Tag Archives: Logistics

It’s no secret to most that since the COVID-19 pandemic began, there have been unprecedented economic and logistical disruptions experienced on a global scale. Supply chains were particularly hard hit by the pandemic as production and shipping were halted around many parts of the world.

In the United States, ports saw decreased demand and were forced to switch from working around the clock to minimal hours. While this led to a significant decrease in shipping times, it also resulted in ships waiting at sea for weeks before they could dock. For organizations that rely on these ports, this slowdown in productivity led to a great deal of anxiety about deliveries and customer service.

However, in the last several months, there has been a dramatic turnaround in the ports of the United States. Backlogs are starting to clear, and ships can dock in much shorter time frames than before. Does this mean that everything is back to normal? Not exactly.

The State of Global Shipping

At the height of the pandemic, there was a shortage of containers due to the decrease in demand for shipping services and ports operating at limited hours. This caused ships to wait longer than usual to dock, leading to a bottleneck in supply chains disrupted by COVID-19. As a result, many depots had difficulty meeting customer demands, and there was a corresponding drop in consumer confidence.

Now, there is a surplus of containers due to increased demand for shipping services, and ports are back up and running at full capacity. This has created a new challenge for container depots, as space is filling up quickly, and there is nowhere for the containers to go.

Perhaps one of the most positive changes since the pandemic began is the freight rates. During the first two years of the pandemic, cargo freight rates recorded the most significant spike, but shipping cost has returned to pre-pandemic levels. This is a welcome sign for those in the industry, making it easier for companies to get their goods out without destroying their margins.

Unlike last year, retailers now have more than enough inventory. As a result, warehouses are operating close to full capacity, and space is increasingly limited. This has led to a slight uptick in storage rates and an increase in the cost of warehousing, but these are expected to level off once the market stabilizes.

While the inventory situation may have improved for retailers and distributors, ordering has significantly slowed for manufacturing factories. Until current inventory levels return to normal, it’s expected that production facilities will have a difficult time ahead as work dries up and demand for resources is limited. This may mean closures or layoffs in the manufacturing sector, which could have a ripple effect on the entire supply chain.

Container repositioning and movement have also been disrupted, creating a new problem for supply chains. Container ships are now struggling to move empty containers from ports of loading to ports of discharge. This could result in congestion and delays, which is something that supply chains have been trying to avoid since the pandemic began. Now, blank or canceled sailings are on the rise ahead of the year’s most significant spending period.

What These Conditions Indicate for Shipping

Overall, it appears that while the situation has improved since the beginning of the pandemic, there is still a lot of work to be done before things return to normal. There are still backlogs, container shortages, and an increase in storage costs, which could lead to further production slowdown.

The mindsets of consumers are also drastically shifting. As inflation has increased this past year exponentially, customers may become more price sensitive and look for cheaper alternatives. This could mean that businesses will need to re-evaluate their pricing strategies to continue to remain competitive in the market while being forced to sacrifice their margins.

Another thing to consider is the total cost of shipping, which includes fuel costs, port fees, and labor. The increase in global demand for resources has raised these costs across the board. As a result, companies may be forced to adjust their budgets or look for alternative suppliers and routes to keep their operations running efficiently. While this may not be enough to cover the full cost of shipping, it could make a difference in the long run.

Shippers also need to prepare for new challenges with canceled sailings, and some ports skipped altogether. This could leave importers and exporters scrambling to find alternative routes or adjust their supply chains accordingly. Unlike last year, many ports are functioning at full capacity, but there is still a need for increased efficiency and cost-saving measures to ensure the smooth transportation of goods.

Looking Forward

It’s clear that the shipping industry is going through a challenging period, but there are still positives to take away. Freight rates have returned to pre-pandemic levels, and warehouses are operating close to full capacity. The biggest challenge right now appears to be coping with the new norm of consumer demand and figuring out how to balance cost with competitive pricing.

Regardless of the challenges, shippers should remain optimistic and continue to look for ways to adjust their operations accordingly. By leveraging existing technology, adapting strategies, and staying ahead of market trends, shippers can ensure that their supply chains remain profitable and efficient in the long run.

David L. Buss

*This article is written by David L. Buss. David is CEO of DB Schenker USA, a 150 year old leading global freight forwarder and 3PL provider. David Buss is responsible for all P&L aspects in the United States, which is made up of over 7,000 employees located throughout 39 forwarding locations and 55 logistics centers.

Back to top ↑

Supply chain analytics refers to the collection of data and information that provide insights into logistics performance, from inventory management to fulfilling and shipping orders.

How Data Analytics is Changing the Supply Chain Landscape

The ever-increasing reliance on big data is altering the landscape of supply chains as we know them. Historically, the majority of supply chain management was dependent on intuition and experience. However, with the introduction of powerful data analytics technologies, supply chains are now guided by data-driven decision making.

The ever-increasing availability of data is driving this transition. Previously, data was dispersed across numerous silos inside a business, making it difficult to provide a comprehensive perspective of the supply chain. Organizations, on the other hand, may collect and store data from all areas of the supply chain in one central location owing to data warehouses and data lakes. This enables supply chain managers to see the entire picture and make data-driven decisions to increase efficiencies and performance.

The rising availability of strong data analytics tools is another factor pushing the change to data-driven decision making. To examine data in the past, supply chain managers had to rely on manual procedures or limited software tools. However, a wide range of powerful data analytics technologies is now available to assist managers in making sense of massive data sets and uncovering hidden patterns and trends. The transition to data-driven decision making is reshaping the supply chain landscape and has far reaching implications for how businesses function.

