Transportfolio

How Global Companies Maximize Transportation Technology

Wed, 23 May 2012 09:39:00 -0500

I frequently talk to companies about problems they experience with their transportation network. The transportation pain points usually get serious when their supply chain starts to go global. The operational processes grow more complicated, more people get involved, and the number of diverse language and cultural requirements increase. Further, it gets harder to track currencies, local shipping rules, and tax regulations. That’s when many companies find that their transportation management system (TMS) can no longer fulfill their business requirements and serve customers.

I spoke on this topic at the recent ARC World Forum. SupplyChainBrain created a video, Tracking and Tracing: New Thoughts on a Supply Chain Basic, from my interview with Steve Banker from the ARC Advisory Group .

The video covers:

Basic requirements for supply chain tracking and traceability
What traceability programs can do for companies
How TMS can help with recalls
What happens when a company decides to outsource a part of their transportation services
How to think about transportation on a global scale
Making your TMS accessible to a global audience to overcome language, currency, and trade barriers

Here are 4 ways to turn potential global supply chain pitfalls into advantages.

Ignoring your supply chain’s global nature. I find that when companies and IT managers think about transportation, they typically think and act regionally. But most companies’ supply chains have a global aspect. And that’s why it’s critical to make the distinction between A) managing a supply chain that’s global with operations in a few different regions, each managed regionally vs. B) managing a global supply chain. It’s my hope that every company can aspire towards the latter—managing their global supply chain.
Trying to reconcile disparate data and reports from separate systems. The synchronization of data between multiple systems is a killer when it comes to doing real traceability and risk management. For example, say a company has a TMS in Europe and a TMS in North America. Each night the two systems merge data overnight to create reporting. That means in the morning, their employees are looking at a great report of everything that went wrong yesterday and it’s too late to do anything about it. Your TMS should be a single instance system. You need one copy of the data in one place for all of your operations around the world.
Forgetting that a global transportation network involves people—a lot of people. It’s not uncommon for global shipments to touch many people, each with a distinct set of regulations, business customs, and IT capabilities. The carriers and suppliers all have their own roles, languages, and customs. For this reason, accessibility for a global audience is critical. English is a universal language for global business, but maybe not necessarily at the shipping docks. To overcome these challenges, you need a TMS that can be accessed in a language that is used in the regions where you do business. It should have numbers, currencies, and dates that are formatted in the way used in that region. This will help you avoid basic mistakes that happen when your trading partners around the world are using a system that is not culturally familiar to them. For instance, a request for goods to arrive on “4/3/2012” indicates two very different days depending on whether the reader is in Germany (March 4) or the United States (April 3).
Missing the boat on global business rules. International shipping involves currency exchanges, navigating local shipping rules, and understanding the various tax regulations. If your TMS doesn’t account for these differences you will run into problems. For example, a document you might use to tender a shipment to a carrier in the U.S. is very different than one for Singapore or for Europe. Your TMS needs to be able to manage and conform to all those rules, like Incoterms®, so that you can define a global shipping process and global transportation strategy that then gets localized for the markets where you do business. For more information on global shipping—calculating total landed costs and real-time, dynamic routing—read Going Global: Building a Sustainable Logistics Model in the Age of Globalization.

Ultimately, a streamlined, efficient global network is important. When your logistics are on a global scale it greatly magnifies the inefficiencies of spending too much time on tactical or low-value tasks.

But what about you? Do you agree that the industry is entering an era where a world view of freight movements is becoming a competitive necessity?

Thank you for reading and I look forward to your comments.

Update: CSA Changes Coming Soon

Thu, 17 May 2012 10:22:00 -0500

On May 16, FMCSA released new outreach information for shippers, brokers, and insurance companies on CSA. We have seen confusion in the shipper community about the relationship of safety ratings to BASIC data. While FMCSA has presented this data and message previously, they have not been brought together and targeted to the shipper community until now. Some highlights in the information are:

Acknowledgement that while FMCSA understands shippers want a simple “safe-to-use” or “not-safe-to-use” system, it is not necessarily aligned with FMCSA’s mission.
Clear descriptions of the three different systems that contain data from the FMCSA on motor carriers: SAFER, Licensing and Insurance, and the CSA SMS.
An explanation that the BASIC data is currently not linked directly to the safety rating and, at present, BASIC data is only used to prioritize interventions.

