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Category Archives: Transportation

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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Effectively Managing Big Data in Your Supply Chain
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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.”

Related Article: Real-time Management from Warehouse to Logistics Fleets

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Truck Drivers Wanted at Walmart – $1,500 Referral Bonus

As reported by Bloomberg, Walmart, whose private fleet of 6,500 trucks is one of the largest in the nation, will offer referral bonuses of up to $1,500, shorten the on-boarding process for new hires by more than a month and broadcast its first national TV ad focused on its 7,500 truckers (see video to the right >>).

The program, which coincides with National Truck Driver Appreciation Week, September 9-15, 2018, aims to fill vacancies and improve the image of long-haul driving as a career amid a tight labor market.

“To be candid, right now I could hire a few hundred drivers,” Tracy Rosser, Walmart’s senior vice president of transportation, said in an interview. “It is getting tougher and tougher to find qualified drivers. It’s a really serious situation right now.”

Read: How a Trucking Shortage Is Fueling U.S. Inflation: QuickTake

The dearth of drivers swelled to a record 296,311 in the second quarter, according to researcher FTR Transportation Intelligence.

Combine that with wage hikes, rising diesel-fuel prices and higher freight demand, and the result was that June saw the biggest monthly uptick in long-distance trucking costs in nearly a decade.

Those expenses have crimped Walmart’s profit margins for three straight quarters, one reason why its shares are down so far this year amid broader gains in the stock market.

A Big Deal

Truckers are a big deal for Walmart – indeed, its path to retail dominance was plowed by its drivers.

Founder Sam Walton began building his own private truck fleet in the 1970s after large trucking companies declined to deliver to Walmart’s mostly rural stores, located far from established trucking routes.

Walton would show up at the drivers’ break room at 4 a.m. with doughnuts and talk to them for hours to get a fresh view of how his stores were faring.

Today, Walmart’s truckers take goods from massive distribution centers around the nation and deliver them to its 4,700 stores in a hub-and-spoke system that allows it to replenish goods quickly.

Two of Walmart’s past CEOs, Lee Scott and Mike Duke, rose up through its transportation department, and current CEO Doug McMillon spent his first day on the job doing a ride-along in a Walmart truck.

Rising Turnover

Walmart only enlists seasoned drivers – with at least 30 months experience over the prior three years – and new hires can earn about $86,000 a year with as many as 21 paid vacation days. That, Rosser said, has kept driver turnover as low as 7 percent historically.

This compares with a turnover rate that hovers around 90 percent for long-haul truckers, with more than a third of new hires leaving after three months, according to the American Trucking Associations and driver-retention consultants Stay Metrics.

But Walmart’s turnover has risen slightly in recent months, Rosser said, amid cutthroat competition for drivers. Some carriers have boosted wages as many as three times over the past year and are handing out signing bonuses of as much as $10,000.

The average age of a Walmart driver is 55, so the company is also losing many to retirement.

Over the next decade, the trucking industry will need to hire roughly 898,000 new drivers, or an average of nearly 90,000 per year.

Related: ‘Smokey and the Bandit’ Charm Fades as Trucking Hiring Lags

To fill the gap, Walmart is hiring nontraditional drivers like Aurelia Yoho, 44, a black mother of two from Chicago’s South Side who joined in 2016 after a stint in the Army and four years driving trucks for other carriers.

She hauls loads five days a week from Walmart’s distribution center in Woodland, Pennsylvania, going as far north as Vermont or down through the Carolinas.

She thought Walmart would never respond to her application, but once she came on board she has “kept the left door closed,” which is trucker jargon for working long and hard.

Still, she found the hiring process “tedious,” so Walmart’s Rosser said he wants to reduce that time from 70 days to 30, and pilot programs to do that are underway in Indianapolis and the company’s hometown of Bentonville, Arkansas.

Walmart will also boost its marketing spending, spread across billboards, satellite radio and a new TV spot, set to the tune of Chris Stapleton’s country hit “Traveller,” that features drivers who are noticeably not 50-something white men.

“Trucking is not just a job, it’s a lifestyle – but it does not work for everyone,” said Gary Mars, a 15-year veteran of Walmart’s fleet.

“Quite honestly, nobody wants to drive a truck anymore. But we have to have ’em. Without trucks, America stops.”

Source: Bloomberg

Related Article: Is There A Way To Better Manage Truck Driver Behavior?

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Driverless Trucks Could Potentially Replace Many of the Nation’s Best Long-Distance Trucking Jobs

Driverless Trucks

Without action from policymakers, driverless trucks are projected to eliminate some of America’s best trucking jobs while also creating low-wage gig jobs, according to the first in-depth study of how autonomous trucks could be adopted by specific segments of the industry and affect wages and working conditions.

