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About: yamilfalcon

Recent Posts by yamilfalcon

The Rewards of Getting Returns and Reverse Logistics Right

Customer expectations are shifting fast and there are different challenges inherent in managing reverse logistics and returns for B2B and B2C.

The returns economy in ecommerce is a real opportunity to shine, but you need a solid foundation in place.

With the right approach, you can tame your returns processes, keep costs under control, and provide the kind of excellent service that differentiates your business from the competition.

At least 30% of products ordered online are returned, compared to almost 9% in brick-and-mortar stores, according to stats collected and presented by invesp.

They also show that 79% of consumers want free return shipping and that as many as 67% of shoppers check the returns page before they purchase online. 92% say they will buy again if returns are easy.

So, it’s clear that a well-managed returns policy will attract new customers and boost loyalty, but how to achieve it?

Visibility and Control

Consider that only 42% of retailers surveyed by ARC Advisory Group and DC Velocity were able to say that they fully understood the financial impact of returns on their business, while 27% admitted that they guess or can’t measure it at all.

Gaining an insight into the process and associated costs is a vital first step.

Creating a top-quality customer experience starts with complete visibility into the forward or reverse flow for all orders.

If you want to give customers a wide choice, fast service, low cost and high reliability, then you need to carefully orchestrate your supply chain.

You need to combine that visibility with control on a very granular level for precise, real-time planning and execution of all the steps required for each and every order.

End-to-end optimization is the path to satisfied customers and reduced costs, but you can’t achieve it without the right tools.

Adopt a Control Tower

A control tower platform can be layered on top of your disparate systems, marrying all the data from warehouse management software, carrier systems, transport tracking, e-commerce systems, CRM, ERP, and everything else.

A control tower gives you the big picture, single source of truth view that you need to be able to make the right decisions for your customers and your business.

It’s not just about linking field engineers, logistics service providers, customer service departments, and repair centers together, but also enabling them to collaborate.

You can drill down in the planning stage and individually optimize every order and return. Find the best parties, the best timing, manage your inventory closely, and map complex multi-leg flows.

This is the end-to-end management of every aspect of the order lifecycle.

Download Modern Control Towers: Choosing the Right One for Your Digital Supply Chain

You can also see the progress in real-time, create alerts so that you’re alerted to potential problems before they develop, and keep a tight rein on costs. When the order is complete, check cost incurred against expected cost and analyze your service providers’ performance.

Finally, you can collect and allocate the cost of all the activities and project them on the return order, giving you an interval cost picture per order and analysis on the supply chain landed cost for your reverse books.

Managing Complex Dependencies

In the B2B world, you have a complex returns landscape with SLAs (service level agreements) to consider.

Customers need to ship back defective or faulty parts to return centers, where they typically get sent onto larger distribution centers. They need to be inspected and then repaired or rerouted to recycling or back into stock. When a repair is required you need to choose the right repair center or vendor.

All the while, your customer service department must be kept up to date on progress, so they can keep the customer happily informed.

There’s a lot of complexity in the average aftermarket supply chain.

With the end-to-end order visibility and inventory availability a control tower can establish, it’s possible to provide faster and more reliable service to customers, but also to conduct the kind of analysis that empowers you to drive continuous improvement going forward.

There’s simply no way of delivering omnichannel capabilities cost-effectively without granular insight and real-time control.

Remember that the initial investment required to establish supply chain orchestration will soon be recouped by tighter cost control and an increase in new and repeat business.

About the Author
Martin Verwijmeren is co-founder and Chief Executive Officer of MP Objects, a leading provider of smart cloud software for supply chain orchestration with offices in Boston, Rotterdam, Tokyo, and Hyderabad. He was previously vice president of IT for CEVA Logistics. He has a Ph.D. in distributed systems for integral inventory management from the Eindhoven University of Technology. Contact him at martin.verwijmeren@mp-objects.com.

Modern Control Towers: Choosing the Right One for Your Digital Supply Chain

In Pursuit of the Perfect Order
Customer expectations are higher than ever. There’s a growing demand for fast lead times, complete transparency on order progress, and an expanded set of services. Customer experience is absolutely vital for any company seeking a competitive advantage. Forrester calls this “the age of the customer” and it’s crucial to ensure your customers get what they want when they want it.

Modern Control Towers: Choosing the Right One for Your Digital Supply Chain

What is the perfect order? In simple terms, you want to fulfill customer orders, deliver them on-time and in-full (OTIF), but also do so profitably, which means controlling costs. If you please your customers by meeting their rising expectations, then they will come back for more, and customer retention is vital for any healthy business.

Download the White Paper Modern Control Towers: Choosing the Right One for Your Digital Supply Chain

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The Data Analytics Revolution in LAST-MILE Delivery

Urbanization is Progressing at a Rapid Pace

The United Nations projects that by 2030 the number of so-called megacities of over 10 million inhabitants will rise to well above 40.

About two-thirds of the global population is expected to reside in cities by 2050.

Without a doubt, cities represent the epicenters of future global economic growth as well as the social, technological and cultural advancement of humanity.

The supply chain implications of these trends are profound. To remain competitive, companies across all sectors, industries, and markets need to succeed at serving urban customers and consumers.

This is particularly true in retail, where the battle over future consumer markets is largely a battle over who excels at managing the urban last mile of physical distribution.

Strategies for Change

As urban populations grow, cities are becoming an increasingly complex and uncertain operational environment.

The key driver of this complexity is a rapid increase in urban density. The potential of any city to grow in geographical size is naturally bounded.

At some point, cities find that to keep growing they must build upwards to accommodate more people, businesses, and activities.

However, these growth strategies also lead to rising levels of congestion across the urban transportation infrastructure and an increased likelihood of accidents and other random disruptions to urban mobility.

Planning efficient and reliable last-mile delivery operations is thus becoming more challenging and requires higher levels of operational flexibility and redundancy from urban distribution systems.

At the same time, the retail industry is facing a continuing boom in e-commerce together with rapidly rising customer expectations regarding the speed, timeliness, flexibility, and customization of last-mile delivery services.

Heavily cross-subsidized premium delivery services offered by some of the major e-commerce platforms are gradually educating consumers to further postpone their purchase decisions, as they can rely on the availability of affordable, fast-track delivery at all times.

This trend toward “on-demand consumerism” renders the last-mile performance of a company’s logistics operations a critical competitive factor.

However, it also leads to a massive increase in the spatial and temporal fragmentation of urban deliveries, making it increasingly difficult for logistics service providers to consolidate shipments into efficient delivery routes.

These trends could render the provision of delivery services to urban markets increasingly unsustainable unless companies fundamentally rethink their approach to last-mile logistics.

Without substantial paradigm shifts in the design, planning, and operation of last-mile logistics, urban goods distribution will become – and remain – economically unprofitable.

