Possible Recession Suggests The Logistics Industry

Posted by Land Link on Aug 7, 2019 11:16:40 AM

There is a rumbling of a possible recession in the logistics industry lately. The red-hot freight market is slowing and that has some economists concerned. The freight industry is an accurate measurement of national manufacturing strength. Generally speaking, if something is manufactured it needs to be shipped somewhere. A slowdown in freight transportation may suggest a reduction in manufacturing which is a key component of GNP. Truck, rail and air freight volumes fell 5.3% in June from the same period a year ago, the seventh straight annual decline, according to the closely watched Cass Freight Index. That followed a 6% drop in May.  

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Logistics Labor Shortage Is Not Just About Drivers

Posted by Land Link on Aug 1, 2019 9:52:17 AM

Any conversation regarding the labor shortage in the trucking industry tends to gravitate towards the driver shortage. In conversations with owners and operations managers, the need for skilled labor is much more involved. Along with the less than glamorous truck driving career is the supporting rolls of diesel mechanic and miscellaneous support staff functions such as forklift maintenance and facilities management. For those who have never spent much time in a warehouse or dock area, it’s a dirty environment wreaking of propane. If the lure of the currently handsome salary of a trucking career won't attract young talent, the opportunity of support staff is a greater challenge.

So, here is yet another challenge for the facilities management staff. Keeping the assets in safe and operational readiness. The U.S. Bureau of Labor Statistics (BLS) says fewer workers are entering vocational education programs as Baby Boomers age and retire. When it comes to diesel service technicians and mechanics, the Bureau reports, the field is projected to grow by 12 percent from 2014 to 2024, faster than the average for all occupations. The BLS also said 67,000 technicians will be needed to replace retired workers, and 75,000 new mechanics must be added to meet additional demand by 2022. For many years, there’s been a societal push that stresses "without a college degree, you won’t have a career." Jennifer Maher, CEO at TechForce Foundation, an organization that raises youth awareness around technician careers, agreed that it’s an issue even for students who are interested in the trades.

Next-Gen Truck Maintenance

The industry shortage of diesel mechanics and nearly dry bowl of prospective recruits begs the obvious question. Who will service the existing fleet of commercial trucks not to mention the next- gen commercial vehicles? The transition should be interesting to say the least. There is no interest in the old technology but maybe some saving grace in the new. Still, the idea of young men and women getting their hands dirty for a living doesn't seem appealing to today's young career seekers. The maintenance of the fleet of these vehicles has morphed from turning a wrench on a single vehicle to tuning fleets online.

Technology Will Not Slow Down

"As the mechanics and technicians for the trucking industry, we can’t either,” explained Tom Wiers, chief executive officer of Wiers Fleet Partners. “We are up to the challenge and know the trucking industry will be forever evolving and our mechanics, technicians and drivers will always have a role in developing the entire trucking world. The advanced technology will also require specialized services and technicians who will be required to have an advanced knowledge revolving around autonomous tech.”

Moreover, there will continue to be a need for maintenance and service from teams like Wiers Fleet Partners as this technology advances. Items like tire blowouts, oil changes, drivetrain issues and more will still need to be addressed routinely. Additionally, these teams will have to embrace the change in technology and acquire new knowledge as autonomous truck fleets become a reality

Align Yourself With Asset Providers Who Have Done the Proper Vetting

The shackles of doing business in the trucking business in today's environment are challenging. Indeed, only the strong will survive in the coming years. The trucking industry is an intensively capital-intensive market in which to compete. Aligning your company with some established industry professionals ins a critical strategy in times of tight capacity and fluctuating pricing. It's times like these to look for the counsel of the logistic professionals from Land Link Traffic Services. We'd love to meet with you.

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Automated Vehicle Implementation; Concerns Still Remain

Posted by Land Link on Jul 24, 2019 8:45:31 AM

Though field testing for automated vehicles has been relatively successful, some hurdles to full implementation remain. Namely, consumer acceptance and comfort in riding in these vehicles. Also, alarming is the idea of an 80,000 lb commercial tractor-trailer rolling down the interstate on autopilot. Additional concerns include who will be servicing these vehicles and the threat of domestic terrorism by system hacking.