Organizations may improve the efficiency and performance of their supply chains by leveraging the power of data, providing them with a competitive advantage in the marketplace.

The Advantages of Data Analytics in Supply Chain Management

Data analytics can aid in the smooth and effective operation of supply chains. Supply chains can uncover patterns and trends in past shipments by examining data from previous shipments. This can help them minimize disruptions and stock-outs while also improving inventory management. Furthermore, data analytics can assist supply chains in optimizing their routes and schedules, as well as tracking their success over time.

Here are some of the primary advantages of employing data analytics in supply chain management:

• Reduced Inventory Costs
• Optimized Production Plans
• More Efficient Cargo Shipments
• Reduced Risks
• Cross-Functional Cooperation

Check out the following infographic by 2Flow which takes a deep dive into ‘Analytics In The Supply Chain’.

Supply chain analytics are guiding managers into the future with data-driven decision making. If you need assistance properly analyzing your data and setting up your supply chain management for success, contact USC Consulting Group today.

Back to top ↑

Yes, it’s that time again. The holiday season is around the corner and it is time for manufacturers to start preparing now.

Most holiday sales will come from online shopping, adding stress to supply chains and the warehousing industry. With proper management, it’s possible to plan to sustain efficient operations despite volume increases and demand.

Managers can analyze the warehouse itself and equip employees and equipment with the necessary tools to make it through the season. What techniques work and what should warehouse managers prioritize among their already lengthy to-do lists?

Preparing Warehouses for Increased Inventory

It’s time to walk the warehouse and analyze the state of everything. Is it already almost bursting with regular inventory, or is there clutter in the walkways? How much space could the warehouse reappropriate for enhanced storage solutions? What maintenance should be conducted to help bear the load of surplus inventory, spatially and financially?

Work with your logistics team on this walkthrough, which should happen long before the holidays hit, to allocate enough time to make renovations or install new structures. Rethinking the floor plan can reveal space optimizations and efficiency modifications, such as more efficient routes for workers and automated machines to pack expediently.

Countless systems and programs can help automate and streamline previously complicated inquiries and tasks, including:

• Implementing scheduling software to help employees trade shifts or sign up for overtime.
• Setting up cameras and other monitoring systems to check everything from maintenance to productivity.
• Choosing the optimal warehouse management system to keep tabs on inventory.
• Collaborating with relevant members of the supply chain with cloud-based blockchain tech, keeping communications open in case of delays or changes.

Your tech stack – the tech that synergizes to make your company run seamlessly – should receive adequate maintenance to ensure technology isn’t the reason for outages or stops in production. Suppose your warehouse does not have any or just a few of these technologies. In that case, this may be a time to invest, because they are long-term solutions that will continually provide benefits outside of the holiday season.

This is the prime time to reflect on the strategies that worked in the previous holiday seasons and what could be improved. Interview the workers to gather perspectives from those who were in the fray last time inventory demand was at its peak.

Readying Workers for Increased Demand

The topmost priority is ensuring the warehouse has enough staff to handle the holidays. It’s helpful to analyze analytics and demand forecasts from the past to make accurate assessments of staffing needs. This will ensure incoming and tenured staff feels supported by the company if they know management gives proper attention to employee well-being and workload distribution.

This doesn’t only include floor staff – extra hands in payroll and human resources to help with scheduling will probably be necessary. They must be equipped with the right resources to adjust for fluctuating employee numbers throughout the holiday season.

Do not resort to increasing hours to adjust for long days, as this will cause turnover and burnout, potentially leaving the success of your holiday season – and after – in jeopardy. It’s vital to prioritize retention during this time, as seasoned staff members can assist with helping seasonal entrants acclimate more quickly to the working environment.

Providing training beforehand will instill accurate expectations for work hours – which could extend past the holiday season due to potential returns – and holiday wages.

On top of having adequate staff is training existing and upcoming staff to mentally and physically prepare them for volume. This combines with informing staff of any changes made to the warehouse, including program updates and organizational shifts that will help efficiency. For mental preparation, ensure employees have access to resources to manage stress to help keep productivity level.

Equipping Shipping Fleets for Holiday Weather and Traffic

Safety is paramount when it comes to holiday shipping. Fleets must be ready to take on the climate shifts in the region while making deliveries on time.

There are plenty of ways to ensure the warehouse’s fleet can withstand holiday conditions. Vehicle maintenance will not only save money by keeping vehicles healthier, longer, but also save on potential injuries in the workplace by keeping employees safer. With hundreds of thousands of fleet vehicles preparing to travel for peak season, it’s also about keeping everyone else on the road safe.

Checking brake pads, tires, and windshield wipers are inexpensive and basic improvements on top of more complex modifications like stronger batteries.

Provide employees with training to know what precautions to take on the road. They must receive as much training as warehouse staff to communicate about and acclimate to unexpected holiday situations. Are they aware of alternate travel routes or how to react in a severe storm?

Warehouses must prep the fleet with insurance and real-time locating system (RTLS) technologies. Especially since the holidays provide the most intensive time crunch of the year, knowing how well your current shipping system is meeting expectations can help you make adjustments along the way to improve efficiency.

It also provides the warehouse and customers with peace of mind, knowing their packages will safely make it to their houses.