Moreover, delivery operations will burden urban environments with more traffic congestion and associated noise and emissions pollution.

One way in which companies can redefine last-mile logistics is by adopting anticipatory planning and flexible operations that allow for dynamic and pro-active adjustments to rapidly changing operational conditions and market requirements.

Another strategy is to build multi-echelon network architectures and multi-modal delivery models, integrating connected and potentially autonomous technologies into smart cyber-physical systems.

Both of these options require companies to deploy advanced analytics, powered by diverse sources of high-resolution data and supported by highly connected and sensor-equipped operations.

Mobile Data and Connectivity as Key Enablers

A number of companies, especially in the fast-moving consumer goods industry and in e-commerce, have realized that they need to challenge traditional last-mile delivery solutions in light of recent advances in data analytics and technology.

Matthias Winkenbach, Ph.D., Director, MIT Megacity Logistics Lab, Research Associate, MIT CTL

Supported by state-of-the-art research from MIT, some enterprises are leveraging their existing data sources. They are using transactional records, delivery data from individual routes, high-resolution telemetry and movement data on the level of individual vehicles to develop a more precise picture of their last-mile logistics operations.

Similarly, publicly available data sources are becoming increasingly relevant for the optimal design and planning of last-mile delivery systems and processes.

These data sources provide insights into the operational and commercial environment – from road infrastructure characteristics to traffic and congestion dynamics to sociodemographic profiles of the customer base.

These are important advances – but they have certain limitations. Most of these data sources describe urban markets in retrospect; many are even static in nature.

This information is valuable in discovering and understanding systematic patterns in how urban markets and the associated logistics services function and perform historically, and in predicting how they may evolve in the future.

However, the information is limited in its potential to improve the way companies dynamically react and proactively adapt to short-term fluctuations in the marketplace and the operational environment on tactical and operational levels.

With the rise of the Internet of Things (IoT) sensor networks, companies are now able to obtain reliable, high-resolution and real-time visibility into their transportation networks.

Moreover, this visibility is not limited to the status and location of shipments, or to the inventory levels of individual storage locations. It is now possible to obtain system-wide insights into the number, status, location and expected trajectory of products and shipments along their entire journey from their upstream source or vendor to the final recipient.

Driven by significant advances in sensor technology, mobile computing, mobile data and vehicle connectivity, real-time visibility is no longer limited to aggregate information on stationary items at distribution and warehousing facilities.

It is now possible to achieve real-time visibility for in-transit volumes down to the level of individual items or shipments. This new level of detail and dynamism enables companies to substantially reduce the number of blind spots in their distribution networks.

Previously, these blind spots prevented them from dynamically adjusting their last-mile distribution approach to changing market dynamics, or to proactively mitigate the effects of disruptions to their last-mile operations.

The Data Analytics Revolution

Another key development is the availability of advanced analytics. The recent methodological advances in this field will have a major impact on last-mile logistics on three levels.

First, advanced analytics – and in particular a group of tools commonly known as machine learning – can help companies to better understand urban markets, customers, and operational environments.

This is particularly relevant when serving a large and highly fragmented customer base.

Such tools can provide substantial business value by revealing customer-specific insights that would have otherwise remained hidden or too costly to identify.

For instance, a leading global brewing company recently partnered with researchers from the MIT Megacity Logistics Lab to use data to improve the operational efficiency of its global last-mile deliveryoperations.

Based on historic route plans and delivery records, machine learning tools helped identify customer-specific delivery constraints in a pool of hundreds of thousands of customers around the world –  from big box retailers in the U.S. to single-owner operated nano stores in emerging markets.

The analyses helped to identify those customers that are most disruptive to the efficient operation of that company’s delivery operations due to their hidden delivery constraints.

The company was then able to address these issues by re-incorporating the information into its route planning algorithms, or by reconfiguring distribution services for certain customers.

Similarly, machine learning can help reveal and exploit the local knowledge and expertise of a company’s distribution workforce.

For instance, the analysis of high-resolution GPS traces in conjunction with telemetry data and transactional records can provide relevant insights on the availability and suitability of local infrastructures such as roads and parking bays for last-mile delivery.

The data can reveal behavioral patterns of drivers and delivery crews that have local knowledge about their route territory and know better than any algorithm or data source where to park, which shortcut to take, or which congestion hotspot to avoid.

Extracting this knowledge without having to disrupt crew member workflows can achieve significant improvements in route planning and more effective delivery instructions.

Companies also can maximize service levels and minimize cost inefficiencies due to inaccurate planning.

Second, state-of-the-art analytics of the increasing amounts of readily available, high-resolution data can help predict last-mile operations at much higher levels of detail and accuracy.

In light of rapidly increasing customer expectations regarding delivery speed and responsiveness, detailed and accurate spatiotemporal demand forecasts – i.e. understanding what, where and when customers will order – are becoming indispensable.

At the same time, shorter delivery lead times give companies limited leeway to compensate for short-term fluctuations in traffic conditions or the availability and pricing of (potentially crowd-sourced) carrier capacities.

Advanced analytics can also be used to develop reliable near-term predictions of traffic dynamics and resource availabilities, taking into account historic patterns as well as real-time information on influencing factors such as the weather or other relevant events.

Such capabilities are crucially important to guaranteeing high levels of service to increasingly demanding customers.

Lastly, advanced analytics can inform a new generation of prescriptive analyses, helping companies make the right tradeoffs and decisions during the strategic design, tactical planning and day-to-day operations of fast, reliable and responsive last-mile distribution systems.

More companies across sectors, industries, and geographies are reaching out to academic partners to develop prescriptive decision support tools based on high-performance optimization and simulation techniques.

Questions and Answers

To gain an understanding of how analytics can be deployed to improve last-mile logistics, it’s helpful to look at specific questions that the technology can address.

Changing urban environments and customer needs require new approaches to the design of urban distribution networks.

They also raise several questions for supply chain managers and logisticians.

For instance, how can a company transition from a traditional, static, single-tiered, uni-modal urban distribution approach that is built around various dimensions of operational flexibility?

Especially when such a network must also allow for dynamic changes in the company’s distribution approach in response to dynamically unfolding customer requirements and operational conditions such as traffic or weather.

And, how can enterprises design, plan and operate a distribution network that is built on a combination of various vehicle technologies, delivery models and supporting distribution facilities?

Large-scale optimization models informed by descriptive and predictive analyses of both historic and real-time data can provide answers to these and other questions.

Faster, more responsive last-mile delivery services can also have major implications for inventory management – raising more questions.

How, where and in what quantities should a company allocate its inventory so that it can quickly respond to customer requests at various service levels?

What is the impact of decentralizing inventory in a network of hyper-local storage locations in order to move closer to the urban customer?

Can service levels be improved and cost reduced by sharing inventories across a network of fulfillment locations, or by making them mobile?