In addition to yesterday’s news, FMCSA is discussing a potential change in the BASIC categories. Here is a preview of what the new SMS data display will look like.

They propose to move all vehicle securement violations in the current cargo related BASIC to the Vehicle Maintenance BASIC. If finalized, that will leave only Hazmat violations as a new, stand-alone BASIC. You can read more about the proposal here. The proposed changes to the BASIC categories may occur as early as June 2012.

Later this year we anticipate that FMCSA will release a draft rulemaking directly linking BASIC data with the safety rating. In the interim, we will continue to help shippers learn about ways to mitigate their risks, perform due diligence, and balance over-the-road transportation risks with reasonable motor carrier selection policies.

We recently published a white paper addressing the complexities, risks, and best practices in developing a carrier qualification process. Download and read Key Factors in Motor Carrier Selection: Balanced Risk Assessment. The white paper includes a list of 7 items to consider when balancing shipping risks with reasonable motor carrier selection policies.

What questions do you have about FMCSA’s new communication?

Thank you for reading and please comment below.

9 Deadly Sins of Customs-Related Mistakes

Tue, 15 May 2012 08:30:00 -0500

U.S. importers and exporters of any size aren't immune from audits as the U.S. Customs and Border Protection (CBP) steps up enforcement of customs compliance. It's not just fraud the CBP is looking to correct. Poor recordkeeping, mistakes, and uncorrected discrepancies in your import or export dealings—including myriad process or info gaps among trading partners—can result in fines while increasing your chance of a customs audit.

Mistakes in the customs process aren't cheap. CBP can impose fines up to $10,000 per entry for recordkeeping infractions. Depending on the level of negligence found by CBP—whether negligence, gross negligence, or fraud—penalties on dutiable imports range from .5 to 8 times the value of the loss of duty. But CBP imposes the most penalties for infractions on non-dutiable, non-revenue items. Again, depending on the level of the violation, infractions on non-dutiable items range from 5 percent to 20 percent when negligence is found, on up to 50 percent to 80 percent of the value of the goods when fraud is involved.

The hidden costs of customs violations come steep: freight delays, lost productivity as staff researches the infraction, and potential loss of trade privileges. International shippers can take steps to minimize their risk for an unsuccessful audit by examining their trade transaction flows and processes. Here are common trade-related errors to avoid as identified by CBP during audits:

Manufacturing Assists: Items supplied directly or indirectly and free of charge or at a reduced cost for use in connection with the merchandise. Examples are materials, components, tools, molds, and engineering or design work undertaken outside the United States. The cost of the assist is dutiable.
Additions to Price Paid or Payable: Modifications to the price of the goods is very common in an import transaction. Issues such as missing or damaged cargo can lead to a reduction or addition to the price actually paid by the importer rather the price claimed at time of entry.
Non-Dutiable Costs: Various costs that are not subject to duty payments. For instance, assembly and maintenance services after importation.
Country of Origin: Just because something was shipped from a country doesn’t mean it was made there or that the importer can claim this exporting nation as the country of origin. Know the country of origin for products.
Classification: Inaccurate product classification can lead to disastrous outcomes regarding import compliance. The incorrect use of special trade program terms is just one example. Special trade program eligibility is often predicated on the Harmonized Tariff Schedule (HTS) being applied to the goods.
Free Trade Agreements: Wrong or inaccurate interpretation of special trade programs. Does the product really qualify? What means/processes and justification did the importer use to determine that the goods qualified? Do you have the proper documents on record at time of import to support this claim?
HTS Chapters 9801 and 9802: Outlines the rules for re-importing goods of U.S. Origin. CBP requires tangible proof that the product was originally manufactured in the United States and that they were not advanced in any way while abroad. Not complying with the provisions of these chapters is an easy way to trip up in an audit.
Related-Party Transactions: The price paid for a good when the buyer and seller are related parties. For example, a transfer price arrangement where the participants are part of the same organization.
Recordkeeping: You are responsible for keeping trade transaction records for five years. Corporate guidelines should be followed. CBP audits for consistency and compliance.

Avoiding these deadly pitfalls only begins the conversation of best practices in trade compliance. For more guidelines to improve your trade-related processes that can lower your risk of a CBP audit or how to prepare for one, see the C.H. Robinson Worldwide white paper Get Ready for a Customs Audit.

Please take a moment to post questions or comments you may have.