Warehouses Prepare for the Holiday Season

Though the holidays can feel overwhelming for anyone in consumer industries, it’s possible to deal with the work gracefully. These timeless strategies allow warehouse managers to find improvements and discover the tactics that genuinely make a difference.

Making necessary adjustments to your warehouses, training employees, and creating safe shipping environments will also reinforce strategies to use in subsequent seasons.

* This article is written by Devin Partida. Devin is a tech writer with an interest in the IIoT and manufacturing. She is also the Editor-in-Chief of ReHack.com.

Back to top ↑

When is the last time you can remember logistics dominating the headlines? Rarely has this industry gotten this much press. That’s because the public is feeling what we who work with logistics have known for awhile — bottlenecks and supply chain disruptions have led to an unprecedented level of delay transporting goods from point A to point B.

Foreign suppliers have been stymied because of travel restrictions as a result of complex and confusing vaccination and testing processes. But even when the cargo arrives, ports on both coasts of the U.S. are filled to the brim with container ships, backed up like a logjam because there are no trucks available to transport those containers to where they need to go.

As anyone involved with the industry knows, logistics is the unsung hero of the American economy. The public rarely thinks about how the product they’re putting into their grocery cart made its way to the store, but they sure notice when it’s not on the shelf.

The problem has gotten so bad that it has captured the attention of the media and even the White House.

All eyes are on logistics right now

This past month, logistics and supply chain disruptions have been the lead story on the evening news night after night, with reporters stationed at ports shooting footage of the enormous backlog of containers. News articles are advising consumers on how to plan for empty shelves in their local grocery store or worse yet, the toy stores around the holidays. Remember the toilet paper shortage of 2020? It’s on the horizon again. Parents are urged to shop now for holiday gifts for their kids.

The problem has become so dire that the White House launched the Supply Chain Disruptions Task Force in June, which focused on bottlenecks that are bedeviling everyone in the logistics industry. As part of that, President Biden named a “Port Envoy” specifically charged with driving coordination between private companies who run the transportation industry and the logistics supply chain.

At the UN General Assembly earlier this fall, heads of state worldwide got a letter from the International Chamber of Shipping (ICS) warning of a global transport system collapse if governments don’t restore freedom of movement to transport workers.

The government doesn’t have to tell the logistics industry about the problems it has been facing since 2020. And typical bureaucratic red tape might suggest they’re not going to snap their fingers and fix what’s wrong immediately. So what can logistics companies do to make sure the goods they deliver will keep rolling?

At USC Consulting Group, we’ve been helping companies navigate all types of crisis situations for more than fifty years. In this two-part blog, we’ll highlight some of the strategies we’re recommending to our clients.

Shipping containers pile up at the Port of Los Angeles

Rethink foreign supply chains

Having Asia as a supply partner has long been seen as a way to cut costs. But that business model had been fraying at the edges even before the pandemic unraveled it. According to the 2022 26th Annual Third-Party Logistics Study, 83% of shippers saw supply chain disruption this year, and 68% of logistics pros believe supply chains have become too global. Looking for domestic suppliers is vital. And it’s not necessarily about the pandemic. Yes, the issue of pandemic-based restrictions and hold-ups exists now, but when this pandemic is in our collective rear-view mirror, it’s still vital to have more domestic suppliers. That’s because trade policies, diplomatic relations, tax laws, and governmental regulations can change, putting your supply chain in jeopardy.

Make operations more efficient by taking a 360-degree look

We specialize in making operations more streamlined by looking for hidden opportunities for efficiency that exist in your current processes and procedures. Will this solve the problem of your containers sitting at a port instead of being on the road? No. But making sure your internal operations are running at optimal efficiency will help balance your bottom line in the event more slowdowns occur.

Use SIOP to perfect supply levels

You’re probably familiar with sales and operations planning (S&OP), a process that involves sales forecast reports, planning for demand and supply, and other factors. It’s useful, but we think it’s incomplete. Inventory is left out of the mix. If you’ve been using S&OP, we encourage you to use sales, inventory, and operations planning, that factors in your all-important inventory. For more information on SIOP and how it can increase your operations efficiency, download our free eBook, Sales, Inventory, and Operations Planning: It’s About Time.

Ramp up your hiring

The trucking industry in particular is stretched extremely thin when it comes to drivers. All industries are experiencing a hiring crunch right now, and logistics needs to step up its hiring game to entice more people to sign on to the great jobs in transportation. That means competitive pay, solid benefits, and generous PTO.

In Part 2 of this topic, we look deeper into the Third-Party Logistics Study and go into more recommendations for moving logistics forward.

Go to Part 2 of Moving Logistics Forward series →

Back to top ↑

When you think of shipping and transportation, perhaps the last thing you consider is the threat that cybercrime can pose to the industry. However, as technology advances and systems become increasingly connected to online networks, cybersecurity is a necessity of modern shipping logistics.

Meanwhile, all kinds of digital attacks are increasing against a wide variety of industries. In this dangerous landscape, shipping companies must build strategies and implement processes that increase the safety of their digital systems.

From the rising threats to the evolving role of cybersecurity in shipping logistics, here’s what you should know.

The Rising Threat

When the COVID-19 pandemic struck, shutting down economies and causing widespread financial uncertainty, hackers took it as an opportunity to increase their malicious efforts. As many as 90% of surveyed IT leaders said they experienced an increase in cyber attacks due to the pandemic. Meanwhile, 93% said they had to delay key security projects in order to manage remote-work transitions.