Consumer Concerns

Over the past two years, consumer awareness of driver-less vehicles has increased substantially. But a majority of people still want to have the option to drive themselves, according to a new report from Cox Automotive. The report finds that 84% of consumers want to be able to drive themselves, even in a self-driving car, compared to 16% who would feel comfortable letting an autonomous vehicle drive them without the option to take control.

Despite the promise that autonomous vehicles will make roads safer because it will eliminate human error, respondents’ attitudes to this has changed, decreasing by 18 percentage points in the last two years. Generally, self-driving cars are seen as less safe by consumers compared to two years ago. Nearly half of consumers responded they would never buy a Level 5 vehicle, up from just 30% saying they wouldn’t buy an L5 vehicle two years ago.

Much of the reason for the change may reside in the recent high-profile accidents that have involved autonomous vehicles, including the death of a pedestrian due to an Uber car in March of last year. Interestingly, those unaware of this incident are just as likely as others to believe roadways would be safer if all vehicles were operated by people as opposed to self-driving cars. Despite this, consumers do want and expect semi-autonomous features in future cars because they agree that collision warning alert systems and collision avoidance systems help make people better drivers.

What Will the Automated Vehicle Technician Look Like?

The greatest need for new knowledge is in body shops, where crash repairs are increasingly more complex than even the most experienced service technicians can handle. What service executives say dealership technicians will have to know to work on automated vehicles: 

• Technology of advanced safety and driver assistance systems
• Repair and replacement of sensors
• Electrical theory
• Information technology 

Sensor-based, blind-zone, and cross-traffic alerts get knocked around in crashes. Advanced driver assistance systems are proliferating in lower-priced vehicles. Electronic stability control is federally mandated. All new light vehicles will have to have backup cameras by 2019. Furthermore, the industry has agreed to make automatic braking and forward collision warning systems standard by 2022. The collision repair diagnostic person is going to be the one who determines what might be damaged. Replacing a sensor torn off a car's front end and swept up at a crash site can require a body shop diagnostic technician to go far beyond looking up a vehicle identification number to see what advanced driver assistance systems technology original equipment was. Such fact-finding requires the ability to follow an automaker's flow charts, make sure the replacement sensor is reinstalled accurately, and perform static and dynamic calibration.

There are so many controllers on a vehicle that has to work with each other; the technician will have to be able to follow increasingly sophisticated diagnostic protocols for what to clean, adjust, repair or replace. Fulfilling that vision will require a significant transformation of vocational training programs.

Car Cues

As future technicians are trained to work with automated vehicles, they'll have an advantage. The vehicles will predict when failures of key components are imminent. As autonomous and electric vehicles and mobility converge, service will be even more critical. Automated vehicles, especially those owned by fleets rather than individuals, will operate more hours of the day and accumulate twice as many miles as today's cars and trucks before they are replaced.

Hacking Fears and Other Gray Areas of Autonomous Vehicles

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The Logistics Market: What To Expect Into 2020

Posted by Land Link on Jul 17, 2019 9:16:44 AM

Today's Logistics managers have been dealing with the most challenging freight landscape in recent memory. Innovation, technology applications and improved carrier relations have helped ease the turbulence in a market of rising prices and tightening capacity. There is little evidence to suggest this trend will end anytime soon. 2018 was among the most challenging of years for shippers. 2019 has seen similar challenges. Tight capacity led to significant, and in some cases, multiple rate increases in order to continue to secure capacity. Shippers struggled to manage their logistics spend.  Looking ahead it would benefit shippers to make every attempt to guarantee their capacity for the near future, particularly their busy seasons.  

