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Transportation Management Systems Market 2018

A critical link in the supply chain, transportation is costly, time-consuming, and sometimes difficult to manage – and it’s going to get even more complex as capacity tightens and rates continue to rise over the course of 2018.

Approached haphazardly, transportation management can quickly eat up human resources, consume a good portion of logistics spend, and can leave customers asking questions like: “Where’s my truck/stuff?

But done right, transportation helps shippers create efficiencies, improve productivity, save money, and provide premium levels of customer service.

And while several strategies can be used to attain these benefits, transportation management systems (TMS) consistently stand out as one of the best tools for streamlining the transportation component of the supply chain.

Acting as the logistics management “hub,” TMS handles route planning and optimization; freight audit and payment; order visibility; carrier management; and other critical functionalities that help shippers digitally manage and optimize their transportation networks. Historically offered as an on-premise software application, TMS has since largely moved into the Cloud and, as such, provides real-time, always-on collaboration across shippers, carriers, trading partners and customers.

Read: Myths and Realities of Implementing a TMS

In this annual examination of the state of the TMS market, we’ll look at the current adoption trends for this software, show how vendors are innovating and coming up with new functionalities and delivery methods, and discuss what’s ahead in 2018 for what can be the most valuable tool in the logistics manager’s toolkit.

Shifting to the Cloud

Vendor innovation plus the proliferation of e-commerce and omnichannel distribution are both pushing more shippers to consider TMS as part of their overall supply chain management strategy. Bart De Muynck, Gartner’s research director, transportation technology, says adoption is particularly strong for shippers that spend more than $100 million annually on freight.

“Those companies continue to invest heavily in TMS,” says De Muynck. Much of that activity involves shippers that are “changing out” their current TMS and replacing it with modern platforms that come with more bells and whistles than their predecessors could offer.

“We’re seeing a lot of companies moving from older, on-premise platforms to either multi-tenant [when a single instance of software runs on a server and serves multiple tenants] or Cloud-based solutions,” says De Muynck, noting that some shippers are purchasing the software from vendors that they haven’t worked with before while others are sticking with their original software providers.

“At this point, a lot of the older TMS solutions are starting to be bypassed, and particularly if their vendors aren’t going to be supporting them anymore.”

Not to be outdone, small to midsized (SMB) shippers are also adopting TMS – a trend that’s being driven by a new crop of Cloud-only solutions that offer quick setup and affordable, or even free, subscription-based models.

“In 2017, we saw a huge growth in TMS usage by the SMB segment,” says De Muynck, who points to AscendTMS (developed by InMotion Global) as a lesser-known vendor that’s actually the “world’s largest” TMS vendor. “They have over 15,000 companies using their TMS, with a lot of those users being smaller shippers that are using the free version of the software.”

The World's #1 Rated TMS Software As Ranked By Crowd Reviews, Capterra, and Software Advice

Free TMS Software…

Just 10 years ago, a company that spent a few million dollars in transportation annually probably didn’t own a TMS. That’s because the software was too expensive, too much of a hassle to implement, and didn’t really drive improved productivity, says De Muynck.

The tide has turned over the last few years, De Muynck notes, and now the market is coming out with solutions that are cheaper, more relevant, and even more user-friendly. “These new solutions are so easy to implement and use that companies are very attracted to them, and particularly those shippers that are dealing with challenges around capacity and freight rates,” says De Muynck. “They see TMS as a way to get more productivity out of transportation.”

Vendors have caught onto this trend, and are coming up with solutions that fit the smaller shipper’s budget while also offering all of the bells and whistles that larger systems are offering.

Companies like Kuebix and Cloud Logistics are saying: “hey if you’re a smaller shipper, we’ll give you our solution for free or at a very low cost,” De Muynck says. “Within a week these companies are signing on thousands of new users with that strategy.” Cloud Logistics, for example, ran a $500-a-month subscription special in 2017. “We saw a very high uptake in the number of companies using the solution” he notes. Also, Kuebix ran a free TMS campaign recently that resulted in over 5000 companies signing-up for their state-of-the-art TMS solution.

Read: Kuebix Tops 5000 Companies Using Its Transportation Management System

De Muynck says that these “loss leader” strategies are creating a groundswell of SMB firms taking an interest in TMS – to the tune of tens of thousands of new users across multiple vendors. And because those shippers bring their own carriers onto those networks, they also represent new levels of transactional volume.

“This plays into the whole goal of transportation management,” says De Muynck, “which is to become more efficient and make more efficient use of available capacity.”

Strong Return on Investment

If there’s one factor driving more shippers to adopt TMS it’s the strong return on investment (ROI) that these solutions offer to companies of all sizes.

In its most recent “TMS Market Research Study,” ARC Advisory group says companies report an average savings of approximately 8% with the use of a TMS application. Of these savings, nearly 60% of users indicated that less than 10% of the net savings were absorbed by the TMS. These freight savings can be attributed to simulation and network design, load consolidation and lower cost mode selections as well as multi-stop route optimization.

View TMS Resources

“The growth of e-commerce and omni-channel fulfillment continues to help the market grow as well,” says Chris Cunnane, an ARC senior analyst, noting that in the last five years, e-commerce revenues have increased by 51% and are expected to grow by 42% in the next five years.

“This continued growth will make it more important for organizations to utilize TMS. Additionally, it’s not just retailers turning to e-commerce; more brands are selling products directly to the consumer over the web.”

Read: Why Transportation Management Technology, Why Now?

Cunnane adds that one of the key drivers of the TMS market right now are “barriers to entry that are lower than we’ve ever seen.” He credits the continued growth of Cloud-based solutions with pushing those barriers down over time. “Historically, if you didn’t have $20 million in freight spend, purchasing a TMS was out of the question,” he says. “Instead, you would look to a third-party logistics provider to handle it for you. Now, with the number of Cloud applications that are out there, suddenly it’s a lot more cost efficient to bring transportation management in-house.”

There are also more providers and solutions to choose from, with the lines between enterprise resource planning (ERP) and best-of-breed solutions beginning to blur. “Right now, when you look at the leading TMS suppliers, it’s a mix of both ERP and best-of-breed,” says Cunnane, who points to SAP, Oracle, JDA, Descartes and TMW Systems as a few of the top players right now.

“Whereas the rest of the market is focused on offering more of a ‘point’ or best-of-breed solution that fits into a different footprint.”

More TMS Speed, Please

As he looks around at the TMS marketplace, Amit Sethi, senior manager for logistics and supply chain at Capgemini, says that he’s seeing less focus on transportation optimization and more focus on execution.

“TMS and its vendors have moved toward more online planning, and to flowing orders through automated systems that vet, tender and ship without human intervention,” says Sethi. This, in turn, has pushed optimization online, with a focus on immediate execution – versus “batching” orders for execution at a later time. “This is being driven by shippers that are more interested in speed versus optimization.”