This demonstrates the vulnerability of online global systems. Threats like the Kwampirs malware are running rampant and IT leaders are caught off-guard while attempting to deal with other pressing concerns.

But what does this have to do with the shipping logistics industry?

All kinds of new and highly connected technologies are propagating in the fleet management market. These innovations consist of sensors and monitors in the form of Internet of Things (IoT) devices, AI route-improvement software, and Advanced Driver Assistance Systems (ADAS) that improve driver safety through assisting with difficult and repetitive tasks. These in-vehicle monitoring systems bring location tracking and enhanced driver analytics to fleet management, creating altogether safer roads.

But what happens if these systems get hacked?

June of 2017 was a preview of exactly that. When 80 logistics and transportation ports were struck by ransomware, shipping company A.P. Moller-Maersk lost $300 million. Meanwhile, many deliveries were held and drivers forced to idle. The attack disrupted a complex supply chain and the effects rippled through various markets.

A.P. Moller-Maersk lost $300 million in 2017 due to a cyber attack.

As we come to increasingly rely on connected tech and even fully autonomous vehicles, the threat of cyberattack can be dangerous both financially and physically. Fortunately, there are a few simple steps you can take to better ensure supply chain cybersecurity.

Initiatives to Enhance Cybersecurity

Cybersecurity is needed in virtually every industry in today’s highly digital world. Securing your systems, however, can be difficult without the right professional assistance and reliable data services.

But finding the right help can be a challenge in its own right. Information systems professionals are in high demand, especially in the manufacturing and supply sector, where experts with the right skill set can earn their piece of a $2.17 trillion market.

Additionally, all kinds of IT personnel can build a better approach to secure shipping logistics through strategies like the following:

1. Assess compliance standards across the board.

A variety of data security standards are present across industries, such as HIPAA in healthcare or PCI-DSS in retail. Ensure all third-party suppliers and vendors meet relevant standards to facilitate safer information transfer.

2. Secure your software.

Software can be a vulnerability in supply chains. Protect yours with firewalls, VPNs, Transport Layer Security (TLS), and more to better ensure the safety of your networks and equipment.

3. Limit and monitor access.

Every user should maintain their own strong passwords and clearances. Data systems like blockchain can be helpful in securing information behind individualized user authorization keys, complete with immutable timestamps recording access to the system.

4. Educate your employees.

Avoiding a data breach can come down to simply educating your employees on avoiding links from unknown senders. Ensure all shipping logistics workers understand the importance of strong private passwords and maintain an awareness of common phishing practices.

5. Continuously run vulnerability assessments.

Risk assessments should be run at consistent intervals to help keep systems updated and functioning with the protections they need. Your assessments should include all IoT devices and networked equipment that could present an access point for an attacker.

When it comes to securing the digital systems throughout your shipping logistics processes, each of these strategies can mean the difference between a data breach or a prevented hack. Ensure your current systems are protected by a thorough baseline of SSL and VPN usage. Then, keep your employees educated in digital hygiene.

Evolving Roles in Cybersecurity and Logistics

With a comprehensive and consistent analysis of your data systems, you can mitigate the potential of a costly cyber attack. As our use of tech increases, cybersecurity will continue to play a greater role in shipping logistics.

Much like how a barcode system is now essential to inventory management, digital tools and AI technology are essential to managing supply chains with a modern edge. Systems like delivery and route management software can be the perfect way to increase your shipping efficiency, but the payoff won’t be nearly as great if your systems are compromised by malware.

Roles within shipping logistics are changing in consideration of the virtual shift. Understand the shifting nature of the industry and implement cybersecurity best practices like these to better protect your supply chains.

This article is written by guest author Beau Peters. View more of Beau’s articles here.

Back to top ↑

The trend towards automation is progressing all the time. With the advent of COVID-19 creating employment concerns amid a changing workforce, the role of automation in manufacturing has taken on new meaning.

Now, robotics looks to automate processes for the increased safety and productivity of the modern factory. There are many ways that automation trends are reshaping the industry. Here, we will look at a list of these trends and the ways they are altering global trade.

From faster processes to 3D printing innovations, automation in manufacturing looks much different than it has in past decades. Here’s what you should know.

1. Making Processes Faster and More Efficient

One report found that automation at a macroeconomic scale could increase global manufacturing GDP between 0.8% and 1.4% per year. While those numbers might seem small, the overall impact in economic growth is substantial.

Paired with increased productivity, automation offers the following benefits:

• Labor cost savings
• Improved safety
• Enhanced quality
• Overall efficiency

Currently, substantial losses in production time and energy occur in fighting human error and clunky procedures. With automated systems, efficiency can be integrated amidst better processes for fighting energy drains like friction. This translates to potentially millions of dollars in increased revenues for manufacturers that adopt automation technology.

2. Collecting Data Through Digital Twinning

Improving manufacturing processes is possible through the trend of digital twinning changing the manufacturing landscape. Digital twinning involves virtually modeling the manufacturing process alongside the real-world system. Doing so allows companies to gather valuable data and models for simulation and experimentation.

With 50% of large manufacturers set to utilize this tech by 2021, digital twinning represents the future of manufacturing. And for good reason. Up to 30% of improvements in product quality and product cycle time are possible thanks to digital twinning, allowing companies to pair data with experimentation for revenue-boosting results.

3. Increasing Safety Through Robotics

The emergence of COVID-19 changed the way businesses manage a workspace. This is true as well for factory floors where workers have to adopt sanitation and social distancing measures. Robotics allows for the safe implementation of these policies without increased human risk.