In Driverless?: Autonomous Trucks and the Future of the American Trucker, Dr. Steve Viscelli, a sociologist and trucking expert at the University of Pennsylvania, projects that under the adoption scenario that leading technology firms are working towards, autonomous trucks would primarily handle long-distance highway driving while human drivers navigate local streets. Specifically:

  • Autonomous trucks could replace as many as 294,000 long-distance driving jobs.
  • 83,000 of the best trucking jobs, with stable careers and average annual earnings between $60,000 and $70,000, would be at high risk of automation.
  • Another 211,000 lesser-quality jobs would also be at risk. Their annual earnings average between $46,000 and $53,000 and workers suffer from exploitative labor practices and high turnover.
  • While new local driving and delivery jobs (with humans at the wheel) would be created, data suggests these jobs could pay just half as much as those lost through automation. These workers are also likely to be misclassified as independent contractors, without basic benefits, labor protections, or the right to organize for better pay and conditions.

“This is the first study to both forecast potential scenarios for how autonomous trucks could be adopted by specific segments of the trucking industry, and what that could mean for the quality of trucking jobs,” said author Steve Viscelli.

“In contrast to earlier estimates that autonomous trucks would eliminate all 2.1 million trucking jobs, this approach tells a more nuanced story, where some jobs would be lost and others created, but with significant negative effects on wages, working conditions, and employment status.”

Dr. Steve Viscelli, a sociologist and trucking expert at the University of Pennsylvania

“This is the first study to both forecast potential scenarios for how autonomous trucks could be adopted by specific segments of the trucking industry”Dr. Steve Viscelli,sociologist and trucking expert at the University of Pennsylvania

The report was jointly commissioned by the UC Berkeley Center for Labor Research and Education (Labor Center) and Working Partnerships USA, and is part of a broader multi-industry research project on the impact of new technologies on work supported by the Ford Foundation, the W.K. Kellogg Foundation, and the Open Society Foundations.

“This report makes clear that it’s time to move beyond robots apocalypse thinking,” said Annette Bernhardt, director of the Low-Wage Work Program at the UC Berkeley Labor Center.

“The real challenge of the next 20 years may be less about rampant job losses than about technology having the effect of degrading wages and working conditions and exacerbating already high levels of inequality.”

Driverless? identifies and analyzes six possible scenarios for how autonomous trucks could be introduced by industry, with different job and environmental impacts. The analysis was based on extensive background research and interviews with engineers, developers, trucking firms, and drivers about the direction the industry is heading.

“Right now, we’re on a path where tech developers and big companies decide what technologies get introduced, while workers and the public bear the cost of those choices,” said Derecka Mehrens, executive director of Working Partnerships USA.

“If we want innovation to benefit all of us, we need a more balanced approach: one where workers and the public play an active role in guiding innovation, and those who profit from new technology also take responsibility for its impacts.”

The report proposes new policies to ensure that advances in autonomous driving technology benefit workers, the environment, and the public, including:

  • Establishing a multi-stakeholder Trucking Innovation and Jobs Council to develop a shared innovation agenda, create career pathways, and support displaced workers.
  • Laying the foundation for a 21st century freight industry by addressing the exploitative labor practices that currently prevail in the industry segments that are projected to grow.
  • Promoting innovation with social and environmental benefits, such as electric local trucks and human-drone highway platoons.

Working Partnerships USA is a community organization bringing together the power of grassroots organizing and public policy innovation to drive the movement for a just economy. Based in Silicon Valley, it tackles the root causes of inequality and poverty by leading collaborative campaigns for quality jobs, healthy communities, equitable growth and vibrant democracy. WPUSA builds the capacity of workers, low-income neighborhoods and communities of color to lead and govern.

The UC Berkeley Center for Labor Research and Education (Labor Center) is a public service project of the Institute for Research on Labor and Employment (IRLE) at UC Berkeley. IRLE connects world-class research with policy to improve workers’ lives, communities, and society. Since 1964, the Labor Center has produced research, trainings, and curricula that deepen understanding of employment conditions and develop diverse new generations of leaders.

Here’s How Trucking Could Look with Automation and Proactive Public Policy

The way we move goods is going to change dramatically in the coming decades, but how new technologies make their way onto our roads – who benefits, who may be left behind, the impact on our environment – will be shaped by the response of governments, businesses, and workers across the industry.

Effective public policy can ensure that trucking evolves into a productive, high-road industry. Policymakers, collaborating with workers and industry leaders, have an opportunity to tackle some of our biggest challenges: creating good, family-supporting jobs, improving road safety, and reducing traffic congestion and carbon emissions.