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Retail Vendor Compliance Planning

Posted by Land Link on Jul 10, 2019 4:11:47 PM

Retail vendor compliance is becoming increasingly complicated and costly for consumer goods companies and their distributors as they seek to meet the ever-changing demands of retailers. If requirements for electronic notification, delivery time and location, packaging and labeling, and numerous other details are not met perfectly, the vendor can receive a short payment on a shipment invoice, commonly called a chargeback. Chargebacks can erode your bottom line quickly. Charge back avoidance planning should be a primary concern if your doing business with large retailers like Walmart, Kmart, and Target. Walmart’s On-Time In-Full (OTIF) policy has set a precedent that will actually fine shippers and suppliers if goods don’t arrive when they are supposed to, whether that be early or late. This means that shippers and carriers need to work closely together to hit the designated delivery window. Must Arrive By Date (MABD) and OTIF are crucial for the changing client expectations. Given that Walmart is such a substantial customer for many suppliers in the United States, making deliveries on time and in full is the difference between making a tidy profit, or losing out on a major customer. There is no uniform plan that will work for all retailers so a plan needs to be tailored for each customer. What’s compliant for one retailer is not necessarily acceptable for another, and there’s a wide range of possible violations. Some are based on one-off problems such as delivery made outside of the approved time window, which could cost the vendor up to 3% of the cost-of-goods sold. Others may be applied due to multiple repeated violations or an inability to reach the required percentage of acceptable, on-time deliveries. Chargebacks are a key component in vendor assessments. Excessive fines could leave you out of next year's RFQ opportunities.

Compliance Planning Design

Strict vendor compliance programs, scorecards, and chargebacks are strategies to dissuade vendors from disrupting a retailer’s finely-tuned, multifaceted, omnichannel supply chain. Given the high stakes involved, setting penalties high enough to be considered punitive ensures that retail vendors pay attention and make compliance a priority. Today, retailers are employing sophisticated supply chain management software powered by artificial intelligence and automated systems, including robotics, to manage these extended supply chains cost effectively, and their financial health depends upon it. Compliance planning is critical if vendors are going to keep pace with the supply chain of the future and do it profitably. There are several step which can be implemented to establish your vendor compliance program for all of your customers. Again, this is a custom designed plan to fit both vendor and customer supply chain systems. So the first step is to evaluate your current supply chain protocols and existing vendor compliance plan in order to identify areas of improvement. Such an evaluation is part of the many services offered at Land Link Traffic Systems.

While chargebacks can cause tension in the relationship between retailers and their vendors and distributors, all of it can be avoided. Vendors can avoid chargebacks by prioritizing compliance within their organizations, employing the right technology, and choosing logistics providers with experience and a history of success with retailers. Supply chain compliance is a complex process that requires the management of numerous moving parts, designed and managed by experienced logistics professionals. Vendors that make the effort to work themselves seamlessly into a retailer’s supply chain don’t only avoid costly, chargebacks but become a preferred vendor. By becoming preferred vendors, these businesses position their products to be available wherever and whenever a consumer is ready to buy them. So, the claim can be made that retail compliance drives profitability. Protect your profit margin with a well-designed Retail Vendor Compliance Plan from Land Link.

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2019 Freight Rates and Demand Stay Strong

Posted by Land Link on Jun 27, 2019 9:31:11 AM

World economies declined slightly in the past 18 months but domestically the U.S. has stayed strong. However, the momentum may be difficult to maintain in the coming years. Trump's tariff policy and international conflict is creating uncertainty in global markets. One major risk in the coming year is the sharp drop-off in world trade growth. The risk of an escalation in trade conflicts remains elevated. If such an escalation were to occur, a contraction in world trade could slow the world economy even more. At the same time, the sell-off in equity and commodity markets, on top of the gradual removal of accommodation by some central banks, means that financial conditions worldwide are tightening. Potential military conflicts may also threaten future growth. For the balance of 2019, U.S. economic fundamentals are expected to remain fairly solid.