A series of roles are now increasingly being filled by robots to allow for greater safety procedures. These include:

• Assembly Line — Working side-by-side with humans are automated systems known as co-bots. On the assembly line, these co-bots are enhancing productivity while making social distancing increasingly possible.
• Sanitation — With COVID-19 concerns, more janitorial robots are being integrated to help sanitize workspaces. These robots go beyond the average Roomba, ensuring the cleanliness of shared spaces for employee safety.
• Heavy Lifting — The constant movement and shuffling of parts and packaging in the manufacturing industry create risks for human workers. Robots can reduce that risk while efficiently moving and hauling heavy objects across a factory.

With sanitation and dangerous work now being filled by robots, factory workers can enjoy a greater level of safety. This not only increases productivity for manufacturers but reduces liability risks and costs as well.

4. Focusing on Logistics for Better Processes

Artificial intelligence. The term might invoke fear in movie-going circles, but the integration of AI in manufacturing to enhance the logistics of every process is reshaping the industry.

AI relies on the accumulation of manufacturing data to provide streamlined logistics workflow. This means sensors, digital twinning, analytics, and more to truly understand and predict factory success. With each new data set, an AI can better learn a system, inform technicians of when maintenance is needed, and build better models for an effective process.

With all the implications for manufacturing improvement, AI is one trend of industrial robotics sure to last long into the future.

5. Changing the Manufacturing Process Through 3D Printing

Automation of manufacturing is changing through the increasing use of additive processes, such as 3D printing. This automation trend has a huge impact on manufacturing of all types of products, with a wide range of materials including sustainable and plant-based options possible.

3D printing uses a digital blueprint to then produce a product from the bottom up, bit-by-bit. By building in this way, the efficiency and durability of parts can be maximized even when using alternative materials. This process means better products at potentially cheaper production costs as the technology improves. The ability for sustainable materials to be substituted in production also has beneficial implications for the environment.

The Changing Landscape of Manufacturing

As the world integrates new automation technology, manufacturers look to reap the benefits. From more efficient practices to better building techniques, manufacturing in the modern world has made substantial headway towards safety and sustainability. These technological trends enhance the safety and productivity of any manufacturing workforce, but the question has to be asked—how will automation affect displaced workers?

Currently, humans and robotics are working side-by-side to deliver better solutions. However, only time will tell how workers adapt to increased automation in the new landscape of manufacturing technologies.

This article is written by guest author Beau Peters. View more of Beau’s articles here.

Back to top ↑

The last couple of decades have seen some significant changes affecting the logistics industry, and the supply chain as a whole. New regulations to working practices have forced fleets to more carefully monitor drivers, and make adjustments to ensure efficiency is maintained. The driver shortage also remains a problem, with some agencies predicting that the deficit could rise to 160,000 within the next decade.

Rising alongside these challenges, though, are technological advances. Some of them have the potential to help solve the prevalent issues of our industry, others could transform the shipping business as we know it. Technology continues to develop at a rapid rate, and advances such as artificial intelligence (AI) and autonomous vehicles are already starting to make an impact in the logistics industry.

We’re going to take a look at areas in which AI and autonomy both have the potential to alter the way the logistics industry does business, and how those we’ve already begun to embrace are developing. How might these affect the roles of workers in the sector, and what do we need to prepare for?

Fleet Management

Freight transportation is one of the most important industries to the health of the US economy. It not only provides a vital lifeline of essential products across the country, but it also gives us a valuable insight into consumer behavior and market fluctuations. When freight providers use tech tools to make their operations more efficient, there’s an opportunity to keep this indispensable economic resource serving the nation effectively.

For many companies, these operations take the form of ground freight — the use of fleets of trucks to quickly and cheaply deliver goods. In this sector, fleet management is an essential tool, which has also become one of the early adopters of AI software. With multiple mobile assets and constantly evolving variables such as road conditions and weather patterns, AI software does the grunt work of receiving and analyzing data. This software also factors in information from maps and vehicle service history, allowing for predictive maintenance. As a result, managers receive real-time predictions that allow them to make efficient advanced plans, and adjust them swiftly when conditions change.

One of the positives of utilizing AI in fleet management is its ability to keep learning. Collecting data from devices such as onboard vehicle diagnostics, GPS, and camera footage, the software is being fed evolving information that allows it to improve the predictions it makes. AI is reliant upon the quality of data and engaging with other tools that allow fleets to build better industry networks, and sharing important operational information can be key in giving AI platforms the information they need to bolster the entire logistics industry.

Safety Driven by Technology

Safety continues to be a key concern across the fleet industry. In recent years we’ve seen regulations come into effect that restrict the hours that drivers can be on the road, and technology — in the form of electronic logging devices that track drivers movements — is a mandatory feature in remaining DOT compliant. However, fleets have begun to look beyond these basic requirements to discover new ways for AI and autonomous tech to keep everyone safe.

Fully autonomous trucking is neither practical nor safe just yet and is unlikely to make an appearance for several years to come. However, some limited autonomy has found its way into trucks to improve safety. Adaptive cruise control is a prominent example of level 2 automation. It uses a combination of radar and a camera to detect the distance of objects in front of the truck, regulating the speed of the vehicle to reduce the potential for emergency braking.

