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3PLs offer shippers ‘untapped capacity’

3PLs offer shippers ‘untapped capacity’

As the second half of 2018 unfolds, shippers are presented with compounding challenges as the holiday season approaches. The truck driver shortage is showing no signs of loosening, lower tax rates have fueled consumer spending, and the tariffs imposed on Chinese goods are spurring manufacturers to stock up on imports in order to get ahead of the presumed price increases, all of which are driving truckload capacity constraints.

In the recent American Shipper article, “3PLs offer shippers ‘untapped capacity’”, Maggie Turner, National Account Manager at AFN, delves into the complexities of the market and shares insight on how shippers can successfully navigate this uncharted territory. Turner discusses how shippers have found new ways to make themselves a ‘shipper of choice’ and tap into available capacity by working with a trusted 3PL to gain access to smaller carriers.

Please read the article to find out more.

 

To learn how AFN can help you access untapped capacity, contact our supply chain professionals today.

Hot Topics In Supply Chain Management

“Hot Topics In Supply Chain Management”: AFN Hosting Chicagoland Food & Beverage Network Event on September 13th

Food and beverage manufacturers are facing a variety of challenges in today’s transportation market, including historically tight truckload capacity, rising shipping rates, and increasingly stringent retail compliance requirements.

On September 13th, join AFN’s supply chain experts and representatives from food brands including Enjoy Life Foods, World’s Finest Chocolate, and more, as they address these “Hot Topics In Supply Chain Management” and share strategies for thriving in the current environment.

Presented in conjunction with the Chicagoland Food & Beverage Network and the Loyola University Supply and Value Chain Center, the event will include cocktails, appetizers, and networking before and after the panel discussion.

Details:

Thursday, September 13

AFN Headquarters

7230 Caldwell Ave.

Niles, IL 60714

  • 4:30-5 PM: Registration and networking
  • 5-6:30 PM: Panel discussion
  • 6:30-7 PM: Networking and refreshments

For more information and to register for this event, please click here.

Mastering the Complexities of the Cold Chain

Mastering the Complexities of the Cold Chain

A “new normal” for the transportation industry is here, and supply chain leaders are increasingly seeing how the retail landscape is changing- especially for the cold chain. What has caused this “new normal”? If you’ve ever ordered a frozen pizza online or a meal kit recently, you have part of the answer.

Changing consumer demands shifting weather patterns, record breaking load-to-truck ratios, and implementation of government regulations are all factors. Where does this leave retail and logistics leaders, and how must supply chains adapt to these changes? Rachal Snider of AFN and Alan Reed of Chicagoland Food & Beverage Network dive deep into the complexities of the cold chain- and shed light on how shippers can master the new normal of today’s retail landscape with the right partners.

Read Rachal and Alan’s full article in Food Logistics to get the full scoop. 

 

If you have any questions regarding the cold chain or current market conditions, please feel free to reach out to AFN at info@afnww.com.

 

5 Big Questions Facing Retail and Logistics Leaders

5 Big Questions Facing Retail and Logistics Leaders

How can I be a shipper of choice? How can my company navigate increasingly complex retail compliance requirements and mitigate the risk of noncompliance? And will this crazy transportation market ever cool off?

Throughout the first half of 2018, the transportation market has consistently seen record-setting load-to-truck ratios and spot rates- and it isn’t looking to slow down anytime soon. Evolving consumer demands and competition from online retailers are changing the landscape for brick-and-mortar retailers and the 3PLs and carriers that manage their transportation needs. In her recent article in Total Retail, Rachal Snider, AFN’s vice president of customer supply chain, shares insights and answers to the “5 Big Questions Facing Retail and Logistics Leaders.”

Time for a mini bid already?

Time for a mini bid already?

It’s more than fair to say that we are officially in the thick of another busy freight season! RFP roll-outs are now being implemented and/or executed, and carriers and brokerages alike are navigating through their resources to ensure coverage of their commitments. It’s as simple as that…right?  

Not necessarily! Eerily similar to the same period in 2017- though perhaps less a shock to the system- the disparity in the supply of drivers and trucks relative to demand for those resources continues to create hardship for shippers. While individual shipper experiences will always vary, even the most meticulously drawn-up plans may already be showing some cracks, as evidenced by poor Acceptance and Service rates.  

How can this be happening so soon? Why can’t assets and brokerages simply uphold agreements they created only one to two months ago? AFN does not aim to explain today why assets and brokerages become active contributors to these shortcomings. However, we have noticed a number of shippers have implemented an interesting solution to their procurement woes.  

