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Develop a Strategy to Combat Dimensional Pricing

Posted by Land Link on Mar 11, 2020 10:00:00 AM

The debate over whether density-based pricing will succeed in toppling the traditional National Motor Freight Classification’s (NMFC) based pricing in the LTL industry is an ongoing debate. Carriers are pushing for dimensional pricing to combat the profitability of lightweight shipments. This is the basis of the argument. Under the NMFC classification density was taken into consideration as was packaging and commodity but it was largely based upon weight. Back in the day, carriers in a battle over business after deregulation, were offering FAK (Freight All Kinds ) tariffs to get the business. This strategy ultimately led to unprofitable operation ratios, subpar delivery performance and ultimately the bankruptcy of some major carriers. Jevic Transportation of Delanco, NJ is the first one that comes to my mind. Interestingly New Century transport, which was founded by Jevic‘s founder, adopted a similar strategy ending in the exact same fate. Considering this history and the recent high-profile bankruptcies of other major national freight carriers in recent years, one would have to conclude the days of beating up the carrier on rates is over. Unlike in the past, the LTL industry today has a massive volume of smaller shipments. There is also the challenge of completing same-day deliveries or time definite deliveries. Likewise, these shipments are not always of consistent size and density, making it difficult for LTL shippers to sustain profitability.

Today, if you want dependable service, you’re going to have to pay for it. Let’s see if we can help you avoid some of the pitfalls to come.

Dimensional Pricing

There is no secret to dimensional pricing. It’s really a simple equation; L x W x H / 139. It could be argued that the ecommerce boom started all this controversy overweight vs size. Ecommerce shippers have millions of items in inventory and a finite amount of box sizes. I’ve been personally amazed at the box size of some items I’ve received. It didn’t take long for the parcel carriers to figure that their trucks were dimming out before weighing out. This may have been the catalyst for dimensional pricing. It wasn’t long before the LTL carriers arrived at the same conclusion. They were charging by pound through diluted tariffs, not by the room the pallet actually occupied.

FedEx Freight, XPO Logistics, and other LTL carriers have been installing equipment that can scan a palletized shipment and, combined with scales, provide the cubic dimensions and weight needed to check the shipment classification. The consensus among LTL industry executives is that the current classification system is on its way out. The reality is that LTL carriers sell space in a trailer. Using the dimensions of a pallet identifies precisely how much space that shipment will require, thereby providing accurate real estate pricing.

Shippers Prepare

Many shippers believe dimensional pricing amounts to a rate increase, and the number of shipments, they say, are re-billed once they go through a dimensioner, supporting their contention. It can also be argued the shippers are finally being charged an accurate rate. Shippers who are not prepared to invest in equipment to measure their shipments’ dimensional weight will have to adopt strict packaging protocols to package their freight in a uniform method as to avoid a dimensional pricing situation.

The ability to double stack pallets is a prime example. Under dimensional pricing a pallet that cannot be double stacked will be billed at 2 pallet spaces since the pallet will essentially occupy the air above it. To date, much of the use of dimensional pricing has been limited to W & I procedures at truck terminals. However, by capturing more and more dimensional shipment data, LTL carriers are laying the data foundation needed for the expanded use of dimensional pricing.

Our supply chain managers at Land Link Traffic Services can help with packaging strategies, supply chain management techniques to maximize lane and weight balancing strategies and overall shipment planning protocols to maximize your freight spend in this more expensive environment. Finally, the Coronavirus will certainly cause some challenging strain on the supply chain. Don’t wander through this uncharted territory alone. Contact us today for a supply chain consultation.  

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

Trucking Regulation Tweaks for 2020

Posted by Land Link on Feb 18, 2020 11:03:27 AM


The federal government has proposed long-awaited changes to the hours-of-service rules that would increase truck drivers’ flexibility while on duty.
FMCSA’s newly proposed HOS rule offers five main revisions to the existing HOS rules, which are based on extensive public comments shared with the agency since last year. The adjustments would happen in five areas:

1. Flexibility for the 30-minute break rule by tying the break requirement to eight hours of driving time without interruption for at least 30 minutes; and allowing the break to be satisfied by a driver using on-duty, not-driving status, rather than off-duty.