Looking ahead, De Muynck says TMS vendors will likely continue to shape their solutions’ functionalities around shipper challenges like capacity crunches and changing end-user demands. “Capacity is tight and companies are out looking for their 2018 bids and seeing that it’s not easy to secure the capacity that they need,” De Muynck points out. “Wanting to control costs, more of them are likely to turn to technology for help.”

Read: How Your TMS Can Help Manage the Amazon Effect

Acknowledging the status of TMS as one of the most mature supply chain software segments, Cunnane says there really is “only so much that vendors can do” to improve upon their platforms at this point. He sees backhaul optimization as a potential area of innovation going forward for TMS vendors that help shippers figure out how to make the most of their return freight movement.

“It’s a mature market, so innovation may slow down until we see one of the newer players enter the market with something that’s groundbreaking – something no one else thought of,” says Cunnane. “Then suddenly there’s a race to try to get to where that vendor is, but I don’t see any of those entries in the market right now.”

Related White Papers & eBooks

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Say Goodbye to Your Outsourced 3PL
In this eBook, we explain how companies that switch to the right TMS, experience a 10%-20% ROI on their freight spend in a matter of months, and how by taking back the management of their logistics operations in-house they make better shipping decisions every day. Download Now!

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The Shippers Guide to Transportation Management System ROI
Taking a deeper look at the technology needs of transportation departments, Ohio State University Logistics Professor Jim Hendrickson conducted research into the value that supply chain execution systems provide. Download Now!

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E-Commerce Transportation Execution
In this white paper, we’ll further explore the key challenges that shippers are facing in the e-commerce/omnichannel environment and show how transportation execution and optimization is already helping companies jump these hurdles, improve customer service levels, and cut costs.Download Now!

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5 Reasons to Buy a True SaaS Transportation Management System
This white paper describes how a true SaaS infrastructure can give users real-time benchmarking of transportation rates, and connect your company to a Global Trade Network.Download Now!

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Amazon Begins Grocery Delivery from Whole Foods Market

Amazon and Whole Foods Market announced the introduction of free two-hour delivery of natural and organic products from Whole Foods Market through Prime Now, with plans to expand across the U.S. in 2018.

Starting yesterday, Prime customers in neighborhoods of Austin, Cincinnati, Dallas and Virginia Beach can shop through Prime Now for bestselling items including fresh produce, high-quality meat and seafood, everyday staples and other locally sourced items from Whole Foods Market.

John Mackey, Whole Foods Market co-founder and CEO

“We are happy to bring our customers the convenience of free two-hour delivery”John Mackey, Whole Foods Market co-founder and CEO

Customers can start shopping from Whole Foods Market selection at or by using the Prime Now app available on Android and iOS devices.

“We’re happy to bring our customers the convenience of free two-hour delivery through Prime Now and access to thousands of natural and organic groceries and locally sourced favorites,” said John Mackey, Whole Foods Market co-founder and CEO.

“Together, we have already lowered prices on many items, and this offering makes Prime customers’ lives even easier.”

Prime customers can shop thousands of items across fresh and organic produce, bakery, dairy, meat and seafood, floral and everyday staples from Whole Foods Market available for free two-hour delivery.

Select alcohol is also available for delivery to customers. Prime members receive two-hour delivery for free and ultra-fast delivery within one hour for $7.99 on orders of $35 or more.

Delivery from Whole Foods Market through Prime Now is available daily from 8 a.m. to 10 p.m.

Customers can visit or download the Prime Now app to enter their zip code to see if they are in the delivery area.

As reported by Bloomberg, about 7 percent of U.S. households bought groceries online last year, according to NPD Group.

Read: Growing Ecommerce Grocery Channel Will Accelerate Adoption of Meal Kit Delivery Services

Most of those – about three-quarters – get their orders delivered to their door; the rest pick it up at the store. NPD Group said it expects online grocery shopping to grow quickly, especially among young adults, who are more comfortable shopping online. And grocery chains don’t want to miss out when that happens.

Walmart, the country’s largest grocer, is making it easier for customers to order groceries online and pick them up at the store.

Target bought grocery-delivery company Shipt late last year. Kroger, the largest traditional supermarket chain, has been promoting store pickup for online orders and doing trials of home delivery.

Amazon isn’t saying where delivery will expand, but its Prime Now service is in more than 30 cities, including Chicago, Milwaukee, and San Diego.

The announcement gives Amazon yet another way to get groceries to customer’s doorsteps.

Related: Amazon Reportedly Focusing on Expanding its Delivery Trial Offering Threatening FedEx & UPS

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The Future Belongs to Organizations with Intelligent Operations

Organizations that leverage Intelligent Operations to make decisions and act in real-time will be best placed to thrive in the future, according to a new report from HfS Research and Accenture.

Based on survey research of 460 respondents across the globe, the report found that organizations which harness the combination of innovative talent, diverse data and applied intelligence will be in the best position to overcome digital disruption and utilize data-driven insights to drive superior business outcomes and enhance the customer experience.

The move to Intelligent Operations is fast becoming a make-or-break proposition for organizations, with 80 percent surveyed saying they are concerned with disruption and competitive threats, especially from new digitally savvy entrants.

The report reveals that most organizations are currently unable to make data-driven decisions due to a paucity of skills and technology to process data: in nearly 80 percent of respondent organizations, 50 percent to 90 percent of data is reported as unstructured and largely inaccessible.

Half of the organizations surveyed also say their back office is not keeping pace with front office requirements to support digital capabilities and meet evolving customer expectations.

“To win in today’s market and ensure future viability, it is essential that organizations capture value quickly, change direction at pace, and shape and deliver new products and services. Organizations also need to maximize the use of ‘always on’ intelligence to sense, predict and act on changing customer and market developments,” said Debbie A. Polishook, group chief executive, Accenture Operations.

“Our research suggests technology alone is not a magic bullet. To successfully transform their operations, organizations must take a holistic approach that integrates business process and industry expertise, human ingenuity, and intelligent technologies,” Polishook said.

Debbie A. Polishook, group chief executive, Accenture Operations

“Our research suggests technology alone is not a magic bullet”Debbie A. Polishook,
group chief executive, Accenture Operations

“This enables the agility, flexibility, and responsiveness needed to drive superior decision-making, business outcomes, and customer experiences. It’s about responding swiftly to change and how to steer a new course with confidence,” Polishook added.

When it comes to digital disruption, 42 percent of executives report that they see more opportunities than threats now compared with two years ago. A robust customer experience strategy is identified as the most significant driver of operational agility.

“Breaking down the silos between the front and back office is now essential to delivering a modern customer experience. More than half of survey respondents state that it takes months or even years for their business functions to make changes to evolving business needs”, said Phil Fersht, CEO and chief analyst at HfS Research.