Simulation and analytical approximation methods can provide insights to these questions, based on an in-depth understanding of the spatiotemporal dynamics of urban demand obtained from advanced analytics of last-mile Big Data.

At the operational level, more flexible delivery models require more sophisticated route planning capabilities.

Logisticians must ask: How should delivery vehicles be dynamically routed in response to unfolding uncertainty of demand and operational conditions?

How can multi-tiered and multi-modal delivery models that rely on multiple vehicle systems that work hand-in-hand be perfectly synchronized into an efficient and reliable service?

How will the introduction of (partially) autonomous technology and unmanned aerial or terrestrial vehicles affect the design, planning, and operation of such systems?

These and other questions can only be answered by smartly combining large-scale optimization, high-resolution simulation, and detailed near-term prediction of market dynamics, environmental conditions and delivery operations.

Communicating About Data

In an increasingly customer-centric and service-oriented market environment, companies need to take a leap of faith to embrace these new methods of leveraging data and analytics for their strategic, tactical and operational decision making.

To many companies, this appears particularly challenging because the use of data and analytics is not ingrained in their corporate culture.

What’s more, many lack the internal capabilities to develop such tools on their own.

To avoid being blindsided by the analytics revolution in last-mile logistics, many companies need to build internal capabilities and collaborate with external knowledge centers such as academic institutions.

Moreover, they need to initiate a cultural change that enables them to develop and apply advanced analytics and quantitative methods both tactically and strategically.

For example, some companies – even in traditional industries – are turning advanced analytical methods from black boxes into trusted toolsets by building advanced analytics teams and centers of excellence that operate outside of their day-to-day business operations.

These teams identify issues that benefit the most from analytical approaches to problem-solving and provide the expertise that business units and, ultimately, the whole organization, need to put these solutions into practice.

Turning advanced analytics into actionable insights, however, requires a second group of people that is often neglected in companies’ efforts to build analytics expertise – the data translators.

Data translators bridge the gap between advanced analytics experts (usually referred to as data scientists) and domain experts who run the business on a daily basis.

Educational institutions such as MIT should develop graduate and professional programs that educate supply chain and logistics professionals to become data translators.

The industry needs to engage with academia to align research agendas and academic curricula with the real-world challenges faced by practitioners in making the next generation of last-mile distribution systems become a reality.

Visualization has a key role to play in achieving these goals.

Current display standards, as well as rapidly emerging technologies such as augmented and virtual reality, allow for rich, high-fidelity visual representations of complex datasets along with the mechanics and results of advanced analytical methods that are built on top of these datasets.

These visual representations are a powerful tool that enables domain experts to understand, validate and trust the data and the outcomes of sophisticated analyses.

Individuals can interact with these representations and conduct what-if analyses, or move from high-level, aggregate views of supply chains to arbitrarily granular views.

As technology evolves, interactive visualization will become an indispensable decision-making tool.

To support the logistics industry in embracing this development, the MIT Center for Transportation and Logistics has partnered with leading companies to conduct research and develop tools at the intersection of last-mile logistics, advanced data science, and interactive information visualization within the newly created Computational and Visual Education (CAVE) Lab.

Benefits from Sharing Data on a System Level

Aside from promoting the use of data and analytics within individual companies, a huge untapped potential to improve the efficiency and long-term sustainability of urban last-mile delivery operation lies in cross-vendor collaboration and data sharing.

Today’s last-mile operations are highly fragmented across multiple carriers and logistics service providers, leading to suboptimal asset utilization.

Hundreds of thousands of unnecessary miles and hours traveled are expended within already congested and polluted urban centers.

There is fierce competition for the increasingly scarce resource of urban transport infrastructure capacity.

Attempts by policymakers and legislators around the world to force vendors to collaborate, coordinate and consolidate urban shipments have largely failed.

The solution to the problem may, once again, be technology. Technological advances are enabling increasingly seamless, low-cost and platform-independent connectivity between vehicles, distribution facilities, infrastructure components, shippers, carriers, and customers.

The transaction cost, risk, and operational friction caused by sharing information and assets across players will reduce substantially over the coming years.

This trend may be reinforced by technologies such as blockchain that reduce the effort, risk and cost of validating information, executing contractual agreements and processing transactions of money, goods, and services further.

With regards to system-level connectivity and data sharing, there are four major directions in which urban last-mile delivery operations will experience transformational shifts driven by new levels of connectivity in the near future:

  • Vendor-to-vendor, carrier-to-carrier, and vendor-to-carrier connectivity will finally enable the safe, efficient and mutually beneficial sharing of transportation infrastructure, facilities and fleets; a tight coordination and consolidation of shipments across vendors and carriers; and an efficient integration of downstream last-mile delivery operations, upstream first-mile pick-up operations, and reverse logistics flows.
  • Vehicle-to-infrastructure connectivity will allow for a paradigm shift away from individual-vehicle route optimization toward a system-level optimization of overall urban mobility by jointly optimizing vehicle flows and sharing information about traffic, accidents, the availability of parking spaces and other relevant operational constraints to last-mile delivery.
  • Machine-to-machine connectivity will enable more streamlined and efficient interactions between multiple vehicle systems (e.g., trucks and cargo cycles or bike couriers) in multi-modal delivery models. It is also a crucial prerequisite for the large-scale deployment of autonomous vehicle systems for last-mile delivery.
  • Carrier-to-cloud or crowd-to-cloud connectivity will encourage the massive sharing of (potentially crowdsourced) historic and real-time information on road and traffic conditions, customer-specific delivery requirements and other defining actors of last-mile efficiency.

The latter trend will also enable new commercialization models for last-mile data and analytics as a service.

Already, some of the major express logistics and parcel delivery services are investing heavily in the analysis and commercialization of data that their vehicle and courier fleets can collect in cities around the world, every day of the year.

Future Challenges

Rising demand from consumers, who are increasingly intolerant of service failures, coupled with urbanization and more intense competition is forcing companies to rethink their last-mile delivery supply chains.

Developments in data analytics will play a key role in meeting these challenges. But first, companies must build capabilities that allow them to use analytics creatively, and, crucially, to have the confidence to implement solutions based on these analyses.

About the Author
Matthias Winkenbach, Ph.D., is director of the MIT Megacity Logistics Lab. He can be reached at mwinkenb@mit.edu.

The End of Distribution As We Know It?

In an uncertain future, one thing’s for sure: The era of the vast, single-use, single storey, plain-vanilla warehouse is over

Roadmap for Change: The Flexible Industrial Distribution Facilities Network of the FutureWarehouses of the future with on-demand additive manufacturing capabilities are co-located in multi-modal centers for efficient transfer of goods.

While businesses of all sizes and industries are scrambling to keep up, distribution is being upended entirely.

Some experts have suggested that in 30 years, the distribution industry as we know it today will disappear altogether. But that doesn’t mean that demand for warehouse space is going to go away.