2. Modifying the sleeper-berth exception to allow drivers to split their required 10 hours off duty into two periods: one period of at least seven consecutive hours in the sleeper berth and the other period of at least two consecutive hours either off duty or in the sleeper berth. Neither period would count against the driver’s 14‑hour driving window.

3. Allowing one off-duty break of at least 30 minutes but not more than three hours that would pause a truck driver’s 14-hour driving window, provided the driver takes 10 consecutive hours off-duty at the end of the work shift.

4. Modifying the adverse driving conditions exception by extending by two hours the maximum window during which driving is permitted.

5. Changing to the short-haul exception available to certain commercial drivers by lengthening the drivers’ maximum on‑duty period from 12 to 14 hours and extending the distance limit within which the driver may operate from 100 air miles to 150 air miles.

The proposed rule would not increase driving time and would continue to prevent commercial operators from driving for more than eight consecutive hours without at least a 30-minute change in duty status.

Safety Remains The Driving Force For Both Sides

Most in the logistics industry consider trucking deregulated. While this perspective is accurate in a financial sense, the truth is trucking is among the most regulated industries in the country. It is important to understand government regulations add significantly to the cost of operations which, of course, is reflected in the rates. Most carrier executives question the depth and breadth of the regulations and how the federal regulators iron out their final rulemaking is critical to fleets’ efficiency and legal use of time. For example, a truck driver has 660 minutes (11 hours) of legal driving time during his or her 14-hour “on duty” time. How those minutes are divvied up not only matters to safety, but it’s a huge factor in both the driver’s compensation and the carrier’s financial wellbeing.  Among the challenges of drafting regulations for the trucking industry is the myriad of equipment types and services offered. Dry van, refrigerated, bulk carriers and other specialty carriers have present different safety concerns. Add to that mix carriers who transport more dangerous commodities such as hazardous materials like chemicals and munitions, fuel and over-dimensional loads and you end up with multiple regulations to cover all possibilities.

Manufacturers Look To Technology for Help

Technology is constantly evolving, particularly for motor vehicles. Self-automated technologies such as automatic braking systems have already appeared in passenger vehicles and are rapidly becoming available for large semi-trucks as well. Safety systems recommended by AAA researchers include:
  • Air disc brakes, which significantly reduce the distance a large truck needs to stop.
  • Automatic emergency braking systems, which engage the brakes if the system detects the truck is about to collide with another vehicle or object.
  • Lane departure warning systems, which detect when a truck drifts from its intended lane and may hit vehicles in neighboring lanes.
  • Onboard video monitoring systems, which monitor the road in front of a truck or the driver’s actions inside the cab to detect when unsafe practices occur.

Some of these systems not only help reduce the risks of truck accidents but may also aid injured victims recover legally afterward. For example, onboard systems can record if the lane departure warnings triggered before the accident, or whether the automatic braking engaged. This can provide evidence that a truck driver was distracted, fatigued, or otherwise impaired behind the wheel. Onboard video monitoring systems are pretty much common these days. They provide a solid picture of what transpired in any incident. They are a welcome e addition to most fleets since they reduce litigation costs and help drivers become more safety conscious. 

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

‍AI and IoT are Ready for Your Warehouse

Posted by Land Link on Feb 12, 2020 3:25:35 PM

Artificial intelligence and the Internet of Things are making their initial forays into a myriad of warehouse operations. The expected outcome; DCs able to respond dynamically to current supply chain conditions instead of pre-set rules. Look for newfound flexibility and an ability to respond to specific customer demands. The general programming protocol is to minimize human intervention in daily supply chain operations. This should not be news to anyone involved in complicated supply chain systems.

We are at the point where AI and IoT are viable IT applications for the warehouse. Both are powerful new tools that better enable warehouse and distribution center activities to keep pace with rapidly shifting supply chain dynamics. Artificial intelligence systems can learn, over time, the patterns and trends that are most important. It can identify when specific events occur which require human intervention. It can sense security breaches and stop them before they become crises. Simply put, for the IoT to grow to its full potential, it needs the processing power of artificial intelligence.