“The market leaders of the future will be businesses that operate on a OneOffice™ model: an intelligent, single office characterized by seamless processes and digital capabilities centered on creating, enabling and supporting the customer experience.”

The research suggests the future belongs to organizations with Intelligent Operations that enable them to have a 360-degree view of their operations enabling quicker, insight-led decision making.

Five Essential Components of Intelligent Operations Identified by the Research:

  • Innovative talent. The talent of the future will need to bring creative problem-solving in addition to digital expertise. Organizations will need a more agile human resources function and a recruiting approach that heavily leverages an open talent marketplace.
  • Data-driven backbone. Organizations need to capitalize on the explosion of structured and unstructured data from multiple sources to gain new insights for the innovative talent to use in order to achieve stronger outcomes.
  • Applied intelligence. Using integrated automation, analytics, and AI-based solutions, organizations need innovative talent who can understand the business problem and then apply the right combination of tools to find the answer.
  • Leveraging the power of the cloud. The cloud will enable the plug-and-play digital services with better integration of diverse data, can scale up and down, and help organizations move toward an as-a-service environment.
  • Smart partnership ecosystem. Organizations of the future will develop symbiotic relationships with start-ups, academia, technology providers and platform players to achieve their goals.

The research is based on the responses of 460 participants from Accenture enterprise clients involved in buying decisions related to technology and services. The respondents were all director level or above; working for organizations with more than $3 billion global annual revenue and spanning diverse geographic locations, including North America, Europe, Latin America and the Asia Pacific.

Companies Face New Challenges and Demands

Companies today face a number of significant challenges that make competing and growing more difficult with every passing year. For survey respondents, generating new business – i.e., top-line growth – is as big a challenge as boosting profitability. But not far behind is the pressure to remain competitive, boost productivity, and improve the customer experience.

Top Five Challenges Faced by Businesses Today

Source: Download The Future Belongs to Intelligent Operations

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Advanced Robotics Developments Produce Game-Changing Innovations for Material Handling Industry

In the last decade alone, workflow innovations and technological advancements have permeated every aspect of our personal and professional lives – the way we communicate, manage our home, conduct meetings and especially the way we shop.

The dramatic rise of e-commerce and its impact on the material handling industry and the supply chain at large has been remarkably transformative.

Download the White Paper: Conquer High-volume E-commerce with Goods-to-operator Order Fulfillment

The U.S. Census Bureau reports that U.S. retail e-commerce sales for the second quarter of 2017 were an estimated $111.5 billion, a 4.8 percent increase from the previous quarter.

Manufacturers are scaling up output, and distribution and fulfillment operations are pushing more product out the door in an effort to serve ever-increasing order volumes.

This growth drives a need to reduce order cycle times, increase accuracy and enable greater efficiency throughout the supply chain. In response, we’ve seen extraordinary industrial innovation over a very brief period.

Robots are not a new phenomenon. They’ve been around since the ’60s performing various tasks in the factory, such as welding cars on assembly lines. Robots made inroads into logistics in the ’90s in the form of robotic palletizing and case packing applications. All of these applications share a common thread of a consistent, known environment and material which yields optimal performance in repetitive manufacturing processes.

Traditionally, robots have struggled with uncertainty and unstructured environments such as those seen in the warehouse as well as distribution and fulfillment operations. This is changing rapidly. Advancements in computer vision serve as excellent examples of the diffusion of innovation in robotic material handling solutions.

However, some vision sensors for robotics systems weren’t originally developed for industrial use. Any guesses?

The Microsoft Kinect (now discontinued – RIP) Xbox gaming consoles allowed players to direct the action of a game simply by moving their bodies, but researchers quickly realized this tech could be used to greatly improve how robotic systems “see.” These sensors provided 3D data which proved to be extremely valuable since robots move in the real world.

Fast forward a few years and we now have industrial sensors providing similar information that enables robots to function in new and more challenging environments like those seen in warehouses and fulfillment operations.

Coupling the advances in computer vision with the increase in computing power and adding the advances in machine learning and artificial intelligence (AI), robotic systems are becoming more capable every day. But, what can robots do in the warehouse now?

Learn More: Intelligence for the Connected Enterprise

Applications like robotic tote or case palletizing and depalletizing are such examples of robotics in the warehouse. Building on the robotic palletizing core, robotic tooling to pick-and-place totes leverages both traditional robotics and advanced sensors to stack and de-stack totes for a wide variety of end use cases, driving greater efficiency in downstream supply chain processes.

Fully automated robotic applications like each-picking are now becoming viable solutions, with the necessary degree of precision, processing power, and handling capability becoming available at a cost-effective price point. Advances in perception, motion planning, and grasping enable picking capabilities that approach the speed and ability of manual operators while offering the superior predictability, scalability, accuracy, and efficiency of automation.

Although impressive, these robots still cannot yet handle the extreme variety of products seen in all e-commerce fulfillment operations, but they are showing quite some promise for the right product mix.

Building on many of the recent advancements from the massive investments in self-driving cars, indoor mobile robots have been making inroads into the warehouse. These vehicles are capable of navigating autonomously in the warehouse by using a suite of sensors much like a self-driving car drives on the street. These vehicles can do some of the walking required of warehouse workers, freeing them up to provide more value-added services unique to the worker’s skill set.

Though still in their infancy, small carrier robots are currently on the sidewalks of San Francisco and a handful of other test cities delivering hot meals to hungry customers. Autonomous drones are also being evaluated for use in inventory warehouses and external deployment as last-mile and direct-to-consumer delivery solutions. And that’s just one of many recent technological developments. This up-close and personal consumer interaction with autonomous machines is a relatively new phenomenon and still needs to mature.

As technological breakthroughs continue at an extraordinary rate, it becomes less clear where the next material handling innovation will come from. Self-driving vehicles? Artificial Intelligence (AI)? Alternate/Virtual Reality? Only time will tell.

Download: The Robotics Solutions Brochure

Related Articles:
Smart palletizing drives more efficient supply chains
More palletizing flexibility – hold the hassle
Six benefits of robotic palletizing software

Intelligence for the Connected Enterprise

Tap into the power of data insights. Understand the impact of artificial intelligence on the enterprise. Enhance operational productivity and safety.

11:00 A.M. – 12:00 P.M. CST, Wednesday, February 14, 2018, Live From Dallas, Texas (U.S.)

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Amazon Reportedly Focusing on Expanding its Delivery Trial Offering Threatening FedEx & UPS

Last fall, Bloomberg reported that Amazon was working on a new delivery offering geared towards making more products available for free two-day delivery while helping to relieve overcrowded warehouses, with this initiative driving the global ecommerce power into services typically handled for Amazon by UPS and FedEx.

The report, which was published in October, explained that Amazon first began work on this service, entitled Seller Flex, in India in 2015 and subsequently “slowly marketing” it to United States-based merchants with an eye on a national expansion.

