How U.S. Election Results Could Shape the Logistics Industry: Exploring Both Conservative and Liberal Outcomes
The US election results affect logistics industry and as one of the essential sectors for economic stability and growth, the logistics industry is keenly aware of how election results can impact everything from trade policies to environmental standards. Both conservative and liberal outcomes could set the stage for significant shifts in this industry, each focusing on different areas of policy, regulation, and investment. Here’s a look at how each side’s potential policies could shape the logistics industry and what companies should prepare for.
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Trade Policies and Supply Chain Issues
Conservative Approach:
A conservative outcome would likely prioritize trade policies that emphasize American manufacturing and bring back domestic production. This could mean introducing or maintaining tariffs on imports and negotiating trade deals that protect U.S. manufacturing. For the logistics industry, such policies could boost demand for domestic freight and warehousing services. However, higher tariffs could also lead to increased prices on imported goods, impacting logistics costs and potentially pushing companies to reconfigure supply chains to mitigate expenses.
Liberal Approach:
A liberal administration might favor more open trade policies, focusing on collaboration with global trade partners and easing restrictions to foster smoother international trade. This could be advantageous for logistics companies engaged in international shipping, as it would likely reduce tariffs and streamline import/export processes. Open trade policies might lead to more stable, predictable trade relations, which could enhance the efficiency and cost-effectiveness of cross-border logistics operations and supply chain issues for 2024 and beyond.
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Infrastructure Investment and Development
Conservative Approach:
Infrastructure development is essential for efficient logistics operations, and a conservative government would likely emphasize private-public partnerships to fund such projects. Conservatives typically advocate for reducing government spending, focusing instead on incentivizing private investment. This approach could lead to infrastructure upgrades, with the advantage of reducing wasteful spending, but might also result in fewer extensive projects in rural or underserved areas where private investment interest may be lower.
Liberal Approach:
Liberals often favor government spending on infrastructure to improve highways, ports, railways, and bridges, particularly with the goal of creating jobs and supporting economic growth. In this scenario, the logistics industry might benefit from a comprehensive infrastructure plan that tackles both urban and rural areas, leading to reduced transit times and fewer supply chain disruptions. Although this approach may increase government spending, the investment in infrastructure could have a lasting impact on logistics efficiency.
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Environmental Standards and Sustainability
Conservative Approach:
A conservative administration might favor a gradual approach to environmental regulations, prioritizing energy independence and easing emissions restrictions for logistics operations. By allowing businesses the flexibility to transition to green technology at their own pace, conservatives argue that the industry can continue to operate cost-effectively while making environmentally friendly adjustments gradually. This approach may benefit smaller logistics companies that would otherwise struggle to meet strict emission standards.
Liberal Approach:
Liberals are likely to prioritize environmental standards by enforcing stricter emissions regulations and investing in green technology. For logistics companies, this could mean requirements for adopting electric vehicles, reducing carbon footprints, and upgrading fleets to more eco-friendly alternatives. While these regulations may initially increase costs for compliance, some companies could benefit from incentives and tax breaks that help offset the costs of investing in green technology, ultimately improving sustainability and appeal to eco-conscious consumers.
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Labor Policies and Worker Rights
Conservative Approach:
Conservatives typically support policies that give businesses greater flexibility in hiring practices and managing workforce costs. In logistics, this could mean resisting reclassification efforts for gig and contract workers and allowing companies to utilize independent contractors more freely. This approach could help logistics companies manage labor more effectively, especially during peak demand seasons, though it may draw scrutiny over worker benefits and job stability.
Liberal Approach:
A liberal administration would likely advocate for increased worker protections, higher minimum wages, and benefits for gig workers in sectors like last-mile delivery. This could raise labor costs for logistics companies but might also improve employee retention and satisfaction. For logistics companies, adapting to these policies could mean balancing increased labor expenses with potential productivity gains from a more secure, motivated workforce.
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Corporate Taxes and Investment in Innovation
Conservative Approach:
Conservative policies often focus on lowering corporate taxes to encourage reinvestment and business growth. Lower corporate taxes could be a boon for logistics companies, allowing them to allocate more funds toward expanding fleets, upgrading technologies, or building new distribution centers. This approach is based on the idea that lower taxes fuel innovation, making companies more competitive on a global scale while enabling them to pass some of the savings on to customers.
Liberal Approach:
Liberals may advocate for maintaining or slightly increasing corporate taxes to fund public initiatives and infrastructure projects. Although higher taxes could reduce the available cash flow for some logistics companies, the investment in public infrastructure and worker protections could ultimately create a more stable and predictable operating environment. For logistics companies, the goal would be to balance tax obligations with strategic investments in automation and efficient operations to offset higher costs.
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Energy Policy and Fuel Costs
Conservative Approach:
Conservatives typically emphasize energy independence, which could lead to policies supporting domestic oil and gas production. For logistics companies, this approach would likely help keep fuel prices lower and more stable, directly benefiting transportation costs. Fuel-intensive sectors, like trucking and shipping, would see cost relief from this policy, which could also improve profitability and allow companies to offer competitive pricing.
