As we head into 2019, the global transportation industry will continue to face complex supply chain challenges. But the new year also provides many opportunities for shippers to turn to technologies and digital transformation to improve their operations, efficiencies and bottom line profits. Here’s what we foresee:

1. Big changes—and a more holistic, organization-wide approach—to global supply chain strategies. Tariff wars and related uncertainty/repercussions mean top-level executives are relying much more on supply chain professionals and trade compliance personnel to rethink supply chain strategy and operations. Their major strategic focus? Managing global operations risk, understanding and mitigating the role of tariffs on company financials, and dealing with ongoing business uncertainty and higher global supply chain costs.
2. More intense focus on data analytics in supply chains. Data analytics is key for supply chain professionals looking to examine, analyze and interpret data related to supplier risk, tariff risk, logistics costs or manufacturing costs. Supply chain professionals with well-honed analytical skills and the use of advanced analytics software for mining and reporting data will continue to help organizations make informed and better decisions.
3. China’s expanding global reach and economic power. China’s One Belt One Road (OBOR) investments in the Middle East and Africa and infrastructure investments in modes including rail lines, roads, ports, bridges and even schools will help the country continue to outpace other countries’ economic expansion as they build long-term economic ties and trading partners. Its development of global trade routes means China’s economic influence is expanding even as U.S. influence begins to contract.
4. “King Consumer” and ever-faster delivery of e-commerce orders. High consumer expectations about delivery and shipping of packages will continue to challenge retailers, carriers and logistics service providers, forcing fundamental changes to warehouse design and location and driving up wages and competition for all types of supply chain labor.
5. Intensified technological disruption and innovation. Technological innovations like the “sharing economy,” the Internet of Things (IoT), big data, on-demand logistics and autonomous and automated equipment solutions will have great impact on supply chains around the world. Going into 2019, companies in the logistics and supply chain space will continue to take advantage of innovation in artificial intelligence, robots, freight supply and demand matching and blockchain applications to bring new efficiencies and lower supply chain costs.
6. Battered U.S. transportation infrastructure. Buffeted and damaged by hurricanes, floods, snowstorms and the like—especially “weather events” that impact ports and major highways—the U.S. transportation infrastructure is a risk for both companies and the U.S. economy.
7. Continued trucking/transportation regulation impacts. While most larger truck fleets have electronic logging devices (ELDs) that electronically track compliance with driver hours-of-service regulations, smaller fleets without ELDs are reporting reductions in miles traveled per day of up to 15 percent. This significant reduction can impact shippers’ planning and supply chains for 2019 and the longer term.
8. The ongoing capacity crunch with drivers/trucks. The “capacity crunch” affecting the U.S. trucking industry will continue, due in part to fewer drivers in the “driver pool” thanks to attrition and the tight economy combined with low truck supply and high freight demand.
9. Soaring truck rates. Rates have continued to rise steeply throughout 2018, are soaring at the end of 2018, and likely will continue to rise into 2019.
10. Trucking industry technology trends. New technologies and apps will continue to ease the jobs of logistics professionals. On-demand load-matching freight apps are likely to be increasingly embraced by carriers and shippers. In addition, semi-autonomous trucks are finding a place in fleets and the supply chain, providing a 500-mile shipping range.

For 2019, we believe the U.S. transportation industry and supply chain professionals will place more emphasis on digitization within the supply chain to help them address these complex challenges. Kuebix TMS will continue to transform transportation operations, helping companies along their path of growth and sustainability by improving their operations, efficiencies and bottom line profits.

Nearly every industry relies on some manner of transportation to keep their sales flowing. Over the past decade, transportation rates have experienced a steady period of growth. A combination of recovery from the Great Recession of 2008 and consumers’ increased dependence on online shopping have kept the supply of trucking capacity at a premium. If we were sitting in an Economics 101 class, there has been plenty of demand for supply. National spot rates, which have remained high in accordance with this supply/demand formula, are becoming more volatile as market uncertainty pervades the industry.

Average daily spot market rates from August to November of 2018 have been nearly twice as erratic as spot rates during the same time-period in 2017. The DAT National Van Freight Rate Index places average daily movement in 2017 as $0.034 per mile. This number has climbed to $0.064 per mile in 2018!

The climb in average daily movement of the national rate per mile is indicative of uncertainty. Key players in the supply chain like shippers and carriers don’t have a solid grasp on market conditions and are quoting and booking rates with less foreknowledge than in the past. Things like fuel prices, driver wages, and the availability of capacity are no longer known facts. Many shippers accept rates without being able to tell what the market price should be.