Guest Blog: Low-Hanging Fruit for Transportation Savings

Tue, 08 May 2012 08:06:00 -0500

A few weeks ago, Walmart reported in its 2012 Global Responsibility Report that it had improved the efficiency of its fleet by 69 percent compared to its 2005 baseline. The company delivered 65 million more cases—while driving 28 million fewer miles—by increasing its pallets per trailer and better managing routes (emphasis mine). Walmart also reported success in reducing empty backhauls, specifically in Mexico. "Our focus on backhauls," the company reported, "saved more than 56,000 trips" last year.

Maximizing trailer capacity utilization and reducing empty backhauls are two cost reduction "low hanging fruit" opportunities that still remain on the tree for many companies. If you haven’t worked to improve your performance on these metrics lately—or worse, you don’t even measure and track these metrics—then you need to put this on your priority list now. Here are a few recommendations for getting started.

Before anything else, make sure your data is accurate. You have a trailer and you have some product that you need to load into it. How hard can this be? But as anyone who has tried to load up a minivan with suitcases and stuff for a family-of-six vacation can tell you, there’s actually a lot of complexity in doing this right. You have to take all sorts of factors into consideration, such as conveyance type (cases, pallets, drums, rods, etc.), weights, dimensions, densities, stackability and compatibility constraints, and so on. You must have accurate data for all these factors before you can effectively use any load optimization technology. Otherwise, you’ll find yourself in a “garbage in, garbage out” situation.
Establish your baseline. What percent of your trailers are loaded to maximum weight capacity? What is the typical delta between loaded weight and maximum capacity? How does this data differ by lane or product type? Spend some time at the loading dock and observe the trailer loading process. Is there a lot of wasted space in the trailers? Does the loading process make sense to you? If not, ask the associates to explain why they do it that way.
Forget about using a spreadsheet; invest in a TMS and load optimization technology. Simply put, with so many factors involved, an Excel macro is just not going to cut it. And why bother when there are existing, off-the-shelf solutions (with 3D graphical interfaces) that specialize in load optimization. Make sure the solution is capable of modeling the different conveyances you use and takes into account stackability, compatibility, and other types of constraints related to your products.
Rethink your packaging design and materials. Yes, there is a link between smarter packaging (smaller, lighter, better stacking) and transportation savings. By making package design changes—sometimes even small ones—you can potentially fit more products per case, more cases per pallet, and more pallets per trailer, thus increasing trailer capacity utilization and reducing the number of shipments you make.
Break down the barriers between inbound and outbound, private fleet, and common carriers. We all know it happens: your private fleet comes back empty from an outbound delivery while a common carrier follows behind with inbound goods. Or a common carrier makes an inbound delivery and heads out empty, while another truck (perhaps from the same carrier) heads out in the same direction loaded with outbound goods. Optimizing inbound separately from outbound, and your private fleet separately from common carriers, is what leads to empty miles. Technology constraints used to prevent companies from truly taking an integrated approach to transportation optimization, but with today’s more advanced transportation management systems, that is no longer the case.
Collaborate with other shippers and 3PL partners to leverage each other’s networks. Everyone knows that “collaborative shipping” offers great opportunities to reduce empty miles and improve the overall efficiency of transportation networks. Putting this concept into practice, however, hasn’t been easy. As I mentioned in a previous posting, I believe that 3PLs (or another type of third party) need to be involved in these shared networks, not only to engineer the solution, but also to manage the day-to-day operations. I also believe that many 3PLs are eager to play a role. But this will only work if 3PLs and shippers transform the way they currently work together.

These low-hanging fruit opportunities to save transportation costs are ripe and ready for picking. You just have to reach for them.

Leveling the Fuel Surcharge Playing Field

Wed, 02 May 2012 08:15:00 -0500

Editor’s Note: Last summer, Kevin McCarthy’s Leveling the Surcharge Playing Field blog post on TMC Blog generated a lot of discussion on fuel surcharge programs. We’re sharing his original post here on Transportfolio because fuel is always a good topic of conversation. Please share your thoughts and read Kevin’s January blog post, How to Make the Best Choices in Procurement Bidding Season.

Is it possible to create a fuel surcharge program that is consistently fair to shippers and carriers?

As we have seen over recent months, the cost of motor vehicle fuel is a national preoccupation. Perhaps this is one reason why rising prices at the pump, and mechanisms such as fuel surcharges that are designed to spread the pain between shippers and service providers equably, attract so much attention.