These small, incremental improvements serve to gradually build confidence in the industry and the public. Legislators have started to approve certain aspects of autonomy, and as a result, we’ve started to see a ramping up of testing. Volvo and FedEx have recently trialed automated platooning in Europe, using vehicle to vehicle (V2V) communications systems and advanced driver assistance (ADA) to allow multiple trucks to maintain close distances behind one another on highways safely.

Staff Supported, Not Replaced

One of the key concerns surrounding automated systems such as self-driving vehicles and AI is their effect on employment. However, it’s been clear from the way in which this technology has been used and trialed in the logistics industry so far that the preference is to support workers rather than replace them.

Recently, UPS and Waymo teamed up to pilot autonomous package pickup in the Phoenix Metro area. This kind of short distance usage, to fill in the gaps for efficiency, could be an indicator of how autonomous trucking is likely to advance. Last-mile delivery is one of the areas in which there is a deficit of drivers, and there are expectations that this could be the key focus for autonomy, rather than long-distance driving.

It’s important to note that trials for full autonomy have required the presence of a human expert on board or in a supervisory role. This could also be an indicator of a change of career path for those in the trucking industry. Rather than removing jobs from the freight sector, automation could see a range of new skilled positions being introduced. Drivers could see their roles expanding to become on the road automation technicians, too. Though fleets may also need to start planning for the raise in salary level such high skilled workers will be able to command.

Progressing Forward

While we are not yet in a fully autonomous, AI-controlled world, elements of this technology have started to appear across the logistics industry. The slow and steady approach that the sector is taking allows us to assess where the challenges might lay, and make sensible adjustments accordingly. Workers and leaders alike need to watch how these advances are progressing, and plan to make changes in their investments and skill sets accordingly.

This article is written by guest author Beau Peters. View more of Beau’s articles here.

Back to top ↑

Once one of America’s most respected professions, truck driving now generally struggles to be seen in a positive light. Instead of being seen as a traditional, hard-working segment of the workforce, unpleasant notoriety now exists around truck drivers. In 2018, Wisconsin-based trucking company manager Boris Strbac told The Washington Post that “people don’t respect truck drivers. We are treated as the bad guys on the road by other drivers and the police.”

That perceived lack of respect from other motorists, law enforcement, and the general public is just one reason why the U.S. is in the midst of a truck driver shortage. The job is also difficult and isolating, resulting in a high turnover rate.

Employment trends within the trucking industry have wide-reaching implications. For starters, trucking is essentially the lifeblood of manufacturing logistics. Without trucking, the whole supply chain could crumble. In fact, about 71% of American freight is moved via truck, equating hundreds of millions of dollars in revenue on an annual basis. Due to the national truck driver shortage, freight prices have jumped considerably in recent years. And the trend is expected to continue, to the detriment of food suppliers and restaurants alike.

How Trucking Impacts Food Manufacturing Supply Chains

Rising freight costs within the food industry due to truck driver shortages are nothing new. The same year that Strbac vented his work-based frustrations to the Washington Post, food manufacturers began to see freight costs severely impact their bottom line. Representatives for Tyson Foods, one of the country’s largest producers of meat products, reported a freight cost increase of $250 million in a single year.

When freight costs rise, those costs are typically passed along to the consumer. According to the U.S. Department of Agriculture (USDA), national food prices in January 2020 were 1.8% higher than the previous year. What’s more, the cost of foods consumed away from home, such as in restaurants, increased by more than 3%, with fruits and vegetables seeing the largest relative price increase of all food categories.

Produce often must travel long distances to reach the nation’s restaurants, grocery stores, and cafes, and their transport is typically done via truck. And even food and beverage industry trends, such as increased demand for plant-based meat substitutes, can’t curb the damage caused by increased freight costs.

Data indicates that the truck driver shortage is a primary culprit of rising freight costs nationwide. In order to help curb those rising costs, the trucking industry may need to make changes to help bring more workers to the crippled industry.

Methods for Improving Truck Driver Health

Trucking can take a major toll on a driver’s physical and mental health. Thus, many job seekers overlook truck driving opportunities as they find the pay to be negligible compared to the work performed. Long-distance truck drivers, for example, spend a large chunk of their time on the road, and may only see their families a few times per month.

That social isolation, coupled with health difficulties such as lack of physical exercise and sleep deprivation, directly contributes to the national truck driver shortage. Reducing hours spent on the road while increasing pay may be key factors in job recruitment within the trucking industry.

Exercise is also an important consideration for prospective truckers, who need to counteract their sedentary lifestyle in order to improve their overall health. Sitting for more than six hours per day can be detrimental to one’s health, even contributing to premature death. Trucking companies should thus consider including a gym membership as part of their sign-on bonus, or provide incentives for positive health changes among employees, such as weight loss or smoking cessation.

Manufacturing Logistics, Supply, and Demand

Unfortunately, health-related measures may not be enough to spawn a renewed interest in truck driving as a career. The sad truth is that the “U.S. trucker shortage is expected to more than double over the next decade,” reports Bloomberg. Trucking companies are looking to fill in the employment gaps by recruiting more young people and women, typically underrepresented in the workforce.

But it may not be enough, leaving the U.S. manufacturing industry in a limbo. In fact, Washington State University reports that the manufacturing industry is adding jobs faster than the rest of the economy, especially within the fabricated metals, machinery, and food manufacturing industries. And as the manufacturing sector continues to rake in steady revenue, the demand for freight and trucking naturally increases.

