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Washington May Be Easing Trucking Regulations

Posted by Land Link on Oct 31, 2018 3:22:38 PM

Most industry practitioners believe trucking is a totally deregulated industry. It’s true that, economically, it has been deregulated in interstate commerce since the Motor Carrier Act of 1980, but safety regulations have made it one of the most tightly regulated sectors in interstate commerce. Environmental pollution, driver standards, HOS and electronic logging rules instituted by the FMCSA have been a major cost of doing business in the trucking industry. Following the pro-regulation Obama White House, Trump may be the advocate the trucking industry has been pining for. There has been no significant easing of current regulations but the good news is there is like to be no more additional legislation affecting the industry for the remainder of Trump's term. In this issue, we'll take a look at a few of the major regulations and update you on what's going on.

ELD Update

The three most invasive regulatory hurdles currently facing trucking are the enforcement of electronic logging devices (ELDs), the further tweaking of driver hours of service (HOS), and the move to allow a pilot program of only 200 drivers under the age of 21 into interstate commerce; an age-group that has been locked out of driving the big rigs since the Motor Carrier Act of 1935.
So far this year, the biggest issue for shippers has been the lost productivity due to the full enforcement of the ELD rule. This rule is designed to eliminate cheating on driver HOS through the elimination of paper log books in favor of electronic devices that are difficult to evade. after several delays in implementation and enforcement regulatory enforcement personnel have begun issuing stiff penalties for noncompliance. Industry analysts predict this regulation alone has caused a 3% to 8% drop in carrier productivity. Longtime advocates of ELDs say that the devices ultimately make carriers and their drivers more efficient through better planning of routes to take cost out of the system. Carriers say LEDs can help nudge shippers to work more closely with their carriers on times and locations of pickups. Even little things as reducing congestion at the loading dock can pay big dividends for both shippers and carriers in eliminating inefficiencies. The efficiency gains and improvement in public safety not withstanding, these deficits must be accounted for in the form of rate increases.

Going forward shippers should try and emulate four best practices in order to mitigate the effect ELDs are having on their valuable capacity and rates:
Make sure your business is not overly complicated from a carrier’s perspective;
Eliminate unnecessary stops as well as freight that require multiple moves;
Reduce or eliminate detention times, which ultimately reduces driver pay;
and create favorable lanes and market niches to make your relationships mutually beneficial.

Ultimately, if these goals are realized, shippers can obtain all of the capacity that they need from a variety of carriers vying for their business. Otherwise, carriers say, their choices will lessen and rates increases will skyrocket.

HOS Rules

While compliance with the ELD rule has reached nearly 99% across the trucking industry, truckers continue to complain about HOS regulations, especially the impact they have on agriculture, seasonal deliveries, logging and other sectors of trucking.

Washington is considering revisions in four specific areas:
expanding the current 100 air-mile “short-haul” exemption from 12 hours on-duty to 14 hours on-duty in order to be consistent with the rules for long-haul truck drivers;
extending the current 14-hour, on-duty limitation by up to two hours when a truck driver encounters adverse driving conditions;
revising the current mandatory 30-minute break for truck drivers after eight hours of continuous driving; and
reinstating the option for splitting up the required 10-hour off-duty rest break for drivers operating trucks that are equipped with a sleeper-berth compartment—the so-called “split sleeper” rule.

We'll keep you informed on what revisions, if any, are implemented.

Under-21 being considered

For years trucking companies have advocated under 21 truck drivers. Insurance companies made the idea nearly impossible to implement even if Washington lightened up on this restriction. But on July 3rd this year the DOT announced a pilot program to allow a test group of 18-year-old drivers to operate 80,000-pound rigs. Based upon statistics there really isn’t any question that younger drivers are more likely to crash and be involved in serious incidents. And considering a fully loaded tractor-trailer can weigh 40 tons, carriers and safety advocates alike agree that this is no place for on-the-job training. Most carrier management and insurance companies are not proponents of the idea. These potential revisions alone will not solve the driver shortage however, carriers say it’s an example of Washington listening to the industry with an open mind, which itself is a change in the regulatory environment. To stay current on these and other industry topics subscribe to our blog www.Land-Link.com.

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Topics: Industry Trends, Supply Chain Management

Blockchain and Smart Contracts are Redefining Commerce and the Supply Chain

Posted by Land Link on Oct 3, 2018 2:24:42 PM

At its core, blockchain is attractive for global trade professionals because it can be used to create a completely secure record of every step in a given business process. Whether one speaks of applications related to finance, operations or logistics, blockchain’s ability to execute encrypted actions that include identification of the parties, authentication of a transaction and the time-stamping of blocks in a chain has a truly universal appeal. In this weeks blog we're going to explore blockchain technology in the supply chain and how this technology has changed international commerce. Blockchains have their problems, but they are rated undeniably faster, cheaper, and more secure than traditional systems, which is why banks and governments are turning to them. Blockchain offers the greatest potential for international trade when three factors are present: a contractual agreement, clearly defined rules that govern the agreement and finally, a transaction that involves a monetary exchange. All of these are managed by smart contracts within the blockchain.