Another possible reason is that freight practitioners come under pressure to control fuel costs when prices are climbing. Corporate procurement departments are not always familiar with the intricacies of freight transportation. When fuel prices are rising, procurement has been known to increase scrutiny of transportation managers’ decision making and pricing practices.

Even though these competing interests are unlikely to disappear, creating an unbiased surcharge formula that works for all parties in the transaction does seem like a good idea. Such a solution would remove—or at least mitigate—a potential source of conflict between shippers and transportation providers.

One reason why this subject sparks lively debate is that some believe surcharges are not always used to fairly distribute the costs between shippers and providers. The challenges of such programs are highlighted in research carried out recently at the Massachusetts Institute of Technology (MIT). The graduate students in the MIT Supply Chain Management (SCM) program at the MIT Center for Transportation & Logistics, point out that when a shipper modifies a fuel surcharge, “the carrier will counter with an adjustment to the line-haul bid. This means that ultimately line haul rates and FSC (fuel surcharge) schedules are compensating.” This “revenue neutrality” means that “it does not seem possible for a shipper or carrier to establish a new FSC or modify their existing FSC in order to significantly reduce costs (shipper) or increase revenue (carrier),” according to the researchers.

But even if a fair-minded fuel surcharge is desirable, is it possible? The answer is affirmative, providing more thought is given to how the formula is structured.

The number of miles that a truck covers does not necessarily correspond with the point-to-point distances between origins and destinations, for instance. Calculating mileage when driving a car is relatively straightforward: you simply record the odometer readings at the beginning and the end of a trip. In trucking industry parlance this is called hub miles (hub refers to a wheel hub or the actual miles traveled). However, carriers don’t get paid on the actual distance traveled but according to a set of theoretical miles derived from a mileage program.

Another complication is deadhead miles, which can significantly increase the distance covered to deliver a load and hence total fuel consumption. Short haul carriers tend to have higher deadhead mileage and probably worse fuel economy in terms of the number of loaded miles they travel.

The three scenarios below illustrate how these factors affect the miles per gallon (MPG) figure that is the basis of fuel surcharge programs. The calculations show what the real MPG should be in order to fully compensate the carrier for the distance it covers. The hub miles refer to the actual distances traveled by the carrier, and the paid miles are point-to-point map distances as measured by guides such as PC Miler or Rand McNally.

We compiled the figures for illustrative purposes only. Scenario 1 might be a long haul carrier being paid on short miles. The statistics in Scenario 2 fit the profile of a regional short haul carrier with higher dead head. Scenario 3 depicts a long haul carrier being paid on practical miles. The difference in effective MPG between the highest and lowest scenarios is 17%; a significant number.

The MIT researchers maintain that the escalator, the factor that represents the fuel efficiency of the carrier’s fleet in the fuel surcharge equation, is the “most contentious issue of the FSC discussion.” The above three scenarios illustrate why. The escalator defines whether a fuel surcharge is perceived as “at-market” or “below-market” or “generous” by carriers. Even a generous surcharge is not necessarily well received by carriers because “it forces them to drop their line-haul rates, in effect, placing the cost of transportation into the FSC.”

So what is an equitable solution? I’m not sure there is a single answer. However, one way to minimize the variance in these scenarios is to set a fuel surcharge program base or trigger point as close as possible to your average fuel cost. This minimizes the amount of variance between your fuel escalator and the carrier’s actual needs. The approach is not without risk since a decline in fuel costs will require you to reduce the carrier’s rate, and as a manager you will have to explain why these costs have moved from the fuel surcharge expense bucket to the line haul bucket.

Do you agree, and what is your experience? I welcome your input.

Guest Blog: Growing Importance of Supply Chain Traceability

Tue, 17 Apr 2012 09:49:00 -0500

On January 4, 2011, President Barack Obama signed into law H.R. 2751, the FDA Food Safety Modernization Act (FSMA), which puts legislation in place to help companies modernize the food safety system to better prevent foodborne illness and allows businesses to respond more efficiently and effectively to outbreaks. This is perhaps the most significant development in recent history in terms of the role that the U.S. government—and governmental regulation more broadly—will play in traceability in the manufacturing space.