And it noted that its U.S. launch kicked off on the West Coast earlier last year, which is expected to be followed by what the report called a broader rollout.

In terms of how Seller Flex works, Bloomberg said that Amazon will oversee package pickups from the warehouses of third-party merchants selling goods through and delivery to customers’ homes.

These tasks are currently handled for Amazon by UPS and FedEx. And while Amazon may still use UPS and FedEx for delivery, the report said that Amazon will decide how to send a package, as opposed to leaving that at the discretion of the seller.

Among the benefits of handling more deliveries for Amazon, cited in the report, are things like providing greater flexibility and control over the last mile to consumer’s homes, saving money through volume discounts, and helping to avoid congestion in Amazon warehouses through keeping merchandise in outside sellers’ facilities.

Other noted benefits include how Seller Flex would provide Amazon with more flexibility into warehousing and delivery operations of merchant partners, with the potential of making full use of their product inventory, storage, space, and customer proximity with a quick delivery guarantee.

A separate Bloomberg report, which was published today, indicated that Amazon has expanded the Seller Flex service, which Amazon has renamed to FBA Onsite.

The report explained that along with changing the name of the offering, Amazon is recruiting more sellers and telling merchants they can keep goods in their own warehouses, as in the past merchants had to send goods to Amazon facilities and then pay extra fees to participate in FBA Onsite, as well as Amazon’s household goods fulfillment service called Subscribe and Save that offers discounts on frequently purchased items.

Among the benefits of FBA Onsite cited in the report were: increasing inventory; shortening delivery times; reducing costs; and letting merchants send inventory to Amazon warehouses and pay Amazon to handle storage, packing and delivery.

Related: Amazon Crushes Earnings

Jerry Hempstead, president Hempstead Consulting

“The impact of FBA Onsite on UPS and FedEx is not perceived as a ‘huge threat,’ it is more of a logical nuance ”Jerry Hempstead, president Hempstead Consulting

FBA Onsite is interesting from a delivery and distribution on a few different levels, according to Jerry Hempstead, president of Hempstead Consulting, in a recent interview.

“It’s for retailers that peddle their products on the Amazon site. So in some situations, dependent on volume, of course, it’s more efficient to pick up some packages I think they are looking at regional footprints) and inject the volumes directly,” he said.

This is in lieu of moving volume from retailer to Amazon fulfillment and then from Amazon fulfillment to consumer. This next logical step can reduce mileage on a piece of inventory, reduce handling, and reduce time to consumer gratification.”

As for the potential impact of FBA Onsite on UPS and FedEx, Hempstead said it is not perceived as a “huge threat,” saying it is more of a logical nuance. And he noted that some retailers that use Amazon to sell their items select their own carrier today but are required to meet Amazon’s delivery requirements and some of that business may be subject to diversion away from the integrators.

“I think this new offering will be limited in clientele and delivery footprint,” said Hempstead.

A research note issued last fall by Baird and Co. analyst Colin Sebastian said that Amazon’s final-mile efforts reflect a logical extension to its model as it builds network density, justifying incremental insourcing of purchased transportation spend, as well as ongoing efforts to continue managing rising costs in its final-mile delivery network.

Read: Is Amazon About to Disrupt Another Billion-Dollar Market – Third Party Logistics?

In recent years, Amazon has been diligent in expanding its own logistics network in the form of things like opening 20 regional sort centers and launching its own air network contracting with ATSG and Atlas Airlines.

Other logistics-related efforts of note by Amazon include things like testing drone delivery of parcels and building an Uber-like app for freight, among others.

Related: Amazon Doesn’t Have Enough Route Density for Its Own Delivery Service

Related ‘Amazon’ White Papers

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Amazon’s Move into Delivery Logistics
Many industry players and experts are waiting anxiously to see what innovations Amazon will come up with next – and above all, whether Amazon will enter into delivery logistics under its own banner. Download Now!

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Chasing Amazon: Building a Dynamic Warehouse Network
Most of Amazon’s competitors are feverishly playing catch-up, and if your company is among them, reassessing your supply chain design, particularly pricing and quick delivery, is a good place to start. Download Now!

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Amazon: Yet Another Massive Market on the Horizon
Amazon has “powerhouse potential” in the large transportation and logistics market, dominated by global enterprises such as DHL, FedEx, and UPS. Download Now!

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Home Delivery and Same-Day Delivery for Retailers
Retailers are struggling to respond to the new threat of online giants like Amazon, who are siphoning off the customers of traditional retailers, what is driving this and what can retailers do to retaliate against this threat? Download Now!

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How Industrial Distributors Should Compete with AmazonSupply
Companies that recognize and respond to the shift in power to the customer are winning hearts and wallets, the key is not to get hung up on trying to save a penny. Download Now!

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Global E-Commerce Logistics
Regardless of who is winning the race for volumes and profits, consumers continue to spend and the e-commerce logistics market continues to grow. Download Now!

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State of Online Freight Sales
While many business-to-business sales industries continue to expand sales online, the logistics industry has been slow to adopt online freight sales and booking, leaving ample space for ambitious forwarders to expand sales with new channels. Download Now!

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Are Robots Going to Replace People in the Warehouse?

Robots obviously are becoming quite popular if you read anything on the internet or any news about robotic technology.

But in warehouse automation, the five areas that I would see most popular, most common, that you’re hearing the most about, about applications of robotic technology is one, speed; two, accuracy.

When you combine the two, as you’re seeing especially on E-commerce, a tremendous growth in the number of orders, in the amount of volume that is being pushed out by DC centers.

This focus on including robotics, I think two main areas are the speed of the ability to pick an order and fill an order, and then two, the accuracy level.

You also have a reliability factor. Robots are always there, every day. They don’t call in sick. They can work 24 hours a day, and that lends itself obviously to a fear factor.

Are robots going to replace people in the workforce?

There is an issue of availability of labor, so robots are becoming very popular because they fill a void that exists right now in the warehouse environment.

Especially when the Christmas season rolls around and warehouses are looking to increase their employee base by as much as five or tenfold sometimes, they can’t find that workforce.

You’re seeing robotic technology that can work in conjunction with laborers. They call them cobots.

You’ve got robot technology that can supplement a travel application.

They’re replacing or at least providing a more efficient picking process so that the robots can take over the travel.

They can travel to and from the picking and the shipping consolidation area.

The fifth one would be the cost really. Robots are becoming a very good economical alternative or supplement to consider improving the warehouse automation.

Better Together: Humans and Robots in the Warehouse

It’s not hard to find headlines touting a “robots taking over the workplace” narrative, like this recent article in the Wall Street Journal, “Robots Are Replacing Workers Where You Shop,” or this one from CNN Money: “Robots Could Wipe Out Another 6 Million Retail Jobs.” Before declaring a protest on all robots, however, it’s important to hear another perspective that doesn’t get as much press.