Integration Into the Supply Chain

AI promises a brave new world of computers that can plan, strategize, evaluate options, calculate probabilities, and make smart decisions. The inter-connectivity and dual reliance of both systems is evident in the automotive applications currently being tested. Repetitive daily environments are best suited for early stage AI learning and IoT experiences at this stage in the application. An example is a typical commercial bus route. The travel route is planned and timed out as are the stops. IoT applications including sensors, video cameras and time keeping technology all gather data throughout the daily route. This data is the basis upon which AI evaluates and electronically digests the information. It is through the digestion process that AI basically learns the particular details of the route like staying on time, the average number of passengers per stop, and, in fact, the unpredictable events like traffic and weather delays. It is through this repetitive experience that AI will eventually be able to maximize the efficiency of the route by anticipating daily events along the route based upon historical data.

The same inference can be applied to a route for a commercial delivery unit whether it be a truck, plane, train or any other conveyance unit. In this example the desired result is the same. To maximize efficiency by learning the route and experiencing every possible condition which may affect it so contingency plans can be implemented in real time to maintain the integrity of the delivery. The benefit of this technology application will become evident once driver less technology is fully implemented.

Early Areas of Implementation

AI can significantly improve business operations by leveraging the tremendous amount of data generated by sensors monitoring the production and movement of products using IoT. The result is referred to as AIIOT, which is the merging of AI and IoT to manage inventory, logistics, and suppliers with a higher level of awareness and precision. The supply chain is one area that can benefit the most from streamlining since it has a direct influence on profitability and customer satisfaction.

There are already several implementations of AI and machine learning where supply chain efficiency is improved:

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

Technology Trends For 2020 And Beyond

Posted by Land Link on Jan 30, 2020 9:24:07 AM


There is little doubt that technology has transformed the Logistics business in the last several years. Will we ever get to fast enough or efficient enough? It's not likely. Under pressure exerted by demand for instant gratification, new tech-first logistics providers are beginning to pervade the fulfillment environment. Without the autonomous hardware that promises to supersede traditional road transportation, they are instead leveraging digital tools to improve the performance of manually executed deliveries and reduce lead times from days to hours, with 24 being today’s bargain-basement service level. These companies, through the use of customer-integrated business platforms, mobile technology, and crowd-sourcing, are finding ways to pick orders within minutes of receiving them, dispatch deliveries on-demand, and bring buyer’s purchases to them in time-frames of two hours or even less.  How are logistics professional going to keep this pace?  Here are some technology trends that may be worth a look as we enter 2020 and beyond.

Robotics

Given the energy and investment in robotics in our space, suggesting that there will be a robotics trend in 2020 is pretty obvious. After all the pilots and promises, what seems to be happening is that robot solution providers, and the end user community, are realizing that there is no one size fits all robotic applications. Quite the opposite is true. The customization is proving so complicated due to the advanced operations of the robots that the programming and engineering has become problematically complicated. Robotic applications are a very customized solution depending upon the product line, distribution protocols and warehouse volume parameters. The challenge, in addition to the design, will be the management system that can bring the components in synchronicity with the rest of the automation. The difficulty seems to be that there is no standardization among the robotic providers. Each have their own standards, communication protocols and capabilities. Someone will have to figure all of that out as robots proliferate. The next generation robots will not just be tasked with simply, repetitive and mundane projects as were the first generation. The robots of today will be much more complicated providing a wide range of services. As you increase the tasks you increase both the software and hardware configurations necessary to support the project. These ambitious goal will certainly be a challenge to the engineers and programmers.

