling prices.

What top industry trends are you embracing this week?

TransMATCH Success: SMC³ Alliance Award 2016

There is an enormous amount of collaboration and planning involved when implementing a seamless multi-stop truckload solution across numerous shippers – but when done right, it can yield some stellar results. Transplace is honored to have been awarded the 2016 SMC³ Alliance Award at the Jump Start 2017 Conference last month for the results it has seen from its TransMATCH program, in partnership with Best Solution Express and Glanbia Performance Nutrition.

The Alliance Award recognizes successful partnerships that use innovative problem-solving and continuous improvement tactics to achieve valuable results. Alliance is unique in that it measures collaboration and partnership, recognizing each individual player contributing to overall supply chain excellence.

 

The Transplace TransMATCH team, pictured from left to right (Greg Umstead, Kurt Hepker (Glanbia) and Matt Lowery). Also on the team (not pictured) Jack Dierks, Phil Golike and Zachary Chopp.

 

To celebrate this award, we wanted to share some of the key challenges and results of the successful partnership between Transplace, Best Solution Express and Glanbia:

The challenge that led to the formation of the partnership: As Glanbia’s 3PL provider, Transplace determined that Glanbia’s claims ratios were greater than the industry average, which offered a starting point to help reduce its overall transportation costs and enhance efficiency.

Transplace immediately enabled processes to help reduce the claims ratio – and implementing its TransMATCH program helped to reduce it even further. With TransMATCH, Transplace created multi-stop shipments within Glanbia’s network and determined opportunities outside of Glanbia’s network to achieve the benefits of multi-stop truckloads. Best Solution’s network and service was quickly identified as a premiere carrier to partner with for this program.

The specific goals of creating this project:

  • Reducing cost
  • Reducing claims ratio
  • Reducing handling and exposure to outside risks.
  • Improving transit time and on-time percentage to consignees

Collaboration among Transplace, Glanbia and Best Solutions was critical to achieving the goals set for the program, but there was additional collaboration needed with other shippers within the TransMATCH program. Using its enhanced visibility of Glanbia’s entire transportation network, the Transplace team determined eligible shipments and identified viable candidates for those shipments. Then, a multi-stop truckload solution was created with Transplace’s proprietary transportation management solution (TMS).

Best Solution’s nationwide carrier network was able to support Transplace and Glanbia’s unique needs, and their driver base is able to accommodate the necessary numerous stops and handling – a unique service that is not typical among truckload carriers.

The proven results and benefits of this partnership: The positive results of the collaboration have been realized through reduced transit time, improved on-time percentage, reduced damage and a decrease in costs. The program saw immediate success in terms of improved visibility across shipments with all parties collaborating and consolidating efforts within Glanbia’s network. Additionally, as the program progresses, more of Glanbia’s shipments will be included within the project, leading to greater improvements.

Transplace has helped Glanbia reduce its overall transportation network costs and improve customer satisfaction, ultimately leading to improved sales and growth. Glanbia’s supply chain has been positively impacted through this program and it has been able to deliver to customers faster and more efficiently while providing security to its products.

There were many lessons learned throughout the development of this program, but open and honest communication among all partners was certainly the most significant aspect its success.

A special thank you to Best Solution Express, Glanbia and SMC³ !

Making Retail Magic: Get Ready for RILA 2017!

Walt Disney World in Orlando, Florida is considered the “happiest place on earth” – and with this year’s RILA Supply Chain Conference also located in Orlando, the city is a great place to be on February 12-15!

As you may be preparing to attend RILA 2017 — which will highlight some of the best and brightest in the supply chain, retail, transportation and manufacturing industries — we wanted to share some fun facts about the event and the Orlando area. Do you know just how big Walt Disney World is? Or how many people visit Disney’s retail stores annually? Find all the stats on Orlando’s retail magic in the infographic below!

*Click on the image above for full view.

Are you are planning on attending RILA this year? Be sure to stop by and say hello at booth #1123! Also, you can follow us on Twitter (@Transplace) and use the hashtag #RILASupplyChain to keep up with all of the conference activities.

 

Transportation TIP List: This Week’s Brightest Industry Trends

Week of February 5th, 2017

This past weekend, Lady Gaga showcased a little extra sparkle in her Super Bowl halftime performance. Intel’s 300 shooting star drones provided the innovative lighting effects to the show; which was the first time that drone technology was used at an event of this magnitude. And just as technology helped provide some great halftime entertainment, this week’s TIP List provides some of the brightest industry trends. Keep reading for info on the appointment of Elaine Chao as the Secretary of Transportation, the effect of Trump’s industry regulation reductions and more!