Liberal Approach:
A liberal administration might focus on reducing fossil fuel reliance, investing heavily in renewable energy, and incentivizing electric vehicle adoption. While this shift may lead to an initial increase in costs for logistics companies that rely on fossil fuels, government subsidies and incentives for renewable energy sources could provide long-term savings. Additionally, investments in renewable energy could help logistics companies future-proof their operations and appeal to eco-conscious clients.
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Conclusion
The upcoming election holds the potential to drive substantial change within the logistics industry, with both conservative and liberal administrations bringing distinct approaches that impact costs, efficiency, sustainability, and growth. We must keep a close on to supply chain issues 2024 and through the next presidency.
Ultimately, logistics companies can prepare for either outcome by adopting agile strategies, investing in technology, and building flexibility into their operations. By planning for both regulatory changes and potential economic shifts, the logistics sector can stay resilient and continue to play its crucial role in supporting the economy, regardless of the election’s results.
7 Reasons Medical Logistics are Crucial for Healthcare
Healthcare continues to be one of the most dynamic industries, with new advances and technologies coming on the scene every day. But getting these technologies and medical equipment to those who will benefit from it most is where medical logistics plays a crucial role. For 3PL’s with a specialty in medical and healthcare logistics, ensuring an effective and comprehensive program is more important than ever.
Medical logistics goes beyond just transporting medicines and equipment—it’s about saving lives. In this blog, we’ll explore why medical logistics is integral to the healthcare system, and how it plays an essential role in maintaining seamless operations.
1. Ensuring Timely Delivery of Essential Supplies
Timely delivery of medications, vaccines, and medical devices is crucial in healthcare. Delays can lead to compromised patient care, which is why efficient logistics are indispensable.
Without a robust logistics network, even the most advanced hospital facilities can find their operations stifled. This includes procuring essential items like biopsies, pharmaceuticals, and biological samples, along with equipment used for testing and diagnostics. An efficient logistics system ensures that these items are warehoused and delivered with precision, ultimately contributing to smoother medical procedures.
Moreover, having a reliable logistics partner is not just about meeting delivery windows; it’s about outmaneuvering the unpredictability that often accompanies healthcare demands. As we see here at TechTrans, sudden needs for critical equipment repairs underscore the necessity for a logistics partner that can respond swiftly, preventing any disruption to patient care.
2. Maintaining the Cold Chain
Certain medical supplies, such as vaccines, require precise temperature conditions. Medical logistics ensure that the cold chain is maintained from start to finish, preserving the efficacy of these critical supplies.
A disruption in the cold chain can render pharmaceuticals less effective or even useless. To avoid this, logistics companies incorporate state-of-the-art technology that includes real-time tracking systems to ensure products remain within the required temperature threshold throughout transit.
Beyond temperature control, having an efficient supply chain infrastructure is critical to meeting demand when needed. As we saw with the cold supply chain issue during the pandemic, a supply chain fraught with logistics challenges can make it difficult, if not impossible, for medical and pharmaceutical companies to get critical supplies and vaccines to consumers when it matters.
3. Optimizing Inventory Management
Efficient logistics systems help healthcare facilities manage their inventory better, ensuring that essential supplies are always in stock while avoiding excess that could lead to waste.
By leveraging logistics expertise, healthcare facilities can strike a balance between supply and demand. For instance, understanding how inventory fluctuations can impact costs enables facilities to adopt strategies that avoid stock-outs and overstock situations. As outlined by the Kaizen Institute, effective inventory, warehousing and distribution strategies can significantly reduce delivery times and mitigate costs associated with poor planning or lack of visibility.
4. Enhancing Patient Care and Safety
By ensuring that all necessary medical supplies are available when needed, medical logistics play a direct role in enhancing patient care and safety, allowing healthcare professionals to provide optimal treatments.
For example, the rapid distribution of Durable Medical Equipment (DME) like hospital beds and mobility aids can significantly enhance patient comfort and care, especially in home settings. The growth of home-based healthcare, as discussed in this DME Logistics Needs blog, underscores the importance of robust logistics solutions that are nimble enough to adapt to growing and diverse care environments.
5. Streamlining Costs through Efficiency
Streamlined logistics processes lead to cost savings by reducing delays, errors, and waste. This allows healthcare facilities to allocate resources more effectively.
Investing in a comprehensive logistics service eliminates the burden of managing warehousing spaces. As hospitals navigate fluctuating demands, outsourcing logistics allows them to pay only for the services they need, thus optimizing operational budgets.
6. Adapting to Technological Advancements
With the advent of technology such as AI and IoT, medical logistics continue to evolve, offering innovative solutions that enhance tracking, forecasting, and delivery processes.
Modern logistics tools provide unparalleled visibility into the supply chain, allowing healthcare providers to forecast needs accurately and respond proactively. Innovations such as real-time ambient condition monitors or use of Digital Twins technology assure stakeholders of product safety, built-in efficiencies and cost savings, and even compliance with regulatory bodies.
