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Category Archives: Digital Logistics

C.H. Robinson Announces Bob Biesterfeld to Replace John Wiehoff as CEO

February 13, 2019 · By Jeff Berman · 

C.H. Robinson Chief Executive Officer

A change at the top is coming soon for Minneapolis, Minn.-based global logistics services provider, and freight forwarder C.H. Robinson.

The company announced that as part of a “long-planned succession process”, effective May 9, Chief Operating Officer Robert (“Bob”) Biesterfeld, will become Chief Executive Officer, as well as being nominated to stand for election to the company’s board of directors.

Biesterfeld will replace C.H. Robinson Chairman and CEO John Wiehoff, who will continue as Chairman of the Board when Biesterfeld becomes CEO.

C.H. Robinson also announced that Scott Anderson, current C.H. Robinson Board member, will become the Lead Independent Director, also effective May 9.

“Our success at Robinson has always been driven by our people, processes, and technology,” Wiehoff said in a statement.

“The Board and I are confident Bob is the right person to lead our accelerating investments in each of these areas. During his almost two decades at Robinson, Bob has consistently demonstrated deep industry knowledge, strategic vision, and a passion for delivering results. He has been the driving force behind our digital transformation efforts, accelerating the pace of innovation and technology deployment across our platform. He is an established leader with the right experiences and skills for the next chapter of Robinson.”

Chief Operating Officer Robert (“Bob”) Biesterfeld

Biesterfeld will have large shoes to fill, as, under Wiehoff’s leadership at C.H. Robinson CEO over the last 17 years, total company revenues have increased more than 500% to $16.6 billion, with annualized total shareholder returns of 13% over the past 17 years.

An accomplished industry veteran, Biesterfeld has been with C.H. Robinson for 20 years. Before being named COO in March 2018, he served as President, North America Surface Transportation and prior to that he served as Vice President, Truckload and Vice President, Robinson Fresh, where he started his logistics career path in 1999.

Biesterfeld is a graduate of Winona State University and serves on Board of Winona State University Foundation in addition to the board of the Transportation Intermediaries Association.

Earlier, Logistics Management/Peerless Media Group News Editor Jeff Berman caught up with Biesterfeld to discuss his new role as CEO and industry trends and themes. A transcript of their conversation follows below.

What are your expectations and objectives in your pending new role as C.H. Robinson CEO?

We have had a senior leader in John Wiehoff, who has been in the CEO chair for most of the past 20 years or so.

As for what looks different on May 9, I think the really good news for our people and organization is that John’s tenure as CEO has been nothing short of spectacular. In the industry changes that have occurred over the last 17 years, with competitive and macro forces and the cyclical and secular changes of our history, C.H. Robinson started in a leadership position, at the beginning of John’s tenure as CEO, and will end his tenure as CEO in a leadership position as well.

Over the last four years or so that I have served as the company’s president of North America Surface Transportation or COO, with accountability for the company’s five business units and shared services as well, John and I and the rest of the senior leadership team have really been co-developing and co-owning the strategic direction of C.H. Robinson.

As John exits in May, there will not be a sharp left or right turn, in terms of our strategic priorities or how we invest our capital or how we show up in the marketplace. There have been a few chapters of the company’s history over the last 115 years, and one of the interesting things is that John is not the only long-tenured CEOs.

Going back to 1963, prior to my being appointed in this role, we have only had three senior leaders since then. I think it really shows the stability of our company and that we have continued to invest across multiple generations of supply chains, as we established our foundation and determined what we ‘want to be when we grow up’ so to speak.

Our roots began as a production company, evolving into being more of a full logistics provider in North America post-deregulation. We then got into the next chapter of international and global expansion, where we invested heavily in growth overseas in Asia and Europe, as well as the first instances of Navisphere, our technology platform.

When thinking about where we sit today, we have this great combination of North America and have spent more than $1.5 billion on M&A and investment into our global forwarding network. It was really about streamlining that investment and bringing it all together. 

Where do things go from there?

A lot of it has to do with turning the page to a more digital future, where we are very focused on the three core components of people, process, and technology, with technology continuing to be a more important piece of that overall puzzle.

That is how I am thinking about it directionally, and our senior leadership team is focused on that strategy.

Staying with technology, given all the attention to logistics technology in the form of things like blockchain, AI, IoT, Cloud, and others, how would you describe the state of supply chain and logistics technology?

There is no doubt that the logistics technology space is growing faster than ever, with change never slower than it is today.

The way that I think about it is that everyone has algorithms, and, years ago, everybody talked about proprietary technology and now everybody has it in some way, shape, or form. And all the leading companies in the logistics space have their own data scientists and algorithms. There is kind of this level set across technology, and there can only be so many differentiators, with everyone pursuing the same goals.Collaborative Supply Chain Intelligence

June 24 – 26, 2019 • The Broadmoor • Colorado Springs, CO

Collaborative Supply Chain Intelligence

Keep up-to-date

Full details coming soon!

Technology on its own is, really, I don’t think, the solution. We think about our investments in technology, and they really support the two other pillars, people and process, and where we think those three things come together, and what separates us in that space…is experience and scale. When we think about that fact that we have had 115 years of experience, we have learned a lot of things along that journey.

That experience does not come with just time; it comes across multiple industry verticals, continents, and modes and services. When we aggregate those experiences, the other thing we are aggregating is data, and we have all these data points that we are able to bring together on a global basis across what is viewed as the world’s largest supply chain platform.

That really starts to become scale, and our IT people that are building programs and cool algorithms have a really big competitive advantage, because we have more data, and we have more data because we have more loads. 

How does that data translate into the market?

When a small motor carrier comes to us, 15%-to-20% of its miles are driven empty and are non-revenue-generating miles. The biggest thing a small motor carrier wants is more miles to get more money, and, chances are, we have a load closer to that carrier than anybody else does.

If a shipper comes to us, we can offer them a broader base of capacity than anyone else does and we are more likely able to provide a service for them that is on time and meets their needs.

Another thing specifically around technology is that many of the new technology entrants, or tech-enabled brokers, or disruptors, disruptors, are really pushing customers to integrate and operate only on their platform.

What is C.H. Robinson’s approach?

We want Navisphere to be the easiest supply chain platform to use in the industry.

If you would like to operate in Oracle or SAP or whatever your ERP system is as a shipper, or JDA as a carrier, or use your off-the-shelf Transportation Management System, we can work with you, rather than pushing customers only on to our systems.

We want to meet our customers where and how they want to buy, as opposed to pushing them.

Shifting gears, C.H. Robinson is a very big player in a very competitive and crowded brokerage market. In this environment, what are you trying to do as a company to distance yourselves from the competition, given such a finite carrier base?

Looking at the customer lens is where we try to start all of our conversations.

We serve such a broad and diverse group of customers, from the smallest micro shipper making something in a garage and doing a residence pick up and shipping a parcel, to the world’s largest companies that are fully integrated with Navisphere, like Microsoft, for example, that uses our technology to power their supply chain.

We have a whole continuum of customers, from the smallest of the small to the largest of the large, and I think what has been important for our customer go-to-market strategy is to ensure that we have aligned our value to the needs of those customers.

Can you provide an example of that?

We are not going to go to a small manufacturer and ship once a month and sell them on our data and analytics capabilities or our robust reporting.

So, for that small shipper, we will ensure they have the easiest system to access and have access to the best rates for parcel, LTL, and truckload and that they can come online, get a quote, book a shipment, swipe a credit card, and within an hour have someone there picking that shipment up to bring it to the final destination in full.

But a Microsoft does not want to deal with using a credit card. They need robust reporting and real-time visibility through things like IoT and sensors and the Cloud, which shows them where their entire inventory is, in motion or at rest, to be able to ensure there are no supply chain disruptions for something like the next launch of an Xbox.

We are focused on providing value for a wide variety of segments. If you think about specific verticals like oil and gas, they have very specific needs…so we really work to customize that solution for that sector. It takes smart people and supply chain engineers to do that, and it goes back to having the people, process, and technology to do that.    

Looking at the current state of the market, what is different now compared to a year ago?

What is different now compared to a year ago is the cycle repeats itself again and again and again. It started with the hurricanes, which drove capacity constraints and things [were crazy], with very few trucks and many loads and that led to an industry reset and everyone re-priced.