Spot rates are likely to remain volatile for some time as a result of the capacity crunch and driver shortage. More and more baby-boomers are reaching retirement age, and younger workers are less likely to become truckers than past generations. This is leaving a hole in the industry and too many available positions for truck drivers, which causes wages to go up. Again, supply and demand.

Following a 10 year rise in the transportation market, we’re now in a period of cooling. According to FreightWaves, “The DAT Van Freight Index hit $2.11 per mile on June 27th, the highest rate all year. Since then the market has cooled significantly with the rates falling as low as 1.53 in the middle of October but bounced back up to 1.63 a few days later.” Volatility like this causes uncertainty for people trying to provide rates based on market pricing and for people who are uncertain what a fair price per mile is.

With customer expectations rising, there is a greater need to deliver faster with more visibility. Some companies trying to accommodate these new customer expectations are willing to take a hit to stay in their customers’ “good books.” This means they may take a loss just to meet their on-time delivery standards. This level of unpredictability is adding to uncertainty.

The transportation industry is morphing around emerging technologies and consumer expectations. One thing is for sure though, whether there is an increased or decreased demand for trucking capacity and spot rates, trucking will remain a key feature of the economy’s supply and demand curve. In this unpredictable environment, the goal is to find a comfortable middle where customers are happy and freight costs are kept down as much as possible.

The transportation industry, which originally balked at the idea of the ELD mandate, has now had 10 months to come to terms with the new technology requirements. The mandate, which went into effect on April 1^st of this year, requires trucks to be equipped with an electronic logging device (ELD) to automatically record a truck’s driving time. This ensures that drivers are strictly obeying hours of service requirements put in place to protect them and other drivers.

10 months in and transportation professionals still seem to have mixed feelings about the ELD mandate. To capture how the industry is reacting, Zipline Logistics’ carrier team surveyed over 150 trucking companies to get their opinions on the ELD mandate and how it’s impacted the industry. FreightWaves compiled these results into this detailed infographic:

According to the research, trucking companies are split on whether ELDs improve safety. About 60% of respondents felt that ELDs increased safety since the mandate went into effect, while the remaining 40% thought the devices decreased safety.

77% of carriers surveyed reported that they are more selective in the shippers/receivers that they are willing to work with after the mandate. 80% of these say there are now some facilities they will absolutely not load out of. Slightly more than half of carrier respondents say they have changed how long they will wait at a shipper/receiver. With hours of service being monitored more closely, there is no longer much wiggle-room for delays or partners who cannot maintain high KPIs.

Whether or not freight costs increased was another main question of Zipline Logistics’ survey. 48% of carriers say that linehaul rates have increased due to the requirement for ELDs, though 33% felt that ELDs weren’t at fault for rate increases. It seems to be a consensus, at 71%, that per mile rates have increased due to ELDs.

What can be done to keep ELDs from disrupting supply chains?

Equipping all trucks with electronic logging devices has been a hurdle for many in the transportation industry. Now that the mandate is in effect, devices are installed, and drivers are successfully using them, it’s time to think about how to leverage them to your best advantage.

Transportation management technology like Kuebix TMS can help companies achieve higher levels of visibility across their entire supply networks. This level of visibility will help them plan ahead to avoid facilities that are too slow to load/unload and choose carriers that have excellent service levels and on-time delivery metrics. The ELD mandate doesn’t have to be a detractor for companies shipping freight, with the right strategies in place, ELDs can actually serve to improve operations and keep drivers safe on the road.

Black Friday is just around the corner—November 23^rd—followed by Cyber Monday on the 26th. These are huge shopping days for U.S. consumers: Last year sales reached $7.9 billion, an 18% increase over the previous year, while Cyber Monday earned retailers $6.6 billion.

But where did these holidays get their start?

•     A pre-Thanksgiving shopping day has been around since the 1940s and 1950s. But the Black Friday moniker first appeared 1966, when the Philadelphia Police Department used the name to describe traffic jams and crowding in downtown stores the day following Thanksgiving.

•     The term Cyber Monday was coined in 2005 by Shop.org, a division of the National Retail Federation, as a “catchy hook” to match the brick-and-mortar shopping frenzy fueled by mention of Black Friday savings. Preferred by consumers due to convenience, Cyber Monday sales have been aided by the rise of reliable and expedited delivery and high levels of product availability.