Edge Computing is a distributed computing paradigm which brings computation and data storage closer to the location where it is needed, to improve response times and save bandwidth. In layma 's terms it puts the entire computer in your handheld or mobile device. Not all that long ago, we saw the wireless revolution in the warehouse as barcode scanners, mobile printers, voice headsets and the like were decoupled from the computers that controlled them. That enabled the mobile worker, who could take a device to the point at which the work was being done. But those tools were essentially dumb terminals, the computing power and analytics were back somewhere else. Edge computing changes that. It puts computing power and analytics down on the floor, enabling truly real-time decision making and real optimization of the associate pushing a cart or driving a lift truck. Edge computing simply provides serious computing power to handheld and mobile devices throughout the warehouse enabling the user to have much more computing power at the point of use.

Logistics Safety

Ever since the eCommerce boom, the race has been on to deliver products faster with the fewest errors possible. In 2019, we saw the race for faster delivery hit a few bottlenecks, both legal and physical. The ability of tools such as drones to fly freely ran up against privacy laws. Delivery technology appeared to have reached a limit short of asking drivers to speed and forgo sleep.

The way we know these bottlenecks became serious was seen through companies suddenly making logistics safety their priority. With greater connectivity and more robust data, concerns over logistics safety and cyber-security came to the forefront. Customer data faced new challenges, and enhanced data richness gave drivers and fulfillment professionals new corners to cut, posing a challenge to safety. Technology appears to be introducing logistics solutions at a greater rate than federal, state and local governments can digest them.

Looking Forward: Order Fulfillment Optimization Logistics Trends for 2020

In 2020, you can expect to see many of the above trends continue to develop since they are still massively useful.

As safety became an issue in 2019, companies have turned to delivery experience enhancement. These are Order Fulfillment optimization methods that help alleviate the customer’s “gotta-have-it-now” anxiety; a need that I struggle to understand even today. These methods of order experience enhancement are all about letting the customer in on the shipping process. One massively effective way we can enhance customer experience is simply by raising the transparency of the shipping process. When it comes to improving customer experience, this is done with customer-facing APIs. API stands for “Application Programming Interface.” APIs give individuals and companies the power to add functionality to a website, application, platform, or software without having to actually write the programming code.

This is accomplished by integrating the API code into a company's existing code. We encounter APIs all the time online. If you’ve ever bought something from an online retailer, for example, then you’ve almost certainly interacted with an API. Most online retailers process payments using APIs from Stripe or PayPal.

‍Other APIs you’ve likely run into include the Google Maps API on sites like Yelp, and the “Sign in with Facebook” API which allows you to log in to a website using your Facebook credentials. Be careful of that ease of login using social media or other websites. You're giving up some security.

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Topics: Logistics News, Industry Trends, Technology, Big Data

This Is a Good Time for a Year-End Freight Bill Review

Posted by Land Link on Dec 19, 2019 9:12:46 AM


As another year draws to a close it may be useful to review some of your supply chain protocols. A good place to start is a year end freight bill review. Things are a little quieter this time of year and there is plenty of recent data to review. Typically, this is a no cost exercise provided by your 3PL so there is every reason to have the review done. If for no other reason than knowing your fright payment protocols are working.

What is a Freight Invoice Audit?

As a concept, freight invoice auditing is simple to understand. The idea is to make sure you only pay the shipping charges you should, and nothing more. In most cases, software does the hard work. However, some auditing must be done by hand. All this happens once the invoice is received. The carrier only gets paid after it’s determined that the invoice is accurate.

Billing Errors Happen More Than You Think

Shipping charges can make up to 10 percent of a company’s total expenses. It’s not unusual for companies to spend millions or tens of millions of dollars annually to ship their products with trucking companies or parcel carriers like UPS and FedEx. But it’s common for major shipping carriers to overcharge by missing discounts or mis-classification of freight. Pricing in the shipping industry is complex, and in many cases, carriers make mistakes or do not meet service requirements. Billing in today’s logistics environment contains a myriad of charges and discounts, base rates, fuel surcharges and hundreds of accessorial charges. There’s a lot of opportunity for mistakes, and you need to protect yourself. That’s where freight invoice auditing comes in.

At Freight Payment, Inc., a subsidiary of Land Link, freight bill auditing is a big part of our business.  Most successful companies know the value associated with utilizing the services of a fully integrated freight bill audit and payment service. More than 80% of well managed companies, with operations in the US currently use and leverage the power of audit and pay solutions. Our solution takes the benefits of standard freight bill audit and payment to an entirely different level.

