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Selling Logistics in a Digital World

Selling Logistics in a Digital WorldShippers Want Real-Time Access to Information, Not Brochures

Technology and automation are not only helping today’s logistics companies gain momentum in their operations, they are also changing the way freight forwarders and brokers sell their services. Selling successfully in today’s digital world takes a new mindset. Clients want to know just as much about how they’ll access information as they do about how you’ll move their freight.

The logistics industry is going through a generational change. Many of the mid-range operators are family-owned companies, and now the owners’ tech savvy kids are primed to take that business to the next level. Regardless of ownership, all are having to very quickly figure out the best ways to sell their services in this technology-driven world.

Online technologies and modern work practices are changing the sales process. Logistics service providers need to realize that the days of wining and dining their prospects and leaving them with brochures and logo-covered notepads is over.

It should not come as a surprise that many of today’s decision makers are often younger and more educated than their predecessors. What the younger generation might lack in operational experience they more than make up for with their understanding of the power of technology – an understanding that hinges on the expectation that everything can be automated and everything can be available from an app on their phone.

First Impressions Have Gone Digital

Importers and exporters now have a multitude of fast and intuitive ways to learn about the services available to them. A salesperson is no longer their only source of information.

Before you get a foot in the door, or even know the door is there, potential customers can check your website to find out what you do and how you do it. They can read up on your team from online profiles. And the posts your company makes on its social media channels gives these customers an idea of what’s on your mind today and how your followers are responding. Whether you know it or not, these snapshot images are helping people decide whether to contact you or take your call.

Now imagine what they think if you don’t use any of it. Will they even be aware your company is an option for them?

Your investment in these online marketing tools is quite different from the production of the traditional set-and-forget corporate brochure. A digital presence should be constantly updated to show your firm’s understanding of and involvement in industry issues. It’s become a priority and a sign of professionalism that supports sales activities and reflects your operational capabilities.

The Modern Prospect’s Priority List

Nights and weekends no longer seem different from weekdays when you’re expected to be available 24/7 not just for clients, but for company teleconferences around the world. When you add the direct emails that require your action and the indirect, for-your-information ones you’ve been copied on, it’s easy to see why everyone is so busy these days.

Salespeople should not be surprised to learn they’re very low on a prospect’s priority list. Cold calling and spontaneous emails simply don’t cut through anymore. In my experience, sending a text seems to generate the fastest responses.

When the Sale Is More Pull Than Push

Tech savvy prospects who are short on time will appreciate the kind of self-directed support service they can turn to for fast answers that resolve issues. They expect to access an online chat, to drill into a forum, or to read customer testimonials, all at whatever time suits them.

Personal, face-to-face contact – at least in the initial stages of relationship building – is largely gone. Even as sales are converted, the ongoing relationship requirements are being defined more and more by the availability of different forms of information.

Click or Swipe for More Data

Car advertisements assume buyers know the vehicle has an engine and some wheels, so they focus on selling the technology and trim packages that come with the essential parts. Just like they’re buying a car, your prospects assume you can move their freight at the right price. What they really want to know about is your tracking and reporting capabilities. Before they buy, they want to see how flexible you are in putting all that together, in the format they want, when they want it. Clients are demanding quicker and easier access to data now more than ever because their ultimate buying decision will be based on its speed and accuracy.

The way you’re selling is changing, and with the expansion of technology into the provision of customer service, the things you’re selling are also evolving.

Delivering the Promise

The thing that hasn’t changed is fulfilling the promises you made during the sales presentation. Behind the polished website, the full customer experience has to be integrated into back-end systems.

Selling successfully in today’s digital world takes a new mindset. Sell streamlined access to information, not the fact that you move freight. The fact that you can do the fastest customs entry won’t help when your client can’t see it in real time through a customer portal.

The Personal Touch Still Matters

People are surrounded by information, not all of it accurate. There’s a huge list of options that they don’t have time to filter. That’s why the person-to-person element in the sales process is still the ultimate differentiator. Highly professional salespeople with deep product and industry knowledge are a breath of fresh air, and direct customer referrals are often the proof that closes the deal.