Clearly not all segments of the manufacturing industry are equally impacted by food safety legislation, but for those who are, this new law may be a blessing in disguise. When product recalls and/or food safety concerns become an issue for a particular manufacturer, the potential harm to the business can be both costly and long lived. Whether it is the lost revenue due to business interruption and physical recall costs, or the more intangible costs from the erosion of employee morale and negatively affected brand image, the magnitude and duration of a product recall can be devastating to a business.

In recent years, many industry surveys and reports have painted a sobering picture of the state of product recall execution, including:

The lack of speed in identifying, and then notifying customers that there is a food safety issue.
Less than a third of food manufacturers can locate information about affected product lots within two hours.
Over 40% of consumers buy different brands today versus two years ago because of product quality or safety concerns
Improving product quality is a top priority for food and beverage manufacturers

Despite the potential impact to their business, many manufacturing companies for whom supply chain traceability is critically important are unsure of how and where to proceed. I think this is because traceability is both a business process and reliant on a set of application tools. This means that ensuring that the right process is in place is critical prior to investing in any kind of facilitating technology. Traceability is also inexorably intertwined with the upstream suppliers and downstream customers that characterize the extended supply chain. So it is not enough, for example, to have comprehensive intra-company traceability; companies must also have visibility into suppliers, their supplier's vendors, freight carriers, and customers. This inter-company traceability, the provocatively coined 'farm to fork,' is far more complex.

Yet, there are manufacturing companies that I have worked with who have strong capabilities in terms of supply chain traceability, and they share four common traits:

Product quality, risk management, and supply chain visibility business processes are in place to ensure consistent and verifiable performance.
Suppliers and third-party logistics providers are evaluated (both during the initial qualification process and during the business relationship) for their ability to provide visibility and clear source identification.
Technology is employed to facilitate the business process and eliminate as much latency as possible.
The business "trusts" the data. Contrarily, investing in people and capital in a modernized traceability system, but then reverting to old behaviors because business leadership does not trust the output, makes the investment in the capability pointless.

Having the right traceability processes and tools in place will not prevent the spread of food safety incidents. However, once traceability tools are in place, companies can react more quickly to a potential problem (protecting the consumer) and emerge from a product recall with limited cost exposure and brand damage.

The views and opinions expressed in this blog submission are the author’s and do not necessarily reflect the opinions of the C.H. Robinson Worldwide, its affiliated companies, or their respective employees. C.H. Robinson Worldwide is not responsible for the accuracy of any of the information supplied by the author.

Research: 128 Executives Share Visibility Strategies

Tue, 10 Apr 2012 08:35:00 -0500

What can you do to improve visibility across your global supply chain? Aberdeen Group surveyed 128 supply chain executives to get a read on strategic actions for improving visibility. The survey results show that companies are challenged with the same business pressures, but when they master end-to-end visibility, the positive outcomes are significant for all partners in the global supply chain.

The Aberdeen report makes a distinction between best-in-class companies and laggards. Whether you resemble a laggard, industry average, or best-in-class company, the report can give you actionable information to improve your supply chain visibility. For example, 97% of best-in-class companies experienced increased complete and on time outbound deliveries compared to 75% of laggards. Similarly, 96% of best-in-class companies complete on time inbound deliveries (compared to 78% of laggards). Additionally, best-in-class companies reduced total landed costs and decreased total supply chain execution costs by nearly 1% while laggards experienced a 10% increase in execution costs.

The survey revealed that 86% of study respondents indicated plans to increase their current level of end-to-end supply chain visibility due to:

Growing global operations/complexity
The need to improve speed and accuracy
To meet stakeholders and customers increased demand for accuracy and timeliness of shipment event information

So, what are best-in-class companies doing to stay ahead of the pack and address these challenges? The research shows that they have:

Greater control and visibility to customs brokerage events
Formalized risk management and the ability to analyze supply chain risk exposure
More online visibility into disruptions and into accrued supply chain costs
Increased online trading partner collaboration and enablement

The best-in-class are also using advanced technology to access rapid, relevant data through business intelligence software, ERP system modules, TMS, SaaS, WMS, EDI, supplier/trading partner portals, and utilizing 3PL/LSP systems and expertise. Although visibility in general is essential to a high performing supply chain, automated visibility (as opposed to manual visibility) is regularly practiced by the best-in-class to more quickly and accurately achieve results.