Trucking Concerns

Oil production is among the many concerns on the minds of logistics planners. Chief among them is on the supply side of the equation. Shippers and carriers are eager to learn the extent of threats made by OPEC and Russia to follow through on recent agreements to cut oil production by 1.2 million barrels per day. It's unclear if shale producers alone will be able to lift production at a rate that’s commensurate with rising global demand but one solid economic principle is in play hear. Limited supply means higher prices. Possible resurrection of the Fuel Surcharge Expense is but one of the many challenges facing logistics managers reliant on motor carriers in 2019. While this transport sector remains robust, increasing driver wages and insurance costs are eroding profits. Furthermore, costs associated with labor, maintenance, equipment, licensing and compliance have increased steadily for several years. And least we forget the ever-present driver shortage problem which has plagued the industry for years.

Truckers are charging higher fees for shipping services, but much of the increase is going to cover rising driver wages, which leaves many companies still struggling to make sufficient profit. David Ross, transportation equities analyst for Stifel Financial Corp., forecasts truckload (TL) rates to rise from 5% to 7%, with less-than-truckload (LTL) rates rising 3% to 4%. However, he does not find this particularly alarming. Capacity is expected to remain tight. Make an effort to improve your preferred shipper status and carrier relationship. Finally, seek out the counsel of a qualified 3PL to maximize your freight spend.

Air Cargo Remains Strong

Air freight rates are expected to remain strong this year thanks largely to the on-line shopping boom. The velocity with which the supply chain is now expected to operate also creates demand for air transportation. Overall the air cargo industry is expected to finish 2019 strong.

Rail Is Always An Option

Rail service has improved dramatically in the last decade. CSX is creating precision scheduling railroad (PSR) techniques which will continue to transform the pricing and rate landscape while improving service. Union Pacific and Norfolk Southern are following CSX's lead. Rail service has positioned itself to be a viable alternative to over the road transportation. The days of special or low ball rates from the railroad are likely over. Trucking’s capacity constraints have provided a windfall for rail and inter-modal. The railroads made a lot of money in 2018. The same results are expected for 2019, as coal transport had a significant uptick and steel manufacturing strengthened.

Ocean Freight

Fuel prices are a major concern of ocean carriers. Carriers, on some routes, are no longer prepared to sign contracts with fixed all-in rates that include bunkers. Over the second half of 2019, refineries and ship owners will begin preparing for the final phase in compliance with the IMO 2020 sulfur regulations. These rules stipulate that as of January 1, 2020, all bunker fuel consumed on ships will need to have a sulfur content that is no greater than 0.5%. The cost of IMO 2020 compliance is estimated to be $10 billion. You can bet the rates will reflect this cost. Changes to contract terms, fuel surcharge structures, a potential slowing down of vessels, the demolition of many fuel-inefficient vessels and the possibility of an escalation of the U.S.-China trade war are worrisome to the industry. Without a long-term agreement between the two global powers this year, shippers may have to confront a massive disruption in global ocean cargo supply chains and vessel deployments.

The current logistics environment is largely positive but there are potential hazards ahead. Now may be a wise time to talk to us at Land Link Traffic systems to help you navigate what's ahead. We can help insure availability at competitive rates.

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Integrating Robotic Technology in Your Organization

Posted by Land Link on Jun 19, 2019 12:25:16 PM

Robotic applications in the manufacturing process is nothing new but until recently has been limited to simple repetitive processes. The implementation of more sophisticated robotic applications is well on its way in many commercial and retail environments. Self-driving forklifts and pic-and-pack robots are common in warehouses worldwide. Inside Amazon's warehouse in southern New Jersey, U.S., it isn't uncommon to find giant beetle-like robots moving around busily with vertical shelves stacked on them. In retail environments, Lowes is testing customer service robots that cruise the isles to direct and escort customers to what they seek. Walmart has two types of robots supporting inventory management, including shelf scanners and fast unloaders, machines which automatically scan and sort items unloaded from trucks based on priority and department. As robots increasingly move from warehouses to shop fronts, embedding Artificial Intelligence (AI) in them will allow retailers to dramatically transform their customer interactions. While a basic sensor-based robot can bring customers what they are looking for, an AI-led robot can offer personalized product recommendations. The robot's advice is invariably driven by analytical insights gleaned by combining data, such as customers' age and location, with their purchase histories. From logistics and supply chains to back-office operations, store operations, merchandising, sales and marketing, customer-facing experiences, and robotics can drive innovation and help boost top and bottom-line outcomes. Online retailers are developing systems that are user-individualized for customers at the front-end and business users at the back-end.