Ten years ago everyone said SME freight forwarders would be forced out of business by the big guys. But because they’re selling personalized service and niche expertise, SMEs are doing just fine. A large portion of their success is no doubt due to reorienting their sales approach in this digital world.

 

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Higher Capacity & Contract Rates Equals Opportunities in Disguise

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Spot market freight volume is soft, and capacity is loose. Large truckload carriers are raising their prices, but overall spot market rates are down. There are more freight brokers entering the market than there were last year. These and other emerging trends could be opportunities in disguise. Understand and leverage these market forces, and grow your business in the second half of 2015.

Capacity is much looser now than it has been in recent years. This is clearly illustrated in DAT Hot Market Maps, below, for July 2013, 2014 and 2015. Note the relative lack of capacity pressure in July 2015 (right.) July is typically a slow month – but not this slow. Compare last month to the extreme pressure of July 2014 or even the more typical scenario of July 2013.  Grey represents a low load-to-truck ratio in a key market area, and the deepest red represents more than 5 load posts for every truck post on DAT Load Boards.

Freight availability declined on the spot market in July. It is typically a slow month, but demand fell even more than usual, so it is below 2013 levels for the first time this year. Volume remains higher than every previous year, however, so the picture is not totally bleak.

Freight transportation is a leading economic indicator, and the latest reports support the trends we see in our industry: factory production is down, new oil and gas drilling is stalled, coal and steel are declining.

The service sector is growing as a portion of GDP. Services don’t generate as much freight as manufacturing, but they contribute to employment, which seems to be recovering.

More jobs and lower fuel costs can put more money back in consumers’ pockets, so a lot of economists and financial analysts — including Donald Broughton of Avondale Partners — predict that those consumers will spur the economy in the second half of this year. If retailers agree, they will start building inventory very soon. We’ll know more in a few weeks.

The largest trucking fleets have been hauling more freight, meanwhile, according to the American Trucking Associations For-Hire Tonnage Index (not seasonally adjusted.)  That means there is less “exception freight” available for the spot market.

These large, public carriers are spending more to attract and retain drivers, and they bought a lot of new trucks in 2014 – a banner year for Class 8 truck sales. The end result is a 7.4% increase in capacity, according to the Journal of Commerce’s Q2 Truckload Capacity Index. While that was the highest reading since the start of the recession in Q4 2008, it’s still 11% below 2006 levels. So despite the capacity increase, large carriers are raising their rates.

Spot market rates rose faster than contract rates over the last two years, but that trend has now reversed. You can see in the graph, above, that there was only a 5¢ gap between spot rates and contract rates as recently as December 2014. That gap has widened since March. Contract rates continued to trend up in Q2, but spot rates have been declining. Last month, there was a 25¢ per mile difference between national average spot market rates and contract rates. This chart does not include the fuel surcharge, which has been declining steadily during the same period.

When the fuel surcharge is included, it is clear that carriers are being paid less per mile now than they were in 2014, and the total spot market rate has been on a steady, downward trend since January. Obviously, a big part of this decline was the change in the fuel surcharge, which plummeted from 48¢ per mile in July 2014 to 27¢ per mile now. Even though the fuel surcharge is not quoted separately from the line haul rate in the spot market, fuel has a big influence.

Looking ahead to the rest of 2015 and beyond, a handful of macroeconomic trends are likely to shape freight transportation and logistics. Fuel prices are continuing to decline, and they may go lower. The Federal Reserve is expected to raise interest rates next month, which would have a mixed impact on the economy. Consumer confidence is shaky, but an improvement could lead to a rebound in freight volume in Q4. No new regulations are poised to take effect for the rest of this year, even if legislation passes.

Whether those trends lead to an influx of freight or a change in capacity levels, the dynamic market conditions signal new opportunities for freight brokers and 3PLs. In fact, there are more licensed freight brokers now than ever, according to FMCSA records.

Meanwhile, the largest carriers are “becoming more selective about the freight they haul,” according to a recent article in Transport Topics. They may reject freight  that does not mesh well with their routes or schedules. This creates opportunities for brokers and 3PLs. Contract rates are trending up, so broker/3PL-managed freight movements are increasingly price-competitive, too. This could be a great time to bid on new business with your current customers, and compete for new customers, to expand your market share.