In our Managed Services business last year, I think our average tender for a truckload shipment was 3.5, meaning that loads went through the routing guide to the third or fourth carrier before it was bid on and this is for the $4 billion worth of freight in our industry.

Today, it is now about 1.4, so what happened was that everyone went out to market…and people locked in capacity at higher rates and when that happens the spot market dries up, as it is comprised of unplanned demand. Loads that were supposed to go through the tracking process fall back in and that drives spot market pricing down and resets rates at a higher rate.

If you look at public motor carrier earnings, they are talking about mid-to-high single digit rate increases for 2019, which I believe to be an effect of the rate pricing they did in 2018. The rates now are a combination of a mixed shift with contractual freight making up a higher percentage of our portfolio combined with declining annual spot market rates.

How do you view the last-mile logistics and the e-commerce driven supply chain?

There is no question that e-commerce and omnichannel fulfillment have changed a lot about the supply chain, in terms of inventory position, order cycles, and other things.

Beyond that, the experience we have on our mobile devices that we get used to when we order something online, or the personal experience, is now transferring into our business experience. We now need to know where everything is all of the time.

In terms of our position, there are a couple of things that have driven change to our model. One thing is that we are working with a lot of shippers in Asia that want to position inventory through things like Fulfillment by Amazon and other seller networks to move products out of Asia, and that works really well for our ocean and air business. We certainly are not one of the largest providers of the inside home delivery type of business.

The biggest part of our business directly related to e-commerce exists with our managed services business, where we are using Navisphere to provide large global shippers with complete supply chain visibility across everything from ocean freight to parcel shipments.

We are touching it in a lot of different ways, and in the last few years or so we are seeing it in the average length of our truckload movements.

How is that?

In 2013, the average mileage per truckload was about 780 miles and it is now 620 or so.

The impact through the shortening of the length of haul is a function of inventory being placed in different parts of the country.

It allows for the order cycle to be shorter and enables us to move things when and where we want it in a different way.

What are some of the key things happening in the ocean market from a C.H. Robinson perspective?

When we look at our ocean business as a forwarder, we are a much bigger player there than we are on the air side.

Our focus in ocean has been to continue to strengthen our TransPacific eastbound business, as we are the largest NVO in that lane and also into Australia.

When we acquired Phoenix International in 2012, we really doubled the size of our overall global forwarding business and somewhat turned the keys over to the Phoenix leadership to continue to build on their model.

In the ocean business, we are continuing to build out density in our trade lanes and we will continue to look for ways to grow in that space both organically and through acquisition.

What about the air forwarding market?

2018 was a really important year for us in that space as we invested heavily into it. It is a complex market.

You cannot just sit on a trade lane; you need to focus on gateways, assets, and people, and it continues to be a strong growth vehicle for us.

Related ArticleC.H. Robinson CEO John Wiehoff Talks Transportation Trends

C.H. Robinson CEO John Wiehoff Talks Transportation Trends

Related Resources

Download the Paper

Why eShipping Selected the SMC³ Platform for Transactional LTL API Connectivity New!
In this case study, Chad Earwood, CEO of eShipping, describes how they integrated the SMC³ platform for transactional LTL API connectivity, and by using the analytical APIs RateWare XL and CarrierConnect XL they are able to obtain immediate LTL rates and audit LTL pricing. Download Now!


Download the Paper

Strategic LTL Bidding for Minimum Cost & Maximum Efficiency
This paper details how SMC³ designed Bid$ense for complete procurement transparency, and how you’ll move ahead with ease and confidence toward best-choice carrier qualification and truly strategic LTL procurement. Download Now!


Download the Paper

The Case for a Re-Indexed LTL Benchmark Pricing System
This paper takes a deep dive into SMC³’s CzarLite XL, an advanced pricing system solution that gives shippers, logistics service providers and carriers a new neutral benchmark choice when negotiating LTL shipping rates. Download Now!


Download the Paper

The Single Source for LTL Pricing & Transit Information
The SMC³ Platform empowers 3PLs and Shippers of any size to successfully navigate and optimize the LTL shipment arena, choose the level of computing power based on your specific needs and operating environment with a technology platform offering the best of all worlds. Download Now!


More Resources from SMC³

Article Topics Trends  Business  Leadership Leadership Logistics Services Provider Transportation Management Systems All topics

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About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics ManagementModern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman Latest Business NewsC.H. Robinson Announces Bob Biesterfeld to Replace John Wiehoff as CEOFebruary 13, 2019 ·         C.H. Robinson has announced that as part of a “long-planned succession process”, effective May 9, Chief Operating Officer Robert (“Bob”) Biesterfeld, will become Chief Executive Officer, as well as…
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February 13, 2019 · By Jeff Berman · 

C.H. Robinson Chief Executive Officer

A change at the top is coming soon for Minneapolis, Minn.-based global logistics services provider, and freight forwarder C.H. Robinson.

The company announced that as part of a “long-planned succession process”, effective May 9, Chief Operating Officer Robert (“Bob”) Biesterfeld, will become Chief Executive Officer, as well as being nominated to stand for election to the company’s board of directors.

Biesterfeld will replace C.H. Robinson Chairman and CEO John Wiehoff, who will continue as Chairman of the Board when Biesterfeld becomes CEO.

C.H. Robinson also announced that Scott Anderson, current C.H. Robinson Board member, will become the Lead Independent Director, also effective May 9.

“Our success at Robinson has always been driven by our people, processes, and technology,” Wiehoff said in a statement.

“The Board and I are confident Bob is the right person to lead our accelerating investments in each of these areas. During his almost two decades at Robinson, Bob has consistently demonstrated deep industry knowledge, strategic vision, and a passion for delivering results. He has been the driving force behind our digital transformation efforts, accelerating the pace of innovation and technology deployment across our platform. He is an established leader with the right experiences and skills for the next chapter of Robinson.”

Chief Operating Officer Robert (“Bob”) Biesterfeld

Biesterfeld will have large shoes to fill, as, under Wiehoff’s leadership at C.H. Robinson CEO over the last 17 years, total company revenues have increased more than 500% to $16.6 billion, with annualized total shareholder returns of 13% over the past 17 years.

An accomplished industry veteran, Biesterfeld has been with C.H. Robinson for 20 years. Before being named COO in March 2018, he served as President, North America Surface Transportation and prior to that he served as Vice President, Truckload and Vice President, Robinson Fresh, where he started his logistics career path in 1999.

Biesterfeld is a graduate of Winona State University and serves on Board of Winona State University Foundation in addition to the board of the Transportation Intermediaries Association.

Earlier, Logistics Management/Peerless Media Group News Editor Jeff Berman caught up with Biesterfeld to discuss his new role as CEO and industry trends and themes. A transcript of their conversation follows below.

What are your expectations and objectives in your pending new role as C.H. Robinson CEO?

We have had a senior leader in John Wiehoff, who has been in the CEO chair for most of the past 20 years or so.

As for what looks different on May 9, I think the really good news for our people and organization is that John’s tenure as CEO has been nothing short of spectacular. In the industry changes that have occurred over the last 17 years, with competitive and macro forces and the cyclical and secular changes of our history, C.H. Robinson started in a leadership position, at the beginning of John’s tenure as CEO, and will end his tenure as CEO in a leadership position as well.

Over the last four years or so that I have served as the company’s president of North America Surface Transportation or COO, with accountability for the company’s five business units and shared services as well, John and I and the rest of the senior leadership team have really been co-developing and co-owning the strategic direction of C.H. Robinson.

As John exits in May, there will not be a sharp left or right turn, in terms of our strategic priorities or how we invest our capital or how we show up in the marketplace. There have been a few chapters of the company’s history over the last 115 years, and one of the interesting things is that John is not the only long-tenured CEOs.

Going back to 1963, prior to my being appointed in this role, we have only had three senior leaders since then. I think it really shows the stability of our company and that we have continued to invest across multiple generations of supply chains, as we established our foundation and determined what we ‘want to be when we grow up’ so to speak.

Our roots began as a production company, evolving into being more of a full logistics provider in North America post-deregulation. We then got into the next chapter of international and global expansion, where we invested heavily in growth overseas in Asia and Europe, as well as the first instances of Navisphere, our technology platform.