Today—whether shopping in-store or online—consumers still want to save. The National Retail Federation and other sources note that a preference for discounts keeps the days between Black Friday and Cyber Monday top shopping days for customers as retailers continue to roll out exclusive deals:

     •     $2 billion will be spent the day before Black Friday. Last year, $93 billion dollars were spent online. With conservative estimates pin Thanksgiving online revenue at about $2 billion, it will still be one of the more popular days of the year.

     •     $2 billion on Thanksgiving shows that peak day revenue is being distributed across the surrounding days. Similar revenue will likely be generated across the Saturday and Sunday leading up to Cyber Monday, where nearly $4 billion is expected to be spent and 36% of customers will only purchase items on sale.

Getting ready for the big demand

This massive glut of orders can tax retailers’ logistics systems, but there are several steps you can take to ensure better preparedness and meet demand over this concentrated period:

     •     Ensure your inventory is in place. A platform that brings all product information together–from ordering and inventory, to temperature monitoring and transit, and expense allocation—helps you to manage your requirements in one place, ensuring inventory is in the right place at the right time.

     •     Use a transportation management system (TMS) to schedule your shipments. A well-designed TMS lets you share your predicted shipment schedule with carriers—helping them to schedule their resources—as well as letting you quickly locate capacity with your contracted carriers to stay ahead of demand and effortlessly compare your contracted rates to the spot market to find the best rate.

     •     Ramp up your insights for better Black Friday/Cyber Monday logistics results in the future. With the right tools, you can look at historical shipment data to find areas for improvement for the Black Friday and Cyber Monday shopping crunches you’ll face in 2019 and far beyond.

A little planning goes a long way when it comes to avoiding expedited freight charges and optimizing your logistics operations during these two critical holiday shopping periods. This is a great time to ensure you have the capacity you need at your fingertips when you need it so that you can easily meet customers’ demanding shipping expectations and nail down your brand’s integrity

Amazon has instilled a new mindset into the wants of consumers today – they want their orders immediately, in a day or two, instead of next week. And often they want them shipped for free.

Plus, businesses may need to utilize time-critical services to guarantee the velocity they need to meet a customer’s deadline or when handling specialty items like medical supplies that have a certain expiration date.

Pharmaceutical companies have the need for speed when it comes to transporting drugs for medical emergencies. Companies shipping high-value items or potentially dangerous goods look to time-critical shipments to gain tighter control. Manufacturers may use time-critical services to get parts to an assembly line to avoid shutting down the line.

With this in mind, shippers are turning to technology to help them manage their time-critical shipments. Here are 6 ways you can manage shipments that require a definite arrival time:

•     Communicate with carriers about your time-critical shipment requirements by giving them forecasts of these shipments as early as possible. This helps carriers better manage their capacity, ensuring your shipment has a place on their truck when it is needed.

•     Ensure your freight is packaged correctly to avoid damage. Use the right packaging for your items and if palletized, make sure that you stack heaviest to lightest items vertically and then shrink wrap them. This will keep the packages intact and make for easier handling.

•     Label packages properly so that the information on each part of the shipment matches the Bill of Lading. If there are discrepancies on the documentation, this can delay the shipment.

•     Leverage a transportation management system (TMS) to schedule your shipments. to gaining visibility to shipments in process so if any issues arise, you will know what they are and can best create contingency plans. Being able to see where your shipment is at any time gives you peace of mind that your customers are being taken care of.

•     Use a TMS that allows you to automatically connect your carriers for any mode so that you can view and compare rates side-by-side to choose the best rate and service level. The ability to choose any mode helps you discern which mode can best meet your timeline for shipments.

•     Access the spot market if you can’t find the delivery services you need from your contracted carriers. A strong network of thousands of shippers and carriers extends the reach to find capacity, allowing shippers to leverage their existing rates and relationships or find new opportunities via the spot market.

Managing time-critical shipments is not just about getting a shipment to its destination on time. Many carriers also offer special handling, extra security and track/trace capabilities that go along with time-critical services. While time-critical services may cost more, the extra benefits can mitigate the risk of a lost or delayed shipment, while making sure you are able to give your customers what they need.

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Technology is changing the way we do business every day. Traditionally, companies with freight to ship have collaborated with their external partners over the phone, booking appointments, asking for shipment statuses and updating order information. With the rise of email, these companies have begun to manage their logistics operations over the internet with greater frequency. In America, “an average office worker receives 121 emails a day and sends around 40 business emails daily.” (Templafy) That number is likely far higher for those folks scheduling and booking freight.