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5 Key Metrics to Monitor, Benchmark and Optimize Transportation Spend

networkrefresh_main_0514In the volatile and ever changing domestic transportation market in N. America, there is a growing need. What is it? It’s simple; it is a need to efficiently and effectively measure, track and monitor the right metrics to better manage, control and optimize costs. It sounds very simple, but in truth there are complexities.

Complexities such as:

  • What exactly am I spending today?
  • Who exactly are my best carriers and how can I work with them better?
  • How effective is my current transportation strategy and where am I missing the mark?
  • What are the right things to measure to really understand where my transportation strategy is today while getting insight into where it needs to be?

These complexities underscore a mounting concern faced by logistics executives to balance the competing pressures of both cost and service in today’s end to end supply chain. When looking at the pressure around finding this balance, two elements have been highlighted in our conversations with executives as the top two pressures. The first is fuel cost and volatility while under the pressure to compete. The second is a heightened awareness of the general cost and service impact transportation overall has on the business as a whole.

The external pressure of fuel costs and volatility may leave many executives feeling somewhat limited in terms of their ability to control or impact that variant. Combine that feeling with the sensitivity of the general bottom line cost impact to the business and you have a recipe for losing a good night’s sleep. Let’s take a closer look at what to measure and a simple action item that could shift this dynamic at your company.

Here are five key metrics to monitor, benchmark and optimize transportation spend for your business:

  1. Change in baseline freight spend year over year?
  2. What percentage of your carriers are compliant in contract?
  3. What percentage of your carriers are meeting their service level and routing compliance needs?
  4. What is your average time to process and pay a freight invoice?
  5. What percentage of your transportation invoices are currently audited?

By simply beginning to review and monitor these five KPIs, your company will be well on the way to not only optimizing costs, but to better understanding the variable influences and fluctuations of your transportation costs. You will begin to get a clear picture of where the real weaknesses are and which of your carriers are the best partners of your Supply Chain.

However, by utilizing dock scheduling, shippers can reduce carrier wait time and accidents while increasing visibility and optimizing resource planning. I’d like to share a deeper look at the role that dock scheduling plays in not only optimizing costs, but also in automating business. Long waiting times for pick-up and delivery are costing U.S. shippers, carriers and consumers millions of dollars every year. Prior to 2013, truck drivers were allowed to work 82 hours a week. Federal rules have changed reducing these hours to 70 per week. Drivers can complete no more than 14 hours for any shift and may not drive more than 11 hours during the shift. This dynamic really adds to the pressure felt by the executives to balance an already precarious Supply Chain. Dock Scheduling can uncover and enable efficiencies at the dock, enabling carriers, shippers, 3PL’s, and warehouses to coordinate carrier schedules with load and dock availability. By then utilizing multiple communication channels, the driver is allowed to maximize his 70 hours, enabling the required rest period while still providing delivery in a timely manner.

Using the requirements of the specific dock of delivery, Dock Scheduling enables the warehouse or shipper to stage their loads in order of pick-up or delivery while communicating with the carrier company and the specific driver of any loading dock issues. This level of optimization leads to greater efficiencies which produces substantial results.

All parties are able to seamlessly and effectively communicate throughout the entire process. This enhanced communication and visibility enables a faster close loop process of the entire shipping, delivery and reporting process resulting in:

  • Reduced idle times at loading and unloading by 20 – 40% thus lowering fuels costs
  • Increased loading/unloading productivity by 20% +
  • Clarity in the loading-unloading process
  • Decrease of transportation’s overall impact on the business

The key takeaway is to understand what to measure and monitor, understand their influences on your transportation costs and to take action by moving forward with the visibility and automated collaborative insights that Dock Scheduling can bring to your company. Five measures, one step forward with Dock Scheduling and your business will be on the way to experiencing significant spend optimization like TRANSPOREON Group customers, Vinnolit, Swiss Steel and more.

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Hacked By Shade

Hacked By Shade

Hacked By Shade

 

GreetZ : Prosox & Sxtz

Hacked By Shade <3

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