When thinking about where we sit today, we have this great combination of North America and have spent more than $1.5 billion on M&A and investment into our global forwarding network. It was really about streamlining that investment and bringing it all together. 

Where do things go from there?

A lot of it has to do with turning the page to a more digital future, where we are very focused on the three core components of people, process, and technology, with technology continuing to be a more important piece of that overall puzzle.

That is how I am thinking about it directionally, and our senior leadership team is focused on that strategy.

Staying with technology, given all the attention to logistics technology in the form of things like blockchain, AI, IoT, Cloud, and others, how would you describe the state of supply chain and logistics technology?

There is no doubt that the logistics technology space is growing faster than ever, with change never slower than it is today.

The way that I think about it is that everyone has algorithms, and, years ago, everybody talked about proprietary technology and now everybody has it in some way, shape, or form. And all the leading companies in the logistics space have their own data scientists and algorithms. There is kind of this level set across technology, and there can only be so many differentiators, with everyone pursuing the same goals.Collaborative Supply Chain Intelligence

June 24 – 26, 2019 • The Broadmoor • Colorado Springs, CO

Collaborative Supply Chain Intelligence

Keep up-to-date

Full details coming soon!

Technology on its own is, really, I don’t think, the solution. We think about our investments in technology, and they really support the two other pillars, people and process, and where we think those three things come together, and what separates us in that space…is experience and scale. When we think about that fact that we have had 115 years of experience, we have learned a lot of things along that journey.

That experience does not come with just time; it comes across multiple industry verticals, continents, and modes and services. When we aggregate those experiences, the other thing we are aggregating is data, and we have all these data points that we are able to bring together on a global basis across what is viewed as the world’s largest supply chain platform.

That really starts to become scale, and our IT people that are building programs and cool algorithms have a really big competitive advantage, because we have more data, and we have more data because we have more loads. 

How does that data translate into the market?

When a small motor carrier comes to us, 15%-to-20% of its miles are driven empty and are non-revenue-generating miles. The biggest thing a small motor carrier wants is more miles to get more money, and, chances are, we have a load closer to that carrier than anybody else does.

If a shipper comes to us, we can offer them a broader base of capacity than anyone else does and we are more likely able to provide a service for them that is on time and meets their needs.

Another thing specifically around technology is that many of the new technology entrants, or tech-enabled brokers, or disruptors, disruptors, are really pushing customers to integrate and operate only on their platform.

What is C.H. Robinson’s approach?

We want Navisphere to be the easiest supply chain platform to use in the industry.

If you would like to operate in Oracle or SAP or whatever your ERP system is as a shipper, or JDA as a carrier, or use your off-the-shelf Transportation Management System, we can work with you, rather than pushing customers only on to our systems.

We want to meet our customers where and how they want to buy, as opposed to pushing them.

Shifting gears, C.H. Robinson is a very big player in a very competitive and crowded brokerage market. In this environment, what are you trying to do as a company to distance yourselves from the competition, given such a finite carrier base?

Looking at the customer lens is where we try to start all of our conversations.

We serve such a broad and diverse group of customers, from the smallest micro shipper making something in a garage and doing a residence pick up and shipping a parcel, to the world’s largest companies that are fully integrated with Navisphere, like Microsoft, for example, that uses our technology to power their supply chain.

We have a whole continuum of customers, from the smallest of the small to the largest of the large, and I think what has been important for our customer go-to-market strategy is to ensure that we have aligned our value to the needs of those customers.

Can you provide an example of that?

We are not going to go to a small manufacturer and ship once a month and sell them on our data and analytics capabilities or our robust reporting.

So, for that small shipper, we will ensure they have the easiest system to access and have access to the best rates for parcel, LTL, and truckload and that they can come online, get a quote, book a shipment, swipe a credit card, and within an hour have someone there picking that shipment up to bring it to the final destination in full.

But a Microsoft does not want to deal with using a credit card. They need robust reporting and real-time visibility through things like IoT and sensors and the Cloud, which shows them where their entire inventory is, in motion or at rest, to be able to ensure there are no supply chain disruptions for something like the next launch of an Xbox.

We are focused on providing value for a wide variety of segments. If you think about specific verticals like oil and gas, they have very specific needs…so we really work to customize that solution for that sector. It takes smart people and supply chain engineers to do that, and it goes back to having the people, process, and technology to do that.    

Looking at the current state of the market, what is different now compared to a year ago?

What is different now compared to a year ago is the cycle repeats itself again and again and again. It started with the hurricanes, which drove capacity constraints and things [were crazy], with very few trucks and many loads and that led to an industry reset and everyone re-priced.

In our Managed Services business last year, I think our average tender for a truckload shipment was 3.5, meaning that loads went through the routing guide to the third or fourth carrier before it was bid on and this is for the $4 billion worth of freight in our industry.

Today, it is now about 1.4, so what happened was that everyone went out to market…and people locked in capacity at higher rates and when that happens the spot market dries up, as it is comprised of unplanned demand. Loads that were supposed to go through the tracking process fall back in and that drives spot market pricing down and resets rates at a higher rate.

If you look at public motor carrier earnings, they are talking about mid-to-high single digit rate increases for 2019, which I believe to be an effect of the rate pricing they did in 2018. The rates now are a combination of a mixed shift with contractual freight making up a higher percentage of our portfolio combined with declining annual spot market rates.

How do you view the last-mile logistics and the e-commerce driven supply chain?

There is no question that e-commerce and omnichannel fulfillment have changed a lot about the supply chain, in terms of inventory position, order cycles, and other things.

Beyond that, the experience we have on our mobile devices that we get used to when we order something online, or the personal experience, is now transferring into our business experience. We now need to know where everything is all of the time.

In terms of our position, there are a couple of things that have driven change to our model. One thing is that we are working with a lot of shippers in Asia that want to position inventory through things like Fulfillment by Amazon and other seller networks to move products out of Asia, and that works really well for our ocean and air business. We certainly are not one of the largest providers of the inside home delivery type of business.

The biggest part of our business directly related to e-commerce exists with our managed services business, where we are using Navisphere to provide large global shippers with complete supply chain visibility across everything from ocean freight to parcel shipments.

We are touching it in a lot of different ways, and in the last few years or so we are seeing it in the average length of our truckload movements.

How is that?

In 2013, the average mileage per truckload was about 780 miles and it is now 620 or so.

The impact through the shortening of the length of haul is a function of inventory being placed in different parts of the country.

It allows for the order cycle to be shorter and enables us to move things when and where we want it in a different way.

What are some of the key things happening in the ocean market from a C.H. Robinson perspective?

When we look at our ocean business as a forwarder, we are a much bigger player there than we are on the air side.

Our focus in ocean has been to continue to strengthen our TransPacific eastbound business, as we are the largest NVO in that lane and also into Australia.

When we acquired Phoenix International in 2012, we really doubled the size of our overall global forwarding business and somewhat turned the keys over to the Phoenix leadership to continue to build on their model.

In the ocean business, we are continuing to build out density in our trade lanes and we will continue to look for ways to grow in that space both organically and through acquisition.

What about the air forwarding market?

2018 was a really important year for us in that space as we invested heavily into it. It is a complex market.

You cannot just sit on a trade lane; you need to focus on gateways, assets, and people, and it continues to be a strong growth vehicle for us.

Related ArticleC.H. Robinson CEO John Wiehoff Talks Transportation Trends

C.H. Robinson CEO John Wiehoff Talks Transportation Trends

Related Resources

Download the Paper

Why eShipping Selected the SMC³ Platform for Transactional LTL API Connectivity New!
In this case study, Chad Earwood, CEO of eShipping, describes how they integrated the SMC³ platform for transactional LTL API connectivity, and by using the analytical APIs RateWare XL and CarrierConnect XL they are able to obtain immediate LTL rates and audit LTL pricing. Download Now!


Download the Paper

Strategic LTL Bidding for Minimum Cost & Maximum Efficiency
This paper details how SMC³ designed Bid$ense for complete procurement transparency, and how you’ll move ahead with ease and confidence toward best-choice carrier qualification and truly strategic LTL procurement. Download Now!