Making A Smooth Integration In The Workplace

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Topics: Industry Trends, Technology

You Can Now Hail A Helicopter From Your Smartphone

Posted by Land Link on Jun 12, 2019 12:22:05 PM

The Transportation industry has evolved dramatically in the last several years all thanks to the smartphone. Without it Uber and Lyft would not exist, nor would Uber Freight. It seems now you can request a Uber helicopter in New York City. Uber is adding regular helicopter air service to the heaviest users of its platform with Uber Copter; a new service line launched this month that will provide on-demand transportation from Lower Manhattan to JFK airport for, on average, between $200 and $225 per person, which includes car service to and from the helipad at each end. A ground transportation ride to the same destination is less than half the helicopter ride but the convenience and thrill may be worth it. Given the NYC traffic it may be worth the extra fare to not miss your flight. Plus, this isn’t something just anyone can access: It’s reserved for Platinum and Diamond members of Uber’s Rewards program, which means you’ll have to already be dropping a lot of cash on rides to even qualify for whirligig service. If you qualify, the rides are available either on-demand, or bookable up to five days ahead of time. Each helicopter has room for up to five passengers. In time the service will be available to anyone. The depths of service which technology has opened up is truly staggering.

Safety Is Always A concern

In the non asset world of transportation providers, we all depend upon equipment providers. Vetting these providers on behalf of our shippers is a primary responsibility. This is only one of the values of contracting with a 3Pl. A helicopter crashed this week in NYC which had previously dropped off passengers. The weather turned foggy over Manhattan that morning. Turns out the pilot did not have the required certificate that would have allowed him to legally fly when the visibility was less than 3 miles and where he could use the instruments on his chopper to guide him through the gloom and rain that enveloped the city. So the question here is who is vetting these helicopter pilots, weather private or for Uber. I question whether Uber, which is a mere child in the transportation industry at 7 years old, is schooled in the transportation vetting process which is necessary to provide safe cargo and personal conveyance in both inter and intra state transportation. It seems technology is setting such a pace that safety cannot keep up. Speed and convenience seems to have taken a back seat to safety.

How Much Risk Are You Willing To Take?

With the convenience of transactions comes risk. Sure you can hail a car, a helicopter, or who knows, even a boat to transport you or your loved ones. But how much do you know about who is picking up your precious cargo? It is also possible to hail a truck to transport your freight through Uber or several other apps...same question applies. Are you seriously going to trust your brand equity to some trucker you assume has been professionally vetted? While all of these conveniences have their acceptable levels of risk you must consider your options when the stakes are high. When you need a quick ride downtown or your late for the airport and want to take a helicopter ride that's your risk. But when you freight shipment is of high value or the client satisfaction is of great importance you need to consider everyone's risk. That's when you need to go with the experienced and proven freight transportation providers like Land Link Traffic Systems. We will provide the most reliable assets available and track the shipment throughout its journey. Satisfaction is guaranteed. Give us a call today for more information. We look forward to hearing from you!

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Topics: Transportation News, Industry Trends, Technology

Technology Is Transforming Our Business

Posted by Land Link on Jun 6, 2019 4:03:59 PM

The transportation and logistics industry are currently going through some major transformations. The current metamorphosis is creating opportunities as well as challenges. Successful shippers are looking for ways to adjust to the challenges and take advantage of the opportunities. The economy, labor, and I believe, most dramatic, is the technology component which will be the game changer. Astonishingly what seemed like an unrealistic idea ten years ago, today, is now plausible because of technology. From robotics to radio frequency identification technology to block chain applications, the possibilities are intriguing to say the least. The challenge for supply chain professionals is how to stay current on these applications and how they can give your business the competitive edge that often makes the difference between black and red on the financial statements. Here are a few key areas in which every supply chain professional should have a firm understanding.

