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Category Archives: Transportation

DHL launches Global Trade Barometer

Global express delivery and logistics service provider DHL rolled out the inaugural edition of its Global Trade Barometer, which it said is an early indicator for the current state and future development of global trade.

The company said that this will be published quarterly and is the result of a partnership between DHL and Accenture, whom will provide data modeling and predictive analytics to forecast future trends for DHL.

DHL explained that the Global Trade Barometer is based on import and export data for a number of intermediate and early-cycle commodities that serve as the basis for further industrial production such as brand labels for clothes, bumpers for cars or touch screens for mobile devices. And it noted that sources are aggregated market data from air and containerized ocean freight in seven countries that represent more than 75 percent of world trade. The barometer leverages artificial intelligence and statistical models to compress the data into a single index value that is published on both a global and individual level for the seven countries it evaluates.

The reading for the first edition of the Global Trade Barometer is 64. This figure marks the weighted average of the current growth and next two months of global trade, with a reading of 50 or higher indicating a positive development and a reading below 50 indicating a global trade decline. The reading of 64, said DHL, is slightly below the values calculated for previous months, indicating global trade is in expansion mode, while growth is losing momentum, due to a weaker outlook for Chinese and Japanese trade that is partially offset by gains in India, South Korea, and Great Britain.

“We have been working on the Global Trade Barometer for around three years,” said Tim Scharwath, CEO of DHL Global Forwarding, in an interview. “During this period, with the help of Accenture, we have developed the model, applied machine learning to identify the intermediate commodities with a leading predictive quality and a high correlation with future movements in actual trade and created and calibrated the regression model that produces the Barometer index. The reason we decided to roll out the Global Trade Barometer was that we recognized that DHL – with the support of Accenture and its Seabury Consulting arm – was able to take advantage of new developments in technology and digitalization (specifically, AI and machine learning) to help our customers by developing a predictive model and using our expertise to interpret the data and provide insights on what the data meant for their supply chain planning and management.”

As DHL began to see how effective the Barometer was, Scharwath said DHL also saw additional potential for others (for example, financial institutions) to use the Barometer in their models and planning. Additionally, he noted it can help DHL in its own resource and capacity planning, as well as commercial activities like offering solutions to particular sectors, based on the Barometer’s predictions for the coming quarter.

Addressing the Barometer’s methodology, Scharwath explained it looks at around 1.5 million commodities and intermediate products with a leading quality like clothing labels (which can predict trade in fashion items), car bumpers (which can predict future car exports) and mobile phone parts. It uses machine learning to look at these variables and their correlation with trade trends and to identify those with the highest predictive quality and their weighting. It then selects the top 100 individual predictors to each of 150 industry verticals and applies a random forest algorithm, multivariate regression and time series analysis to find the top 10 and weight them to produce a single index figure.

“There are numerous benefits that supply chain stakeholders can derive, including better planning capacity and allocation, benchmarking their own trade forecasts against the industry average, identifying new business opportunities (i.e. in sectors and on trade lanes with strong performance forecasts), understanding trade lane fluctuations, and spotting potential downturns in demand (for example, in order to adapt their supply chain strategies, reduce inventory levels etc.),” said Scharwath. “For DHL, it may help us to adopt specific pricing strategies, strengthen our negotiating position with carriers on certain lanes, more efficiently plan our air freight and ocean freight volume allocation etc. to take advantage of trends we see.”

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Tariffs Present Different Supply Chain Challenges for Shippers

Well, that time is now officially here, with the White House saying it’s moving forward with a 25% tariff on $50 billion of goods imported from China, as well as focusing on: protecting domestic property and intellectual property; stopping noneconomic transfers of industrially significant technology and intellectual property to China; and enhancing access to the Chinese market.

So instead of the “what if” scenarios that had been floated and discussed, we are instead in a “what now” scenario. And, to be sure, that scenario is fairly open-ended at this point.

For nearly 18 months, or even longer, there have been steady gains in United States-bound imports from China, with much of it due to the pending, now actual, tariffs, which have been by viewed by many as protectionist measures.

What happens now remains to be seen on myriad fronts, but one thing for certain is that these new tariffs are not catching anyone by surprise, as the very real possibility of them taking effect has been really going back to early March when the White House first floated the possibility.

