In response to customer demands, motor carriers are coming out with time-definite services that are designed to be fast, flexible, pinpoint accurate, ? and absolutely invaluable to shippers.
Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
Not long ago, suppliers to Dillard's Inc. had it made. When it came to merchandise deliveries, Dillard's, a fashion and home furnishings retailer with 330 stores in 29 states, was anything but a demanding customer. Not only did the retailer give its vendors a shipping window of 21 days, but the company's buyers were happy if they had merchandise on the retail floor on the first day of the month.
That much leeway is, of course, a thing of the past. Like most major retailers, Dillard's has become a much harsher taskmaster in recent years, demanding that its suppliers and carriers conform to ever-stricter delivery requirements. "We give our vendors a ship window that is getting narrower and narrower," says Director of Transportation Fred Anderson.
About 40 percent of the retailer's inbound DC shipments arrive by less-than-truckload (LTL) carrier. Dillard's has winnowed its list of LTL carriers down to FedEx National (the former Watkins Motor Freight) for long-haul freight and FedEx Freight for multiregional LTL service. The retailer also uses a third-party logistics service provider to consolidate shipments in the New York/New Jersey area and does additional consolidations at its DC near Charlotte, N.C., for full truckload shipments to its other DCs. In addition, private-fleet drivers often pick up shipments from vendors after they make store deliveries.
To keep all of those different types of deliveries on target, Dillard's has set up a transit-time matrix based on origin and destination ZIP codes for vendors that ship merchandise to the retailer's seven distribution centers. "All carriers are measured against that transit matrix," Anderson says. "You don't get extra points for being early. Early is as bad as late."
great expectations
When it comes to time-critical services, shippers are demanding more from their carriers than ever. Here's what FedEx Freight says its customers expect it to do:
Provide visibility from the time of pickup to delivery so they can plan replenishment orders, avoiding out-of-stocks and lost sales.
Invoice accurately to avoid administrative and auditing costs.
Count the pieces and read the labels. This is crucial when a retailer has multiple receiving destinations and a carrier picks up multiple shipments from the same vendor.
Be a partner. What can the carrier and the retailer do together to drive costs out of the supply chain to keep rate increases to a minimum?
Be consistent and do what you say you can do.
Charge a competitive price.
The transit-time matrix is coupled with requirements for visibility of goods in transit. Dillard's gets that information in large part from advance shipment notices from its vendors. Says Anderson: "We know down to the SKU [stock-keeping unit] level what's expected."
Both of those tactics support the retailer's overall goal of streamlining operations. "Basically, the direction we are heading is to speed up the supply chain," Anderson says. The reason: "We are undergoing a dramatic change in merchandising," he explains. "We want to reduce the amount of inventory on the floor, reduce costs, and become more customer-friendly."
Less inventory, lower costs, and greater customer satisfaction, all at the same time? It can be done, but only if the motor carriers involved meet some pretty demanding performance standards. "We need accountability and reliability for quick replenishment into the stores," Anderson says. "We need to rely on our carriers and be specific about when we expect deliveries.We are putting the requirement on our carriers that transit times need to be accurate. They have to be on time, but not early."
Carriers say such requirements are becoming more and more common. Fortunately for both buyers and suppliers, carriers also say they're up to the challenge.
Designed for speed
Anderson's expectations will sound familiar to anyone who does business with large retailers, manufacturers employing just-in-time delivery strategies, and other companies that have very specific requirements regarding when goods must reach their facilities. Not only are those companies becoming more and more demanding, but they're also enforcing their programs by imposing hefty penalties on shippers that fail to meet their requirements.
The burden of figuring out how to meet tight delivery demands has largely fallen on carriers' shoulders. In response, they've developed an expansive menu of time-based services, ranging from traditional over-the-road shipments to emergency deliveries in exclusive-use vehicles.
What follows is a list of just a few of the many carriers that offer services that are specifically designed to meet their customers' requirements for faster shipments:
Roadway Express offers two versions of its emergency and expedited products. Its Time- Advantage service is a next-day, non-guaranteed service that complements its guaranteed Time-Critical service.
In September, USF Holland, part of YRC Regional Transportation, launched a next-day service that includes guaranteed delivery before 9 a.m., noon, or 3: 30 p.m. for shipments within 750 miles.
Also in September, FedEx Express added Same Day Freight service for palletized or loose shipments weighing in excess of 150 pounds.