Download the Paper

The Case for a Re-Indexed LTL Benchmark Pricing System
This paper takes a deep dive into SMC³’s CzarLite XL, an advanced pricing system solution that gives shippers, logistics service providers and carriers a new neutral benchmark choice when negotiating LTL shipping rates. Download Now!


Download the Paper

The Single Source for LTL Pricing & Transit Information
The SMC³ Platform empowers 3PLs and Shippers of any size to successfully navigate and optimize the LTL shipment arena, choose the level of computing power based on your specific needs and operating environment with a technology platform offering the best of all worlds. Download Now!


More Resources from SMC³

Article Topics Trends  Business  Leadership Leadership Logistics Services Provider Transportation Management Systems All topics

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About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics ManagementModern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman Latest Business NewsC.H. Robinson Announces Bob Biesterfeld to Replace John Wiehoff as CEOFebruary 13, 2019 ·         C.H. Robinson has announced that as part of a “long-planned succession process”, effective May 9, Chief Operating Officer Robert (“Bob”) Biesterfeld, will become Chief Executive Officer, as well as…
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Want To Be Like Amazon? Treat Your Customers Like Kings

Exciting and Delighting Customers

While many companies consider Amazon to be the ultimate competitor, Amazon didn’t become the trillion-dollar retail and distribution behemoth it is today by focusing on what its competition was doing.

Instead, it focused on exciting and delighting its customers.

Remember, Amazon started out selling books.

Bookstores were its main competition. Amazon did not aspire to beat bookstores at their own game. Instead, Amazon created an entirely new game.

In a talk at The Economic Club of Washington back in September, Amazon founder Jeff Bezos told his audience;

“The number 1 thing that has made us successful by far is an obsessive-compulsive focus on the customer as opposed to obsession over the competitor.”

Leadership Principles

In fact, customer obsession is the very first of Amazon’s 14 Leadership Principles: “Leaders start with the customer and work backward. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.”

It’s this unrelenting drive to address customer needs that’s made Amazon “the everything store.”

From day one, Amazon observed its customers, asked for their input, anticipated their wants and needs, and treated them with complete trust and respect.

Amazon has been able to build – and scale – its legendary customer service by paying attention to customer behavior and delivering on promises so well that it changed the meaning and importance of “customer expectations.”

Amazon makes its customers “king.” They’ve proven the validity of this strategy by lapping up 50 percent of US e-commerce sales in 2018, per TechCrunch.

Nowadays, customers demand Amazon-like services, a trend known as “the Amazon effect.”

Customers want to know where their orders are when they will arrive, and if there is a delay. Amazon does all that – and your business can too with the help of technology.

Meeting Customer Needs

To be able to meet customer needs, Amazon uses technologies to track and optimize shipments, giving visibility to customers so they know what is happening to their orders all along the supply chain.

To make customers king, businesses need to offer a technology-driven experience that gives visibility into transportation processes from order entry to proof of delivery.

Shippers use TMS like Kuebix to find scarce capacity, analyze freight rates and secure transportation.

With Kuebix TMS businesses can compare carrier rates side-by-side and choose the best rate that the shipment demands, ensuring quick and efficient deliveries to their customers.

They can also provide their customers with real-time tracking and a level of visibility that can only be gained with technology.

Download the Report: The TMS Buyer’s Kit | Learn | Build ROI | Decide

Related Article: Improving the Customer Experience in the Age of Ecommerce

Improving the Customer Experience in the Age of Ecommerce

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It’s Almost October and the Holiday Hiring Has Arrived for the Transportation & Logistics Sector

The Holiday Hiring Season

The time for holiday hiring has arrived, with three of the biggest households in the freight transportation and logistics sectors-UPSFedEx, and XPO Logistics, each making announcements to that effect over the last few days.

The need for extra help, in form of staffing, is not a new, or novel, approach by any stretch of the imagination.

Instead, it is something that is required and needed, in order to keep up with the heightened demand that this new age of e-commerceand related last-mile logistics efforts, brings with it.

And when you factor in the holidays, well, it becomes quickly apparent that every one of these additional hires, even if temporary for the most part, are truly needed and serve as vital cogs in the fulfillment, distribution, warehousing, and delivery processes for each of these three companies.

Greenwich, Conn.-based XPO Logistics said it plans to hire 8,000 North American-based logistics staffers for the peak holiday season.

This looks to be a good decision at a good time, as the company said that its retail logistics volume through August is up around 20% compared to 2017, with the gains paced by consumer-demand for e-commerce and omnichannel retail fulfillment.

“We’re ramping up for the holiday season and another significant increase in e-commerce activity,” said Troy Cooper, XPO president, in a statement.

“We expect to add 8,000 seasonal jobs before November – a significant increase over last year’s holiday hiring. Our modern warehouses are filled with automation that is an attractive choice for workers and helps us to be as productive as possible for our customers.”

UPS, as usual, announced a significant seasonal staffing increase, with an expected 100,000 seasonal staffers to support what it described as its anticipated package volume increase from November through next January.

Big Brown said these seasonal positions are both full- and part-time, mainly for package handlers, drivers, and driver-helpers.

What’s more, it noted that these seasonal roles have long served as a springboard to full-time employment, as was as the case for UPS CEO David Abney and other senior UPS executives as well. UPS also said that over the last three years, 35% of the seasonal staffers it brought on became full-time staffers once the holiday season wrapped up.

“Every year, we deliver the holidays for millions of customers,” said Jim Barber, UPS chief operating officer, in a statement.

Jim Barber, UPS Chief Operating Officer

“Every year, we deliver the holidays for millions of customers”Jim Barber, UPS COO

“In order to make that happen, we also deliver thousands of great seasonal jobs at our facilities across the country.”

Lastly, when announcing the move for its FedEx Ground subsidiary to up its U.S. operations to six days a week, Memphis-based FedEx announced it plans to increase hours for some existing staffers and hire roughly 55,000 positions for the holiday season.

It also noted that FedEx Ground again plans to run six- and seven-day operations through the holiday season and also continue six-day operations throughout its U.S. network on a year-round basis.

FedEx said it expects a record influx of volume for this year’s holiday season and beyond, too, due to (you guessed it) increasing e-commerce demand. And FedEx made it clear that the rise in demand for e-commerce goes beyond peak, observing it is a “year-round phenomenon” and FedEx is prepared to meet that demand.

No matter how these companies word it, the fact remains that more e-commerce activity means more package volume, which means more staffers are needed to fill.

While unemployment is low, it stands to reason that these seasonal jobs may not be as easy to fill as they may have been in the past. But the opportunities are there, to be sure, and as in the case of UPS CEO Abney can potentially open the door to a bright future in the logistics field.

Buoyed by decent economic fundamentals and people shopping more than ever from the “virtual mall,” it is clear this is more than a trend and has been that way for more than a while, too. That will likely play out in the form of growing package volumes and the constant need for seasonal help.

6 Ways Companies Can Ready Their Supply Chains for the Holidays

“Because of the rise in the number of e-commerce orders during the holiday season, there is a big increase in transportation requirements for everything from last-mile packages delivered to a consumer’s home to inbound shipments coming into a distribution center,” said Dan Clark, Founder and President of Kuebix.

Read: It’s Almost October – Time To Get Ready For the Holidays!