In fact, demand is rising. Major population hubs are driving a marked increase in industrial absorption. The Journal of Commerce reports that as of first quarter 2017, US vacancy rates for warehouse and distribution space were at a 17-year low, with asking rents rising quarter over quarter since 2015.

“The proliferation of online retail is creating structural shifts in the industrial sector through a reconsideration of retail space needs and supply chains”

Retailers are increasingly taking advantage of major savings by maintaining inventory off-site, even as they absorb vacant or underdeveloped properties in densely populated urban areas so they can store goods closer to their end users – and get them delivered faster.

Download the Paper Roadmap for Change: The Flexible Industrial Distribution Facilities Network of the Future

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Minimizing the Impact of the Electronic Logging Device Mandate

May 4, 2018 · By Dan Clark
Electronic Logging Device Mandate
On April 1st of this year, strict regulation of the electronic logging device (ELD) rule came into effect after a 3-month grace period.

The mandate requires the use of an ELD to automatically record a truck’s driving time to more accurately record a driver’s hours of service (HoS).

The Federal Motor Carrier Safety Administration states that the restricted Hours of Service (HoS) were put in place to combat an increased risk of crashes and chronic health conditions associated with lack of sleep.

This mandate, however, which is forcing immense changes for the industry, has been met with adversity.

Trucking companies are reporting that some truckers are even going so far as to leave the industry rather than use an ELD.

In the past, many drivers were concerned about the foul weather, accidents or long detention times because of the potential to miss their next delivery or a desire to return home.

Now, any form of unexpected delay could put that driver over his HoS and force him to stop for the night. This eats steadily into productivity and profit margins for drivers being paid by the trip.

With the new ELD mandate, there is no way for drivers to omit uncontrollable delays such as Acts of Nature from their logs which could put them over their HoS.

In the past, a shipper might have taken a 5-6 hour run, made a delivery, picked up a new load and then returned home. Now, that same driver would have to secure overnight parking to avoid violating the 11-hour daily driving limit.

These mandates serve to make the roads safer for all drivers but put additional pressure on an industry already strapped for capacity.

What else is causing the capacity crisis?
The economy is requiring more trucks on the road as both e-commerce and brick-and-mortar stores’ sales continue to be strong
Gen-Xers and Millennials are not filling trucking jobs vacated by Boomers at a fast-enough rate
Inbound deliveries are often late due to congestion in the yard or at the dock
Traffic, weather, and accidents on the road result in wasted, otherwise productive, time
The ELD mandate has put a spotlight on the HoS issue for the entire industry.

Already facing a capacity crisis, it is more important than ever that shippers maintain total control over their supply chains to ensure deliveries are made on time and any issues are dealt with as soon as they occur.

There is very little an individual shipper can do to encourage younger entrants into the job market to become truckers and, of course, nothing should be done to depress the flow of goods within the marketplace. Therefore, a shipper’s only option to effectively combat the capacity crisis is to streamline their own supply chain processes.

What can shippers do to minimize the effects of the ELD mandate?
Reduce the number of inbound deliveries entering their facilities through consolidation
Speed-up driver turn-around in their yards with dock scheduling and order management tools
Communicate effectively with promise dates, notifications and issues as they arise
The ELD mandate is a new part of the shipping industry that will have a big impact on how freight is shipped. In order to comply with the regulations without being negatively impacted by HoS limitations, shippers should leverage the power of transportation technology to improve their operations.

With the help of a Transportation Management System (TMS), a shipper can identify the optimal carriers for their freight and hold those carriers to a high standard of execution.

In addition, a TMS can consolidate LTL freight into FTLs whenever possible. Time-slot appointments can be secured by leveraging a dock scheduling solution, reducing driver waiting times.

These improvements and many others can reduce the number of trucks on the road, saving money and speeding-up yard flow. Once a more streamlined operation is established, shippers can rest assured that their drivers will be set up for success.

Learn more about Kuebix’s TMS Dock Scheduler, Order and Route Optimizer, and other Premier Applications that help shippers become more efficient and minimize the impact of the ELD mandate.

Read: Calculating Less-than-Truckload Freight Rates, What Should You Be Paying?

Related White Papers & eBooks

Download the eBook
The Art of the Inbound: 11 Ways to Improve Your Inbound Shipping Operations New!
This ebook provides a guide to benchmark your company against best practices in the transportation and shipping industry and helps to put together a strategic approach to capitalizing on the opportunities to manage the “art of the inbound.” Download Now!

Download the Paper
The Complete Buyer’s Guide to Transportation Management Systems
There is almost no limit to how a Transportation Management System can benefit your unique supply chain, but the key to success is finding the right one for your goals, so, before selecting a TMS, use the 12 questions in this buyer’s guide to find the best solution for your company. Download Now!

Download the Paper
Effectively Managing Big Data in Your Supply Chain
In this white paper, we’ll explain what the term “big data” means to the typical supply chain, introduce effective strategies for managing and leveraging that data, show how one grocer is using predictive analytics to harness its own big data, and explain the “first steps” that companies need to take down the path to effective management of their big data. Download Now!

More Resources from Kuebix

 

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C.H. Robinson CEO John Wiehoff Talks Transportation Trends

April 27, 2018 · By 24/7 Staff ·
John Wiehoff, CEO of C.H. Robinson, is one of the keynote speakers for the Connections 2018 supply chain conference, which will take place June 25-27 at the Greenbrier Resort in West Virginia.

He recently spoke with SMC³, which has served as one of the 3PL’s long-time partners, about emerging technologies in the industry, unique supply chain opportunities, and how C.H. Robinson uses technology to optimize its business.

What are some of the major trends you’re currently seeing in the LTL marketplace?
Demand for LTL is higher than we’ve seen it in nearly 10 years. This shift is an especially significant change when paired with supply changes. Both manufacturing and e-commerce are extremely strong right now, and both have close ties to LTL.

Online orders are driving smaller shipments to the LTL space, not just in the final-mile area. Smaller orders are becoming more common for the middle mile – from one distribution center to another.

LTL capacity is tight because carriers have not added a significant amount of equipment to their fleets in recent years. But even if there was an influx of tractors, there aren’t enough drivers available.

Historically, the driver shortages that affected the truckload market remained mostly out of the LTL space, but even that is changing. Growth in other sectors that have a shared labor force with truck drivers means more LTL drivers are leaving for options that are more lucrative.

As LTL carriers look to be more productive, we are seeing them place a large emphasis on optimizing their networks. With the data, analytics, and tools like dimensionalizers available to them, LTL carriers are paying more attention to accepting the right freight in the right lanes at the right time. More isn’t absolutely better anymore.

How has the ELD mandate impacted the domestic transportation market?
Drivers are reaching their hours of service in shorter timeframes, especially given the tight capacity. Organized and efficient loading/unloading times will become even more important. Reducing driver wait time at either the origin or destination can have a significant impact in a driver’s hours of service.