Much of what is driving the White House’s tariff endgame is the need to compete on a global basis, which requires the U.S. being able to grow its global exports, according to Walter Kemmsies, Managing Director, Economist and Chief Strategist for JLL’s U.S. Ports, Airports, and Global Infrastructure Group.

“It is important, as the U.S. [collectively] is not the youngest or most vibrant consumer group in the world,” Kemmsies said.

“While there are a lot of millennials out there, it is going to be a while before they become ‘hardcore’ consumers like their parents are. If you are really going to grow, you want to tie your economy to where the consumers are spending and the consumer is global and spending on things like food, where we are really well positioned, clothing, automobiles, and appliances. We are also the world’s most efficient plastics producer….we need to leave the markets open for that and also to compete on an equal basis. In the end, what the U.S. really is asking the world is to ‘let our companies compete with yours on an equal basis.’”

And in order for global shippers to weather whatever tariff storms that may be coming, taking a longer view of trade beyond just the U.S. and China is a good step to take.

That requires looking into setting up production and distribution operations in places like Vietnam and India, as well as parts of Africa, which Kemmsies said are emerging.

“If you are going to operate as a global company, you need to make your decisions that way, too,” he noted.

“When you look across certain products, you can see how bad some supply chains are actually managed if they are not. It makes no sense not to truly diversify globally. If you source stuff in one country and sell it in another, you are extremely vulnerable.”

What’s more, even if these tariffs do not lay out the possibility of a full-on trade war, Kemmsies said there is no benefit for shippers to be so concentrated on one country, even though China has the capacity and manpower to meet the needs of many shippers. But for products and designs that can change on the fly, he said China is not optimal, as it is more large scale-focused.

While Kemmsies stresses shippers look beyond China, Ben Hackett, founder of maritime shipping consultancy Hackett Associates, made the case that implementing tariffs will result in retaliation from major U.S. trading partners, calling it a “shoot yourself in the foot” strategy.

Panjiva research director Chris Rogers

“In a world with no President Trump and President Xi shouting at each other, we are feeling pretty optimistic about things”Chris Rogers, Research Director, Panjiva

“How is that good for America? If the steep tariffs are put into place expect higher producer costs and lower exports,” said Hackett. “Again, neither good for the American economy nor the consumer. Nothing is certain anymore in Washington, D.C.”

And Panjiva research director Chris Rogers noted that despite the back and forth between the U.S. and China regarding tariffs and related protectionist measures, things overall are in a pretty decent place, as it relates to global trade.

“Trade fundamentals remain solid,” explained Rogers.

“In a world with no President Trump and President Xi shouting at each other, we are feeling pretty optimistic about things. Consumer confidence and business confidence are down a little bit but still remain at high levels. Most products [categories] are seeing solid growth, but there remains an overhanging worry about tariffs finally arriving, with the ones for metals already intact. But once others kick in, there could be a sense of the wheels coming off the wagon.”

And he also noted that there has recently been a step back in shipments from China that is not directly related to tariffs on shipments from China being implemented but rather to concerns that tariffs ‘might’ be implemented.

“One could argue that the mixture of nervousness, coupled with sensible supply chain strategies, could lead to less growth,” he said.

“But things are a long ways from not growing as much as in the past, as opposed to [shipment levels] actually falling. It is possibly a sign of more to come, with signs of a summer slowdown, much like what has occurred over the past two years.”

It’s a brave new trade world now, and it looks like it will be quite the ride.

Related Article: Trade Relations are Building a Bigger Wall Between US & China

Trade Relations are Building a Bigger Wall Between US & China

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

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Amazon’s Real-Time Map Tracking Package Delivery App Available to All US Customers

Amazon Map Tracker, a feature the company quietly introduced last month, has started expanding to more users in the US, as noted by Android Police and confirmed by CNET.

The feature gives you a real-time map of your Amazon package delivery as it’s in transit, letting you watch a dot on the screen similar to monitoring an incoming Uber or Lyft driver. It was given a soft launch last year.

The feature is great for anyone who obsesses over the exact moment an Amazon delivery is slated to arrive.

It’s also handy because it allows you to pop out for an errand by showing how many stops or deliveries the driver will make before reaching you.

“The Amazon Map Tracking feature is another delivery innovation we are working on to improve convenience for our customers and provide them greater visibility into their deliveries,” Amazon spokeswoman Alana Broadbent told CNET.

“The Amazon Map Tracking feature is another delivery innovation we are working on to improve convenience for our customers and provide them greater visibility into their deliveries.”