  1. Give customers visibility to their orders. Using technology, retailers can provide Amazon-like experiences by tracking shipments in real-time and alerting customers if orders will be delayed. Carriers can house shipment information letting suppliers and customers know where their goods are and when to expect them to arrive at the next destination. With complete visibility, businesses can get more details on bottlenecks or specific incidents if there is an issue such as product damage or late delivery.
  2. Prepare to use the spot market to make up for excess demand not covered by carriers. Shippers can leverage their negotiated rates from their existing carrier relationships, and compare the full depth of market pricing across the spot bidding marketplace to find the best rates for the best service or to find the extra capacity to meet excess demand.
  3. Get more rates by connecting with more carriers. Connect to a global community with thousands of carriers, then compare all their rates side-by-side and choose the best carrier for each shipment, leading to substantial cost savings and better customer service.
  4. Get products as local to customers as possible. Many retailers are acquiring new, smaller warehouse space closer to their customers to shorten delivery times and journeys. Also, orders can be fulfilled from storefronts with end-to-end visibility of inventory. The shorter the distance from where inventory resides to the end customer, the faster the delivery and the lower the cost.
  5. Integrate internal systems like ERPs with transportation management platforms. The ability to integrate purchase orders automatically from an ERP system directly into the TMS cuts out paperwork and admin hours. Since the integration is two-way, shipment data is populated back into the ERP system for record-keeping and to provide stakeholders with complete visibility. This enables information down to the SKU level to be leveraged in claims management, meaning the shipper always has the information they need to protect their company’s interests. Shippers can also better understand the true landed cost of goods to make smarter decisions regarding their company’s bottom line when they integrate purchase orders directly from an ERP system.
  6. Get a TMS or replace legacy TMS platforms. Look for a TMS system that is modular and scalable so that it can expand as needs change during the busy holiday season. A cloud-based platform means faster implementation before the busy season and will have lower support costs. Actionable analytics from the TMS will help businesses make smarter shipping decisions and foster continuous improvements ahead of the holidays to ensure the supply chain is fully optimized.

“Black Friday, Cyber Monday and numerous holiday promotions all add to the huge spike in demand. Shippers need to keep operations flowing and use tools to handle the upsurge while keeping customers satisfied” said Clark.

Getting ready for the demand spikes imminent with the holiday season will keep businesses on track to meet customer expectations. Rising demand during the holiday season will ‘make or break’ businesses; a little preparation will separate those with winning strategies from those without.

Source: Kuebix

 

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Amazon Orders 20,000 Mercedes-Benz Sprinter Vans for New Last Mile Delivery Program

Last-Mile Delivery Services

When e-commerce powerhouse Amazon announced in late June it was rolling out its Delivery Service Program, in an effort to increase its package delivery and logistics service capabilities that it said will enable entrepreneurs to set up their own businesses to deliver Amazon packages, it drew a lot of attention, as it typically does, and interest.

That interest was renewed recently, with the company announcing it has ordered 20,000 Mercedes-Benz Sprinter vans to be deployed for the new package delivery offering.

A report in the Seattle Times said this order is more than four times higher than what Amazon initially anticipated this summer, adding that these vehicles will be used for last-mile delivery services, which Amazon often has UPS, FedEx, the United States Postal Service, and contractors do for them.

But the report explained that Amazon’s initial expectation of ordering 4,500 vans was pushed higher as it received 10,000 applicants for the delivery program and resulted in a higher order number.

As previously reported in Logistics Management, an owner of an Amazon package delivery franchise can earn up to $300,00 in annual profit, with startup costs starting at $10,000, through operating a fleet up to 40 delivery vehicles.

What’s more, it added that owners will be able to leverage delivery volume from Amazon, access to the company’s sophisticated delivery technology, hands-on training, and discounts on a suite of assets and services, including vehicle leases and comprehensive insurance.

And they will also have access to various “exclusively negotiated discounts” on resources for a delivery business, including branded uniforms, fuel, and comprehensive insurance coverage, among other options.

Looking to the future, Amazon explained it wants to bring in hundreds of in-house delivery partners that would, in turn, hire tens of thousands of U.S.-based delivery carriers, whom would work in tandem with the company’s existing base of traditional carriers, in addition to small-and-medium-sized businesses that currently staff thousands of drivers delivering Amazon packages.

“We have great partners in our traditional carriers and it’s exciting to continue to see the logistics industry grow,” said Dave Clark, Amazon’s senior vice president of worldwide operations, in a statement made in late June.

“Customer demand is higher than ever and we have a need to build more capacity. As we evaluated how to support our growth, we went back to our roots to share the opportunity with small-and-medium-sized businesses. We are going to empower new, small businesses to form in order to take advantage of the growing opportunity in e-commerce package delivery.”

When Amazon initially introduced its delivery service program, a Wall Street Journal article noted that this move is viewed as another push by Amazon to gain more control over its own deliveries in a “continued quest” to build a vast freight and parcel shipping network.

What’s more, it added that Amazon has said it needs to expand its internal delivery service offerings to keep up with the number of orders made online that UPS, FedEx and the United States Postal Service cannot.

Dave Clark, Amazon’s senior vice president of worldwide operations

“We have great partners in our traditional carriers and it’s exciting to continue to see the logistics industry grow”Dave Clark, SVP, Amazon Worldwide Operations

And taking that a step further, the report, citing analyst estimates, pointed out that orders made via Amazon.com account for more than $4 or every $10 spent online in the United States, with 2017 deliveries topping 1 billion.

“It’s an incredible buy for vehicles that amazon will lease out to owner-operator firms, much like Fedex Ground, FedEx Home Delivery, Airborne Express, and others have done at some point,” said Jerry Hempstead, president of parcel consultancy Hempstead Consulting.

“Buying that many gets them purchasing leverage to get the cost down per unit and control over the brand image. The drivers of the vehicles, however, are not Amazon employees. In light of the financial woes of the USPS, Amazon is just taking care of Amazon.”

Rob Taylor, co-founder and CEO of Austin, Texas-based Convey, a cloud-based technology provider that helps shippers connect disparate data and processes from parcel to freight and first to last mile, said this announcement lends further credence to the ongoing emergence of last-mile logistics.

“If this news confirms anything it’s the immense volume of untapped latent final mile capacity in the market that isn’t part of mainstream delivery and logistics networks,” Taylor said.

“Amazon has been clever to identify and unlock this potential. It remains to be seen how quickly and effectively their delivery service partner program begins to show results for its various stakeholders, financially and otherwise.”

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Gaining Supply Chain Efficiency With Artificial Intelligence

Supply Chain & Artificial intelligence

Artificial intelligence (AI) will change the way you think about your supply chain and supply chain efficiency.

Today’s supply chain complexities demand additional support.

You cannot afford to pass up on automating at least some of the processes.

And no, you don’t have to have robots replacing all your human workers at your facility.

AI goes beyond just robots to include automated processes in computers and more.

Implementing AI in your supply chain will make your life easier and your business more streamlined.

Increased Supply Chain Efficiency Means Maintenance Made Easy

Maintaining your equipment requires regular repairs and upkeep. But what if there was a way to know exactly when to conduct those tasks? You’d save money while cutting downtime.

The secret behind this lies in automating data collection through Industry 4.0 to automate the process.

Artificial intelligence collects information from sensors on equipment, which combines with maintenance records.

The system analyzes the information to predict the best time to repair your equipment, which is called predictive maintenance. And it could boost your productivity by 20 percent and cut maintenance costs by 10 percent.

Manage Your Warehouse Painlessly

The most familiar AI examples in industrial settings are warehouse robots that automatically pull products from shelves for shipping. This use of AI helps protect human workers from the dangerous tasks around a warehouse.

It also improves accuracy and safety in the warehouse. Smart robots can avoid obstacles like people and shelving for easier maneuvering when retrieving or storing products.

With AI, you can control multiple pieces of equipment in your facility from a single panel, which lessens the need for numerous low-skilled laborers. Though AI can replace some low-skill tasks, it cannot replace all jobs, such as supply chain managers.

Predictions claim job openings for supply chain managers could outnumber prospective employees by a ratio of six to one.

The good news is that your job as a supply chain manager is safe, but your task will change to integrate controlling AI and analyzing data from a smart warehouse.

Improve Inventory

One of the hardest aspects of being a supply chain manager is predicting what to keep in stock. When two large auto suppliers used AI to predict how much stock they’d need, they decreased inventory by up to 40 percent. Cutting needless inventory is the best means of freeing up space in your warehouse for stocking more products you sell.

Read: 8 Fundamentals for Achieving Artificial Intelligence Success in the Supply Chain

Predictive modeling uses AI to examine consumer trends and help you identify which products to stock. You can reduce revenue losses from not having the right products immediately available up to 65 percent. Predictive modeling can also cut forecasting errors by anywhere from 20 to 50 percent.

There are too many variables at play for humans to accurately predict the appropriate inventory levels in real time. AI can solve these inaccuracies, making your facility more efficient.

Keep Track of Suppliers

To ease your job and improve supply chain efficiency, you need constant communications with your suppliers. Artificial intelligence allows for synchronization throughout the supply chain. You can send information about predicted customer demand down the line, so you suppliers produce just enough to avoid overproduction waste.