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Topics: Logistics Business, Freight Bill Audit, Shipping News, Logistics News, Technology

Predictions for the Digital Supply Chain for 2020 and Beyond

Posted by Land Link on Nov 26, 2019 2:40:44 PM


We have been writing extensively on the topic of the digital supply chain revolution in recent blog posts. Digital transformation is now the overriding priority for most manufacturers and retailers, with the adoption of digital technologies aimed at improving efficiency and effectiveness in the shorter term while providing the opportunity to grow a leaner operational protocol in the future. The focus is definitely on the efficiency of operations relating to technological applications as we enter 2020. The big question is; are you ready? If not, perhaps we can help. Here are some interesting predictions from a reputable international research firm, IDC, which highlights key areas of technological applications regarding the impending digital revolution of the international supply chain.

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

5G Is Poised to Transform the Supply Chain

Posted by Land Link on Nov 14, 2019 1:19:52 PM


Limited 5G network deployments have begun in some markets in 2019, with widespread rollout expected to take place through the 2020s. The 5G wireless technology promises to accelerate data speeds, improve quality, and reduce latency in the world’s mobile networks all of which means higher performance than today’s broadband wired networks.  “5G will be a game changer because it’s 100 times faster and will support 100 times more devices than current 4G networks,” according to the Cellular Telecommunications Industry Association.

What Impact Will 5G Have On Supply Chain Management

The speed of 5G and its ability to handle volumes of data will have a profound affect on supply chain management as well as virtually any industry. The technology is expected to fuel the growth of innovations such as the Internet of Things, ,robotics, and drones in the supply chain. More generally, it promises to trigger a wave of new applications and services that cuts across all industries.  Payment gateways will be able to process more transactions at a much faster pace. Document transactions, particularly for international shipments, will be streamlines and sped up and online purchasing will experience a genesis as it all connects wirelessly wit countless devices to clouds of data via more intelligent and dynamic networks. 5G is sure to transform online transactional commerce.

IoT technologies can enhance supply chain management using identity chips, sensors, communication devices, cloud computing networks, and data analytics engines all working together to fuel automation, continuous feedback, and better decision-making. With 5G, billions more IoT devices can be connected to the global network, according to Ericsson, a telecommunications equipment manufacturer.

In warehouses and distribution centers, 5G will allow faster updates and access to more computational power for myriad industrial and warehouse-centric use cases. On the factory floor, 5G networks can help managers better monitor quality, increase speed, respond to supply fluctuations, and simplify workflows.

On the financial side of things 5G networks will provide the needed support for systems like blockchain technology. You may recall from some of our previous articles we see blockchain as a significant technology in international commerce. It will enhance the security of transactions and legitimize all parties involved. A blockchain is, in the simplest of terms, is a time-stamped series of immutable records of data that is managed by a cluster of computers not owned by any single entity. Each of these blocks of data is secured and bound to each other using cryptographic principles.  The blockchain network has no central authority. It is the very definition of a democratized system. Since it is a shared and immutable ledger, the information in it is open for anyone and everyone to see. Hence, anything that is built on the blockchain is by its very nature transparent and everyone involved is accountable for their actions.

Lastly, in the retail industry, initially, it’s expected to greatly improve all the things retailers do now with 4G to make money, save money, be more competitive, and offer shoppers superior in-store and online experiences. Then, after a period of maturity, it will open the doors to a whole new age of capabilities. Savvy retailers will utilize high-resolution video, augmented reality, and even virtual reality to differentiate themselves from the competition.  A new age of commerce is indeed upon us.

When 5G is widely available, its speed, quality, and lower latency will help realize the promise of many applications already under development, from the Internet of Things and robotics to virtual reality. Many of these innovations simply wouldn’t work well enough at slower data speeds, with lower quality and higher latency. New applications are also expected to emerge, and as with any technology, many will be hard to imagine until 5G is actually in the field. The supply chain is seen as a particularly strong candidate for 5G innovation, including IoT devices for better monitoring, control, and even financing.