In recent weeks, AFN has seen any number of shippers put out “Flex,” “Mini,” or “Gap” bids/RFPs. We don’t typically see this kind of activity this early in the year. Various reasons have been presented for these procurement events, but ultimately what has happened is that these shippers have recognized gaps early on in the life of their carrier agreements. Our team sees a number of potential benefits to shippers of conducting these off-cycle procurement exercises:

  • Rather than waiting for the absolute height of the freight market, shippers are taking advantage of a remaining- yet shrinking- window to fill gaps with somewhat normalized rate agreements.  
  • Shippers who traditionally resort to daily “Portal” or “Freight Auction” options that can be a nightmare to transportation budgets, are bolstering their networks with stronger agreements – although perhaps more expensive than expected in the original bid – to limit “spot” activity.  
  • Shippers are recognizing carrier and brokerage partners who have done a nice job early on, and deserve the opportunity to drive further partnership.  

The idea of implementing yet another RFP can be an unpleasant thought. But many shippers have decided that the payoff is there, especially if you keep the scope small and focused, include only a few key providers, and move quickly!

AFN would be more than happy to discuss potential solutions to the current challenges in the market at your convenience. Please contact our team of supply chain professionals at info@afnww.com.

 

How to be a shipper of choice in a carrier’s market

How to be a shipper of choice in a carrier’s market

As summer shipping volumes heat up and produce season progresses, truck capacity continues to remain tight, and it isn’t looking to loosen anytime soon. In this challenging, capacity-constrained market, if you aren’t a shipper of choice, carriers may up-charge or in extreme instances refuse to haul your product.

It’s more important than ever for shippers to make their freight appealing to carriers. In this recent American Shipper article, AFN National Account Manager, Maggie Turner, discusses how to become a shipper of choice in a carrier’s market:

“The increasing strain on capacity and resulting burden on shippers’ bottom lines is here to stay. 3PLs are using creative tactics to ease the stress on shippers, like advising on how to be a shipper of choice in a carrier’s market, sourcing key information like capacity trends, and providing OTIF/retail compliance support.”

Learn more by reading Maggie’s feature in the full article.

 

Take the first step towards becoming a shipper of choice.

Contact our team of supply chain professionals

at info@afnww.com or click the button below.

 

Ice Cream: One of the many reasons the cold chain is booming

With much of the U.S. currently experiencing frigid weather, sub-zero temps, and mountains of snow, ice cream is probably the the last thing on your mind. However, the demand for refrigerated and frozen products- and the supply chain needed to deliver them to direct to consumers- is stronger than ever. AFN’s Vice President of Customer Supply Chain, Rachal Snider, shares insights into the growing demand for a robust cold chain network in the recent Supply Chain Dive article “Ice cream: One of the many reasons the cold chain is booming”. In the article she discusses the many factors that have changed how shippers use their cold chain network- and the real reason why Amazon acquired Whole Foods.

Read the article to get the inside scoop about why the cold chain is booming!

Contact AFN’s team of supply chain experts with questions regarding your cold chain network at info@afnww.com.

Thieves Don’t Take A Holiday

Thieves target cargo during the holidays because the volume of and demand for desirable goods increases. CargoNet recently released the infographic below, which shares winter holiday theft trends from 2012-2016.

Of particular interest are the following points:

  1. Of the 199 reported cargo theft incidents, the top targeted commodity was Food and Beverage. Because these commodities are shipped in high volumes, they’re susceptible to opportunistic thefts.  Additionally, because these products are often less secured, harder to track, easier to sell, and (once consumed) leave less evidence than their more traditional high-value cousins (e.g., consumer electronics, alcohol), they can become the focus of more sophisticated thieves.  Shippers of all commodities should rely on transportation providers with strong compliance programs, which are more likely to avoid thieves of all kinds, including those which might optimize their risk-reward in favor of select food and beverage commodities.
  2. The average loss value of $136,222 should cause all shippers to reassess their exposure– particularly those shippers which don’t currently employ security measures. When balanced against the probability-weighted cost of the lost goods, the added time and expense required to initiate and conclude the claims process, the negative brand impact of disappointed consumers, and the risk of losing customers to competing brands because products are not on-shelf, the expense of cargo security might still be a wise investment.  A good transportation provider can help you effectively weigh those costs.
  3. CargoNet rightly cautions against tendering loads to carriers willing to take undesirable loads at rates below industry standards. In the current market, characterized by capacity constraints and rising rates, a carrier that is willing to move any load at below-market rates should set off alarm bells.  Again, good transportation providers are skilled at ferreting-out deals that seem too good to be true.
  4. Minimizing the amount of time that a trailer is left unattended is crucial.  Thefts occur when drivers are away from trailers; it is important from a freight shipper’s perspective to set transit schedules that are sensible and do not require trucks to sit for extended periods of time.  Advising carriers not to leave trucks unattended for more than short and necessary breaks can only help.
  5. “Fictitious pickups” also increase during the holiday season.  Experienced and careful logistics companies employ methods to ensure that the people to whom loads are tendered and rate confirmation sheets are sent are who they say they are.  Best practices include calling the phone numbers and using the email addresses that are listed on the FMCSA website for the hired carrier.  Sometimes, loads are stolen when a shipper gives the freight to a cargo thief disguised as a legitimate trucking company.