Averitt Express, an LTL carrier operating primarily in the Southeast, offers customers both a day-definite and a time-definite service. In addition, it offers same-day, nextflight- out, and next-day ground and air services. Customers can upgrade shipments in transit from standard shipping to time-critical service.
Old Dominion Freight Line, a multiregional LTL carrier with service coverage in 38 states, offers what it calls Speed Service on Demand, which provides guaranteed, time-specific delivery for critical shipments.
Con-way Freight has offered guaranteed transit times on all of its direct services for several years.
Part of the plan
There's a lot more than speed involved when it comes to ensuring precise, on-time deliveries, however. Many carriers have focused on tightening up their own operations and networks to ensure that freight does not go astray, and they've built in recovery strategies for those times when it does.
For many shippers, moreover, reliability is every bit as important as timeliness. Some may not need an urgent mode of transportation, says Phillip Corwin, director of marketing and product management for UPS's critical shipment and service-parts logistics businesses. The most important thing for them, he explains, is not necessarily how long it takes for a shipment to arrive, but rather getting it when promised in order to meet production needs or replenish stores.
Customers' need for absolute reliability has led Roadway Express to hone its time-definite services, says President Terry Gilbert. The carrier was prompted to act in part by requests for help in avoiding chargebacks assessed by big box retailers for deliveries that failed to comply with delivery requirements. In response, Roadway developed its Time-Critical Multiday Window service. That service allows customers to tell the carrier what delivery window is required by the consignee, and Roadway guarantees delivery within that time frame. "That allows the vendor to shift the risk to us," says Gilbert. "We guarantee we will bring shipments into the DC within the parameters of the purchase order."
Similarly, USF Holland, a regional LTL carrier serving the Midwest and Southeast, takes on some of the risk for its customers. "We sell the guarantee," says Mark Pare, vice president of special services. "It holds us accountable and makes us utilize our system to ensure their shipments move according to the forecast. We have a group of people who monitor every shipment to guarantee compliance."
To comply with increasingly complex delivery requirements, shippers are beginning to mix and match time-specific services to fine-tune the way they move and receive goods. They're even incorporating carriers' diverse service menus into their operational plans. "We are seeing some things once considered value-added services that are getting embedded into the normal course of business during normal business hours," Corwin says.
Some shippers are making what have traditionally been viewed as emergency services part of their advance planning exercises. "What we are seeing is not so much sameday service as part and parcel of normal business, but as part and parcel of planning for contingencies," Corwin continues. "Rather than calling [carriers] in desperation, there is a plan in place."
Critical shipment services are even being incorporated into companies' standard operating procedures— think of high-tech manufacturers that include critical-parts delivery in their service contracts. Corwin offers another example: During sports playoffs, manufacturers of licensed apparel finish merchandise proclaiming the winner as the games wrap up, and then need to get it into stores the next day.
Premium price tag
Offering time-definite services demands new ways of thinking, a willingness to change, and a whole lot of time, effort, and cost. Roadway's Gilbert, for one, acknowledges that carriers that provide a variety of timebased services face operational challenges. "It has created an enormous set of complexities for a network our size," he says.
The complexities have grown along with the number of shippers using time-based services. "Two or three years ago, it was easier. With our first set of dispatches, we would make sure all time-sensitive shipments were on one or two trailers," Gilbert says. "Now, almost every trailer has shipments with time-sensitive requirements."
Likewise, USF Holland found it had to implement a number of operational changes before it could offer its time-definite, guaranteed service. The carrier also had to go through the laborious task of measuring the potential impact of restructuring on potentially millions of pairings among the LTL carrier's customers, consignees, and 78 terminals. That took an enormous number of calculations, Pare says. "We did yeoman's work getting it done."
Ironically, the time-definite services that are a challenge for carriers to implement make their customers' lives easier by offering them more ways to meet their own delivery commitments to their customers. Pare says, "When people used to ask how fast we could move from point A to B, there was one answer. Now we have up to six. We have heard from a lot of customers that it gives them flexibility and control."
Given that precision time-definite services require so much of carriers' resources, no one should be surprised that they come with a premium price tag. Even so, demand for such services is growing at double-digit rates—and the need for flexibility and control in today's hotly competitive environment is the reason. Says Gilbert: "Customers are willing to pay for that."
The U.S., U.K., and Australia will strengthen supply chain resiliency by sharing data and taking joint actions under the terms of a pact signed last week, the three nations said.