If the truck driver shortage isn’t mitigated in the near future, manufacturers from all industries will have to look elsewhere for their freight needs. Inevitably, costs will then rise at both the business and consumer levels. Steadily rising freight costs lead to gaps in the supply chain, a fact that seems counterintuitive in a nation where product manufacturing is in high demand. It’s time for trucking industry leaders to make appropriate, forward-thinking policy changes in order to help mitigate the truck driver shortage and perhaps stop the snowballing costs of freight across the country.

For over 50 years USC Consulting Group has been guiding logistics and manufacturing companies with optimizing their supply chains and improving their bottom lines. Contact us today and we will help drive up efficiency in your operations.

This article is written by guest author Beau Peters. View more of Beau’s articles here.

Back to top ↑

Sustained marketplace success and effective supply chain management go hand-in-hand. Why? Organizations that cultivate and maintain reliable yet malleable logistics channels can source the material needed to produce impactful products with minimal overhead and deliver these items swiftly to anticipative consumers. In fact, 62% of logistics, supply chain, and transportation executives say their companies are undergoing profound supply chain transformation, according to a 2019 report from Forbes Insights. However, the stakeholders managing these ever-growing caches should familiarize themselves with some of the most recent SCM challenges and trends to ensure that the supply chains they are constructing are truly built to last.

Here are three of those developments and potential roadblocks, and how they might affect organizations attempting to establish logistics conduits that catalyze success:

1. Advanced technology

Sophisticated enterprise information technology now propels numerous operational functions, including supply chains. In fact, businesses worldwide spent around $14 billion on SCM solutions in 2018 alone, per Gartner. However, this rudimentary software is quickly becoming a remnant of the past due to the emergence of several new SCM technologies. Gartner recently highlighted some of these innovations, which include artificial intelligence software, robotic process automation, digital supply chain twinning, and blockchain. Furthermore, SoftwareHut breaks down the benefits of SCM software that will help boost your profits due to this technology.

AI is particularly consequential within the SCM context, having the ability to render assistance across various essential supply chain functions, including maintenance and production planning. And despite the experimental aura associated with the technology, AI sees significant use today — one study from Adobe estimated that 15% of all organizations have deployed this highly advanced software. Robotics is also rising in popularity among organizations looking to automate select SCM processes. Today, there are an estimated 4,000 robotic warehouses in existence worldwide, according to analysts from ABI Research, who estimated that number will increase to 50,000 by 2025 due to an influx of more than 4 million RPA units. Digital supply chain twinning, which involves developing online logistics models that match physical counterparts and therefore can be used for forecasting and simulation purposes, is gaining comparable traction among SCM stakeholders. Blockchain is too, as many supply chain leaders consider the technology, which rose out of the cryptocurrency revolution, an ideal solution for ensuring logistics security. This is partially why an estimated 80% of businesses are pursuing blockchain, per PricewaterhouseCoopers.

2. Decentralized distribution

Back in August 2018, Amazon earned a patent for a fantastical ecommerce innovation: the floating drone warehouse. The patent, which drew considerable media attention, detailed specifications for a hovering distribution hub that would work in concert with hundreds of drones to deliver customer orders. Many dismissed the idea out of hand, despite the ecommerce giant’s penchant for technological innovation. And while it may be a long time before the first Amazon distribution blimp takes flight, the overarching operational objective behind it, supply chain efficiency through logistics decentralization, is evolving into industry best practice.

A good number of businesses are breaking down and redistributing their supply chain nodes in an effort to reduce last-mile delivery times, which are essential to customer satisfaction. Same-day shipping and similarly accelerated logistics options are in higher demand than ever before, making rapid SCM operations critical to organizational success, particularly for B2C companies serving online shoppers. With more than 60% of digital patrons expecting their same-day deliveries to arrive before noon, per UPS, SCM stakeholders at these businesses and others have no choice but to follow in Amazon’s footsteps and embrace logistical decentralization in an effort to bring products closer to customers.

3. Widespread deglobalization

Numerous worldwide trade conflicts have materialized in recent years, collectively damaging international business partnerships forged in the decades following the implementation of the North American Free Trade Agreement and other key pieces of globalist economic policy. Now, nations such as the U.S. and the U.K. are pursuing protectionist trade strategies made to prop up struggling domestic industries. These methodologies, while somewhat effective, are hurting companies that depend on logistics channels that span multiple continents and countries, Supply Chain Quarterly reported. Tariff issuance is the driving force behind this SCM disruption, as organizations everywhere are forced to offset the increased cost of raw material or end product exportation, or seek new partnerships. Intel, for instance, recently revealed that it was taking a second look at its supply chain operations in an effort to find more cost-effective sourcing and shipping strategies, per Bloomberg.

Unfortunately, this general trend of deglobalization is not likely to end soon. While the U.S. government has been meeting with officials from China, its biggest and most powerful economic opponent, in an effort to de-escalate trade tensions, both countries look poised to continue their protectionist ways for the foreseeable future, The New York Times reported. Additionally, the U.S. Department of Commerce is close to imposing new tariffs on $4 billion in products produced in the European Union, according to the newspaper. This move could further imperil businesses that maintain ties with EU logistics partners or are looking to move their supply chains there due to the deglobalization unfolding in Asia.

Businesses grappling with these and other SCM trends and challenges could encounter difficulties when pursuing the necessary operational adjustments. In these moments, external expertise can make an immense difference, lending organizational leaders the actionable insight they need to marshal transformation within their supply chains and capture associated bottom-line gains. Here at USC Consulting Group, we help companies across virtually all industries navigate internal and external upheaval, leveraging tried-and-true techniques and tools that simplify change management, facilitate operational improvement, and lay the foundation for sustained growth.