Caution: FedEx, UPS, and USPS packages aren’t eligible, only deliveries handled by Amazon logistics will get the live tracking.

Business Insider says you’ll get access to live tracking when your driver only has fewer than 10 stops left before reaching your location.

It shows you their estimated time of arrival and how many deliveries they have left before they arrive.

Since you can see the driver’s every movement, it raises concerns about security and privacy – someone could order an item just to see which houses near them have gotten packages they could steal off porches.

If you’re out of the house and want to make sure you’re there to receive your package or that the driver truly made a stop at your place, it sounds like a very useful tool

In other news, Amazon is banning shoppers who return items too often. As reported by CNET, Amazon’s flexible return policy may not be as risk-free as you think.

The company bans shoppers for violations, which include returning items too often, according to The Wall Street Journal. Some users aren’t told what they did wrong.

Amazon boasts free and easy returns for many of its items, which has pushed many brick-and-mortar stores to offer the same policies as they struggle to compete with the e-commerce giant. But it turns out Amazon’s return policies may come at a price.

RetailWire reported that, according to the National Retail Federation, 11 percent of sales are returned, and 11 percent of those are fraudulent. If I’m doing my math correctly, that means that a little over 1 percent of customers are making excessive or fraudulent returns.

Forbes reports that there is a cost to these fraudulent returns. Any company that sells anything knows that returns, legitimate or not, impact the bottom line. The price of whatever is sold is determined by many factors such as the cost to manufacture, the cost of shipping, the cost of employees and much more – including the cost of returns. Mitigating the fraudulent returns can help the bottom line. Companies that have a low-price business model can keep prices low if they can eliminate fraud.

What Amazon has done is interesting. Rather than make a blanket, across-the-board decision with a more stringent return policy, it has opted to go after the abusers.

In other words, it is not going to punish all of its customers for the sins of a very few.

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Wabtec & GE Transportation to Merge, Creating Global Leader for Rail, Services and Software

Wabtec Corporation has entered into a definitive agreement to combine with GE Transportation, a unit of General Electric Company.

The combination will make Wabtec a Fortune 500, global transportation leader in rail equipment, software, and services, with operations in more than 50 countries.

The deal is the biggest to be inked thus far by GE Chief Executive John Flannery since he announced a major overhaul of the U.S. industrial conglomerate late last year.

Under the agreement, which has been approved by the Boards of Directors of Wabtec and GE, GE will receive $2.9 billion in cash at closing and GE and its shareholders will receive a 50.1% ownership interest in the combined company, with Wabtec shareholders retaining 49.9% of the combined company.

The transaction is expected to be tax-free to the companies’ respective shareholders.

The combination will bring together two global leaders in rail equipment, services, and software, combining GE Transportation, a global digital industrial leader, and supplier to the rail, mining, marine, stationary power and drilling industries, with Wabtec’s broad range of freight, transit and electronics solutions.

Wabtec and GE shareholders will have ownership in a combined company with significantly expanded margins, a highly attractive growth profile based on an improved business mix, expanded global reach, and faster innovation in key growth areas.

Key Strategic Benefits

The combination is expected to:

  • Drive increased value for shareholders: With approximately $8 billion in combined revenues and a large global installed base, the combined company will have a leading position in key freight rail and transit geographies worldwide and will be well-positioned to serve customers as industry demand continues to improve. Investors are expected to benefit through ownership of a stronger, more diverse business better positioned to perform through the cycle, with expected annual double-digit EPS growth and total run-rate synergies of about $250 million estimated to be achieved by 2022. Furthermore, the transaction will facilitate a tax step-up with an NPV of approximately $1.1 billion of net tax benefit accruing to the combined company.
  • Create a leading equipment, aftermarket services, and digital solutions provider across the transportation ecosystem: From factory to the final destination – and every point in-between – the combined company will have the capabilities to accelerate lifecycle solutions for the transportation industry and unlock significant productivity for customers by improving interoperability, efficiency, and competitiveness.
  • Capitalize on digital/electronic technologies to develop autonomous capabilities: Bringing together GE Transportation’s digital solutions with Wabtec’s electronic systems is expected to drive the advancement and implementation of technology solutions to improve safety, efficiency and productivity for the transportation industry. This combination will create a compelling offering to meet the industry’s rapidly growing demand for rail performance, with the potential to unlock billions in annual savings across freight rail for customers and operators.
  • Generate growth opportunities through the extensive installed base and attractive global footprint: The combined company will be a leading global freight and transit rail provider with more than 23,000 locomotives in its global installed base and content on virtually all locomotives and freight cars in North America, creating significant opportunities for aftermarket parts and services in key regions around the world.