Please see the infographic for a wealth of tips and best practices. To learn more about how AFN can create a customized high value/high risk cargo security solution that aligns with your goals, please contact us today.

 

Insights For Your 2018 Transportation Strategy

Current transportation costs have been holding at multi-year highs – a trend that can be expected to continue well into 2018.  For most manufacturers, distributors and retailers, transportation costs represent the largest component of the logistics cost segment.  Per Logistics Management’s Annual Study of Logistics and Transportation Trends, freight transportation costs alone can represent 2 to 3% of total revenue for large ($10B+) companies, and 10 to 11% of total revenue for smaller (<$250M) companies.

While the ups and downs of the transportation market are beyond your control, there are steps you can take to rein in your spend and ensure that you are getting the service you are paying for.  For example, shippers with over-budget and/or under performing supply chains typically share one or more of the following characteristics:

  • Lack of a knowledgeable transportation manager
  • Internal market rate benchmarking is over one year old
  • Not utilizing a transportation management software (TMS)
  • Little to no visibility into fuel surcharges or accessorial costs
  • No KPI scorecard management

In addition to direct transportation spending, proper oversight of other logistics-related costs can be just as impactful to the bottom-line.  These include warehousing/distribution center optimization, inventory and storage management, personnel/resourcing efficiency and financial payable/receivable cycles, etc.

In addition to the changes you can make within your own organization, your level of collaboration with your 3PLs and carriers is an important factor in the success of your overall transportation strategy.

Specific Transportation Procurement Strategies

There is no question that most shippers and producers are feeling the pinch of higher transportation costs, especially over the past five months.  The broad market conditions responsible for driving record high spot rates for van, flatbed and reefer loads are expected to continue through at least Q2 next year.  The new ELD mandate will play a large part in prolonging tight truckload capacity – even further reducing available market capacity.

ELD discretionary, non-compliance citations can be expected beginning after the Dec. 18, 2017 deadline, while the 10-hour ‘out-of-service’ order associated with ELD non-compliance will begin Apr. 1, 2018.  Expect additional tightening and rate pressures leading up to, and immediately after the Apr. 1st deadline.

Cost implications of a higher rate environment can be mitigated through the following initiatives:

  • Carrier diversification to extend capacity and mitigate risk on priority shipments
  • Clear prioritization of freight scheduling (i.e., primary shipments vs. spot shipments) and communication of these priorities to 3PLs and carriers
  • Balancing the value of higher-priced carrier options against the risk of non-compliance fines by receivers and/or stock-outs
  • Utilizing a 3PL for customized capacity solutions and longer-term dedicated options

Other Levers for Your Supply Chain Cost Strategy

Time is money.  Reducing bottlenecks that cause delays within your supply chain can be just as impactful as reducing transportation shipping rates.  Real delays in your network can increase working capital costs, lost sales, spoilage, etc.  Those same delays also drive higher soft costs related to warehousing inefficiencies, rescheduling work and decreased customer service.

The benefits of lower costs fall directly to the bottom line and can significantly improve profitability.  All segments of your supply chain network need to be actively managed to minimize delays and ensure operating efficiency.  

Opportunities to lower other supply chain costs can include:

  • Alignment of scheduling operations and warehouse picks with product flow patterns
  • Employing mode optimization (truckload, intermodal, LTL) to optimize cost per unit/pound
  • Improving forecasting techniques to align production/distribution to customer demands
  • Implementing automation and real-time tracking capabilities to minimize manual intervention
  • Improving collaboration and communication with key stakeholders and service providers

Ultimately, cost decisions should be balanced against the importance of maintaining critical customer relationships, through the efficient delivery of goods when and where they are needed.  The underlying truckload market will remain tight as we head into 2018 and will be exacerbated by any additional, unexpected disruptions such as weather events.  Now is the time for a detailed assessment of your current logistics strategy.  Start working with your internal stakeholders and external service providers to ensure you are best positioned to optimize the balance of customer service and cost, in a changing and volatile market.

To find out how AFN can help balance service and cost in your 2018 transportation strategy, please contact us at info@afnww.com.

 

Four Trends that Will Shape Supply Chain and Logistics in 2017

2016 sparked a long-term shift in the way we transport goods. Silicon Valley behemoths penetrated the commercial freight market. Big-time shippers overhauled distribution networks to capture a share of the growing e-commerce pie and cater to lofty consumer expectations. Technology advancements drove unprecedented innovation by logistics providers and shippers alike.

It’s been a dizzying year for supply chain and logistics managers, and that’s likely to remain the case in 2017. While we may not be primed just yet for autonomous trucks to take over the roads, we’re also not as far off as some might think. We know one thing for sure: Technology will continue to push the envelope industry-wide, and all players will be forced to adapt or be left behind.

Read more about the Four Trends that Will Shape Supply Chain and Logistics in 2017 in my latest Supply and Demand Chain Executive article.

Erik Malin is the head of corporate development with AFN Logistics.