An article that appeared earlier this year in the Houston Chronicle read, “In Houston, Amazon’s Robots Mean More Work for Humans, Not Less.” The article went on to state that Amazon expects to hire 2,500 full-time employees to staff its massive warehouse – more than double the number of jobs it announced the prior year at the outset of the project.

Amazon isn’t the only company finding common ground for humans and robots in its warehouses. Earlier this year in Tennessee, DHL began testing robots to assist its pickers in order fulfillment. Rather than pushing a bin or cart, the robots work alongside workers, helping them pick out medical devices that need to be shipped quickly. Third-party logistics provider Quiet Logistics Inc., which fulfills online orders for retailers like Bonobos and Zara, uses the same type of mobile robots in one of its warehouses to support its employees.

Robot + Human Collaboration = Cobot

Unlike the doomsday narrative of robots taking over the workplace, savvy companies are creating synergistic scenarios where robots perform repetitive, simple job tasks and human laborers focus on tasks that require deeper thinking and strategizing. The new term for this collaboration, “cobot,” allows each type of worker to focus on the tasks they do best. For example, some robots can be used to guide workers to the items that need to be picked or routed through the warehouse to the workers who need to pack and ship them.

According to Barclay’s research, the cobot market will be worth $3.1 billion by 2020. The affordability of the technology is playing a big part in its adoption, too. Barclay’s research found that pricing for collaborative robots is steadily dropping by 3% to 5% a year. With an average price in 2015 of $28,000, the expected price of a cobot in 2025 will be around $17,500.

Another plus for cobots is that they don’t require a pricey extensive network of conveyor belts and automation systems. Collaborative robots can be especially useful for handling surges in sales that happen around the holidays when it can be difficult to find extra workers. “It’s not meant to replace human labor, but you can get greater throughput with the same size workforce,” said John Santagate, an analyst with IDC Manufacturing Insights.

The Future Of Cobots: Brain-Computer Interfaces

Aside from lower prices and higher adoption rates, there’s another interesting cobot trend worth keeping an eye on, which is the ability for human workers to control machines with nothing more than their thoughts.

The key to this remarkable technology is a wearable device that measures brain activity and translates it into a language a computer can understand. Researchers at MIT are already hard at work on developing what’s being called brain-computer interfaces (BCIs). They’re even claiming they’ve been able to achieve up to 20% robotic performance improvement by enabling robots to adapt to users’ thought commands.

While these claims feel more like something from a Sci-Fi movie, it’s nice to know that even if a robot can’t read your mind, it can still improve workplace productivity by working collaboratively with laborers rather than working against them.

Related Article: Four Ways to Future-Proof Your Warehouse

Related White Papers

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Energy Efficiency in Automated Distribution Facilities
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Why Every Company Will Be Using Blockchain By 2027

Almost a decade ago, Satoshi Nakamoto, the creator of Bitcoin, silently disrupted trust-providing organizations, like banks, with an eight-page long research paper describing how money can be decentralized (through Bitcoin).

At the time, not many people understood the potential that those eight pages concealed within themselves.

No, I am not talking about decentralizing money.

I am referring to the decentralization itself. In those eight pages, Nakamoto didn’t just explain how we can regain control over our money – he offered a new way for strangers to safely collaborate with each other.

You might have come across people who deny the potential of blockchains and tell you not to buy into the hype.

My advice: do not pay too much attention to them.

In this article, we discuss five different ways blockchain will fit into your company in less than ten years from now.

So let’s start with the basics: what is blockchain exactly?

Put simply, a blockchain is a database. It’s an ever-growing database of different kinds of data and it has quite remarkable properties:

  1. Once data is stored in the database, it can never be modified or deleted. Every record on a blockchain is permanent for eternity.
  2. No single individual or organization maintains the database; several thousand individuals do, and everyone has a copy of the database themselves.

To understand how several people are able to keep their copies of the database in sync with everyone else’s, imagine this:

There are ten individuals in a network.

Everyone is sitting with an empty folder and a blank page in front of them.

Whenever anyone does something important in the network, like transferring money, they announce it to everyone in the network.

Everyone makes a note of each announcement on their page until their pages are full. When they’re full, everyone has to seal the contents of their page by solving a mathematical puzzle. Solving a mathematical puzzle verifies that everyone’s page has the same contents and ensures they can never be modified. Whoever seals their page first, gets rewarded with some amount of cryptocurrency.

Once the page is sealed, it is added to the folder. A new page is brought out and the process continues forever.

As time passes, these pages (blocks) that contain important records (transactions) are added to the folder (chain), thus forming the database (blockchain).

For the detailed version, here’s the ultimate guide to understanding blockchain.

Because of its unique properties, blockchain technology can be used in many different industries, ranging from banking and accounting to the entertainment industry.

Five Different Ways Blockchain Will Affect Your Company

“Until the contract is signed, nothing is real.” – Glenn Danzig

What would you call a business that isn’t “doing business?” Blockchain will have a large impact on the way organizations engage with one another. Doing business means transacting with other parties to facilitate something that wouldn’t be possible alone. In such an arrangement, the two organizations need to be sure they can trust each other.

In 2017, this trust is provided by a set of pages, or contract, that lists all the terms and conditions of engagement. When a party doesn’t adhere to the promises mentioned in the contract it can be enforced by law – but this can result in an expensive and timely process. So in many cases, going to court over a breach of contract simply isn’t worth the trouble.

Using blockchain technology, many of these contracts can be converted into Smart Contracts. Unlike conventional contracts, smart contracts consist of software code and are executed by the blockchain network. The beauty of these smart contracts is that they cannot be modified after they are deployed, which ensures neither party in a deal can walk away without doing their part.

Smart contracts, written in code on the blockchain, are contracts that are completely inalterable once they have been triggered.

Imagine you’re in a band and you want to sell your music to someone, meaning you’ll have to transfer an audio file. How can you be sure the buyer will pay for it after receiving it? At the same time, the buyer might be skeptical too, thinking you won’t send the audio file if they make the payment first. A smart contract ensures that once the buyer has transferred the money, the audio file will immediately be sent to the buyer. Once deployed, no one can stop the contract from being executed. So both parties can trust the code.

“If you think nobody cares about you, try missing a couple of payments.” – Steven Wright

If your business requires payment transactions between countries, blockchains will come in handy as well. One of the biggest promises of blockchain is that it will replace money someday. This, of course, would entail such a radical shift that it would take years, if not decades, to happen. But right now, we can already use blockchains to transfer money across the globe within minutes, instead of days.

One of the benefits of decentralized money is that payments can be transferred directly between peers, without any intermediaries, like banks, slowing down the process. Given this, cross-border remittances will no doubt be another area of your business that will adopt blockchain.