What might an alternative, shared innovation agenda look like for the adoption of autonomous trucks?

This report identifies an adoption scenario with good outcomes for workers, job quality, and public health and safety: human-led platooning, coupled with clean electric local trucks.

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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.

Related Article: How Will Blockchain Ledger Technology Impact Shippers?

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Stop Manually Auditing Your Transportation Freight Bills

Auditing freight bills

Freight pay and audit can be a very tedious and expensive function.

Money is wasted when companies pay outside firms by the invoice while the company may still be left dealing with difficult exceptions directly with the carrier.

With the help of technology, the entire process can be streamlined and automated.

This makes auditing invoices and handling exceptions highly efficient.

Automation means never accidentally overpaying for freight

Did you know that 15% of carrier invoices are incorrect and, more often than not, those erroneous bills are not in the shipper’s favor?

Manually using carriers’ paper or email invoices to validate billed amounts can result in errors or even approvals without proper research.

Overcharges can occur when all invoices are generically approved for remittance simply because the effort involved to research discrepancies is too time-consuming.

Automation makes auditing faster

By integrating carrier invoices directly with a TMS, carrier bills can be automatically audited against the approved rate quote for each shipment.

If an invoice doesn’t match the agreed upon rate or falls outside an acceptable threshold, a rate exception claim can be created. Rate exception claims should include details of the actual discrepancy to make it easy to dispute.

Then, the ERP system can be automatically updated with the new invoice information and payments can be made with confidence.

When manual freight pay and audit functions are replaced with automatic ones, shippers only spend time looking at the invoices that are incorrect and always know where the discrepancies lay for easy disputing.

Automation helps to better manage cash flow

Paying invoices too early can reduce cash flow for the company. Kuebix keeps track of the payment terms with carriers and helps ERP systems pay carrier invoices on time, ensuring that invoices are not paid too early.

The Kuebix platform automatically alerts the user which invoices to process for payment and on what date, ensuring cash-flow is managed correctly.

Automation provides more accurate financials

With technology, shippers have the ability to add important GL codes to the invoice so that their accounting teams can properly classify the financial information for every line item on every shipment.

Enabling the smooth exchange of all associated financial data helps the company keep track of specific expenses by various product lines and business functions. By leveraging automation technology, opportunities to squeeze savings from shipping operations can be identified and implemented as well.

Kuebix TMS offers out-of-the-box solutions to automate Freight Pay and Audit functions. This means that detailed rate exceptions can be viewed in one place instead of painstakingly researching discrepancies on each mismatching invoice.

By collaborating with Kuebix’s experienced team of implementation experts, a customized carrier invoice auditing integration can be created to fit any company’s specific needs.

Related Article: The Power of Supply Chain Collaboration & Visibility

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US GDP Q2 Growth Highest in Almost 4 Years

July 27, 2018 · By Joana Taborda

Personal consumption expenditure (PCE) contributed 2.69 percentage points to growth (0.36 percentage points in the first quarter) and rose 4 percent (0.5 percent in the first quarter).

Spending of durable goods rebounded (9.3 percent compared to -2 percent) and rose faster for nondurable goods (4.2 percent compared to 0.1 percent) and services (3.1 percent compared to 1 percent).

Fixed investment added 0.94 percentage points to growth (1.34 percentage points in the first quarter) and increased 5.4 percent (8 percent in the first quarter).

Investment rose less for equipment (3.9 percent compared to 8.5 percent), intellectual property products (8.2 percent compared to 14.1 percent) and structures (13.3 percent compared to 13.9 percent) and continued to fall for residential (-1.1 percent compared to a -3.4 percent).

The contribution from private inventories was negative (-1 percent), compared to +0.27 in the first quarter.

Meanwhile, exports jumped 9.3 percent (3.6 percent in the previous quarter) and imports rose at a much slower pace (0.5 percent compared to 3 percent). As a result, the impact from trade was 1.06 percent, much better than -0.02 percent in the first quarter and the highest contribution since the last three months of 2013.

Government spending and investment added 0.37 percentage points to growth, slightly higher than 0.27 percentage points in the first quarter. It increased 2.1 percent, above 1.5 percent in the previous quarter.

GDP growth figures for the previous years were revised due to comprehensive updates of the National Income and Product Accounts (NIPAs), which are carried out about every five years.

The updates incorporate newly available and more comprehensive source data, as well as improved estimation methodologies. The GDP growth for 2017 was revised slightly lower to 2.2 percent from 2.3 percent.

Related: Tariffs Present Different Supply Chain Challenges for Shippers

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Source: https://tradingeconomics.com/united-states/gdp-growth

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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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