Smart Contracts

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Topics: Industry Trends, Supply Chain Management

IoT Technology in the Supply Chain and Logistics

Posted by Land Link on Aug 8, 2018 12:53:59 PM

In keeping with our Supply Chain Technology series, we want to discuss in this article the applications and benefits of IoT technology in the supply chain and logistics functions. So, let's begin with a firm understanding of what the "Internet of Things" is. 

Let's start with understanding a few things:

High speed, broadband internet has become the standard, the cost of connecting is decreasing, more devices are being created with Wi-Fi capabilities and sensors built into them, technology costs are going down, and smartphone penetration is sky-rocketing. All these things are creating a "perfect storm" for the IoT. Simply put, IoT is the concept of basically connecting any device to the Internet. Devices can also be interconnected to communicate with each other via the internet. This includes everything from cell phones, coffee makers, washing machines, headphones, lamps, wearable devices and almost anything else you can think of. This also applies to components of machines, for example, a jet engine of an airplane or the drill of an oil rig. If it has an on and off switch, then chances are it can be a part of the IoT. The analyst firm Gartner says that by 2020 there will be over 26 billion connected devices, some even estimate this number to be much higher, over 100 billion. The IoT is a giant network of connected "things," things in this explanation include people. The relationship will be between people-people, people-things, and things-things. In the very near future, you will have to think of little more than setting your alarm clock. After that, all your devices will know to start the coffee, preheat the oven, turn on CNN for the morning financial news...whatever we used to do manually will all be done for us through IoT. The reality is that the IoT allows for virtually endless opportunities and connections to take place, many of which we can't even think of or fully understand the impact of today.

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Topics: Industry Trends, Technology, Supply Chain Management

Blockchain Technology is Poised to Transform Logistics and Supply Chain Management

Posted by Land Link on Aug 2, 2018 1:52:04 PM

We've been talking a lot about emerging technologies like Blockchain, IOT, (The Internet of Things) and a worldwide digital supply chain. Change is coming, and it's best we prepare. So, in a several part series, we're going to delve deeper into these technologies to explain the technology and offer some real-world applications in logistics and supply chain management. We'll start the first part of our series by taking a close look at Blockchain Technology.

What Is a Blockchain

The blockchain is a breakthrough technology that is expected to alter most industries in the coming years. Whether you work in the financial world, healthcare or any other sector, you will probably face the consequences yourself soon enough. But what is this thing you’re going to face? The technology has been the driving force behind the Bitcoin craze. It is precisely the authenticity aspect of the technology that is most valuable and provided validity and auditable confirmation to the valid value of products like Bitcoin. It gives investors a comfort level, perhaps to a degree like never.

So, in layman's terms lets look at an international shipment as an example to demonstrate the blockchain application. The blockchain is a distributed database existing on multiple computers at the same time. By "distributed" it means that all parties have access to the shipment details of our example shipment. To understand what a block is, in our example, it may be the origination documentation, customs forms, bill of lading, etc. The "Blockchain" is constantly growing as new sets of recordings, or ‘blocks,’ are added to it. So, again using our example, the next block might contain details on the sailing date, cargo vessel, and container ID. Each block includes specific information, a timestamp and a link to the previous block, so they form a chain. So, you might imagine the next "block" would contain details of the destination port, offloading time and warehouse location. The next block would likely include information on the cartage agent, truck number, driver ID, etc. And finally, the last block would contain details on the final delivery including proof of delivery signatures and time stamps. The heightened level of security and impervious nature of the technology to fraud is what blockchain offers to transactional business like ours and just about every other industry. The database is not managed by anybody; instead, everyone in the network gets a copy of the whole database. Old blocks are preserved forever, and new blocks are added to the ledger irreversibly, making it impossible to manipulate by faking documents, transactions, and other information. So, blockchain is independent, transparent, and secure. The advantages of such a distributed ledger are apparent: being it cost and risk reduction, data security, or transactions transparency, companies from most industries can surely benefit from this new technology.

So now that we have a clear understanding of blockchain technology let's examine some Logistics and Supply Chain applications that are emerging today.

Shipping and Receiving Functions

Cargo companies across the world, especially those that support international delivery, recognize the benefits of the blockchain technology. The technology can allow the company to track each item while simplifying the existing logistics process. Maersk, the world’s biggest operator of shipping containers, has already experimented with blockchain. They along with Dutch Customs and US Department of Homeland Security used the technology to keep tabs on the movement of their cargo across international borders. Maersk has now teamed up with IBM to develop highly secure logistic systems that will alter the global trade landscape for good.