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Topics: Logistics News, Industry Trends, Technology

Parcel Deliveries Clogging Up City Streets

Posted by Land Link on Oct 30, 2019 1:37:40 PM

The boom in online stores is increasing the demand for parcel delivery services, particularly in the big cities. New York, Chicago and Los Angeles are experiencing serious traffic issues due to the amount of parcel delivery vans clogging the city streets. Add to this the number of ride share drivers in any metropolitan area daily and it is easy to see how things are getting congested.

Consumers today are spending less time in local stores and more time online, buying not only retail items but also groceries from Peapod, office supplies from Postmates and whatever they need from Amazon. According to the National Capital Region Transportation Planning Board, it’s estimated that, on average, every person in the U.S. generates demand for roughly 60 tons of freight each year. In 2010, the United States Post Service overtook both FedEx and UPS as the largest parcel-delivery service in the country and delivered 3.1 billion packages nationwide. Last year, the USPS delivered more than 5.1 billion packages. The growth in e-commerce is fueling a rise in the number of delivery vehicles box trucks, smaller vans and cars alike on city streets.

While truck traffic currently represents about 7% of urban traffic in American cities, it bears a disproportionate congestion cost of $28 billion, or about 17 percent of the total U.S. congestion costs in wasted hours and gas. Cities, struggling to keep up with the deluge of delivery drivers, are seeing their curb space and streets overtaken by delivery vehicles, to say nothing of the bonus pollution and road wear produced thanks to a deluge of Amazon Prime orders.

The problem, really, is that we now live in a world where the brick-and-mortar stores are only one part of the retail equation and, as many a “retail apocalypse” story is warning, they are a shrinking part. Demand is being driven by people in their individual homes and apartments ordering smaller amounts of goods with higher frequency: groceries one day, several items from Amazon the next. As more goods are ordered, more delivery trucks are dispatched on narrow city streets. Often, the box trucks will double-park in a two-lane street if there’s no loading zone to pull into, snarling traffic behind them.

Many American cities are also playing catch-up as they try to understand these new urban delivery challenges and systems. That’s due in part to the failures of urban planning and the nature of the trucking business. While matters of public policy like public transit, bike lanes and walkability fall within the purview of planning boards and municipal departments of transportation, freight has always been a purely private-sector enterprise. Cities don’t have reliable data on the number of delivery trucks coursing through their streets; let alone planning for them.

Looking For Solutions

Cities can’t just ticket their way out of the delivery-truck problem. For big commercial delivery companies, parking fines are just part of the cost of doing business. UPS paid New York City $18.7 million in parking fines in 2006. In 2011 in Washington, D.C., UPS alone received just shy of 32,000 tickets.

If enhanced enforcement isn’t the answer, diverting delivery traffic might be. Seattle is taking an inventory of all the remaining alley space in the city. Instead of letting developers extend housing lots into the alleys, they might be used to accommodate some of the incoming delivery traffic.

Delivery companies are also experimenting with ways to reduce their impact. Late last year, UPS introduced its first “eBike” deliveries in Portland, Oregon. The goal is twofold: Reduce carbon emissions while putting a delivery vehicle on the road small enough to take advantage of curb space. UPS is also integrating across its U.S. routes its new big-data tool, On-Road Integrated Optimization Navigation (ORION). As a UPS driver travels their route, ORION works in the background considering up to 200,000 possible routes before picking the most optimal route for a driver to take to reduce the overall time spent driving around from delivery to delivery. The next generation is going to be a real-time tool taking traffic into account.

UPS currently uses drones to help drivers in rural delivery locations. It’s unclear how practical drone delivery can be in a metropolitan area considering the risk of personal injury, theft and inaccurate consignee deliveries. The solution to the congestion problem will likely come from many angles over the coming years. We simply were not prepared for the online purchasing boom and have never caught up.