7. Supporting Disaster Response and Preparedness
In times of crisis, an efficient medical logistics system ensures rapid deployment of essential supplies and equipment, supporting emergency response efforts and disaster preparedness.
During disasters, the need for a swift medical response can be the difference between life and death. Logistics play a pivotal role by swiftly mobilizing resources where they are most needed. A proactive stance taken in logistics planning can greatly improve the effects of unexpected strains, and allow a timely logistics response to significant crises and challenges.
In the end, having a comprehensive view and real-time management of products and equipment in the healthcare supply chain is crucial to effective medical logistics and overall improved healthcare.
The Role of Comprehensive Logistics in Modern Industry
In our modern, globally connected era, comprehensive logistics has emerged as a crucial component for success. Whether it’s ensuring timely delivery or optimizing supply chains, understanding the full scope of logistics can give a competitive edge. Let’s explore how logistics plays a vital role in modern industry.
Understanding Comprehensive Logistics
Comprehensive logistics encompasses the complete management of the flow of goods, services, and information between the point of origin and consumption. This holistic approach involves not only the physical movement of products but also the coordination of various logistical components such as transport, warehousing, and inventory management. The goal is to satisfy customer requirements efficiently and economically.
Integrated logistics solutions are becoming a fundamental part of this strategy, as they allow businesses to address logistical challenges with innovative and sustainable solutions. This approach significantly influences a company’s ability to stay competitive in an ever-evolving market by reducing redundancies and supporting seamless operations.
Modern industry has witnessed a seismic shift towards comprehensive logistics due to numerous factors, including globalization and technological advances. Integrating the latest technologies like blockchain, IoT, and artificial intelligence is vital in logistics management by enhancing transparency, accuracy, and efficiency. For instance, automation and digital tracking systems provide real-time data, minimize errors, and streamline processes that were otherwise cumbersome or prone to delay. With these innovations, companies can focus not just on moving products but ensuring a robust strategy that integrates multiple logistics processes into one cohesive system.
One key benefit of comprehensive logistics is the reduction in total cost of installation and delivery as highlighted by TechTrans’ solutions. Streamlining logistics through a single-provider minimizes coordination complexities and hidden costs associated with managing multiple contractors. This one-stop-shop approach captures how businesses can tap into economic efficiencies while maintaining control over logistics performance metrics. By tying all logistical components together, companies can offer predictable and scalable solutions that are instrumental in tackling complex global supply chain challenges.
Enhancing Supply Chain Efficiency
Effective supply chain management stands at the heart of successful logistics strategies, driven by the need to enhance the speed and reliability of product delivery from manufacturers to consumers. By streamlining the various processes involved, companies can improve efficiency, reduce lead times, and meet higher customer expectations.
For many businesses, adopting strategic end-to-end supply chain solutions has proven advantageous, as they mitigate risk, optimize operations, and offer significant cost savings. These integrated systems consolidate resources, facilitating better decision-making and adaptation to market fluctuations.
To further improve supply chain efficiency, companies are also investing in digitization and automation, addressing communication challenges inherent in handling multiple suppliers. In practice, this shift translates to less downtime, improved supply chain transparency, and the ability to track every movement of goods in real-time. This not only ensures efficient handling of resources but also nurtures strategic partnerships and builds a resilient supply chain that can withstand external pressures, whether economic or environmental.
The Impact on Cost Management
Logistics plays a pivotal role in controlling costs across the supply chain. The efficiency gained from well-structured logistics systems translates into significant savings for businesses by optimizing routes, consolidating shipments, and utilizing the latest technology to anticipate and react to inefficiencies. Implementation of integrated logistics approaches reduces redundancies and promotes cost-effective delivery mechanisms. By migrating to holistic management solutions, companies unlock the potential for resource optimization that amplifies their competitive edge.
In many cases, particularly in industries fraught with driver shortages, logistics reforms present an answer to soaring transportation costs, while also addressing service continuity. By tapping into non-asset-based logistics providers–such as TechTrans–which have the flexibility to access various providers, organizations can sidestep the pitfalls associated with internal shortages and capitalize on best-in-class policies. This not only helps fill logistical gaps but looks towards more sustainable and autonomous solutions for long-term cost management and operational effectiveness.
Ultimately, leveraging comprehensive logistics tools provides organizations with a total view of their supply chain, enhancing decision-making to avoid unnecessary expenditures. Insights derived from data analytics empower teams to anticipate demand, optimize stock levels, and efficiently allocate resources. This is key in not only sustaining but enhancing productivity across sectors, allowing companies to thrive in an increasingly competitive global market.
Sustainability in Logistics
With environmental concerns on the rise, logistics is at the forefront of implementing sustainable practices. This shift is driven by both corporate responsibility and market pressure to reduce carbon footprints and promote eco-friendliness. The transition towards sustainable logistics strategies includes processes for optimizing fuel efficiency, the adoption of electric vehicles, and green warehouse facilities. Such initiatives significantly lower emissions and align logistics operations with broader environmental goals—strategies that are also attractive to stakeholders who prioritize corporate sustainability governance.