Both carriers and shippers may rely more heavily on 3PLs. A 3PL can help identify and solve capacity shortages, handle potential rate increases and address other issues from the mandate.

John Wiehoff, CEO of C.H. Robinson

How does C.H. Robinson use new technology to optimize its business, and are there any emerging technologies that will be game changers for the supply chain industry?
We are using technology to reinvent what it means to be a leading 3PL for this industry, our customers, and carriers.

Our technology offering is at the center of what we do and is embedded in our services and solutions every day.

You can see the importance technology has within C.H. Robinson by the number of IT staff and investments we have made and continue to make – we’ve added more than 800 IT staff and invested over $1B in the last decade.

As our business grows – now to more than 120,000 customers who worked with us on more than 19 million global shipments last year – we increasingly rely on technology.

Technology backed by data is critical to the success of our business. As one of the largest 3PLs, we have arguably more first-party data than anyone else in the industry. But, that data doesn’t matter if we don’t use it to our and our customers’ (shippers and carriers) advantage.

That’s why we are continuing to invest in and build tools that leverage the amount of data we have available to us.

The Connections 2018 supply chain conference is perfectly positioned at the midpoint of the year, giving speakers a chance, to sum up, the first half of 2018. What themes have defined the first half of the year, and what will define the transportation market during the second half?
For the first half of the year, we saw efficiencies in utilizing capacity, as truckload utilization climbed to more than 95 percent, according to FTR Transportation Intelligence. At the same time, new trucks increasingly entered the market to replace retiring trucks.

For the second half, these factors will combine for a focus on hyper-efficiency and the most effective use of capacity. We’ll be able to see if the strong truck sales of the first half of the year will add capacity or primarily serve as replacement capacity. We’ll also be able to put our finger on the real effects of ELD.

How can shippers and 3PLs better position themselves to take advantage of supply chain opportunities in the marketplace?
As supply chains grow in both size and complexity, transportation management technology will be an important way for 3PLs to help shippers gain a competitive advantage and exceed their customers’ expectations. That’s why we are invested in delivering and implementing flexible, efficient and integrated technology solutions that connect all aspects of the supply chain.

Read: Transportation Management Systems Market 2018

It is not so much what changes are coming to the industry; it’s more important to focus on what the innovative supply chain of the future will look like and recognize that it will take people, processes, and technology to bring positive change.

Digitalization of supply chains is our opportunity to continue bringing technology to our customers and their supply chains that make them smarter and more efficient. The technology we are able to bring today and into the future has to go beyond freight matching to encompass the complexities of today’s and tomorrow’s supply chains.

An algorithm can do amazing things, but when a truck gets delayed or a delivery window changes, people are still able to provide the most effective solution.

To hear more from John Wiehoff and other industry experts, sign up today for the three-day supply chain conference Connections 2018 to learn about emerging trends, current challenges and new innovations in the supply chain.

Register here by April 30 to take advantage of early-bird pricing.

Raise Your Supply Chain IQ
Connections 2018 | June 25 – 27 | The Greenbrier, WV

Why Attend Connections 2018

To REGISTER for SMC³’s Connections 2018, visit www.smc3connections.com

Related Article: SMC³ Announces Connections 2018 Speaker Lineup

Related Resources

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For The First Time Amazon Prime Air Cargo Planes Are Ready For Takeoff

FedEx Corporation and United Parcel Service, Inc. are not alone anymore, Amazon.com’s Prime Air cargo jets are ready for takeoff.

On Friday, Amazon unveiled the first Boeing 767 of its new fleet of branded cargo planes at Seattle’s Seafair Air Show.

The e-commerce behemoth, which has helped grow the revenues of both FedEx and UPS’ package delivery services, now wants a piece of the action.

Even if that action involves its own deliveries – for now.

Its first-ever branded cargo plane, the Amazon One, is a Boeing 767-300 operated by cargo service provider Atlas Air.

This is one of 40 planes Amazon has agreed to lease from Atlas Air and another partner, ATSG.

Amazon is currently using 11 of the cargo jets, but the company said it plans to roll out more planes in the fleet later this year.

In a press release statement ahead of the event, Dave Clark, Amazon’s senior vice president of worldwide operations, outlined plans for a more expansive “air transportation network.”

Amazon Prime Air

The company is looking for more efficient ways to meet the large volume of deliveries it has daily, while also cutting down on delivery times across the country.

“Creating an air transportation network is expanding our capacity to ensure great delivery speeds for our Prime members for years to come,” Clark added.

“I cannot imagine a better way to celebrate the inaugural flight than in our hometown at Seafair alongside Amazon employees and Seattle residents.”

It would seem, controlling its own logistics instead of relying on either FedEx or UPS is one way Amazon plans to achieve its delivery goals.

To date, Amazon has insisted it has no intention of fully replacing its logistics partners. But with Amazon also experimenting with drone deliveries, UPS and FedEx can’t rest on their laurels and expect to survive.

Related: When Shipping Speed Matters, Think Air Cargo

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The 5 Most Dangerous Jobs in America

Office workers suffer repetitive stress injuries all the time, and research is discovering that sitting for too long can be just as hazardous as smoking.

But these scenarios pale in comparison to some of the possible outcomes of working the most dangerous jobs in America.

Here are the top 5:

1. Logging Workers

In 2016, fatalities for logging workers occurred at a rate of 135.9 per 100,000 workers. There were 91 fatalities and 900 non-fatal injuries, with the most common injury being struck by an object.

What makes logging so dangerous is that it is physically taxing and is located in outdoor remote areas where medical aid is far away.

So, when fatigued workers fail to see a heavy branch falling down on them or are too slow to avoid a log rolling their way, getting the injured to medical care is difficult. And while object strikes are the leading cause for injury, loggers also experience accidents with their heavy machinery, like harvesters and chainsaws. Considering the high rate of deaths and injuries, logging is 38 times more dangerous than the average job and only pays $37,590 annually on average.

2. Fishing Workers

Coming in behind logging deaths is fishing fatalities at a rate of 86 per 100,000 workers. In 2016, there were a total of 24 fatal injuries. Still, it’s easy to imagine that those injuries were not fatal to begin with.

More likely, the injury was sustained on a boat in the middle of the ocean, and the crew couldn’t get back to port in time to save the injured crewman. Like logging, fishing is strenuous physical work in a remote location with sometimes extreme weather. Regrettably, the median annual income for these dangerous jobs is only $27,110.

3. Aircraft Pilots and Flight Engineers

Aircraft pilots and flight engineers suffer a fatality at a rate of 55.5 per 100,000 workers. In 2016, there were 75 fatalities and 470 non-fatal injuries. The most common injury is exhaustion, but one can see how that leads to death if a pilot’s body reacts to exhaustion while in flight. In fact, all 75 fatalities in 2016 were due to an accident while in transit.