Email is still a complicated method to manage freight operations, however, given that it’s up to each individual to organize their own inboxes and ensure all emails are acted upon. If a company’s orders never change, promise dates are always 100% accurate, the warehouse or distribution center runs like a finely oiled machine and email and phone communication seems to be enough, there would be no need to improve collaboration with the suppliers and carriers. In reality, most companies are struggling to achieve visibility and control over their supply chains to effectively manage their cost of goods and consistently meet the expectations of customers. For this reason, collaboration portals are becoming more widely used to facilitate communication and collaboration between internal departments, suppliers and carriers.

A collaboration portal is a cloud-based platform where internal and external users can communicate a variety of information in an easy-to-use and convenient manner. These portals enable procurement and logistics departments to work together with their suppliers (vendors) and carriers to dynamically plan and execute their logistics operations collaboratively, maximizing communication between all parties. Instead of trying to maintain a cluttered inbox or disjointed spreadsheet, all information is stored within the portal.

How do collaboration portals help companies communicate with suppliers?

Collaboration portals allow users to communicate with their suppliers on a common platform. This reduces the risk of manual errors and oversights, as well as increases time savings. Procurement and logistics departments can release orders out to their suppliers, and receive back promise dates, statuses on order changes or short shipments and confirmations on POs approved for shipment. Collaboration portals also provide a way for suppliers to easily access shipping documents produced by the customer including parcel labels and BOLs. All of these interactions are documented in the portal and can be referenced to troubleshoot incorrect deliveries and other issues as they arise.

How do collaboration portals help companies communicate with carriers?

Collaboration portals enable carriers to view and update the information which the main user and suppliers are accessing. In the portal, carriers can confirm delivery dates on inbound shipments as well as make changes to shipment schedules. This allows buyers and logistics professionals to always have visibility to the delivery status of their orders. And by implementing a dock scheduling portal in tandem with a collaboration portal, companies can give carriers the ability to schedule appointments directly at their docks. This level of collaboration ensures that the highest level of visibility is always being achieved.

By collaborating in the cloud with external partners, companies can experience an increase in inbound shipping efficiency, gain complete visibility to shipments and shipment schedules, and help their partners plan more effectively.

Learn more about Kuebix’s modular Collaboration Portals here!

You may know about the importance of Carrier Management – about how measuring the performance of carriers and monitoring KPIs can improve carrier and shipper relationships.

However, it’s no longer just shippers measuring the performance of carriers. Tightening capacity, fewer drivers and heightened demand are causing carriers to hold shippers to similar standards and monitoring their behavior.

It’s now imperative that carriers have great experiences at the dock and in the yard, just as it’s important that those carriers deliver to customers on time.

Here are 5 ways shippers can make their carriers love them:

1. Respect your promises. When you make a commitment with a carrier, whether it is to ship in a certain lane or to provide them with more information about your freight, honoring your commitments will lead to a win-win relationship.
2. Treat each driver as a partner. Anything you can do to help carriers retain drivers will strengthen the partnership. If you respect the drivers, they are more likely to want to great job for you and the carrier. That means respecting a driver’s time, so don’t keep them waiting at the dock. With a dock scheduling system, docks will be open when they are supposed to be, keeping truckers moving.
3. Plan ahead. Share forecasted demand schedules with your carriers so they can better plan their truck assets. If carriers know in advance that there will be a surge in volume around a particular time of the year, like the holidays, then they can be more strategic about keeping the right amount and right size of assets needed for forecasted shipments.
4. Create a two-way street of communication. With an open door policy of regular communication, shippers and carriers become more confident in their relationship. You provide feedback to carriers on how well they are doing. Carriers, in turn, make suggestions to shippers on what they like and don’t like about their operations, procedures and relationship. Make sure to act on the feedback.
5. Pay quickly. When shippers pay carriers quickly, carriers will be happier and more likely to continue doing business with you. They may even be willing to do additional business with your company, such as finding and scheduling additional capacity. Auditing freight bills so that they are paid correctly means your carriers will receive the money they should be paid and won’t have to come back to you when an invoice is wrong.

Proper communication, following procedures and honoring commitments shows that you, as the shipper, respect your carriers. In turn, they will be more likely to want to work with you over other shippers. This will work in your favor in the capacity crisis and help you to keep your orders shipping efficiently.