Besides environmental benefits, sustainable logistics yield socio-economic advantages by creating a resource-efficient ecosystem that supports long-lasting business growth. The integration of green technology within logistics practices, such as renewable energy solutions and energy-efficient equipment, carries commercial incentives by reducing costs and increasing the value perception among customers and partners. Companies committed to sustainability not only future-proof their operations but also lead the industry in setting new standards for innovation-driven logistics solutions.
As logistics evolves, it is clear that sustainable practices will play an increasingly central role. The industry is gradually making strides toward a future where human and environmental health are at the forefront of operational design.
Future Trends in Logistics
As technology evolves, so does its application in logistics. The rise of artificial intelligence (AI) continues to refine logistics operations, offering predictive analytics and real-time decision-making capabilities that optimize supply chain performance. AI-driven logistics solutions facilitate data assimilation and enable firms to anticipate challenges before they arise, ensuring seamless integration across all logistical nodes. The expanding role of AI marks a transformative phase for logistics, emphasizing precision and agility in fulfilling complex consumer demands.
Furthermore, blockchain technology holds promise for ensuring transparency and security within supply chains. Its ability to provide immutable records and facilitate trust among participants is paving the way for smarter and more secure logistics practices, minimizing potential fraud and error across all transaction layers in an organization. As these technologies mature, the logistics landscape is braced for change, with these tools propelling the industry toward greater levels of trust, accountability, and operational fluidity.
Embracing Logistics for Future Success
Comprehensive logistics is undeniably a backbone of modern industry. From optimizing supply chains to embracing sustainable practices, businesses that harness the power of logistics can expect enhanced efficiency and competitive advantages. As the global supply chain continues to evolve, the importance of efficient and cost-effective logistics management will only grow.
Supply Chain and Logistics Trends We Expect in 2023
By Len Batcha, CFO/President
Technical Transportation, Inc
As we end 2022 and head into 2023, it seems like we’re in a fog. It’s difficult to develop a strategic plan based on the current inflation and economy, so it’s equally hard for companies in the supply chain and logistics industries to make concrete predictions and decisions.
However, based on what we can indeed see through these murky times, we can note several trends that companies should consider as they begin the new year.
Uncertainty Will Remain
The current uncertainty and apprehension will likely follow us into 2023, largely due to uncertainty in the economy, which is driven by record inflation and high fuel prices.
In addition, now that the midterm elections are behind us, there are questions about potential policy changes that could affect the overall economy and the supply chain specifically. Those will begin to take shape in the first half of the new year.
Perhaps there’s a bit of good news despite the uncertainty, as consumer spending has grown again this past holiday season, although not at the torrid pace we saw in recent years. In early November, the National Retail Federation forecasted that overall retail sales would grow 6-8% this season, compared to a growth rate of 13.5% last year.
Following a more robust than anticipated Black Friday/Cyber Monday, the organization noted that its growth prediction was on target. At the end of the season, Mastercard data confirmed the forecast, saying retail sales grew 7.6%.
Amazon Announcements a Bellwether?
That good news was contrary to Amazon’s announcements in Q4 2022, when the retail giant shared plans to lay off more than 20,000 employees.
In addition, Amazon Founder Jeff Bezos advised consumers to hold off on purchasing big-ticket items such as cars and appliances during the 2022 holiday season amid growing concerns about a potential recession in 2023.
These announcements, coming during the busiest time of the year in retail, tell us that Amazon is concerned about consumer spending and is cutting its own costs to remain profitable.
Could these moves be a potential bellwether for things to come in the supply chain and logistics spaces as well? We think it’s something to keep an eye on in 2023.
Supply Chain Issues Will Still Exist
There are still supply chain shortages with certain products, especially among big-ticket items such as automobiles, trucks and SUV’s. That is a concerning trend for the entire industry, and one that we hope will improve in 2023.
The good news is that supply chains in some vertical industries, particularly the medical and medical device spaces (where TechTrans has a core competency), are expected to remain strong in 2023.
That said, those industries may face supply shortages as well, which could delay the release of products, but not to the point where it would keep manufacturers in those industries from having a potentially strong 2023.
Election Impacts
The U.S. elections in November 2022 yielded a new crop of politicians, with a pretty stable Senate but a turnover in the House of Representatives slated for this January. Overall, we don’t expect big changes nationally.
On the state level, however, we witnessed stronger division and polarization, where “red” states got redder and “blue” states got bluer. That could potentially result in varying legislation from each state and companies having to adjust to policies and economies on a more localized level.
Emphasis on Quality Assurance and Control
Finally, we believe that quality assurance and control will play a bigger role in the supply chain and logistics industry in 2023. Many companies are evaluating their data and processes to find new ways to boost profitability by ensuring quality and efficiency.
That includes recruiting new talent to serve as quality liaisons between sales and operations to ensure that the customer experience is optimal. It also means meeting and exceeding quality standards for specific industries, whether it’s FDA regulations or ISO standards.
Though the crystal ball is not yet clear for the coming year, we do expect some uncertainty in the market, as well as swing toward operational adjustments that will positively impact the bottom line. If you need support optimizing your supply chain, we’re here to help.