It’s easy to imagine how the odd schedule for pilots – especially during the holiday seasons – can tax the human body. A pilot may not realize how much stress he or she is putting on him or herself until it’s too late. At that point the exhausted pilots are now putting their passengers at risk, too. At the very least, however, the money is relatively good, averaging out to be $105,720 a year.

4. Roofers

Roofing sounds like a foregone conclusion to appear on this list of dangerous jobs; it’s just impressive that it isn’t higher on this list. Roofs are everywhere and accessible locally, so even unskilled, uncertified tradesmen can climb several floors to put their lives at risk without having to travel to some distant place.

In fact, being so close to civilization is probably the only reason there aren’t more fatalities. In 2016, the fatality rate was 48.6 per 100,000 workers, with 101 fatal injuries and a whopping 3,150 non-fatal injuries. As expected, the majority of the injuries are caused by falls, slips, and trips, with 26.7% of non-fatal accidents being falls to lower levels. For this dangerous job, the average annual wage is $37,760.

5. Refuse and Recyclable Material Collectors

Who knew that the garbage man picking up the trash once a week was taking his life into his own hands? Yet, here he is with a rate of 34.1 fatal injuries per 100,000 workers. In 2016 alone, there were 31 fatal injuries with an incredible 6,170 non-fatal injuries.

Most of these accidents are caused by slips and falls, however, 67.7% of the fatalities are due to transportation incidents. Of those fatalities, 29% are classified as “pedestrian vehicular incidents”, which include workers being struck by a car. For this dangerous, but important job, workers can expect to make $35,270 a year on average.

Proper safety, certification, and compliance exist for a reason: They keep workers safe. When companies skirt these requirements, not only can workers be injured or killed, but supply chains are disrupted, affecting multiple organizations and the end customers that rely on the deliverables. Don’t partner with a company that doesn’t emphasize safety. Avetta can help ensure that you only work with the safest suppliers and contractors.

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Building a Digital Supply Chain Ready for the Future

Complaints from frustrated customers were mounting at a major US retailer.

More than 20% said they could not find the company’s branded products in shops because items were out of stock.

The problem was that efforts to improve service disrupted the company’s low-cost distribution model.

It had the right infrastructure but lacked the digital tools necessary to increase supply chain reliability.

Moving quickly, the leadership team invested in digital tools to obtain real-time data, shorten replenishment cycle times, optimize deliveries and predict future demand.

As data streamed in from stores the minute shoppers purchased goods, the company rapidly restocked hot-selling items to capture sales that it previously had lost.

The shift cut retail cycle times by 20%, to four days, generating a 0.5% increase in sales (see Figure 1 below).

And that was just the first wave of improvement.

Over the next 24 months, the company aims to reduce the time needed to fill store orders to two days, for a 60% total reduction in retail cycle time.

Companies that integrate digital technologies into their supply chain can quickly improve service levels while cutting costs up to 30%.

Just as important are the options that digital technologies provide to develop new business models and new strategies.

For instance, leading-edge companies such as Adidas are deploying 3D printing to move some production closer to customers, offering greater product customization and shorter lead times.

Despite those advantages, many companies are struggling to keep pace with an onslaught of digital trends that are disrupting traditional supply chain management, slashing response times and raising customers’ expectations.

The speed of change is overwhelming, especially for those that are not digital natives.

Seventy percent of executives expect digital innovation to have a significant impact on their supply chains during the next five years, according to a recent Bain survey, up from just 63% in 2016.

Building a Digital Supply Chain Ready for the Future
One of the biggest challenges is building a comprehensive view of how performance standards are changing and what customers really want. Without that knowledge, companies risk being outmaneuvered.

Bain research shows more than one-third of CEOs are overly confident about the ability of their supply chains to anticipate swings in demand (see Figure 2).

And the risks of being blindsided are big: higher operating costs from expensive last-minute orders, a pileup of excess inventory, missed revenue opportunities and lost sales from ineffective new product rollouts.

Building a Digital Supply Chain Ready for the Future

Four Steps to a Digital Supply Chain

A good place to start when shaping a digital strategy is understanding the industry context and the company’s starting point. For example, many companies start with customized legacy IT systems. Replacing these with the latest off-the-shelf digital tools can generate new revenue, improve responsiveness, increase efficiencies and reduce the total cost of ownership for IT systems.

Leading companies develop the culture, data analytics, and IT systems to support their digital strategy and business objectives. They pursue specific goals with near-term value while adopting a clear view of their digital destination. And they remain ready to pivot as their industry evolves.

1. What’s my Ideal Future State?

The key to building supply chains that will be competitive in 5 or even 10 years is anticipating change. Leaders evaluate where the industry is going and identify the supply chain capabilities they need to get there.

True, anticipating change is a strategic leap into the future. But most leadership teams can gauge what their business may look like in 3, 5 and 10 years. The 3-year vision is likely to be more concrete, while the 5-year and 10-year visions will be more conceptual. For many retailers and consumer products companies, for instance, it is clear that e-commerce has raised consumer expectations and that traditional retail distribution and replenishment models are unable to meet the needs of their customers who are demanding shorter lead times.

Successful companies avoid incremental moves by envisioning just how extreme the future might look. For example, what would happen if the entire business moved from high margin to low margin or if it shifted from standard products to custom products? These scenarios can help supply chain teams identify what the company would need to do differently and what new capabilities any such changes would demand.

2. Spot the Gaps

Figuring out the ideal future state for a supply chain allows leadership teams to identify missing capabilities and start building them. In our experience, companies that make the right short-term investments to improve supply chain performance generate significant savings to fund long-term investments.

A leading specialty retailer put that technique to good use when an aging supply chain created problems for its direct-to-customer business. The company had underinvested in its supply chain for years, and its basic infrastructure was in poor shape. As a result, service was far inferior to that of digital-savvy competitors. More than 15% of the company’s orders arrived later than promised, and customer loyalty was eroding rapidly.

The leadership team realized it needed to replace more than half of its aging distribution centers with several high-performing ones, but it couldn’t afford to make the entire investment at once. It started instead with the five largest distribution centers, investing in digital tools and establishing best-in-class distribution processes.

The initial pilot improved service levels by 20% while decreasing costs by 20%. The company now expects to turn around its performance in these facilities within nine months, resolving many of its late-delivery problems and its reputation for poor service. Over the next three years, the leadership team plans to close additional gaps, cutting supply chain costs by 20% to 30%. Achieving that goal will create a war chest to fund future investments.

3. Design Options to Close the Gaps

Leading companies create a portfolio of near-term and longer-term options to help them close the gaps between their current supply chain and the future ideal state. For example, they may consider outsourcing elements of the supply chain to minimize the complexity of serving certain businesses or segments. Alternatively, they may consider closing multiple gaps through one common IT platform supporting multiple businesses, with additional specialized capabilities specific to certain business units supplementing this core shared system.