The agreement creates a “Supply Chain Resilience Cooperation Group” designed to build resilience in priority supply chains and to enhance the members’ mutual ability to identify and address risks, threats, and disruptions, according to the U.K.’s Department for Business and Trade.
One of the top priorities for the new group is developing an early warning pilot focused on the telecommunications supply chain, which is essential for the three countries’ global, digitized economies, they said. By identifying and monitoring disruption risks to the telecommunications supply chain, this pilot will enhance all three countries’ knowledge of relevant vulnerabilities, criticality, and residual risks. It will also develop procedures for sharing this information and responding cooperatively to disruptions.
According to the U.S. Department of Homeland Security (DHS), the group chose that sector because telecommunications infrastructure is vital to the distribution of public safety information, emergency services, and the day to day lives of many citizens. For example, undersea fiberoptic cables carry over 95% of transoceanic data traffic without which smartphones, financial networks, and communications systems would cease to function reliably.
“The resilience of our critical supply chains is a homeland security and economic security imperative,” Secretary of Homeland Security Alejandro N. Mayorkas said in a release. “Collaboration with international partners allows us to anticipate and mitigate disruptions before they occur. Our new U.S.-U.K.-Australia Supply Chain Resilience Cooperation Group will help ensure that our communities continue to have the essential goods and services they need, when they need them.”
A new survey finds a disconnect in organizations’ approach to maintenance, repair, and operations (MRO), as specialists call for greater focus than executives are providing, according to a report from Verusen, a provider of inventory optimization software.
Nearly three-quarters (71%) of the 250 procurement and operations leaders surveyed think MRO procurement/operations should be treated as a strategic initiative for continuous improvement and a potential innovation source. However, just over half (58%) of respondents note that MRO procurement/operations are treated as strategic organizational initiatives.
That result comes from “Future Strategies for MRO Inventory Optimization,” a survey produced by Atlanta-based Verusen along with WBR Insights and ProcureCon MRO.
Balancing MRO working capital and risk has become increasingly important as large asset-intensive industries such as oil and gas, mining, energy and utilities, resources, and heavy manufacturing seek solutions to optimize their MRO inventories, spend, and risk with deeper intelligence. Roughly half of organizations need to take a risk-based approach, as the survey found that 46% of organizations do not include asset criticality (spare parts deemed the most critical to continuous operations) in their materials planning process.
“Rather than merely seeing the MRO function as a necessary project or cost, businesses now see it as a mission-critical deliverable, and companies are more apt to explore new methods and technologies, including AI, to enhance this capability and drive innovation,” Scott Matthews, CEO of Verusen, said in a release. “This is because improving MRO, while addressing asset criticality, delivers tangible results by removing risk and expense from procurement initiatives.”
Survey respondents expressed specific challenges with product data inconsistencies and inaccuracies from different systems and sources. A lack of standardized data formats and incomplete information hampers efficient inventory management. The problem is further compounded by the complexity of integrating legacy systems with modern data management, leading to fragmented/siloed data. Centralizing inventory management and optimizing procurement without standardized product data is especially challenging.
In fact, only 39% of survey respondents report full data uniformity across all materials, and many respondents do not regularly review asset criticality, which adds to the challenges.
Artificial intelligence (AI) tools can help users build “smart and responsive supply chains” by increasing workforce productivity, expanding visibility, accelerating processes, and prioritizing the next best action to drive results, according to business software vendor Oracle.
To help reach that goal, the Texas company last week released software upgrades including user experience (UX) enhancements to its Oracle Fusion Cloud Supply Chain & Manufacturing (SCM) suite.
“Organizations are under pressure to create efficient and resilient supply chains that can quickly adapt to economic conditions, control costs, and protect margins,” Chris Leone, executive vice president, Applications Development, Oracle, said in a release. “The latest enhancements to Oracle Cloud SCM help customers create a smarter, more responsive supply chain by enabling them to optimize planning and execution and improve the speed and accuracy of processes.”
According to Oracle, specific upgrades feature changes to its:
Production Supervisor Workbench, which helps organizations improve manufacturing performance by providing real-time insight into work orders and generative AI-powered shift reporting.
Maintenance Supervisor Workbench, which helps organizations increase productivity and reduce asset downtime by resolving maintenance issues faster.
Order Management Enhancements, which help organizations increase operational performance by enabling users to quickly create and find orders, take actions, and engage customers.
Product Lifecycle Management (PLM) Enhancements, which help organizations accelerate product development and go-to-market by enabling users to quickly find items and configure critical objects and navigation paths to meet business-critical priorities.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.