Here’s wishing you and your companies a successful and prosperous 2023! Let us know how we can help you today.
Why the Logistics Industry Offers a Great Career Path Today, Despite Current Challenges
By Rena Mundy, Human Resources Manager
Technical Transportation, Inc
The supply chain and logistics industries require in-person, non-virtual people to get the job done. Since the beginning of the COVID-19 pandemic almost three years ago, however, finding people to fill needed positions has been very challenging for most logistics companies.
Since the original shutdowns that stopped almost everything, followed by the Great Resignation, the U.S. supply chain has been in a state of constant disrepair that has been driven largely by labor shortages.
Earlier this year the U.S. Labor Department reported that there were 5.5 million more job openings than there were workers available to fill them. A recent Washington Post report also noted that a scarcity of skilled supply chain workers in the U.S. is still a big problem. On the positive side, the Labor Department reported in November that the transportation, warehousing and utilities sector had the third-most new hires compared to other industries for the month.
Despite recent struggles, the supply chain management and logistics industry continues to evolve and is becoming a field that can offer high-growth job opportunities for people of any age, background, education level or skillset.
Data Opening New Doors
One area where logistics is growing is data analysis and quality assurance. Logistics companies are turning more to people holding advanced degrees in supply chain management to fill those positions.
Virginia Goss, an operations specialist at TechTrans and a recent MBA graduate from the University of North Texas, says that as logistics companies are using the data inherent in their businesses to make better decisions and improve customer experiences, they’re also creating new positions to analyze and interpret that data.
“While many supply chain companies need people to fill positions in the warehousing and delivery side of things, there is also a growing need for people to analyze the business – operations, quality assurance, etc.,” says Goss. “Having in-house consultants is a big thing right now. Even manufacturers, who traditionally wouldn’t employ supply chain analysts are looking at adding those positions now.”
Moving Forward
Looking ahead, the supply chain and logistics industry will continue to play the vital, if not underappreciated, role of keeping the economy moving, literally.
Over the next five to ten years, we expect that job opportunities in the U.S. logistics industry will continue to grow and perhaps diversify as they bring some capabilities back stateside. This comes in the wake of post-COVID supply chain disruptions and the need for companies to mitigate broad-ranging disruptions in the future.
In addition, new technologies like automation will continue to mature and open new job opportunities as the industry strives to become more efficient and effective in the years to come.
If you’d like to learn more about growing your career in the supply chain and logistics industry, contact us today.
The Railroad Strike of 2022: What it Means if the Temporary Deal Doesn’t Hold
By Len Batcha, CFO/President
Technical Transportation, Inc
Today, the logistics industry is at a crossroads. Expanding e-commerce operations and online marketplaces are driving record volumes of parcels, packages and freight. The rise of on-demand services has transformed how goods move from point A to point B.
In response to these new demands, shippers and carriers alike have invested heavily in technology solutions, such as blockchain networks and artificial intelligence. These investments–which can be carefully planned for and managed–will help companies streamline operations and cut costs over the long term.
Yet, no matter how many advancements we introduce to better manage the supply chain, there will always be one aspect that is more tenuous and more difficult to manage – and that is the workforce. The recent prospects of railroad labor strikes brought this to the forefront and raised concerns about the impact on the supply chain if the temporary deal struck by the current administration doesn’t hold. In this blog post, we’ll explore this impact in greater detail and how those in the supply chain can prepare.
Why Labor Strikes Are Becoming More Common in America’s Supply Chain
The most recent railroad disputes this month involved pay and working conditions. A strike would have affected not only commuters who rely on the railway to get to work but also a portion of the nation’s energy supply, material supplies and parts to manufacturing facilities, drinking water and other commodities destined for end consumers or strategic reserves.
Unfortunately, the possibility of labor strikes is becoming more common in the supply chain industry due to several factors. This includes:
- Union Membership Declining – Over the past few decades, the union membership rate in America has declined. The portion of employees who are union members fell from 20% in 1983 to 10% in 2021. Union members in transportation and material moving occupations represent only 12% of the total number of workers in the industry.
- Automation & AI – Rising levels of automation and increasing adoption of AI have also contributed to the recent rise in labor strikes. As more companies look to automate manual tasks and use AI to drive more complex processes, there is a greater chance that workers will feel threatened.
- Outdated Equipment and Facilities – A lack of investment in the supply chain infrastructure has made working conditions a concern for workers’ health and safety.
The Economic Impact of Strikes
Labor strikes can have significant impact on not only the supply chain, but the economy as a whole. In fact, the Association of American Railroads estimates that a nationwide shutdown of rail operations could cost $2 billion in lost economic output each day.
A strike could also have significant impact on shippers and carriers, including:
- Increased Costs – One of the biggest impacts is the increased costs for shippers and carriers. Shippers face increased costs due to route delays or the need to find alternative modes of transport. Carriers face increased costs due to the need for higher wages and the likelihood of increase in transport-time costs. Some additional costs could be incurred if temporary workers need to be hired and more vehicles leased to make up for the shortage. This has direct impact on the bottom line for most companies involved.