“We’re going to become caretakers for the robots. That’s what the next generation of work is going to be.” – Gray Scott

Experts predict that robots will someday take over our jobs. But until that day arrives, CEO’s everywhere will still need humans running their companies.

Unlike robots, however, people do not come with trademarks or reputation badges. Which is why finding the right employees for your company can be a daunting task.

But what if such information about possible new hires became publicly available? As explored in this article, blockchains can pave the way for faster, cheaper and trustless (where you don’t have to trust another human being for authenticity) reference checks. Each person would have a trail of feedback which would be accumulated over the course of their career by past employers. This would enable new employers to quickly review this trail and decide whether this person would be the right match for the job.

Convenient enough for the new employer, but what happens if this trail contains false information? Suppose your previous boss was a hateful, horrible person – will you then be forever haunted by their negative feedback?

To make sure this doesn’t happen, the reference system should be a two-way street. This way employees can also rate their employers, and if needed, each other. A bad rating from an employer with a bad reputation in the system will have less weight than someone who’s proven trustworthy.

Cloud Storage
“Behind every cloud is another cloud.” – Judy Garland

If you’re running a business, chances are you have company data stored in the cloud. According to a recent report by cloud services provider BCSG, a growing number of small and medium-sized companies are turning to cloud computing. Currently, 64% of small business owners have an average of three cloud solutions in place, which is expected to increase to 72% in the next three years.

Blockchains are playing a huge role in decentralizing cloud storage because they allow strangers to collaborate with each other. Instead of storing files on a single centralized server, you’ll be able to save your files on thousands of devices across the globe.

Here’s how that works: Every file you upload will be divided into several tiny chunks, and each of these chunks will be stored on several devices in the network. Which particular chunk is stored on which particular device is recorded on the blockchain. If you need to retrieve that file, the system will assemble it for you based on this information.

Your data will be even more secure in a decentralized storage than the cloud storage. While the centralized cloud storage stores your file on several backups, the decentralized storage will keep your data on an even bigger number of devices, therefore, increasing dependability.

Also, in centralized systems, the strength of the system depends on how secure one company’s servers are. Using decentralized networks, there isn’t just one device that contains the complete file, which makes it practically impossible for hackers to obtain the data.

Less Hierarchy, Better Governance
Companies will thrive in an environment where power is not limited to the hands of a few, yet this is the way organizations are often structured.

These current authority structures are the result of inefficiencies in coordinating a large crowd. Blockchain itself is not a new technology – it is just a combination of technologies that we’ve had for several decades: peer-to-peer networks and cryptography. Similarly, the solutions on top of blockchains are made up of several moving parts that work together beautifully.

Using a combination of smart contracts on top of the blockchain, communities can have a governance without a hierarchy. It’s very likely that your business will soon have next to zero bureaucracy, and all the major decisions that affect the organization as a whole might be taken through a transparent voting process that gets carried out on a blockchain.

Every proposal gets submitted in the form of a Smart Contract on which everyone can vote. If the threshold defined in the company’s constitution is met, the proposal is approved and further steps can be taken.

Blockchain is Coming

These are the few areas that your business might adopt blockchains sooner than you expect, but the possibilities are endless. There are several mental models that you can use to think of blockchains.

When it comes to identifying the potential of blockchains in business, I like to think of blockchain as a method to make strangers work together. Be it your employees, or your partners, or the supply chain, or anybody else, blockchains will soon penetrate your organization in more ways than one.

About the Author
Mohit Mamoria is the CEO of Authorito Capital (a crypto fund) and the editor of a weekly newsletter, Unmade, which delivers one startup idea from the future to your inboxes. He writes regularly for world’s largest publications including HackerNoon, TechCrunch, TheNextWeb, CoinTelegraph among others. This story first appeared on TheNextWeb.

Introducing ONE Blockchain

ONE Blockchain is a blockchain-enabled solution that brings rich, supply chain orchestration capabilities to the blockchain. It decreases risk, increases efficiency, and greatly simplifies how partners conduct business transactions.

ONE Blockchain overcomes the problems of confidentiality and slow performance that are limiting the adoption of blockchain in full-scale supply chains.

Download the White Paper: Can Blockchain Revolutionize the Supply Chain?

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Maersk IBM Form Joint Venture Applying Blockchain to Improve Global Trade & Digitize Supply Chain

Traditional cross-border shipping processes usually involve manually transporting and verifying paper documents for each shipment.

IBM and Maersk are forming a joint venture to use blockchain technology to make global trade more efficient, transparent and secure.

The aim of the new company will be to offer a jointly developed global trade digitization platform built on open standards and designed for use by the entire global shipping ecosystem.

It will address the need to provide more transparency and simplicity in the movement of goods across borders and trading zones.

The cost and size of the world’s trading ecosystems continue to grow in complexity.

More than $4 trillion in goods are shipped each year, and more than 80 percent of the goods consumers use daily are carried by the ocean shipping industry.

The maximum cost of the required trade documentation to process and administer many of these goods is estimated to reach one-fifth of the actual physical transportation costs.

According to The World Economic Forum, by reducing barriers within the international supply chain, global trade could increase by nearly 15 percent, boosting economies and creating jobs.

The attributes of blockchain technology are ideally suited to large networks of disparate partners. A distributed ledger technology, blockchain establishes a shared, immutable record of all the transactions that take place within a network and then enables permissioned parties access to trusted data in real time.

By applying the technology to digitize global trade processes, a new form of command and consent can be introduced into the flow of information, empowering multiple trading partners to collaborate and establishing a single shared view of a transaction without compromising details, privacy or confidentiality.

Maersk, a global leader in container logistics, and IBM, a leading provider of blockchain, supply chain visibility and interoperability solutions for the enterprise, will use blockchain technology to power the new platform, as well as employ other cloud-based open source technologies including artificial intelligence (AI), IoT and analytics, delivered via IBM Services, in order to help companies move and track goods digitally across international borders.

Manufacturers, shipping lines, freight forwarders, port and terminal operators and customs authorities can all benefit from these new technologies -and ultimately consumers.

“This new company marks a milestone in our strategic efforts to drive the digitization of global trade. The potential from offering a neutral, open digital platform for safe and easy ways of exchanging information is huge, and all players across the supply chain stand to benefit,” said Vincent Clerc, chief commercial officer at Maersk and future chairman of the board of the new joint venture.

“By joining our knowledge of trade with IBM’s capabilities in blockchain and enterprise technology, we are confident this new company can make a real difference in shaping the future of global trade.”

IBM’s blockchain platform is enabling hundreds of clients and thousands of developers to build and scale active networks across complex use cases, including cross-border payments, supply chains, and digital identification.

“The major advances IBM has made in blockchain have shown that the technology can foster new business models and play an important role in how the world works by building smarter businesses,” said Bridget van Kralingen, senior vice president, IBM Global Industries, Solutions and Blockchain.