Economic Forecasts

Everyone is enjoying a robust economic environment at home even with the Trump administrations tariff threats. The domestic manufacturing economic forecast is a practical place to start in planning your logistics budget both operationally and financially. It's not all about the dollars.  Shippers need to assure themselves of available assets to deliver and receive goods.  The driver shortage is real, there are no significant players entering the asset-based transportation industry so capacity issues will be a common challenge. Existing carriers can only add as much capacity as drivers available to operate the equipment. Online retail spending is estimated to increase up to 20-30% over the next 3-4 years. These growth estimates will impact future freight distributions and patterns by creating additional density for retailer’s networks. Crowd sourced delivery options, much like Uber, will become a significant pool of delivery drivers.  Automated trucks will become more increasingly in demand as soon as the technology can be trusted.

The Labor Outlook

Driver positions are not the only area in logistics that are suffering shortages. Qualified warehouse personnel are also in demand. Particularly, as warehouse and distribution centers evolve into a more complex and technology driven environment. There are many reasons why labor is a problem, but two hurdles stand out. First, trucking has historically paid less than other business’ competing for the same potential employee. Second, the nature of the job requires drivers to be away from home in some cases for weeks at a time. As freight volume continues to grow labor will become an even bigger issue. To attract more recruits, some experts have proposed establishing more enticing industry standards such as a higher base pay and a flex time policy. Neither idea has yet to gain much traction. The simple fact is that truck driving as a career does not appeal to today's young people. On the operations side colleges and universities have historically offered somewhat limited programs in logistics as a science. I would expect the training options should improve as demand for these services increases.

Technology and Big Data

There is little doubt that data and the technology which allows us to interpret and leverage that data will be the future of supply chain management. It is well known that many transportation and logistics companies are late adapters of technology. Some are starting to be shut out of contracts if they cannot provide the data and technology required by customers, especially cyber security. Larger customers are adding minimum levels of cyber security to their contracts; this requirement will eventually become SOP.

Many carriers are even more behind in using analytics to make smart operational decisions. They do not understand the competitive edge analytics can give them even the simplest terms like route maximization. Successful shippers are thriving by seeking the guidance of logistics professionals who are trained in and equipped with the latest technology that mitigates risk to their supply chain and brand value. We are in the middle of a paradigm shift in the way transportation and logistics is executed. Adapt accordingly or die.

Count on the logistics professionals at Land Link Traffic Systems to navigate your company through what is certain to be some challenging supply chain waters in 2019 and beyond.

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Topics: Transportation News, Shipping News, Logistics News, Industry Trends, Technology

A Glimpse into the Future of Transportation

Posted by Land Link on May 29, 2019 1:30:13 PM

There are several developing factors refining the world of freight transportation as we currently know it. Technology in the form of ELDs is forcing fleet managers to become more scientific in the management of their assets. The apparently insatiable appetite for immediate gratification from the millennials will force carriers to improve speed to market. This will likely put pressure on trucking companies to better integrate their small parcel and LTL operations so local distribution centers can concentrate on meeting on time final mile deliveries. Data engineering will be at the forefront of everything that goes on in supply chains. Data engineering, according to Dr. Michael Watson of Northwestern University, is "the art and science of blending data from multiple sources, automatically cleaning and filtering the data, and transforming the data to be useful for analysis."  You may have heard the term "Big Data" referring to the volumes of pertinent data accumulated from various sources along the supply chain. This big data will be the source of information in the data engineering process. Another term you've likely heard is IoT or The Internet of Things. The IoT is the network of physical devices, vehicles, home appliances and other items embedded with advanced electronics capable of exchanging data with a central computer over the internet.  

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