- Delayed Deliveries – Another major impact is the potential for delayed deliveries. Shippers and carriers may need to find alternative routes to avoid striking areas. This could result in longer transit times, delays, and potential order cancellations.
- Product Disruption – Finally, there is a risk that strikes could impact how products are distributed across the supply chain. If a strike occurs at a port where exports are shipped, there could be a disruption in moving goods to their intended markets. Alternatively, if a road or rail strike occurs, there could be a disruption in the flow of imported goods.
Mitigating Risk During a Strike
In order to minimize the impacts of a potential railroad union strike, supply chain companies, 3PLS and other businesses caught in the middle should create a plan of action, with contingencies outlined and in place, should a strike move forward. Having this crisis plan ready will ensure you are minimizing downtime and not reacting to circumstances that may drive prices even higher or cause additional disruptions.
Components to a plan of action should include:
- Transportation Strategy – It is crucial to have a contingency plan in place to transport goods should a strike occur. In the event of a railway strike, having trucking, airways, and ocean liner accounts setup and ready to go will be critical for maintaining transport flow. Also setting up alternate routes that circumvent any strike areas can help offset potential delays. Be sure to also communicate these plans and pricing to customers, so there are no surprises if your alternative plan/s need to be implemented.
- Inventory Management Strategy – Inventory management is crucial during a strike, but needs to be planned carefully ahead of time. There are two ways to manage inventory during a strike: Replenishment and Minimum Inventory Strategy.
- Replenishment – this strategy is used to keep your inventory at just the right level to meet expected demand. It can also include stockpiling inventory to maintain extra inventory and mitigate any potential disruption in the supply chain. This may be advisable in situations where the outcome of the strike is uncertain and there is a high risk of disruption.
- Minimum Inventory Strategy – This strategy is used to keep your inventory at a consistent level that allows you to meet customer demand under all circumstances. You will have to keep a close watch on inventory levels and be ready to act if there are any signs of a shortage. This strategy is ideal for helping offset costs incurred with surplus inventory but requires more timely and reactionary management.
In the end, a well-prepared supply chain can better minimize any impact to operations, should a strike move forward down the road. Let us know how we can help you today.
How 3PLs Can Assist Manufacturers with Supply Chain Modeling
By Virginia Goss, Operations Specialist
Technical Transportation, Inc
Supply chain modeling is typically defined as the processes needed to better understand a manufacturer’s supply chain – all with the goal of bringing order to the company’s operations while achieving company-specific objectives such as lower costs and higher customer satisfaction.
While there are many steps and processes on the production and inventory side of supply chain modeling, many companies do not have the resources or expertise to incorporate the part of the supply chain that involves your product making its way to the end customer. For most companies, this can involve additional warehousing, distribution, first and final mile delivery processes.
Ideally, a 3rd Party Logistics (3PL) partner can help companies manage and optimize this part of the supply chain for increased efficiency and cost savings. In fact, a 3PL should make a manufacturer’s supply chain modeling and operations simpler and more efficient overall. Some ways they can accomplish this include:
- Becoming your single – source logistics provider – The ideal 3PL firm will take the lead on your logistics so you don’t have to worry about it. They should manage all the moving parts (the people, the products, the invoices) and you should only have to deal with one person and one bill.
- Expediting delivery – 3PL partners should have a network of carriers and delivery providers who can tailor expedited delivery options to meet your needs. For example, at TechTrans, we recently added Grand Aire to our network, expanding our client’s delivery options and capabilities. With this new provider, our customers can even arrange emergency hand-carry delivery of essential items.
Using a 3PL partner with a nationwide network of transport options allows a manufacturer to realize the savings that comes with the 3PL’s preferred status. - Creating flexible warehousing – Building in efficiencies into your supply chain can also be achieved through creating temporary or permanent strategic warehousing hubs across the country at 3PL-owned or rented facilities. This approach lets manufacturers use more economical intermodal options like full truckload inventory deliveries to these hubs so they can be continually and efficiently stocked to combat supply chain shortages or delays and reduce the overall transportation expenses.
The 3PL teams can then ensure same-day or overnight delivery from these facilities to customers to meet on-demand needs. The warehouses can even be used by the 3PL as a local pick-and-pack distribution center. - Providing enhanced tracking – Any quality 3PL will have electronic shipment tracking as part of their logistics process, usually in the form of a mobile app or online portal. But the top providers will go a step further and include enhanced features such as waybill visibility, proof of delivery, photos of delivery, on-demand activity reports and more.
This offers manufacturers a real-time view for where their shipment is and allows them to incorporate all shipping stages into their internal reporting. - Managing the final mile (plus) – 3PLs naturally handle the transportation and delivery of products, but how they do so and the value-added services they provide make all the difference.
The best providers offer in-room white-glove delivery for high-end and sensitive products, but also go a step further by training their staff on how to set up, install and instruct users on those products so they’re ready to use. Having the 3PL manage this function allows the manufacturer’s field service teams to focus on revenue-producing service calls ultimately saving time and resources.