Effective immediately, Wabtec Chairman Albert J. Neupaver has been re-appointed executive chairman of the company, while Raymond T. Betler remains Wabtec’s president and CEO. Following the completion of the transaction, Stéphane Rambaud-Measson will become president and CEO of Wabtec’s Transit Segment; and Rafael Santana, president and CEO of GE Transportation, will become president and CEO of Wabtec’s Freight Segment.

Betler said: “Wabtec and GE Transportation are global industry leaders and we believe that together we have a unique opportunity to drive tremendous growth in 2019 and beyond as the industry continues to improve. By bringing together our highly complementary strengths we are confident that this transformational combination will create value for both Wabtec and GE shareholders, innovative solutions for our customers, and new outlets for long-term career growth for our employees. Our two companies have more than 250 years of rail industry heritage, and our shared focus on safety, reliability, quality, and customer relationships will enable a smooth integration.”

Santana said: “The combination of our two strong brands and remarkable people is an excellent fit that will create an organization well-positioned to accelerate the future of transportation. Together, we can expand our global reach, strengthen our market capabilities and lead digital innovation across the transportation industry. We are seeing growth in rail traffic and recent promising orders for new and modernized locomotives from North American Class I, Shortlines and international railroads, and are confident in the compelling long-term opportunities and synergies before us.”

About Wabtec
Wabtec Corporation is a leading global provider of equipment, systems and value-added services for transit and freight rail.  Through its subsidiaries, the company manufactures a range of products for locomotives, freight cars, and passenger transit vehicles. The company also builds new switcher and commuter locomotives and provides aftermarket services. The company has roughly 18,000 employees and facilities located throughout the world. For the fiscal year ending December 31, 2017, Wabtec generated approximately $3.9 billion in revenue and $504 million in adjusted EBIT (approximately 13% margin).

About GE Transportation
GE Transportation helps move the world and improve the world, as a global technology leader and supplier of equipment, services and digital solutions to the rail, mining, marine, stationary power and drilling industries. GE Transportation’s innovations help customers deliver goods and services with greater speed and savings using advanced manufacturing techniques and connected machines. The company employs approximately 9,000 employees worldwide. GE Transportation has a backlog of roughly $18 billion, including approximately 1,800 new locomotives and roughly 1,000 locomotive modernized units. For the fiscal year ending December 31, 2017, GE Transportation generated approximately $3.9 billion in revenue and $701 million in adjusted EBIT (approximately 18% margin).

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5 Answers to 5 Big Transportation & Logistics Questions

The Changing State of Logistics

The logistics industry is in a rapid state of change and advancement, and its sophistication and development are a work in progress.

It seems like every day and every week a new value proposition comes along that continues to shape the industry.

This changing environment, particularly ongoing technology trends, brings up some fundamental questions worth pondering.

Being somewhat philosophic, the answers will change as new innovations, ideas, processes, and technology make further inroads.

Here are 5 big questions that are worth looking into.

1. Logistics technology startups seem to emerge daily, will these transportation disruptors succeed?

“Disruptors” is the new moniker for innovators in the contemporary digital world. They often seem to come from nowhere and bring a shattering business model that either succeeds through the roof or flops.

Success for a disruptor, regardless of industry, comes down to one truth-telling attribute: value.

Uber was a successful disruptor with their rideshare efforts because there was underutilized cars/capacity. However, when they tried to enter the freight market, they have not been so successful. Uber Freight is trying to change the space without adding any real value to the market.

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There are not underutilized trucks or drivers sitting idle. Digital freight-matching platforms (like Uber Freight, among others) have almost zero adoption. In some transportation surveys, they represented a paltry .02 percent of prevailing freight volume.

Disruptors, however, aren’t bad for logistics and transportation. Disruptors that are enabling other logistics companies to be more efficient are the ones who are proving successful.

This includes businesses like project44 and Descartes and cloud-based SaaS and on-premise software applications like Transportation Management Systems (TMS), Warehouse Management Systems (WMS), and others. They represent true blue technology innovations that have a valuable place in the supply chain and are making stakeholders more efficient and profitable.