  • Chao Sworn in as Secretary of Transportation: Elaine Chao was confirmed by the U.S. Senate to serve as the 18th Secretary of Transportation. She is one of the least controversial cabinet appointments by President Trump, receiving 93 Senate votes for confirmation.
  • A Look Into the Future: Last year was record-setting for the logistics and supply chain industry, with $5 billion in total projected investments. And these industries are poised to continue making headlines in 2017.

What innovative supply chain and transportation industry trends are you following?

From Field to Fork: The Future of the Cold Chain

By: Jay Moss, President, Specialized Services, Transplace

With winter temperatures fully upon us, it’s a great time to take a look at all of the latest cold chain industry trends. Recently, this sector has seen some shifts with the ongoing implementation of new regulations and continuing advances in technology. Below are a few choice trends, challenges and changes within the cold chain sector that are having a prevalent impact on the outlook of the industry.

Priorities in Today’s Cold Chain Sector

For the cold chain logistics sector, the primary supply chain priority is speed-to-market. Over the past few years, execution within the supply chain is getting shorter and shorter, because every minute, hour and day that is taken out of the process results in big savings for the shipper. From small manufacturers to big-box retailers: many, if not all companies that require a cold chain are trying to shorten the supply chain with a more regional approach.

Companies are now prioritizing getting products to the consumer more quickly and fresher than ever before. For example, services have begun to “cut out the middle man” and deliver fresh ingredients daily to the consumer’s house with a recipe ready to prepare that evening. This method has created a shift in the way that many people purchase their food.

The fact that many online stores are shipping directly to the consumer ultimately allows for product to be delivered in hours, not days, creating new supply chain views and priorities for shippers. This increase of speed-to-market also helps to lessen the carbon footprint of the supply chain, which is often a key business goal of many companies both big and small.

Concerns and Challenges in the Industry

Whether you are an operator, manufacturer or logistics company, capacity is going to be a big concern for your organization. When the economy is slow, too much capacity may be the problem, and when the economy is booming, there is certainly widespread concern about the possibility of being unable to secure enough capacity. Currently, capacity is fairly balanced in the market, but any type of seasonality or surge in the produce or frozen markets can send it suddenly reeling off balance.

A way to work around the challenges of seasonality and capacity shortages is by planning in advance. Cold chain shippers need to be looking ahead and repositioning assets to ensure that they are able to meet demand, adapt to the market and maintain efficient operations if a capacity shortage strikes. This type of planning needs to occur up to 2 to 3 months in advance.

Additionally, just as in other markets, regulations have had an impact on the cold supply chain. A prevalent topic within the industry has been the Electronic Logging Device (ELD) mandate and its impact on shippers and carriers alike. For the refrigerated sector, the ELD mandate creates an opportunity to make a long-overdue positive impact, as the implementation of these devices may open up the eyes of many companies as to how they view their transportation network.

Innovations in Technology

For major retailers, delivering straight to the consumer in a matter of hours is being made possible (and much more efficient and cost-effective) by advances in supply chain technology. And for cold chain shippers, the success of this process comes down to enhanced visibility.

To achieve this visibility, shippers can tap into the capabilities of a true “TMS 2.0,” allowing them to access and leverage a wealth of data. This type of technology also incorporates a graphical view of shipments and active dashboards of KPIs including active shipments, on-time arrivals/departures, carrier performance and DOE fuel index.

Advanced technology is also being used when it comes to cold chain compliance. Monitoring a refrigerated unit, setting the temperature remotely and receiving an alert if anything goes under the required temperature is becoming the new norm. From field to fork, shippers want to ensure that nothing is going wrong and that all temperatures are constantly compliant – and with the right advanced technology, shippers can tap into a supply chain strategy that runs like a well-oiled machine.

What trends are you seeing within the cold supply chain?

Transportation TIP List: Week of January 29th, 2017

This weekend, the Atlanta Falcons and New England Patriots will square off in the Super Bowl in Houston, Texas. And just as both teams are led by some of the most elite players in the sport, this week’s TIP List takes the lead on some of the top trends in the transportation industry. From the future outlook of the retail industry to the recent withdrawal of the U.S. from the Trans-Pacific Partnership – catch all of the industry trends below before the big game!