Thanks to synchronous supply chain planning, you and your suppliers can make decisions in real time. A restaurant took advantage of AI in its supply chain, and the facility cut excess supplies and became more efficient and flexible.

Connectivity of devices and sharing data is critical to AI use in a supply chain. While this connectivity allows equipment to send information about production back and forth, it can also be useful throughout the supply chain. You can store the information you collected through AI in the cloud for others in the supply chain to access.

When inventory levels drop, the AI monitoring those can automatically signal a supplier to send more.

Smarten Your Shipping

Shipping also becomes smarter thanks to AI. Though driverless cars are still in testing mode, they could become the norm in the future. Additionally, AI can make more accurate predictions about shipping times.

TransVoyant uses machine-learning artificial intelligence to account for weather, natural disasters, road conditions and more to make accurate arrival times for shipments.

With machine-predicted shipment times, you can more accurately stage your warehouse to receive shipments at a given time. Your customers will also be happier with the accurate arrival time. AI makes shipment problems outdated.

AI and the Future of Supply Chains

Future supply chains will necessitate the use of AI and integrate more data collection. Without taking advantage of the latest technology, supply chains become inefficient and unable to compete.

With higher consumer expectations and demands throughout the supply chain for faster turnarounds, industry requires the improvements AI can supply.

About the Author

Megan Ray Nichols is a freelance science writer interested in engineering, technology, and other science disciplines. She is a regular contributor to Manufacturing Transformation and American Machinist. Megan is also the editor of Schooled By Science. Subscribe to her blog to stay up to date on scientific news and follow her on Twitter.

The Top Supply Chain Trends that Will Impact Supply Chain Management in 2018

The type and capabilities of supply chain technology is expanding, and technology will only grow more important in effective supply chain management in 2018.

From the increased demand to data-driven decision-making through the industrial Internet of things (IIoT) to the use of cloud-based technologies, supply chain technology will advance light years in the coming months.

Supply chain managers and leaders need to understand which technology trends will be the dominant forces of change and continuous improvement in the coming year.

#10. Use of Artificial Intelligence Will Increase

An increased ability to use AI will result in greater use of AI. It is a self-fulfilling prophecy, but not the dark images that come from Terminator. AI includes machine learning and deep learning, allowing machines to self-optimize performance and alert managers of potential failures or issues before they occur.

In fact, up to 80 percent of companies already use AI, explains Louis Colombus in Forbes Magazine, and 30 percent of companies are planning on expanding AI investments in the next three years. Moreover, this will result in the hiring of AI experts and a Chief AI Officer.

The use of AI will lead to better responsiveness by customer service representatives, and since the technology hinges on automation, order accuracy will increase, which will enable better spend analysis and cost reductions through newer, more advanced analytics, reports Medium.

Since up to 79 percent of supply chain managers surveyed cited cost reductions as a top area of concern, investments in and use of AI will increase.

Download: The Top Supply Chain Trends that Will Impact Supply Chain Management in 2018

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Recapturing Reverse Logistics Expenses Through Blockchain

Reverse Logistics Costs

The costs of reverse logistics amount to more than $750 billion per year, and the demand for reverse logistics has risen in recent years with the rise of e-commerce.

According to Stacy Rudolph of Business to Community, up to 30% of all products ordered online become returns, placing an insurmountable burden on reverse logistics.

Using a combined blockchain and reverse logistics strategy can help alleviate these costs, and supply chain executives need to understand a few things about it.

Reverse Logistics Carry High Risk in Supply Chain Management

Risk within reverse logistics is higher than that and forward logistics. Manufacturers and shippers have a duty to ensure sustainability, reports Supply Chain Dive, and an effective sustainability program must consider what happens to products after their lifespan.

In other words, the final resting place for products is the burden of manufacturers, and some products, such as smartphones and electronics, can pose a risk of harm to the environment and the personal information of device users.

Blockchain Offers Significant Benefits to Returns Management

Consumers are turning toward eco-conscious decisions in purchases, and blockchain technology could be the solution.

They expect manufacturers to adhere to the guidelines within the International Organization for Standardization (ISO), governing proper disposal of goods, including reclamation of raw materials and removal of personal information from electronic devices.

ISO standards are essential to effective returns management. Since products may be used before returned, the burden of ensuring the privacy of consumer data and integrity of the product falls to the manufacturer or shipper. Other products, such as those used for hygiene or personal uses, could increase the risk of cross-contamination throughout the supply chain. This is why blockchain in reverse logistics go well together.

Download the White Paper: An Introduction to Blockchain in Supply Chain Management

Blockchain technology has major implications for monitoring products at the end of their lifespan through devices connected to the Internet of things, and in the spare parts supply chain, which is part of reverse logistics, blockchain technology can be used to reduce over- and under-ordering, ensure compatibility of spare parts with items being repaired.

This is not limited to small items, and it includes major sectors of the economy, like the automotive industry. As explained by a Technavio Report, asserts Business Wire, blockchain technology can enhance the flow from information in reverse logistics, helping manufacturers understand the full cycle of their products, even after disposal. The technology also has implications for handling product recalls, especially in the food and drug sector.

Best Practices for Using Combined Blockchain and Reverse Logistics Strategies

The road to better reverse logistics is not always clear, and supply chain leaders need to understand a few best practices for implementing combined blockchain and reverse logistics strategies. These practices include:

  • Identify limitations of existing systems and visibility problems within reverse logistics.
  • Share information about potential savings to shareholders, as well as the impact on public image, resulting from better logistics within returns management, increasing customer service levels.
  • Integrate supply chain systems into a single platform, providing a combined approach to management of product lifecycles from procurement through reclamation, recycling and disposal.
  • Share plans to implement blockchain-based solutions within the supply chain and with other supply chain partners, such as suppliers or vendors.
  • Outsource nonessential tasks to third-party logistics providers, freeing capital for investment into blockchain technology. In fact, the use of 3PLs rose 5% last year, reports SmartBrief, so the natural progression will be for 3PLs to begin using blockchain in their platforms as well.
  • Encourage a culture of acceptance of blockchain by moving all processes into the ledger technology.
  • Develop smart contracts that ensure all affected parties understand their obligations while cutting out the middleman, explains Irish Tech News. Blockchain can ease concerns over returns processes, critical for returns in stores when purchased online, as defined by the contract.
  • Implement new payment processing systems, such as WireCard, which are using and developing blockchain technology to map payments thoroughly, reports com.
  • Make use of blockchain technology to track returns, as well as initial orders, will increase consumer trust, even when consumers are business to business purchasers.
  • Use cost savings achieved through blockchain in reverse logistics to offer free return shipping, increasing conversion of site visitors. In fact, 79% of customers want free return shipping, and 92% will make repeat purchases if returns are easy.
  • Make the use of blockchain technology in returns management visible to consumers. Since 67% of shoppers check returns policies before making a purchase, this will aid in selling more product and creating hassle-free returns policies.

Act Now to Recapture Reverse Logistics Expenses Through Blockchain

Shippers and supply chain leaders have a big opportunity to recapture lost costs through more effective reverse logistics and comprehensive, easy returns management. It’s not just about saving money in returns; it’s about positive customer experiences and interactions.

Combining blockchain and reverse logistics will generate a hassle-free way of connecting existing supply chains to reverse logistics and keeping costs down for consumers.

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Latest Freight Data Indicates Alarming Global Trade Slowdown

August 31, 2018 · By 24/7 Staff ·

Global Trade Slowdown

According to the latest Goldman freight data, there has been a gradual slowing in global trade since 4Q17, and the July readings suggest an alarming continuation, and in some cases acceleration, of this trend.

The deceleration has closely tracked a tightening in global financial conditions, particularly evident in Emerging Market data, which in turn has largely been a manifestation of the ongoing escalation in trade tensions between the US and China.

Indeed, the implementation of the first round of US-China tariffs in early July may also have had an impact: US West Coast inbound port volumes were -1% in July (5% in 1H), while Chinese ports’ throughput growth slowed to 2% (6% in 1H), worse than implied by the close historical correlation with Chinese export orders.