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Topics: Supply Chain Management, Transportation News, Logistics Business, Shipping News, Logistics News, Industry Trends, Technology

Emerging Warehouse Automation Technologies

Posted by Land Link on Oct 23, 2019 9:48:03 AM


Those in the logistics business have recently speculated as to the direction of technology as it relates to warehousing and distribution advancements. The pace at which technology is advancing is exciting and a little frightening at the same time. The applications seem almost endless and keeping up on the technology can be a daunting task. Let’s take a look at a few emerging technologies in warehouse automation.

Collaborative Robots Infiltrate Human Interaction

Collaborative robots may be described as round one of the robotic invasions into warehouse operations. In this round, robots are introduced to work alongside, and in collaboration with, humans in the day-to-day operations of the warehouse and distribution centers. Last summer, Forbes gave smart cobots, otherwise known as ‘collaborative robots,’ the illustrious title of “the future of work”. It’s a declaration that struck a chord with many, perhaps because the idea of warehouse associates working alongside robots is a simpler image to accept than a fully automated operation in which robots replace living, breathing human workers.

While cobots are quite flexible when it comes to application, the most talked about are the picking and packing variety currently being used by Amazon. Cobots are a no-brainer for large warehouses owned by multichannel retailers who have the extra capital to invest in the technology. These lightweight robots can be programmed quickly and controlled remotely, require just a few hours of set-up time, are often mobile, and, as far as we know, are safer than many of their stagnant, bolted-down competitors.   Cobots will likely give way to the next generation of robot which will largely replace humans if not entirely.

On-Demand Warehousing

On-demand warehousing has been around for a while.  Now it has become more sophisticated in both space design and geographical placement all based upon big data.  Warehousing and DC centers need to be placed in strategic locations to meet the incredible delivery demands of today's consumers. Terabytes of data are being analyzed to decide exactly where to build strategic on-demand warehousing offering flexible utilization terms and easy highway access. Users want flexible warehouse space and supplier contracts that allow manufacturers to take advantage of the service as they scale and remove the services as they downsize. Third-party firms are offering up smart warehouses to manufacturers and suppliers at a fraction of the cost for the businesses to make the investments themselves. This means that even the most modest of startups can benefit from the use of the latest automated technologies, giving emerging businesses the opportunity to compete with the big guys on fulfillment time and accuracy.

Advanced Inventory Scanning Techniques

Fully automated warehouses  have been a hot topic as of late. Trailblazing companies, like Aquifi, have already found a way to automate the task of bar code and label scanning, eliminating the need for handheld scanning tools and the people who operate them. This technology is accomplished through a sophisticated smart dimensioning and 3D identification function that processes a warehouse’s items with more precision than ever before. It’s big news for operations that take advantage of tried and true asset tagging and bar coding. While these materials will not be replaced, the very scanners, and the people who use them, may soon be deemed obsolete.

3D Printing

3D printing has been around for a few years now.  It utilizes the 3rd dimension to not print, but build a particular item.  Most 3D applications are designed for simple replacement parts made out of basic materials. As printers become more sophisticated, the applications have expanded. The sneaker industry is just one example of 3D printing technology application. In the old days, making a customized piece of footwear meant a disruption in the everyday processing of the manufacturer’s movements and a much higher price tag for the customer. Ever since sneaker behemoth, Adidas, invested in 3D printing powerhouse Carbon, the once-fabled affordable customized sneaker is now a reality. In fact, consumers are so completely on board with this 3D-printed footwear option that Adidas is projected to sell millions of units in 2019 alone.

3D printing is also a powerful tool for plenty of other manufacturers, particularly those who are in the positions to take advantage of additive manufacturing according to the operation’s precise needs. This is a big win for manufacturers, as it reduces material waste and shortens processing time in one fell swoop. As technology continues to evolve, so does the variety find in the world’s smartest, most cutting-edge warehouses. Always pay attention to emerging automation technologies and the companies who are making them a reality. These are the very actors who will be dictating how we manufacture, distribute and consume goods in the years to come.