If you’re looking for a logistics partner who can assist with supply chain modeling, then contact us today to learn more.
Rate of Inflation, Supply Chain Costs and Our Response in 2022
By Len Batcha, President and CFO
Technical Transportation, Inc
By now, you’re probably aware of the skyrocketing rate of inflation hitting global economies. But who will end up paying for the rise in costs? The bottom line is that it has trickled down to us as individuals and families, so it is the end consumer who will be burdened to pay for these increases throughout 2022 and most likely beyond. Finding a way to navigate these changes with minimal disruption to your personal finances is a challenge in itself.
Inflation is real, and the current increases are more dire than the general consumer is realizing at the moment. It’s truly a perfect storm of circumstances and government policies that have led us to this situation.
One of the leading factors has been the influx of money into the economy through the U.S. Payment Protection Program (PPP), unemployment compensation and other initiatives that flushed money falsely into the economy and gave consumers and businesses an inflated sense of financial security while increasing the U.S. deficit.
As the markets were flooded with this money, it generated greater consumer demand for products and supplies. Many producers and manufacturers, however, haven’t been able to keep up with this demand due to a lack of resources and labor because of persistent pandemic lock downs all over the world.
In the U.S. supply chain industry, the Great Resignation last year further contributed to bottlenecks as workers opted to stay at home and receive their unemployment compensation rather than taking jobs at strategic ports and other supply chain processing facilities.
So now, as the inflation rate is hitting hard, almost everyone is feeling the financial squeeze. That results in employees and job seekers asking for higher compensation to pay for higher fuel costs, and price increases the highest in over 40 years. And it ultimately means that companies in the supply chain industry must raise prices to stay competitive while trying to achieve profitability.
Getting Granular About Price Increases
We understand there is a lot of fear about price increases among manufacturers and shippers. That’s why, rather than doing blanket price increases across the board, at TechTrans we’re looking at individual clients, down to the product level, to determine if services and rates would justify an increase and which customers/services are already performing at an optimum level.
Our goal is to minimize this burden to our clients as much as possible. By using an analysis tool, we can calculate the best way to determine which fee increases will need to be adjusted, or where we might potentially only raise prices on a case-by-case, client-by-client, and even service-by-service basis.
What we evaluate includes (but is not limited to):
- Fuel costs – What clients are under FSC (Fuel Surcharge) agreements with the standard national rate?
- Divisions within a company – Down to the client/modalities, we look at the historical data, evaluating shipment history and averaging out the gross profit as a whole versus shipment by shipment.
- Service charge increases – We will consider passing on to underperforming clients.
- Clients under contract agreements – Some agreements have built in rates not to exceed a certain % annually. These annual increases are usually maxed at 1-3%.
- Claiming “force majeure” on contracts – In some cases where contractual agreements limit the amount of increase we can pass along, there is an opportunity to claim “force majeure” from the recent pandemic to override those terms and enable a higher increase based on inflation rates for 2022.
- Well-performing clients – These may not see an increase if their gross profit margins are good.
At TechTrans, we don’t want to be just a service provider for our customers. We want to be a value-added partner that has our clients’ best interests at heart. That’s why we’re against blanket price increases for our customers. We’re willing to go the extra mile to analyze each account granularly and help ensure that these challenging times have a minimal effect on our clients’ businesses.
We’re always ready to help you with your supply chain and logistics needs. Reach out today if you’d like to learn more.contact us today.
How to Decide What Intermodal Approach is Best to Transport Your Products
By Len Batcha, President and CFO
Technical Transportation, Inc
The recent supply chain issues have brought global attention to the orchestration of logistics. When shipping runs smoothly, most people don’t notice the processes behind getting their vital goods and equipment. When the system breaks down, even a little, everyone feels it like ripples in the water after casting a stone.
As a logistics company specializing in getting technical, sensitive and bulky equipment safely to its destination on time, supply chain solutions that ensure these outcomes are always the first priority for TechTrans.
Enter intermodal transportation, a system that, while not a recent innovation, continues to be a topic of discussion and popularity as it provides multiple options to logistical kinks globally. Beyond that, it has benefits that translate to outcomes ranging from a better bottom line for companies to a cleaner environment for all.
Basically, intermodal shipping refers to loading goods into containers that can then be smoothly transitioned between various transportation modes. Air, boats, trains and trucks can all easily accommodate standardized shipping containers.
State of Intermodal Logistics Today
According to ResearchAndMarkets.com, the intermodal freight transportation market is expected to register a CAGR of 8.27% between 2020 and 2025. As companies evaluate new ways to reduce freight costs and their carbon footprint, alternative transportation mode options should be considered when moving freight long distances.
TechTrans’ use of domestic intermodal transportation systems means more efficient delivery and a better bottom line for our customers, as we can plan and smoothly adjust how an item moves through the transportation network to suit scheduling and budget needs in a variety of ways. This process also translates to better protection of the goods we ship, regardless of distance and transitions in the network.