At the same time, air cargo growth at Europe’s key hubs turned negative (-2%) in July, with weakness cited on Asia-Europe.

Looking forward, global manufacturing export orders in June/July were consistent with slightly positive, albeit slowing growth.

Breaking down freight by segment, here are some observations from a recent Goldman report:

Sea & air freight (volume growth positive, momentum negative): Freight datapoints have indicated a deceleration in growth since 4Q17. July data appears to have stabilized in Sea, with volumes growing c.3% in line with June, while Air freight growth has decelerated further; e.g. EU airport cargo -2% yoy from 1% in 1H, 7% in 2017.

Container: Active fleet growth continues to slow following announced capacity cuts (6% in August vs. 9% in 1H); Goldman expects further slowing to c.2% by mid-2019. While overcapacity in 1H limited carriers’ ability to pass on rising bunker and charter costs, there are now clear signs of supply rationalization, as carriers begin to hand back capacity and new orders remain low.

Airlines (momentum weaker): While the market environment has remained broadly positive for EU-airlines ytd, growth in load factors has been slightly weaker recently. Forward capacity data suggests stable short-haul capacity trends in Europe, while long-haul supply growth is decelerating.

Infrastructure (volume growth positive, momentum stable): Airport (EU hub) traffic grew 4% in July, a slight deceleration from 6% growth in 1H18/2017/2016. Looking at scheduled airline seat capacity for the coming months suggests near-term traffic growth will remain at similar levels, albeit with growth slowing from high levels in Frankfurt, Spain, and Portugal.

Commodities shipping (freight rates improving, momentum better): In dry bulk, rates have been slightly stronger owing to improved Asian demand and low supply growth of c.2%. Oil tanker rates have been weak over the past year but appear to have stabilized, and slowing fleet growth could be supportive of rate upside. LNG tanker rates have improved ytd from historical lows as higher Asian imports have boosted demand.

View the slideshow to see how global trade has slowed down recently in charts.

Source: ZeroHedge

Trump’s Trade War Could Destroy 4% of Global Trade

If US President Trump follows through on his threats to stage a trade war against his former allies in Europe, China, and other countries, it could reduce world trade by 4% and wipe away 0.4 percentage points of global GDP (about $800 billion), according to Oxford Economics.

World: Freight Indicators

It would be especially bad for the global economy because it would come right as oil prices and interest rates are both rising globally.

“The threat to world growth is significant,” Oxford lead economist Adam Slater wrote in a recent note to clients.

His warning is the latest in a string from researchers, investment banks, and politicians.

“Recent tariff threats, if realised, would extend high tariffs to over 4% of world imports – a tenfold rise. This comes just as the global upturn shows signs of faltering. The threat to world growth is significant: in a scenario of escalating tariffs, our modelling suggests world GDP could be cut by up to 0.4 percentage points in 2019,” Slater wrote.

Currently imposed tariffs only total about $60 billion (or 0.3%) of world trade. But all the upcoming proposed and threatened tariffs bring the total to $800 billion (4%).

Between 2015 and 2017 world trade had been growing. But that trend reversed after Trump took office at the beginning of 2017.

“The upsurge in protectionism comes at an inopportune time for the global economy. World trade growth appears to have slowed notably in recent months. Freight-based indicators are especially worrying, with six-month annualised growth having subsided from 6-7% in January to around zero in April. There are also broader indications of a slowdown. The Citigroup economic surprises indices for the G10 and emerging markets have turned deeply negative, with disappointing data releases dominating.”

The US has some buffer room given that its economy is currently growing more quickly than the other major economic blocs. But that is threatened if a full-blown trade war arrives as central banks increase interest rates and oil prices go up, Slater believes.

Source: Business Insider

Controlling Shipping Costs via Multi-Modal Freight Rate Visibility

The majority of shippers today are concerned with rising transportation costs, fueled by an increasing demand in shorter consumer delivery times and an expanding network of inventory distribution points.

Managing each stage of shipments is very complex for shippers, and most transportation management systems lack a single, multi-mode solution that handles contract rate and schedule data for domestic trucking and LTL haulers, as well as ocean and air carriers

Download this eBook and learn more about how an automated multi-mode solution solution can help you find the most advantageous and cost-effective routes across numerous contracts.

View All Amber Road Global Trade Resources

Latest Freight Data Indicates Alarming Global Trade Slowdown

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Should Retail Stores Tackle “the Amazon effect”?

August 27, 2018 · By Shane Faulkner

The Amazon Effect

Taking its name from the super fast-growing e-commerce giant, “the Amazon effect” is a phrase we use to describe the disruption caused when Amazon decides to enter into a new market and the havoc it can sometimes wreak on competitors.

That effect on brick-and-mortar retail stores is well documented. So, it comes as no surprise that many retailers are looking for ways to stay profitable.

While it has caused some retailers to permanently shutter many of their storefronts, US Census figures surprisingly show that physical retail stores still generate 90.7% of all retail sales. This raises the question: is “the Amazon effect” really an existential threat to physical retail?

Businesses still struggling to keep up may be wondering what they can do to encourage customers to come into their retail stores, instead of shopping from their internet-enabled devices. I think a good place to start would be to fight fire with fire and embrace technology as part of the in-store customer experience as well.

A unique and innovative experience

The convenience of online shopping is difficult to compete with, so many retailers opt for offering their customers a completely different experience than they could find online. A recent study by SOTI showed that 92% of customers prefer stores that offer a mobile technology experience, for example.

Augmented reality apps can allow customers to virtually try on clothes, see what a paint color would look like on their walls, or even how furniture would look in their homes. It is technological innovations like these that will bring the excitement back to shopping in a store. And with the right in-store technologies, retailers can get a better understanding of what their customers want out of the shopping process.

Using technology to track the movements of customers is another way to harness technology in a brick-and-mortar store. Analysing this data and using it to make valuable changes to aspects such as the store layout could go a long way to improving the customer experience, and in turn, boosting in-store sales.

Putting mobile technology at the heart of the logistics process is an option with Swisslog’s CarryPick solution. Coupled with our SynQ software, there are even opportunities to share each step of order fulfillment with customers via a tracking page.

Use stores as warehouses

For omni-channel retailers, boosting sales in physical stores could be as simple as offering a fast and free click & collect option on the website. Delivery charges can be expensive, so providing a free option that brings customers into the store where they’re more likely to make additional purchases could bring an increase in sales.

With warehouse space becoming more and more limited, omni-channel retailers also have the option of utilizing their stores as warehouses for their online customers. Customers who do choose the delivery option could benefit from faster dispatch from their local stores, but those choosing to click & collect get their goods faster as well.

Some of the latest technologies can even help retailers keep their stock up. Investing in an automatic palletizing solution like Swisslog’s ACPaQ would get stock to stores quicker. Using innovative warehouse technology could mean higher stock availability in stores, and therefore an increase in click & collect orders.

More than just retail

A survey conducted by McKinsey showed that even in the most popular e-commerce categories, only around 10% of Chinese consumers stay online throughout the entire customer journey.

For example, customers for consumer electronics tend to visit a physical store to seek advice and get a chance to see the product first-hand before purchasing. This could be said for a number of other categories, including clothing – where people are more inclined to try before they buy.

Physical stores need to be more than just retail. Providing product demos, free advice, and try before you buy opportunities can position retailers as the experts in their field. Apple’s Genius Bars, for example, offer customers the chance to talk to a tech expert about any issues they are having with their Apple product.

Offering these services in store could boost foot-traffic, and even if they don’t make a purchase the first time they come in, they will gain a better awareness of what products are in stock for future purchases.

Automate your way to retail success

Contrary to popular belief, it is obvious that physical retail is not dead and, in fact, many retail stores are thriving again now that they have found their way through a few difficult years. There is more than one way to leverage technology and innovation to tackle the Amazon effect, and it differs depending on the type of business.

Swisslog has a comprehensive portfolio of solutions, from the modular SynQ software and intelligent CarryPick robots, to automated picking and palletising solutions like AutoPiQ and ACPaQ. There is an answer for every retail challenge, so don’t scare away your customers by living in the past. Step into the future and show your customers the way.