A national food manufacturer for groceries and convenience stores used this approach to turn around declining sales. The company’s core problem was matching demand with its manufacturing plan. It lacked information about which products were selling quickly and which ones were sitting on the shelf. As a result, it was slow to produce and replace out-of-stock items. That led retailers to shrink the shelf space they allotted to the company – a vicious circle that was eroding sales.

The company contemplated several options to improve its ability to meet consumer demand. Investing in better forecasting tools and processes could improve accuracy but would not eliminate all uncertainties. Advanced manufacturing technology could reduce its cycle time, but the company would still need to forecast item sales. The leadership team decided to invest in digital tools to connect the salesforce and delivery team with central planning and manufacturing. The new system identified products that were selling nearly in real time, giving both teams greater visibility into store demand. That, in turn, helped it manufacture the right products to quickly fill empty store shelves and increase sales.

4. Build a Balanced Roadmap

One challenge for leadership teams contemplating a supply chain upgrade is identifying near-term steps that will help pay for future innovations. Successful companies build a short-term roadmap with concrete initiatives that will start delivering benefits quickly and provide flexibility in reaching long-term supply chain goals.

One global technology company faced enormous supply chain challenges when it suddenly had to support five new multibillion-dollar businesses. The shift was part of a new market strategy to accelerate growth, but it wreaked havoc on the company’s highly customized supply chain.

Management had to make sure that the new supply chain could enable an array of new business models and balance their competing demands. That meant investing in basic IT capabilities and supporting new cross-functional business processes. For example, if the salesforce agreed to customize a product for a client, the supply chain would need to be able to validate the custom configuration with design, track the lead time of internal and external parts, follow this custom product through delivery, and forecast the resulting revenue and cost.

The leadership team’s roadmap met all these competing needs while generating quick wins and providing flexibility to accommodate future capabilities and evolving technologies. By shifting existing priorities, the roadmap helped the company fund the complex program with only a modest increase in spending beyond its baseline.

 

At the Next Executive Team Meeting

Companies eager to start down the path toward a digital supply chain can begin by debating three questions at the next executive team meeting.

  • What will our business look like in five years, and what supply chain capabilities do we need?
  • How could digital tools help us create powerful new business models?
  • What two or three high-value digital moves should we get started on?

The answers to those questions will provide valuable context for shaping a supply chain that will be competitive for years to come. Successful companies set the direction for the journey and remain nimble. Flexibility and adaptability are more important than precision.

After all, market conditions will change, and new competitors will emerge. Tomorrow’s winners will be those that can turn disruption into opportunity.

About the Authors
Sam Israelit and Peter Hanbury are partners with Bain & Company in the San Francisco office. Rodrigo Mayo is a partner with Bain in the Mexico City office. Thomas Kwasniok is a Bain partner in the firm’s London office.

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Questions & Answers with Bill Driegert, director of Uber Freight

During a wide-ranging conversation, Uber Freight’s Bill Driegert, director of Uber Freight, offered up insights on the company’s approach to a competitive market, the impact of the driver shortage and regulations, and where things may go from here.

More SC24/7 on Uber Freight

The following is a transcript of the conversation between Logistics Management’s Jeff Berman and Bill Driegert.

How are companies like Uber Freight approaching current market conditions, specifically as they relate to tight capacity?

Whenever there is a big capacity crunch, it has created increased opportunities for intermediaries, as shippers are looking for options.

Typically, intermediaries are the ones most well suited to find capacity at the last minute and to access that capacity.

Uber Freight is taking that a step farther. We want to make the transaction and access to capacity be as seamless and as fast as possible by accessing drivers almost instantaneously.

We don’t have to pick up a phone and call them. It is a much [quicker] transaction.

How does this work on the pricing side?

All of our prices are transparent so we are the only provider in the truckload market with 100% transparency with any of our drivers and carriers that log in so they can immediately see what the execution price is…and what that allows for us to be more faster and more elastic in how we go to market.

We can blast out to our carriers seamlessly and tell them exactly what we have. This removes the need that, for many providers, requires a series of phone calls, which requires a lot more touch points.

When shippers enter into our network, they can immediately access all of these carriers instantaneously.

How does surge pricing factor into this?

Within truckload, we have a whole different approach to pricing that is much more market-driven within the freight markets. So, our prices are very much set by what is happening in the market, and it is a very competitive market so they are competitive with other providers.

Ultimately, because our model is so much speedier it gives us access to carriers earlier, and we are often the first place they look because they don’t have to call or negotiate with anyone. It makes the experience better for them.

Going back to Uber Freight’s formal entrance in the market to now, nearly a year later, what are some of the things in the market that have changed or remained the same over that period? Also, how has the market reacted to Uber Freight’s entrance into what is a crowded and competitive field?

Since launching, I think we have had strong success with customers in telling our story and proving through execution how we can make their [operations] more efficient. We have had a lot of success over the last year, and I would say that this is an exceptional market.

It is the tightest market I have ever seen since 2006. With that, comes a lot more interest from customers, as they are asking themselves what they need to do to be more efficient and determining what services are the ones worth buying.

Secondly, given all the volatility in the market and accounting for the impact of ELD and some capacity shortages earlier in the year, the combination of those factors definitely changed how customers think about going to market. For us over this time, it was very much about growth and improvement on the model as we went to market.

We are still a small percentage of the market, and it will take more growth more growth before we become a significant part of that total. We have been able to begin to start working with some of our larger customers in the market.

Looking at ELD, the soft enforcement period ends on April 1. What have you seen since the December 2017 rollout of ELD in terms of its impact on the marketplace as it relates to your business? Has it been a drag on things or perhaps helped?

With total enforcement starting in April, what we are seeing on a lane-by-lane basis that some lanes are not impacted and other lanes that are right on the edge of what could be a 1- or 2-day run it is not as clear. As this plays out, what I think we may see is that certain lanes may be impacted more than others, and we don’t know exactly what that impact might be.

By the fall, we should have a better sense of what things look like in the market as it relates to ELD. We certainly are seeing an impact on certain lanes, and we are seeing drivers being more conscious of their hours to make sure the times work.

For us, we have been working with our shippers to make sure those lanes attractive to our drivers and making those loads attractive and that they are able to work within their hours.

There is no shortage of players in this market. How do you view the competitive landscape?

We are familiar with the many players out there and what they bring to the table. Uber Freight is unique, and I think we bring a deeper depth and technological capability, exceptional operating ability and resources that our competitors would not have access to.

And as a result, I think we have the most sophisticated marketplace, and our approach is unique because it is real-time with fixed prices, and it is unique in its access to capacity. It is very difficult for a lot of our competitors to replicate what we have unless they build it from scratch, and that is the advantage we have.