When disruptors bring value, they succeed. The focus should be on tangible impacts, not just digitization for the sake of technology adoption.

2. Will electronic logging devices impact safety in trucking?

Electronic logging device (ELD) implementation has already shown major impacts on transit times. This means there were more drivers fudging HOS numbers than initially suspected. But with a bit of patience and time, wages will increase to meet HOS, and drivers will no longer feel the need to work overtime to make ends meet.

But to answer the question, yes, ELDs will certainly improve transportation safety. Much math and science were involved in the research and safety studies that supported the adoption of ELDs. The hours of service (HOS) regulations have merit. If followed, they should lead to safer roads.

In time, their merits will be seen in improved safety records as well as a means of objectively recording driving hours.

3. Will self-driving vehicles improve safety and become a reality in the trucking industry?

There is so much heart and soul, as well as capital, invested in the success of autonomous vehicles. But we are a long way from driverless semi trucks becoming a reality.

In fact, all the chatter about achieving completely autonomous vehicles could be harmful to the overall effort and underlying cause (overcoming driver shortages).

A better approach is to focus efforts on incremental change and advancement aimed at autonomy and connectivity to assist drivers, rather than completely replace them.

This strategy will continue to improve their operation and instill confidence in the general public (who may be a bit skeptical after recent autonomous crashes).

With time, attention, and dedicated effort, drivers will soon have an improved job experience and safer environment. Features and attributes will use technology and automation to ensure protection from lane departures, blind spots, and maneuverability errors. These enhancements will make the job easier, safer, and more appealing. Consequently, such features will solve problems long before the wide adoption of a completely autonomous semi-truck.

Focus on today’s issues first. Embrace innovations for the future.  Be patient as they mature.

4. Will supply chain transparency and visibility ever be widespread?

Yes, we are making progress; but it is going to take a while. The tools for full transparency are available to those who have a unified set of assets. But without a globally accepted set of communication protocols, full supply chain transparency can’t be achieved.

In time, protocols will be established, blockchain will be more prevalent, and full-fledged visibility and subsequent control will be at steady state, steady flow. Right now, the market is highly fragmented with a wide range of connectivity, starting all the way at zero. We are still far from complete application program interface (API) connectivity among all trucks and fleets.

Blockchain technology – a robust means of traceability through a distributed ledger system – will progress. This will be a game changer for transparency, visibility, and control. Industry collaboration via organizations like Blockchain in Transport Alliance (BiTA) and other associations will continue to lay the groundwork for the universal protocols needed to achieve the visibility and control that will bring value to the supply chain.

5. Will blockchain technology help with customs documentation and other transportation record-keeping?

When blockchain technology gains more traction within the supply chain and logistics industries, the burden of documentation will lessen.

A recent Supply Chain 24/7 article cited shipping company Maersk, who conducted research three years ago when they followed a refrigerated container transporting roses and avocados traveling from Kenya to the Netherlands.  The journey took 34 days – 10 of which were idle waiting for paperwork.

A Maersk executive told Bloomberg Reporter Kyunghee Park, “The paperwork and processes vital to global trade are also one of its biggest burdens. The paper trail research that Maersk did uncover the extent of the burden that documents and processes inflict on trade and the consequences.”

Maersk has commissioned IBM to monitor its cargo and documents in real-time, using blockchain.

The litany of required customs documentation is costly and just plain burdensome. The good news is that it is one of the lowest hanging fruits for blockchain to solve. The blockchain is a byproduct of the cryptocurrency (think Bitcoin) movement. It provides an uncanny level of security in that no entity in a supply chain can cover up a mistake by altering a database entry.

Because blockchains are ledgers open to anyone in a transaction, everybody is watching. In the supply chain, it could include manufacturers, customs agents, shippers, regulators, 3PLs, carriers, and drivers. A chain may extend from raw materials to finished goods on a consumer’s table.

A Bloomberg analyst called blockchain “the biggest innovation in the industry since containerization.”

But many links in the supply chain aren’t fully onboard with blockchain – yet. As blockchain technology becomes more refined and prevalent, it will provide many benefits.

Read: Why Every Company Will Be Using Blockchain By 2027

These questions are among the many that prevail in our industry. Their answers are temporal.  As our dynamic changing and growing environment changes, so will the answers to such questions.

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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

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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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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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