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Graph Blockchain Solutions Targets $15.5 Trillion Global Supply Chain Management Logistics Sector

August 23, 2018 · By 24/7 Staff ·

Blockchain Data Management & Global Logistics Market

With globalization and the increased consumption of various products worldwide, efficient supply chain management and the role of freight and logistics has become increasingly complex.

The global logistics market involves all activities of Supply Chain Management (“SCM”), including transportation, warehousing, inventory management, and the flow of information and order processing.

As previously published by Transparency Market Research, this market is estimated to reach US $15.5 Trillion by 2023.

Multi-national global logistics and freight companies such as FedEx, UPS, and Purolator have openly acknowledged their endorsement of blockchain technology, with all three joining the Blockchain in Trucking Alliance (BiTA), noting that it will bring efficiencies to their industry through consistent, transparent and immutable data.

“We’re quite confident that blockchain has big, big implications in the supply chain, transportation, and logistics,” FedEx CEO Frederick Smith said at the Consensus 2018 conference.

On their company’s press release, Linda Weakland, UPS director of enterprise architecture and innovation, said: “Blockchain has multiple applications in the logistics industry, especially related to supply chains, insurance, payments, audits and customs brokerage.”

Tied to global logistics, South Korea has one of the world’s highest e-commerce rates, however, they have lagged in keeping pace with warehouses and distribution centers. As such, as reported by the Wall Street Journal earlier this year, there has been a wave of investment into high-specification logistics projects across the country, both by the South Korean government through incentives and into Korean logistics properties by institutional investors such as the Canada Pension Investment Board.

Graph Blockchain Solutions

With the growth of this sector as a tactical objective, Graph’s foray into the global logistics industry commenced with providing solutions to divisions of Samsung and LG corporations. Both companies are South Korean based multinational conglomerates, known to be the world’s largest manufacturer of mobile phones and smartphones, and the world’s second-largest television manufacturer, respectively.

By participating in the development of technology that could revolutionize logistics for multi-nationals, Graph has secured a solid position with the goal of becoming a leading solution provider in the sector, focusing on building a global logistics eco-system wherein the graph blockchain solution would reduce downtime by providing real-time monitoring, tracking and business intelligence analytics.

This will enable companies to realize cost savings by mitigating delays and minimizing the impact of lost goods due to cargo theft and fraud, while at the same time driving efficiencies across their SCM.

Most recently, building on the company’s new-found presence within the global logistics space, Graph announced a memorandum of understanding with the Korean Trade Organization, KTNET, a Korean government Agency, to develop a blockchain based electronic trade services platform. KTNET affects US $5.57 billion annually in trade and services and links 97,000 customers and trade-related organizations through its trade system. By integrating the benefits of blockchain technology with real-time insights and reporting tools, Graph’s data management platform is part of the continued improvement of trade processes by KTNET, and further establishes Graph’s capabilities to provide viable leading-edge blockchain solutions in the global trade services sector.

“While blockchain data management is commonly viewed as a nascent technology, the increasing demand to address efficiency issues in supply chain management clearly dictates the need for rapid adoption of blockchain solutions such as Graph’s. Our successful partnerships to date show that we are a trusted solutions provider, and granted how big these industries are set to grow, this is just the tip of the iceberg,” says Peter Kim, President and COO of Graph.

About Graph Blockchain Limited

Graph Blockchain is in the process of listing as a public company on the Canadian Securities Exchange, by way of a reverse-takeover, resulting in a pre-financing valuation of approximately $39 Million CAD (click here for more information). Graph was started as a joint venture formed between Datametrex and Bitnine, with the mandate to bring the value of Graph Database technology to the blockchain environment where there is a great need to enhance performance and present the verified and authenticated data in unique ways.

About Datametrex AI Limited

Datametrex AI Limited is a technology-focused company with exposure to four exciting verticals. Big Data, collecting data from the retail point of sales environments. Artificial Intelligence and Machine Learning through its wholly owned subsidiary, Nexalogy. Implementing Blockchain technology for secure Data Transfers through its joint venture company, Graph Blockchain. Industrial scale Cryptocurrency Mining through its wholly owned subsidiary, Ronin Blockchain Corp.

Related Article: UPS Blockchain Patent to Route Packages through International Supply Chains via Multiple Carriers

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Vision Picking Can Be Transformed Through Smart Engineers and Processes

Despite the hype surrounding smart glasses and augmented reality (AR), “vision” is not the holy grail of order picking in the distribution center.

Like other technologies that came before – RF, pick to light, voice picking – the value of this new technology will depend on how well it is applied to hands-on tasks in the DC.

In the end, smart engineers and processes will determine the extent to which smart glasses and AR can transform picking and other warehouse activities.

When Google released the first version of Google Glass in 2013, Lucas developers loaded our voice picking application and created a “vision picking” demo. Our conclusion was that the technology was not ready for prime time, and Google eventually shelved the original version of glass. Since then, smart glasses have roared back to life with new, more capable hardware from Google and other vendors (Vuzix, Recon, etc.) who are targeting industrial applications in manufacturing, supply chain and field service.

Today, there is little question that “vision” is the next big thing in manual picking technology, despite some obstacles to widespread adoption. Beyond hardware issues, there is also work to be done to fully integrate augmented reality within an optimized user workflow alongside scanning, voice and other technologies.

These are manageable challenges. But anyone expecting vision alone to transform labor productivity and accuracy will be disappointed. As with any new user technology, the real driver for operational improvement from vision will come from better process and workflow design – that is, process changes “beyond the pick face.”

To understand the connection between process design and technology benefits, consider how voice picking has impacted the DC over the past 20 years. Thousands of DCs use voice-directed picking today, but our experience shows that different facilities realize vastly different productivity (and accuracy) gains with the technology. Among Lucas customers using voice picking, the average productivity gain from voice is 36%, and the range is from the low double digits to greater than 100%.

The disparate productivity results are a direct byproduct of the approach or strategy a given DC follows when implementing the technology. We categorize three main approaches to adopting any new user technology: technology enablement; workflow improvement; and process optimization. Each approach delivers a different scale of benefit.

Technology Enablement

In this approach, a DC implements a new technology (voice, vision, etc.) as a direct substitute for older technologies within an existing workflow. For example, you can substitute a heads-up display for a device display in a traditional WMS-directed RF process, and replace manual barcode scans and key entry on a handheld or wearable RF device with speech input and barcode captured by the user’s smart glasses.

Productivity gains resulting from eliminating the time spent stopping to read device screens, pausing to handle a scanner, or slowing down to key-enter data or press function keys. This strategy mostly impacts the efficiency of activities performed at the pick-face, saving seconds per pick.

Workflow Improvement

To achieve additional productivity gains, DCs can make other changes to their current workflow to eliminate wasted time and unproductive steps in the process. In addition to substituting smart glasses and vision recognition for device screens and key taps, you can condense or combine process steps and change other aspects of the process flow, streamline exception processes (which are extraordinarily time-consuming), and reduce the time workers spend doing tasks ancillary to the main workflow.

These changes can save additional seconds per pick, eliminate unproductive minutes at the start or end of picking assignments, and make the end-to-end process easier and more accurate. When combined with the benefits of technology enablement, this strategy typically results in gains in the range of 20%.

Process Optimization

To get more dramatic levels of efficiency, DCs will often redesign and optimize their processes as they implement a new user technology. Common examples include zone picking, batch picking, two-stage picking (especially for slower-moving items), task interleaving, and bucket-brigade picking.

Going a step further, many DCs are applying advanced optimization algorithms to increase pick density and reduce travel in new or existing batch picking operations. Many of these types of optimizations are independent of the technology being introduced to users, but for many DCs the introduction of a new technology represents a catalyst for these types of process changes.

As a final point, many DCs find that they are unable to implement workflow improvements in their current process due to the inflexibility of their back-end systems, putting their entire technology ROI in jeopardy. In such cases, it is worth considering how a discrete picking or work execution system can offer greater process flexibility without requiring a wholesale replacement of larger, critical systems.

To net it all out, vision picking is great, but the value of the technology to any operation is limited unless you are able to leverage it as part of a wider process improvement activity. So by all means, look to vision, smart glasses and other wearable technologies to make work easier, faster and better for your workers. But recognize that smart engineers and process design is more important than any technology.

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