“Our joint venture with Maersk means we can now speed adoption of this exciting technology with the millions of organizations who play vital roles in one of the most complex and important networks in the world, the global supply chain. We believe blockchain will now emerge in this market as the leading way companies seize new untapped economic opportunities.”

Read: Blockchain will be the killer app for supply chain management in 2018

IBM and Maersk began a collaboration in June 2016 to build new blockchain- and cloud-based technologies. Since then, multiple parties have piloted the platform including DuPont, Dow Chemical, Tetra Pak, Port Houston, Rotterdam Port Community System Portbase, the Customs Administration of the Netherlands, U.S. Customs and Border Protection.

The joint venture will now enable IBM and Maersk to commercialize and scale their solutions to a broader group of global corporations, many of whom have already expressed interest in the capabilities and are exploring ways to use the new platform, including General Motors and Procter and Gamble to streamline the complex supply chains they operate; and freight forwarder and logistics company, Agility Logistics, to provide improved customer services including customs clearance brokerage.

Additional customs and government authorities, including Singapore Customs and Peruvian Customs, will explore collaborating with the platform to facilitate trade flows and enhance supply chain security. The global terminal operators APM Terminals and PSA International will use the platform to enrich port collaboration and improve terminal planning.

With support from Guangdong Inspection and Quarantine Bureau by connecting to its Global Quality Traceability System for import and export goods, the platform can also link users to important trade corridors in and out of China.

To address the specific needs of the industry, Maersk and IBM are establishing an advisory board of industry experts to help further shape the platform and services, provide guidance and feedback on important industry factors, and drive open standards.

Michael J. White, former president of Maersk Line in North America, CEO of the new company

Maersk and IBM have named Michael J. White, former president of Maersk Line in North America, as CEO of the new company. He commented;

“Today, a vast amount of resources are wasted due to inefficient and error-prone manual processes. The pilots confirmed our expectations that, across the industry, there is considerable demand for efficiency gains and opportunities coming from streamlining and standardizing information flows using digital solutions. Our ambition is to apply these learnings to establish a fully open platform whereby all players in the global supply chain can participate and extract significant value. We look forward to further expanding our ecosystem of partners as we progress toward a global solution.”

The new company initially plans to commercialize two core capabilities aimed at digitizing the global supply chain from end-to-end:

  • A shipping information pipeline will provide end-to-end supply chain visibility to enable all actors involved in managing a supply chain to securely and seamlessly exchange information about shipment events in real time.
  • Paperless Trade will digitize and automate paperwork filings by enabling end-users to securely submit, validate and approve documents across organizational boundaries, ultimately helping to reduce the time and cost of clearance and cargo movement. Blockchain-based smart contracts ensure all required approvals are in place, helping speed up approvals and reducing mistakes.

Upon regulatory clearance, solutions from the joint venture are expected to become available within six months.

The new company will be headquartered in the New York metropolitan area.

The platform is built on IBM Blockchain technology, which is provided through the IBM Cloud and powered by Hyperledger Fabric 1.0, a blockchain framework and one of the Hyperledger projects hosted by the Linux Foundation.

For more information about the joint venture read: Digitizing Global Trade with Maersk and IBM

Maersk and IBM Launch Digital Joint Venture

Maersk and IBM Launch Digital Joint Venture

A new joint venture company which Maersk and IBM intend to create is the first open platform of significant scale for sharing information and developing digital products related to trade. Read the Story

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CSX Provides Surface Transportation Board with Update on Precision Scheduled Railroading Progress

Precision Scheduled Railroading (PSR) was created by the late CSX President and CEO E. Hunter Harrison, who passed away in December.

PSR requires cargo to be ready when rail cars arrive for loading or risk being left behind, a practice that served both CP (Canadian Pacific) and CN (Canadian National Railway Company) well under his leadership, with both companies seeing multiple positive results in the form of lower operating ratios, improved service, record amounts of reinvestment into networks, as well as creating significant shareholder value.

But over the course of 2017 since Harrison took the helm at CSX, things have not been quite as smooth in terms of the PSR implementation.

There were various issues stemming from CSX’s PSR implementation that were clogging the tracks, so to speak, in various ways in the form of things like informal complaints from both CSX customers and railroad industry stakeholders in regards to various service issues, including:

  • transit times increasing significantly and/or becoming unpredictable;
  • loaded and empty railcars sitting for days at yards;
  • switching operations becoming inconsistent and unreliable;
  • car routings becoming circuitous and inefficient;
  • CSX customer service being unable to provide meaningful assistance; and
  • slowing train speed and increasing dwell time along with numbers of cars online.

CSX CEO James Foote’s letter to the United States Surface Transportation Board (STB) was in response to a December 14 letter from the STB, which centered on the company’s continued progress in implementing PSR.

He explained that PSR is comprised of two phases, with the first phase at CSX focused on what he called “top-to-bottom changes” into the way in which the railroad operated.

Stifel Nicolaus analyst John Larkin

“CSX is within striking distance of the Holy Grail here, and Mr. Foote may be just the right person to carry the ball over the finish line”John Larkin, Stifel Analyst

“Mr. Harrison introduced the company to a new way of thinking about CSX’ network, which led to major operational enhancements, including the conversion of certain hump yards to flat switching and strategic adjustments to other facilities,” he wrote.

“It also led to replacing CSX’ traditional methods with a new, balanced, scheduled train plan comprised of significantly more mixed-freight trains. Most importantly, Hunter instilled a new railroad culture that has everyone focused on the five tenets of PSR: service, asset utilization, controlling costs, safety and people.”

Addressing the second phase of PSR implementation, Foote cited “the pure, daily execution of those five PSR tenets,” which is well underway.

What’s more, he said that the results of PSR implementation are apparent, pointing to the company’s performance metrics showing a remarkable rate of positive change, with four straight months of improvement, coupled with recent trends far exceeding the prior full-year average and car handling and terminal fluidity ahead of 2016 levels. He also stated that major strides have been made in train velocity.

“Higher velocity serves as a catalyst for multi-faceted improvement,” he wrote. “As trains speed up on the network and reach their destinations sooner, there are fewer total trains running at any given time. This improved line-of-road fluidity, in concert with terminals processing cars more efficiently, leads to a higher level of on-time originations. When trains are operating in their scheduled windows and executing in timely coordination on meets and passes, movements further accelerate freight across the network. As a result, fewer locomotives and crews are needed to handle the same amount of freight, and our cars are able to cycle more quickly, such that total cars online decline. The end of this virtuous cycle is faster transit, better service, markedly improved asset utilization, and greater efficiency at lower cost.”

In concluding his letter, Foote said that he believes PSR is in place at CSX and does not foresee any significant operating changes at this time, adding that through this successful implementation, the company has seen enhanced freight flows across the CSX network and major progress toward its goal of providing a superior product for its customers.