The combination of efficiency and safeguarding is imperative when it comes to vital and sensitive medical equipment arriving at its destination on time and intact, for example.
As a product moves through the transportation supply chain network, it stays in its original container. The individual transporters don’t need to handle the product itself, which can be loaded directly into the container by the manufacturer.
Once a product is securely packed into the container, it may then be transported on a ship, plane, truck or by rail without being functionally jostled or moved until it reaches its final destination.
Things to Consider for Intermodal Shipping
There are pros and cons to sending an intermodal container through various branches of the network. These include:
- Ground/Truck: This is an efficient, flexible mode of transport, and transportation lead time can be predicted and calculated based on mileage and the availability of equipment and drivers. Trucks can be stopped or rerouted easily if demand or conditions change. Trucks and drivers are generally part of any supply chain network and are usually employed on the front end. They load and initially transport an item to a port or hub; and on the delivery end of the chain, retrieve the container from a local hub and ensure it reaches its final destination.
- Pros: More cost-effective than air. Better transit time than rail or ship. Can reach destinations that are inaccessible to other carrier types.
- Cons: Longer transit time than air.
- Rail: Universal containers can be easily transitioned to rail service and can cover the distance efficiently. A train has a higher capacity to transport multiple containers, making it more environmentally friendly than truck transport.
- Pros: Most cost-effective method if speed isn’t the top priority.
- Cons: Longer transit times due to train schedules and stops.
- Air: Larger airplanes, including some passenger flights, routinely accommodate intermodal transport containers, and can leapfrog over other transport methods. However, space and weight limits make this a premium option.
- Pros: Fastest transit times, making same-day or next-day delivery options more feasible.
- Cons: Container sizes are restricted according to airplane capacity, which means it’s notas dimensionally friendly an option as ship, truck, or rail. Tends to be the costliest method of transport.
Deciding when to utilize each of these methods depends primarily on the customer’s needs. If we need to prioritize cost savings over speed, we might forego air transport in favor of slower but more efficient modes like rail and truck. If there’s a narrow window to get an item to its destination, we’ll prioritize speed.
If you have any questions on intermodal transportation, and which option might be best for you, contact us today.
Supply Chain Technology Trends That Will Grow This Year
By Len Batcha, President and CFO
Technical Transportation, Inc
While there is still so much unknown about supply chain shortages and delays in 2022, we are all hopeful this year will mark the end of the COVID-19 pandemic and a switch from merely surviving to thriving for individuals and companies around the world. We also believe this year will mark the continued advancement of several supply chain technology trends that will shape our industry for years to come.
The supply chain and logistics services require organizations to make sure they meet customer deadlines while being compliant with Quality and KPI (Key Performance Indicators) expectations, through automation technology advances that assist employees make operations processes run more efficiently, while allowing stakeholders better visibility into product movement and availability.
There are three supply chain technology areas where we expect to see significant improvement and growth this year.
Automation/Data Analytics
Automation and data analytics have made great strides in the past few years. Although there have been recent supply chain bottlenecks and delays across the globe, those setbacks have actually given companies more time to test automation technologies so they will be prepared for peak seasons as things open up fully this year (we hope!).
That said, we believe automation and data analytics will continue to be huge players in the supply chain technology conversation this year and in the years ahead.
By automating and digitizing supply chain processes, companies can achieve levels of efficiency they haven’t experienced before. Similarly, by using data analytics to gain better insight into the data that is inherent in each company, management can make better, more informed decisions. We also believe that machine learning, artificial intelligence (AI) and augmented reality (AR) solutions will continue to emerge as our industry becomes more data-driven and automated.
Mobility
Whether you’re delivering to businesses or consumers, the final mile has become more important than ever, and supporting technologies will continue to grow this year. Namely, mobile- and browser-based tracking solutions will become even more mainstream and ubiquitous if they haven’t already.
Thanks to big-box ecommerce retailers such as Amazon, Walmart and others, both consumer and business buyers have come to demand a higher level of communication and visibility for each of their product deliveries. This trend will continue this year and beyond to become a standard part of doing business.
Secure access to final mile information via mobile apps or mobile-responsive website portals benefits customers and supply chain companies alike. The information should be easily accessible via order number or PO number and associated tracking numbers and should include relevant delivery details for all products in transit. In addition, relevant contact information should be made readily available should the customer have any questions or issues.
GPS/RFID Tracking
For high-end, mission-critical technology, equipment and other items, supply chain companies can go a step further and track products with RFID chips and GPS as the technology becomes more affordable. This is particularly helpful for items that are being shipped internationally by air, land or sea.
Given the recent supply chain struggles, particularly with issues at U.S. ports on the West Coast, we believe this technology will receive a boost in 2022 as more companies (and even consumers) will want more precise information on the status of their big-ticket items.
While it may not make fiscal sense to track every single item in every situation, supply chain companies will likely start using GPS and RFID tags to track pallets or even containers. Logistics managers and recipients alike will be able to map out exactly where their products are in the world and give more accurate arrival and delivery information.
If you want to learn more about how supply chain technology can benefit your operations, feel free to contact us today.