The system is expected to save billions of dollars for companies engaged in freight transportation by replacing existing logistic processes. It will help to reduce errors, improve delivery times and enable detection of fraud while lowering costs incurred.

Invoice Paperwork and Payments

A significant challenge in logistics is developing efficient and secure systems for invoicing and payments. For decades shippers have extended payment terms by insisting on receiving original proof of delivery receipts for example. Blockchain will eliminate the need for such documentation. Tallysticks has developed a platform, launching in September, based on blockchain that can handle invoicing and payments for logistic and other businesses. Based on smart contracts, it automatically sanctions a payment corresponding to an invoice. Visa has also jumped on the blockchain bandwagon and has launched its B2B Connect payment service. It aims to simplify payments across international borders while ensuring security and transparency. It also provides that a system that prevents frauds and minimizes errors is in place without involving a middleman.

Inventory Tracking

Blockchain technology can be used to build an efficient system that allows different companies to keep track of their products even at micro levels. Multiple food retailing companies have partnered with IBM to develop a system based on blockchain that allows tracking of food items. The alliance includes Walmart, Nestle, and Unilever to name a few. The technology will enable the company to backtrack individual food items back to the farm. Walmart has successfully experimented twice with the blockchain. It tracked pork in China and mangoes in Mexico to their origins. This accurate tracking ability is of importance in recall situations threatening public health.

How will tracking a fruit or meat product be useful? Roll back to the E. coli outbreak in the U.S. ten years ago wherein spinach infected with the microorganism spread the disease. If a similar incident occurs in the future, it will be easy to identify the infected batches of the commodity. There will be no need to destroy the whole stock, only the infected ones. Time is of the essence for managing such incidents and limiting the damage to both the public health and the corporations brand value.

To stay informed on the emerging technologies that are affecting our industry register to receive our weekly blog. For specific information on how your company can benefit from these emerging technologies contact one of our Logistics professionals today www.Land-Link.com.

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Topics: Technology, Logistics News, Supply Chain Management

Keys to Transitioning to A Digital Supply Chain

Posted by Land Link on May 16, 2018 3:03:16 PM

According to industry experts the biggest weapon a company must have to outperform its competitors over the next 3 years is the Digital Supply Chain. The DSC will dramatically improve revenue and reduce costs while delighting customers. There is little disagreement among logistics professionals that this is the direction supply chain technology is moving. The sheer magnitude of data involved in logistics transactions simply requires digitization for the effective management of the information and efficient operations. So, if we're all in agreement regarding the direction of our industry now is the time for shippers and transportation providers to implement the necessary protocols and personnel to be adequately prepared for the transition to digital based logistics technology. Let's examine the theory behind the DSC and what needs to be done to make the transition.

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Topics: Industry Trends, Supply Chain Management, Big Data

Economic Indicators and The Role Logistics Plays in The Domestic U.S. Economy

Posted by Land Link on May 9, 2018 9:15:50 AM

The economy seems to be on a role and, of course, it's happy times at home. Let's look at what is driving this current surge and how logistics plays a key role. Every major economic indicator points to a robust economic outlook. The major indicators are construction, healthcare, energy, agriculture, manufacturing, and transportation. It's the last two sectors which we are most interested in.

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Topics: Supply Chain Management, Logistics News, Industry Trends

The Coming Evolution of Logistics and Supply Chain Management

Posted by Land Link on May 3, 2018 4:55:02 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 blockchain 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. Let's cover a few key areas in which every supply chain professional should have a firm understanding.

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Topics: Logistics News, Supply Chain Management, Industry Trends, Technology

The Trump Tariff Plan Explored

Posted by Land Link on Apr 25, 2018 10:06:41 AM

President Trump’s planned trade tariffs effect mainly imported steel and aluminum. Let's take a moment to explore the details of the tariffs and what consequences we can expect.

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Topics: Industry Trends, Supply Chain Management, Big Data

Detention is Now a Major Expense Line Item

Posted by Land Link on Feb 14, 2018 2:54:03 PM

In one of the first reports dealing with detention the U.S. DOT has concluded that time spent detained at shipper or receiver facilities cuts truck driver pay by between $1.1 billion and $1.3 billion annually. An underlying concern is also the effect on driver safety. An extra 15 minutes spent detained beyond the standard two-hour window causes industry crash risk to climb 6.2 percent, the DOT has estimated. That’s an average of about 6,500 additional crashes annually, the report notes.

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Topics: Industry Trends, Shipping News, Supply Chain Management

Managing Rising Transportation Costs

Posted by Land Link on Feb 9, 2018 10:09:47 AM

We Can All Agree

Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and the most successful shippers will be those that are able to mitigate their impact on profitability. The right technology will play an increasingly vital role in driving efficiencies across the global logistics network.

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Topics: Supply Chain Management, Shipping News, Logistics Business, Technology