Shortly before Harrison passed away in mid-December, CSX issued a statement noting that Harrison would be on medical leave and replaced by Foote on an interim basis.

At that time, Stifel analyst John Larkin wrote in a research note that the company’s strategy would be unchanged but the cultural conversion and rebuilding of customer confidence was required.

“After this summer’s service meltdown occurred at CSX the company moved rapidly and decisively to adopt Hunter Harrison’s precision railroading plan, service rapidly deteriorated,” Larkin wrote.

“Customers were irate and openly complained to the Surface Transportation Board. In the ensuing months, Hunter made numerous management changes as precision railroading requires complete ‘buy-in’ by everyone up and down the organization. Service improved and customer complaints subsided. But, scars from this service meltdown remain.”

“Mr. Foote may be better suited to repairing customer relationships and to further reinforce the need for everyone on the CSX team to simultaneously row in the direction of precision railroading execution. At its best, precision railroading improves service (transit times and transit time variability), lowers cost, and attracts more traffic to the adopting railroad. CSX is within striking distance of the Holy Grail here, and Mr. Foote may be just the right person to carry the ball over the finish line, given his extensive sales and marketing background, while at Canadian National.”

Related Article: CSX Corporation Announces New Chief Operating Officer & Executive Management Changes

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Harsh ‘Bomb-Cyclone’ Weather Adds Different Strategies to Motor Carriers’ Playbooks

While the year may be new, it stands to reason that approaches to handling freight and keeping operations on schedule and efficient is really an age-old practice in many ways.

Pittsburgh-based Pitt Ohio, a provider of less-than-truckload, truckload, supply chain, and ground services, can be viewed as an innovator of sorts, when it comes to handling heavy snowfalls and deep freezes through its more than 1,250 heated trailers spread out among its Pitt Ohio, Dohrn Transfer, and the U.S. Special Delivery groups, which it has invested in over the last three years.

Having done a fair share of business in the chemical and coating sectors, one thing that has been apparent at the company is seeing customers shift to more sustainable processes, through the replacement of things like oil-based products to water-based products, according to Pitt Ohio Chief Marketing Officer and EVP Geoffrey Muessig.

“The byproduct of that is these products are more temperature-sensitive than they used to be,” he said. “With specialty products and formulations, there is a need to keep them from freezing. In the past, we have experimented with heated pads and blankets. While they were operationally successful, the challenges were more from a distribution standpoint, as it adds a lot of extra costs and time at the warehouse. You have to back strip the pallets to take the pads down and then load the boxes on top of the pallet and then wrap the blanket around it. That’s time-consuming.”

After listening to customers, Muessig said Pitt Ohio made a significant investment in heated trailers, which he said its driving business its way. While many of its customers are embargoing shipments, he said Pitt Ohio has picked them up and is seeking to move as many as it can overnight.

“When the roads are impassable, we will keep shipments on the heated trailers or move them into warm rooms at our terminals, but we will protect the freight and move as much as we can, as per our normal service standards,” he said.

“From a customer’s perspective, they want us to minimize disruptions to their supply chain. Their customers don’t want to hear about the bad weather and not being able to get shipments this week; that does not really work. They want to do it in a cost-effective way and don’t want to be shipping four pallets on a heated trailer with a truckload provider, which is hard to justify from a cost standpoint. This is what some shippers have been forced to do in dire situations when it has been cold in the past.”

Muessig said that Pitt Ohio is particularly focused on various areas for its heated trailers in Wisconsin, Illinois, Missouri, the entire Pitt Ohio core area, and into New England and Canada through its business partners.

Visit: PITT OHIO’s Protect From Freezing Service, Heat Track

For national LTL carrier Old Dominion Freight Line (ODFL), the company’s VP of Transportation Hugh Morris called the company’s approach to winter weather complicated but simplistic in nature.

“We do use blankets to wrap around a pallet. As long as the blankets are above freezing, it will keep the temperature of the pallet at that time intact for close to 48 hours,” he said.

“We also have the standard old fashioned propane heaters that were made for trucking companies years ago that we can also utilize. The only problem we have typically is that if it gets below 18 degrees there is not much we can do to protect it.”

But he noted that ODFL has a 30-hour temperature forecasting model, which helps to determine what is the window of opportunity on freezable shipments in terms of being able to get them from point A to point B, where shipments can be protected in the event the temperature falls below 18 degrees.

Geoffrey Muessig, CMO and Executive Vice President at Pitt Ohio

“Pitt Ohio has made a significant investment in heated trailers, which is driving business its way.”Geoffrey Muessig, Chief Marketing Officer & Executive Vice President, Pitt Ohio

“If there was a shipment going from Portland, Maine to Seattle, your natural connection is going to be over Chicago, and if you look from Chicago over across to, say, Minneapolis, Fargo, Billings, Spokane, or into Seattle, the temperature is going to be below 18 degrees and for how long, and we can make the call on when a shipment moves to those connecting points and if we have to hold it in a worst case scenario if there is no window of opportunity, we will hold it in what we call a warm room, which is a refrigerated unit with a ‘warm’ option,” he explained.

“When push comes to shove, our last line of defense for, say, a shipment from Portland, Maine to Seattle, could be run down to Dallas and into southern California and then up the I-5 corridor, because there was no window of opportunity basically anywhere north of I-40 that was going to be above 18 degrees long enough to get the shipment there safely.”

While ODFL would not typically issue a full-blown embargo, Morris said it would communicate to the customer that there are options to either hold a shipment and move it in a couple of days or, alternatively, to take it and keep it moving as best as it can, with a few extra days above the normal surface transit time.

From an operational perspective in times of harsh weather, Morris said that ODFL’s service center managers at its facilities are essentially the boots on the ground.

“The technology today makes it a lot easier, as we can basically pull up any DOT (Department of Transportation) camera across the domestic U.S. and see live traffic and what is going on where our are trucks are going,” he said. “We did not have that option a few years ago, and we relied on the National Weather Service or drivers calling in and providing updates. Most of our drivers run at night between 8-9 and are usually back in the next morning between 7-9.”

As for what ODFL’s plans were for running in weather-impacted areas in storm hit parts of the U.S. today, Morris said the company would look at is forecasting model to determine which trucks are safe to leave and run and what time they would need to leave and get them back before the storm hits.

And he added that exercise is a little easier in the Northeast, because the harsh weather is more commonplace, as compared to down south, where people are not used to driving in the elements.

“A quarter-inch of ice in Atlanta can leave 6 million people stranded,” he said. “Ultimately, it is the drivers’ call when it comes to this kind of weather. If they want to run, we will try to adjust where they can get out and when they can get back. If it does not look like they would not get back in time and they may choose not to run, then they won’t run. It is strictly their call when it comes to weather.”

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