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Topics: Logistics Business, 3D Printing, Shipping News, Logistics News, Industry Trends, Technology

Economic Health Checkup

Posted by Land Link on Oct 8, 2019 11:48:03 AM


There have been rumblings throughout the industry of a potential recession or economic slow down. The transportation industry has historically been an excellent barometer of the overall economic health of our manufacturing sectors. If you manufacturer it, you must ship it. Therefore, the logistics sector has significant foresight into the health of manufacturing both domestically and internationally. Third quarter numbers are not in just yet so we'll take a look at quarters one and two as well as some speculation about the rest of the year to make a somewhat educated guess as to what we might expect for the remainder of 2019 and 2020.

Hard Asset Allocation

The trucking business is asset heavy; meaning, it takes a lot of money to be in this business. The average cost of a standard tractor is about $120,000. Add sleeping accommodations brings you to $150,000. Trailers can run between $20,000 and $50,000 depending upon their additional goodies. Carriers of any significant size generally add 10 plus power units and twice that in trailers when making such an asset upgrade. There is typically millions of dollars in asset purchases at risk every year and estimating demand for transportation services is a critical science for the success of any asset based logistics organization. Over or under asset commitment and utilization can literally make or break a company so let's take a look at current conditions and see if we can project just how many trucks we should buy this year.

Macro View Of The Economy

While the US economy continues to stand on relatively firm ground, GDP growth has converged to its long-run trend of about 2%. Consumer spending growth is holding up, fueled by low unemployment and rising wages. In contrast, business spending and investment are not providing much support to GDP. Additionally, net exports are and will continue to be a drag on overall growth while the US dollar remains strong and imports outpace exports. It is likely that some of these drags will be offset by stimulus, including increased federal non-defense government spending and monetary easing.

GNP Predictions For 2020

Gross national product (GNP) is a broad measure of a nation's total economic activity. GNP is the value of all finished goods and services produced in a country in one year. As previously stated, we in the trucking business get a sneak preview of the developing GNP through industry demand. The demand boom of the last two years seems to hang on even as new truck orders slow. The trucks keep coming as if searching for the lost freight market of 2018. US Class 8 truck registrations lept 29.1% in the first five months of 2019, according to IHS Markit, the parent company of JOC.com. Those trucks simply add to an already overflowing pool of capacity that is improving shipper pricing leverage.

As the third quarter rolls toward trucking’s autumn peak season, “a lot of carriers are going to be more stingy with capital expenditure and adding capacity,” Dan Van Alstine, president and chief operating officer of Ruan, a dedicated trucking and logistics company, said at the recent SMC3 2019 Connections Conference in Colorado Springs. The benefactors of the current environment may be the owner/operators who own their own equipment and pay their own operating expenses.  As you might imagine, those costs can be staggering for a small business owner when it costs $500 just to fill your gas tank..

Dependence On Owner/Operators

Owner/operators have historically been the filler for carriers to maintain an acceptable level of capacity for both equipment and drivers. We'll see just how far out carriers are willing to walk on the ledge of financial commitment going into 2020. It's potentially a pivotal year. The current administration is under some significant pressure to keep the economic fire stoked so carriers can maintain asset funding. The first and second quarters of 2020 should be very telling as to the general health of our domestic manufacturing base.

What To Expect

According to the most recent forecast released at the Federal Open Market Committee meeting on June 19, 2019, U.S. GDP growth is expected to slow to 2.1% in 2019 from 3% in 2018. It is expected to be 2% in 2020 and 1.8% in 2021. The projected slowdown in 2019 and beyond is a side effect of the trade war, a key component of Trump's economic policies.

The unemployment rate will average 3.6% in 2019. It will increase slightly to 3.7% in 2020 and 3.8% in 2021. That's lower than the Fed's 6.7% target but former Federal Reserve Chair Janet Yellen noted a lot of workers are part-time and would prefer full-time work. Also, most job growth is in low-paying retail and food service industries. Some people have been out of work for so long that they'll never be able to return to the high-paying jobs they used to have. Structural unemployment (unemployment resulting from industrial reorganization, typically due to technological change, rather than fluctuations in supply or demand.) has increased.

We will be monitoring these economic indicators over the next 12 months very closely.  To stay informed on this topic and others in our industry, subscribe to our blog.

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