By reading this report, you will find many recommendations for shippers dealing with varying levels of supply chain visibility. For instance, laggards can focus on the highest impact areas first and get control over costs. Average companies can reap benefits by focusing on data quality improvement and enhancing logistics resiliency. Best-in-class companies can continue to work on improving visibility because currently, only 14% of this group automates visibility on suppliers’ projected production plans. Companies can move toward a more connected and visible supply chain by extending visibility within and beyond their enterprise, utilizing dynamic business intelligence and decision making, and centralizing data and sharing collaboratively with customers and suppliers.

To read more, click here to request your free copy (a $399 value) of Supply Chain Visibility Excellence: Mastering Complexity and Landed Costs sponsored by C.H. Robinson by May 29.

Top 5 Commandments of Oversized Shipments

Tue, 03 Apr 2012 09:01:00 -0500

What does U.S. geography have in common with shipping oversized items? Answer: a lot. Each state has different requirements for oversize shipments, so it’s important to know the legal requirements for each state. For that reason, and many others, navigating the specialized world of flatbed shipments can be tricky, especially when shipping oversized loads like tractors, combines, bulldozers, cranes, steel beams, wind blades or prefabricated homes. When preparing to move any flatbed load it’s important to know the exact dimensions and weight of your shipment in order to plan for the correct type of equipment, and make the delivery according to customer expectations.

Know the legal limits for flatbed loads. The legal limits for shipments are well documented and fairly consistent from state to state in the U.S. This equipment guide outlines the limits for all types of flatbed trailers. In general, the maximum legal load width is 8.5 feet (102 inches) and the maximum height limit is also 102 inches. Legal length is typically 48 to 53 feet and the maximum weight is about 46,000 pounds. Some trucks may be able to scale heavier, but 46,000 pounds is usually the standard. For the specific regulations for each state consult their transportation departments. Click here for a directory of state transportation websites.
Find out if your load is oversized. Weight restrictions are applied on a per axle basis. A shipment might not exceed the total weight limit, but it may exceed the per-axle limits. In this case, simply adjusting the load can make the shipment legal and eliminate the need for special permits. The more common measurement that pushes shipments into the “oversize” category is width. Anything over 8.5 feet wide is considered oversized and shipments exceeding 12 feet wide may require 1 to 2 pilot vehicles in the front and/or back of the flatbed truck. Just remember, flatbed drivers are responsible for obtaining the permits, and they cannot obtain an oversize permit for any load that can be feasibly broken down in size or weight.
Learn the rules for when you need travel escorts. In many states, shipments over 12 feet wide require travel escorts (or “pilot vehicles”). In addition to variable per-mile rates, shippers typically pay for hotels and other incidentals known as accessorials and would be included as part of the overall freight costs. The role of travel escorts is to forewarn flatbed drivers of special circumstances, like accidents, construction zones, bridges, low wires, traffic jams, and other hazards that require careful driving. They also serve in alerting the public of the presence of an oversized vehicle.
Understand factors that will impact your schedule. In most states, oversized loads with travel escorts may only be on the road from 30 minutes before sunrise to 30 minutes after sunset, Monday through Friday. Many states restrict or prohibit driving over holidays or weekends. Before a load hits the road, drivers need permits for each state traveled with exact travel routes specified. All of these factors—especially the drive time restrictions—present unique challenges for shippers trying to maintain schedules.
Know the meaning and requirements for special markings. The size of the item being shipped dictates the necessity of flags or lights on the tractor or trailer. Typically, red flags and amber lights are required for oversized loads to ensure visibility to other traffic. Travel escorts accompanying an oversize shipment are often also required to have flags and or lights.

Thank you for reading and please comment below with any questions you may have about oversized shipments.

Top 4 Factors in Global Chemical Transportation

Tue, 27 Mar 2012 08:09:00 -0500

From paints, adhesives, sealants, and resins to fertilizers and pesticides, the chemical industry is broad, intricate, and specialized. When transporting chemicals around the world the level of intricacy increases. You’ll need to be an expert in everything from global trade compliance, and air and ocean freight, to over-the-road bulk and truckload shipping. Transporting chemicals throughout the supply chain relies heavily on process and solid integration into business management. That’s when you need a transportation provider who understands the intricate processes behind safe, efficient, and responsible shipping of chemicals. Here are 4 elements to consider when searching for a chemical transportation provider.