  • The Calm Before the Supply Chain Storm: Current conditions for shippers could best be described as “the calm before the storm,” as transportation forecasting firm FTR’s most recent Shippers Conditions Index indicated a neutral reading of 0.4.
  • U.S. New Home Sales Fall; Weekly Jobless Claims Rise: New U.S. single-family home sales fell to a 10-month low in December after three straight months of solid gains, but the housing market recovery remains intact as a tightening labor market boosts wage growth.
  • ATRI Unveils Annual List of Top Truck Bottlenecks: Atlanta’s “Spaghetti Junction” — the intersection of I-285 at I-85 North — tops this list as the most congested freight bottleneck in the country for the second year in a row, according to research from ATRI.

What top industry trends are you catching up on this week?

Evolving Retail Standards: What Are You Planning for 2017?

The goods manufactured and shipped by retailers and CPG organizations certainly come in a wide variety, but these companies all have a number of key commonalities and shared challenges when it comes to their supply chain. At Transplace, as we continually look to gain insight into the concerns of our customers and meet their ever-evolving needs, it’s important to always be working to employ new processes on our part to fully support each and every customer.

Retail consolidation is one such process that’s also a current hot topic in the transportation industry. Let’s dive into the ins-and-outs of this process and find out how it can be beneficial for suppliers looking to enhance efficiency, lower costs and meet stricter compliance standards.

What challenges are retail and CPG companies facing?

In recent years, shippers have encountered new standards of velocity, market choice and cost for their products. The consumer, who is everyone’s end user, is demanding better variety (SKU proliferation) and expanded availability at the lowest possible cost – further increasing complexity and intensifying pressure on supply chains. This has created what some in the industry are referring to as “supply chain impatience.”

And in many CPG organizations, bracket ordering by customers, growing fees/accessorials and the potential for shipment damage are all growing concerns. Additionally, the industry is seeing a number of increasing compliance requirements for on-time delivery from many retailers, particularly big box organizations. This makes it critical for suppliers to focus on changing their fulfillment rules, optimization processes or communications with their carriers.

Change Management: Implementing Retail Consolidation

As common LTL carriers strategize the best way to meet consumer behavior, a true third party provider is able to implement supplementary measures to prevent supply chain disruptions. In addition to manufacturing postponement, a great approach is “Retail Consolidation,” namely a provider which will pool orders from various suppliers into a consolidated shipment to a retailer. There are a number of positive results to this methodology:

  • Distribution network utilization
  • Decreased claims ratio
  • Increased speed-to-market
  • Improved on-shelf performance
  • Enhanced shipment visibility
  • Inventory accuracy
  • Improved days of supply
  • Fewer fines or late fees

Retail consolidation can help shippers achieve the efficiency and precision they need with their shipments in the face of evolving compliance standards – and this, in turn, saves big on costs and potential fines.

How can Transplace help?

We understand the needs of shippers, especially in light of stricter, harder-to-meet compliance standards. And in turn, we put this knowledge to work to help all of our retail and CPG customers create the most effective cross-company initiatives possible.

As you’re planning for 2017, it’s important to consider new and effective transportation methods, such as retail consolidation, to give your supply chain the efficiency boost it needs. To properly implement an effective retail consolidation program, it’s important to work with a transportation partner who understands how to offer increased speed-to-market without sacrificing your budget.

Has your retail organization been thinking of utilizing a consolidation model?

Transportation TIP List: Week of January 22nd, 2017

The nominations for the 89th Academy Awards were announced this week, and the film La La Land racked up 14 nominations, tying the record for the most in movie history. And this week’s TIP List is headlining some of the premier trends within the supply chain and transportation industry. Our features include a rise in U.S. industrial production, America’s infrastructure needs and the recent fuel price hikes in Mexico. See who snagged our nominations for this week’s top story below.

  • U.S.—Bound Import Levels Up: U.S.-bound waterborne imports had a strong end-of year finish. December had a total of 928,535 shipments, an increase of 0.3% compared to November’s 926,198 shipments – and 2016 year-end shipments totals saw an increase of 8.9%.
  • U.S. Industrial Production Rose 0.8% in December: U.S. industrial output rose at the fastest pace in more than two years in December as activity surged at utilities and manufacturers inched ahead, the latest sign of steady but unspectacular economic growth.
  • U.S. Shippers Racing to Lock Down Truck Rates: U.S. shippers eager to avoid rate hikes in the latter part of the year are sitting down with trucking providers to talk pricing and putting business up for bid as they try to protect savings gained in last year’s weak freight market.

What transportation industry trends are you watching this week?