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Category Archives: Transportation

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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Knight-Swift Adds 400 Trucks/Drivers with Abilene Acquisition

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

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

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

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

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

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

Read: Trucking Industry Struggles With Growing Driver Shortage

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

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

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

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

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Transportation Management Systems Market 2018

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

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

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

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

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

Read: Myths and Realities of Implementing a TMS

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

Shifting to the Cloud

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

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

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

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

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

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

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

Free TMS Software…

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

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

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

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

Read: Kuebix Tops 5000 Companies Using Its Transportation Management System

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

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

Strong Return on Investment

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

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

View TMS Resources

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

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

Read: Why Transportation Management Technology, Why Now?

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

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

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

More TMS Speed, Please

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

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

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

Read: How Your TMS Can Help Manage the Amazon Effect

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

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

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Amazon Begins Grocery Delivery from Whole Foods Market

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

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

John Mackey, Whole Foods Market co-founder and CEO

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Maersk and IBM Launch Digital Joint Venture

Maersk and IBM Launch Digital Joint Venture

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

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

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

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

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

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

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

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

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

Stifel Nicolaus analyst John Larkin

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Geoffrey Muessig, CMO and Executive Vice President at Pitt Ohio

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

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

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

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

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

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

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

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

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

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