Back to top ↑

More than 43,000 commercial aircraft navigate American airspace daily, shuttling an estimated 2.6 million passengers among airports here and abroad, according to the Federal Aviation Administration. An army of approximately 10.6 million aviation professionals facilitate these efforts, propelling the countless behind-the-scenes and front-of-house functions that make modern air travel possible. Maintenance specialists are among these essential personnel and perform mission-critical duties that support passenger safety and operational efficiency. Carriers understand well just how important these technicians are and devote tens of billions of dollars annually to funding maintenance programs, per analysts for the International Air Transport Association, who estimated that total MRO spending for the industry was $76 billion in 2017, the latest year for which IATA research was available. Despite this level of investment and hard work on the part of on-the-ground maintenance teams, many airline companies struggle with aircraft availability and reliability.

Southwest Airlines’ recent rash of maintenance foibles is among the most prominent examples. The airline, which is the second-largest American carrier based on market share, according to the Bureau of Transportation Statistics, has been forced to cancel hundreds of flights throughout the month of February 2019 as a consequence of unplanned maintenance issues, per Reuters. Southwest has watched its stock prices decrease by almost 6 percent over this tumultuous span, which it seems will continue for the foreseeable future.

Recently, the carrier conducted an internal review and discovered that as many as 100 disgruntled mechanics may have deliberately caused some of the maintenance disruptions that catalyzed hundreds of cancellations and delays, The Dallas Morning News reported. While this brand of alleged internal vandalism is certainly unique, Southwest Airlines’ aircraft availability issues are not. Available seat miles for all U.S. carriers dropped from 1.74 billion in 2017 to 1.66 billion in 2018, the BTS found. This was the first year-on-year ASM decrease the agency recorded since 2009.

It is clear that carrier maintenance divisions must make improvements, but how? The IATA pinpointed some sector-specific operational problems that are hamstringing maintenance teams in the industry. By addressing these issues, carriers can bolster aircraft availability, re-engage travelers and regain ground in the marketplace.

OEM explosions and trade tensions

U.S. airlines consume an estimated 40 percent of all aircraft equipment produced worldwide, according to the Business Research Company. While domestic carriers are expected to continue their spending dominance, the aircraft manufacturing space itself is undergoing significant change, the IATA found. For one, more original equipment manufacturers are entering the aftermarket component arena in a bid to usurp the MRO manufacturers that have long populated the subsector.

The OEMs entering this niche market offer top-of-the-line replacement components and sometimes bundle such items with system-wide repair services, Aviation Pros reported. These offerings boast obvious benefits but are designed to draw airline procurement teams away from MRO producers or manufacturers that provide FAA-certified items with parts manufacturer approval.

Unfortunately, the emergence of aftermarket OEM products is not the only development catalyzing jarring change within the aircraft equipment space. Widespread economic protectionism is hamstringing international supply chain operations and making it difficult for aviation manufacturers to obtain reasonably priced raw materials, CBS News reported. These organizations have no choice but to raise their prices to cover the extra overhead costs that come with possibly rerouting shipments or bearing the brunt of 10 percent to 15 percent tariff increases. In the end, these additional expenses trickle down to carriers, of course.

Together, these less-than-positive trends directly affect airline maintenance teams. How? With their colleagues in the procurement department scrambling to adjust to these new realities, maintenance leaders and technicians risk MRO stock shortages that delay aircraft upkeep and ultimately lead to slowdowns or cancelations.

That said, there are viable solutions to the procurement problems discussed above – most notably, strategic sourcing. By redesigning their procurement networks and cultivating collaborations with multiple vendors spread across geographic locations, airlines can get the parts they need, when they need them and for the right price, no matter the market conditions.

Growing technician shortages

Both domestic and international carriers are staring down an immense and ever-expanding aviation maintenance technician shortage, per researchers for the Aviation Technician Education Council, who predict airlines will be struggling to fill approximately 15,000 open maintenance positions by 2027. There are two reasons for this. For one, an estimated 30 percent of current maintenance specialists are near retirement age, the ATEC found. Secondly, many of the young talent who might step into these empty positions are pursuing other careers or going to college to move into management roles in the aviation space rather than take on technical work, CNBC reported. This is, of course, a major problem for carrier maintenance crews, most of which are already struggling to keep fleets in good shape with the assistance of seasoned technicians.

While airlines may not have the resources to launch their own training academies, they can help cultivate talent pipelines by working with educational institutions to offer apprenticeships and other hands-on opportunities that engage young people interested in entering the aviation arena and potentially the maintenance specialty. Carriers can also address talent shortages operationally by developing and rolling out workflow optimization programs that allow them to do more with less. These kinds of stopgaps can not only mitigate the impact of the developing technician deficit but also lens carriers the operational framework they need to move forward without depending on future workforce development.

U.S. airlines that hope to address the above maintenance challenges and keep their customers should take immediate action, lest they see cancellations and delays knock them out of the marketplace.

Is your airline searching for a strategic partner that can help bolster maintenance operations in the face of great change and turmoil? USC Consulting Group can assist. We have been working with organizations within the aviation industry for more than five decades, collaborating with them to transform their operations and adapt to marketplace shifts of all kinds.

Connect with us today to learn more about our experience and how we can help your carrier adjust to the ongoing maintenance challenges.

Back to top ↑