We are in it for the long haul, and are very driver-centric, as it is all about empowering the drivers, making them more efficient, and improving their revenue. That makes it a compelling product for shippers because they know they have immediate access to this high-quality driver pool. That was very much our focus early on, and all of these things have a big impact.

There are many challenges in the TruckLoad (TL) market, whether it is the driver shortage or lack of available capacity, among others. What are the biggest challenges these things present, especially on the driver side?

Smaller carriers have a hard time currently operating in the market. And that is why we have been so focused on drivers, as our success hinges on their success, and it is critical that we build tools and a platform with them in mind.

We are very careful in how we view the market and try to make it better for them. It can be very hard for an owner-operator to get access to good freight, and with what have built provides for a more seamless, easier and more transparent transaction. We think this provides drivers with better opportunities.

A lot of the capacity challenges in the market are due to driver churn, with some drivers leaving larger carriers and try to go on their own, but find they no longer have direct access to that good freight and instead need to go through intermediaries. Our objective is to make this a more stable market for small carriers and those individual drivers that come into the market.

How does Uber Freight match up with traditional brokers as it relates to business on a transactional level?

Some differences we have are things like transparency, the lack of rate negotiation that a traditional brokerage would have with their drivers, as well as transparency with shippers.

We want to be a transparent, real-time partner, as anyone logging into our system can see prices for any given load at which point they can determine if that works for them or not.

Nobody else offers that, and it a small but pretty significant difference for the driver and carrier experience as to what they see in the market. A shipper also would not typically be able to see what a broker was executing at, too.

How do you view the truckload market between now and the end of 2018 from an Uber Freight perspective?

With the capacity situation that is brought on by ELD and the driver shortage to a large degree, we think it creates an opening in which we think Uber Freight is well positioned. 2017, for us, was about building our foundation and initial relationships with shippers and carriers.

And for 2018 we are well-positioned to be active in the market. It is a great opportunity for us go out and demonstrate the value of what we have built. We are seeing freight move off our platform and more engagement from drivers that are using it every week, and from shippers we are seeing increased interest in how we reach the market and plug in deeper to their operations with real-time access.

It is a unique time in the market, and it is creating a lot of opportunities for how they run operations and go to market.

Read: Amazon vs Uber: Two Technology Giants Disrupting Logistics

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Transportation Capacity Management and the Evolving Logistics Business of Ecommerce

With the ‘explosion’ of e-commerce transactions being executed online, logistics managers are having to get creative to find capacity for the exponential amount of trucks needed to make deliveries to/from warehouses, stores and customers’ homes.

Retailers, distributors, suppliers, and manufacturers need innovative and robust solutions to beat the competition and create a sustainable edge.

In a recent Logistics Management article titled, “Evolution of E-commerce: The possibilities of tomorrow,” the writer, Roberto Michel, interviewed several thought leaders and industry analysts about the trends and solutions that should be of interest to industry leaders.

In the article, Kuebix’s own Dan Clark was quoted discussing how to combat issues caused by the boom in e-commerce, which is tightening truck capacity even more. “To deal with this challenge, companies need to find all possible transport opportunities, such as tapping into otherwise empty backhauls.

The name of the game is capacity,” says Clark. “You need systems that allow you to be exposed to as many capacity opportunities as possible.”

“According to Clark, a Transportation Management System (TMS) should be adept at connecting to multiple freight matching marketplaces and online logistics communities so that the shipper organization can match orders with capacity from more brokers, small independent trucking firms, and fleet operators. ‘You need to be able to quickly access all of those potential opportunities and match your loads with that capacity,’ he says.”

“Of course, TMS still needs good analytics and planning logic, especially when it comes to what Clark calls ‘deconstructing’ truckloads into less-than-truckload (LTL) shipments to see if breaking orders into LTL moves makes sense for both service level and costs.”

As e-commerce has evolved, new processes, trends, and technologies have kept pace to facilitate the journey, including:

Another trend that Dan discussed in the article was about last-mile deliveries, saying, “The growth of e-commerce is driving a greater need for efficiency in last-mile delivery.”

For last-mile carriers, they’ll want to be able to closely track where their driver and truck assets are and match that knowledge to shipment opportunities coming from brokers and online logistics communities. Through such ‘digital matching’ of assets to deliveries, carriers can find backhauls and make operations more cost-efficient.

Over the longer term, the last-mile challenge in urban areas will also be addressed by the build-up of new types of warehouses or means of last-mile distribution. This might involve older shopping malls being converted to warehouse space or new approaches such as AVs that act as mobile warehouses.

I think absolutely that we’ll see some new approaches in dense metro areas because there needs to be enough space close to population centers to hold the inventory needed for same-day deliveries.”

Read: Industry Experts Discuss Technology Trends & Solutions for Efficient Ecommerce Logistics

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Knight-Swift Adds 400 Trucks/Drivers with Abilene Acquisition

Phoenix-based Knight-Swift Transportation says it is buying Richmond, Va.-based Abilene Motor Express for an undisclosed amount.

It’s the first expansion since Knight Transportation bought Swift Transportation last September.

Knight-Swift, with revenue in excess of $5 billion, already is the largest TL carrier in the nation and now commands about 2 percent of the highly splintered truckload market. Unlike LTL with its complex hub-and-spoke terminal networks, there are few barriers to entry in the truckload sector.

In buying Abilene, Knight-Swift Chairman Kevin Knight is tearing a page out of the old Swift playbook.

During Swift’s go-go growth during the 1990s and early 2000s, Swift founder Jerry Moyes was known to make one Abilene-type “tuck-in” acquisition a year to help fuel Swift’s profitable growth.

The truckload sector has been plagued by a shortage of drivers, which the American Trucking Associations now estimates at 50,000. Turnover in the TL sector is about 90 percent a year. With increasing scrutiny and testing of drivers, the fastest way for a TL carrier to grow is through the acquisition of companies with a stable supply of company drivers.

Read: Trucking Industry Struggles With Growing Driver Shortage

That appears to be the route Knight-Swift is taking with the Abilene acquisition. Knight-Swift said in a Securities and Exchange Commission 8-K filing that the Abilene business has an operating ratio “in the low 90s,” meaning its operations are reasonably profitable.

Privately held Abilene was Abilene Motor Express was founded in 1986 by brothers, Keith and Kolen Jones. It’s a family-owned business that the company says on its website is “rooted in hard work and determination.”

Abilene began operation with a single tractor and has grown into a mid-sized carrier. Abilene offers expedited and time-definite services as well as dedicated routes for temperature-controlled and dry van freight. It also utilizes team operations for shippers who need expedited, or near air freight, services.

Nearly certainly, Knight-Swift will operate Abilene as a stand-alone entity under the K-S aegis. A source within the company says Abilene drivers will be hauling Abilene trailers with no plans for Abilene tractors to be pulling either Knight or Swift trailers at the moment.

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