August 15, 2014

An interesting online article from Area Development magazine takes a look at just how likely it is that we’ll see a rapid move to intermodal supply chain solutions by North American companies.

Map of the North American Class I railroad net...
North American Class I railroad network from 2006. (Photo credit: Wikipedia)

To support this theory the writer points to an impressive 30 new inland port operations that are now functioning or in the works since the turn of the century. Two-thirds of these are also new as of the past five years, showing the increasing vitality of the trend.

Where unloading facilities open, storage and distribution centers are sure to follow, and the fact that rail freight volume has quadrupled in the last 25 years makes the resurgence of rail connections a very real phenomenon.

The domination of shipping ports and trucking companies has made the coasts the center of attention for as long as most supply chain professionals can remember. Of course goods move all over the country from there, including plenty of internal distribution points, but the promise of rail is that there are towns all along the lines in desperate need of economic regeneration.With development funds being channeled as widely as Ohio and Pennsylvania to Tennessee and New Mexico, a majority of the country stands to compete for the potential new business that new inland facilities bring.

Some of the driving factors here are positive, others less so. We wrote last year about the potential to bring back the true appeal of “Made in the USA,” which many Americans value and would help to kick the economy on to the next step of its recovery.

On the downside, the lack of investment in our roads and bridges is forcing supply chain planners to reevaluate the risk and costs associated with trucking, which helps to make planners pause for thought when it comes to taking advantage to train moves.

In reality, the future of cargo movement will be a carefully crafted blend of sea, rail and road freight (with air reserved for those vital, valuable items that your purchaser simply must have tomorrow!)  The revitalization of the country’s railroads and internal distribution points is nonetheless something to be celebrated, and a trend that the industry will be watching intently.

 

May 21, 2014
dovetail joint from enWP: 05:42, 17 August 200...
Think of your 3PL like a dovetail joint; the  closer the connection, the sturdier the solution! (Talk (Photo credit: Wikipedia)

Earlier this month we recommended eight questions to ask a potential 3PL when you decide to outsource some or all of your supply chain operations.

As some of those questions warranted a deeper dive, we’ll be looking more closely at the considerations to make and what to listen for when you ask them.

Today we look at services or processes specifically designed for your business and why it’s wise to ask your 3PL for some custom logistics solutions.

 

The Benefits of a Custom Logistics Solution

As we said in the previous post, it’s vital that your supply chain partners give you the confidence that comes from understanding your industry. More importantly, you need them to have a good handle on your business itself and the inevitable quirks that come with your order fulfillment process.

A good logistics partner who knows how you work will be able to make suitable recommendations about supply chain improvements that better serve your customers. This could be anything from consolidating a variety of processes into one unified shipping solution,  to improved packaging practices that reduce damage potential and customer complaints.

Some of the advantages of probing for these custom logistics solutions include:

  • Cost reduction from driving out supply chain inefficiencies.
  • Open your eyes to new technology solutions which may be commonplace to your 3PL but that you hadn’t considered (or even heard of!)
  • You flag any potential misunderstandings about how your existing business processes work before you’re up and running, at which point they’re more costly to resolve.
  • Closer integration with your logistics provider by “learning on the job” and making incremental improvements on the fly.
  • Greater business trust between both parties, as you have confidence that they improve your operations and the aforementioned integration gives your 3PL a significant stake in your success.

 

Know Your Limits

Dont be a Bottleneck. Beat the Promise - NARA ...
Beat the bottlenecks before they begin… (Photo credit: Wikipedia)

The original question, “what custom service can you recommend for my business?” also helps both parties to understand any limitations that your logistics partnership will throw up.

Discussions around customization tend to dig into the details of what can and can’t be done. If you’re making a decision to outsource for the first time, this could throw up some show stopper issues. If you’re in the middle of a relationship, the question still has value in drawing out the limitations of your current provider.

Even simple misunderstandings about what is possible can lead to expensive disagreements further down the line, so it’s always better to get on the same page as your suppliers as soon as you can.

If you have any more questions about how custom logistics can help your business, we’re happy to help!

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