Don’t ignore the core supply chain expertise needed for global shipping. Even though the chemical industry is specialized and you want your provider to speak your language, it still comes down to finding a global third party logistics provider (3PL) that specializes in the full spectrum of supply chain execution and management. Ultimately, the provider should recognize that maintaining product quality and reliable shipments are paramount. They should be large enough to be able to scale up as your operations grow with a diverse carrier base for optimal flexibility.
When you vet providers it pays to look through a process lens. In chemical transportation, everything has a process and your provider should live and breathe sales and operations planning (S&OP) just like you do. S&OP, an integrated business management process that starts with a company’s executive leadership team, should resonate with your provider and they should be able to identify a multitude of processes they follow to ensure seamless execution for your shipments.
Find a provider who is certified as a Responsible Care® 14001 partner. Created and monitored by the American Chemistry Council (ACC), the Responsible Care Partnership Program certifies companies involved in the chemical supply chain for their adherence to environmental, health, safety, and security (EHS&S) practices. A 3PL with Responsible Care® 14001 certification is able to demonstrate organizational knowledge and processes around environmental management systems with standard policies and objectives for legal and other environmental requirements. Knowing that your chemical transportation provider implements the program and obtains independent certification will strengthen your EHS&S efforts throughout your supply chain. And it will positively impact your company’s sustainability goals and carbon footprint.
Technology plays a key role in ensuring global visibility when transporting chemicals. Visibility to your shipments and actionable business intelligence is critical. You need a flexible, scalable, and comprehensive TMS to service your established and emerging markets around the world. Look for innovative solutions, but make sure the provider is innovating in the right area and putting an emphasis on the features you need to lower costs and improve service reliability and minimize risks.

In the end, when you ship a variety of hazardous and non-hazardous chemical materials, you care about every detail of the transportation process. Make sure your provider is certified, experienced, and well-versed in the process and business value of transporting chemicals. I am passionate about helping chemical companies with their supply chain needs and I am looking forward to upcoming conferences like LogiChem and the Responsible Care conference. If you’re attending these conferences, please connect with me and comment below if you have any questions.

How Feedback Improves the Supply Chain

Tue, 20 Mar 2012 08:29:00 -0500

Ken Blanchard, author of One Minute Manager and Raving Fans, coined the phrase, “Feedback is the breakfast of champions.” Though Blanchard’s field is management and leadership, feedback is especially valuable in transportation, logistics, and supply chain management.

These fields impact the cost of goods, and thereby the everyday life experience of billions of people around the world. The availability of the products we want, when we want it, at reasonable prices, has an enormous influence on the standard of living and the quality of life for all of us. And getting feedback—an honest, genuine evaluation of how we’re doing—helps transportation providers, logisticians, and supply chain providers improve their services.

At C.H. Robinson Worldwide, we’re glad that our customers—shippers, receivers, carriers, and suppliers—give us feedback every day. We recognize that customers can “vote with your feet” by going elsewhere if we don’t perform to high standards and provide the excellent service customers demand and deserve at competitive costs. And we pride ourselves on the way our people are in close, personal contact with customers so that we have a clear idea on where we stand, how we’re doing, and how things are going.

We also know that there’s a limit to how many people they can reach and how much time they can spend seeking that all important feedback. You have similar limits because giving feedback can often take second place on the priority list considering your many roles and responsibilities.

That’s why we at C.H. Robinson so strongly support the Inbound Logistics Annual 3PL Award. It provides a quick, easy format for you—our shippers, receivers, carriers, and suppliers—to voice your opinion on our performance. If we’ve done well, provided value for your organization, and met or ideally exceeded your expectations, we want to know. And contrarily, if we haven’t been able to make you or your team happy, we want to know that as well.

At C.H. Robinson, your feedback is vital to our success. It drives our organization, allows us to enhance our service offerings, and provide effective pricing. It gives hard-earned recognition to our people for a “job well done” and gives us insight into what we can do better. All that leads to improvement.

Yes, in 2011 our customers of all types voted C.H. Robinson the #1 3PL of the Inbound Logistics award. We’re proud and honored to receive such recognition from the people we work with each and every day. Our goal is to keep that top spot by keeping close relationships and providing service at the highest level. We believe you put us in first place because we listen to your point of view, we learn from you, and then we live up to your expectations.

I hope we’ve earned your support for 2012 and I hope you’ll vote for C.H. Robinson. But more importantly, I simply hope you’ll participate in the survey because of the positive impact it has on the global supply chain community to which we all belong.