A Perfect Storm: West Coast Port Delays, Driver Shortages & COVID Create Uncertainty, Drive Price Increases

By Tom Chick – Vice President, National Accounts

Technical Transportation, Inc

A perfect storm is brewing in the U.S. supply chain, and its effects will be both far-reaching and costly to businesses.

A combination of negative factors occurring simultaneously has created an unwarranted exposure of high demand and increased logistics costs. This is anticipated to exist through at least the first half of 2021, creating a challenging dilemma for the logistics industry.

In its recent shipments and expenditures index for January, Cass Information Systems said that U.S. shipments increased 8.6% year-over-year, with its expenditures index surging 19.5%.

In addition, a recent Wall Street Journal article quoted DAT Solutions LLC saying that the average cost to hire a big rig from Los Angeles to Dallas in the spot market has risen to $3.16 per mile, excluding fuel, which is “almost triple what it was in April.”

These trends point to the potential for increased transportation costs across the industry at a time when there’s high demand to move goods across the country.

So what’s causing this perfect storm? There are several primary factors at play. Here’s a rundown:

1. The West Coast Port Backlogs
   Currently, more than 40 ships are sitting anchored off the coast waiting for entry. This is in addition to ships waiting for entry to east coast terminals, such as Savannah, and rail delays out of Canada. This has added a 30-day lead-time to deliveries from California. The delays have been compounded by labor and longshoremen shortages due to COVID-19.
2. An Ongoing Truck Driver Shortage
   Due to an older demographic that currently makes up the driver population, the COVID pandemic has caused many to claim early retirement or furlough time, due to possible health risks in the field. This has been exacerbated by new protocols put in place that cause terminal shut-downs when a driver tests positive for COVID-19. The result is fewer trucks and drivers available to take goods to points across the country.
3. A Big Increase in E-commerce Sales
   With stay-at-home orders put in place for most of last year, the pandemic forced online shopping rates to skyrocket. In fact, overall e-commerce sales grew by 44% in 2020–a nearly triple jump from 2019 online sales. Combined with unseasonably strong online holiday purchases, the market experienced a logjam in delivery times it is still recovering from.
4. LTL Freight Volume Volatility
   LTL carriers have seen a whiplash effect this past year, as they initially were hit with low truckload volumes during the height of COVID-19 shutdowns. However, with the reverse in effect now, carriers are struggling to keep up. This volatility is expected to remain at least through the end of Q1 2021.

What’s the outlook? How should you prepare?

There’s a good chance that rates in general, and LTL rates specifically, will increase during the first half of the year. It’s hard to determine exactly by how much at this moment, but there is a decent probability that will occur for some, if not all, of the industry.

To prepare, we advise all of our customers, and anyone in the supply chain industry, to anticipate a possible 5-15% increase in LTL shipping rates.

It’s our hope that many of the causes behind this perfect storm will be temporary and can be resolved with time and with the COVID-19 vaccines. Some effects will linger, however. Namely the driver shortages.

In the meantime, we here at TechTrans are doing everything in our power to keep operations as normal and cost-efficient as possible for our customers.

We pride ourselves as a one-stop logistics resource for manufacturers and suppliers across North America, and we have developed a strong network of industry partners over the past 30 years who are working with us closely to ensure that delays and costs are minimized.

If you’re a manufacturer needing third-party logistics help as you navigate these uncertain times, we’re here to assist. Contact us today to learn more.

The Cold Truth of the COVID-19 Vaccine Supply Chain

By Phil Burnette – Vice President, National Accounts

By John Cox – National Accounts

Technical Transportation, Inc

The COVID-19 vaccine deployment is still in its early stages, and we’re taking note of some interesting trends while keeping an eye out for some potential supply chain challenges in the near future.

The U.S. Department of Health and Human Services originally awarded Pfizer/BioNTech and Moderna with contracts for 100 million doses each and then extended a follow-up contract to both companies for another 100 million doses each. The combined contracts total 400 million doses with an expected delivery date to vaccination points around the country by May/June.

It’s been a slow start on the supply side so far, with only 20 million doses having been administered as of this writing. At this pace, it would take our country more than three years to administer the 400 million doses that have been ordered. Outside of any vaccine manufacturing issues, there are several mitigating supply chain factors that have contributed to this early sluggishness, including:

1. The vaccine launched during the holiday season, and the primary delivery companies for the vaccine effort were in the midst of their busiest season.
2. The healthcare system has been overwhelmed the past several months with COVID-19 cases, meaning there are fewer qualified and trained healthcare workers available to run vaccine clinics. Some providers are resorting to volunteer-based clinics to meet the demand.
3. States seemed unable to prepare for the logistic roll out for distribution and administration of the vaccines.

While availability of vaccines may be the primary cause for the delays today, we believe that in the coming weeks and months, supply of doses will become less of an issue as vaccine manufacturers become more efficient and are able to produce the vaccine quickly. As distribution continues, the ability to administer the vaccine in a timely manner may very well become a primary limiting factor.

A Cold Storage Problem

To achieve this, vaccination centers will need to store vaccines locally. While it sounds simple enough, these vaccines cannot be kept in standard medical refrigerators for extended periods of time. Both vaccines require access to medical-grade freezers for long-term storage at the point of use, and it’s complicated by the fact that the Pfizer and Moderna shots have incompatible storage requirements in their frozen state. Meaning, you can’t keep them in the same type of freezer. The Moderna vaccine can be kept in a standard scientific freezer from -25C/-15C but the Pfizer vaccine requires storage of -70C, a temperature that can only be achieved by ultra low temperature (ULT) freezers.

Combine that with the fact that not all points of vaccination have an adequate supply of either standard or UTL freezers to meet the coming surge in demand, and you can see a potential for further bottlenecks and delays.

Pfizer is currently using an innovative just-in-time (JIT) delivery method at the moment that incorporates cooler boxes with dry ice. This is keeping the cold storage problem at bay for now, but may not solve the problem long term. This will especially be the case if vaccination administration sites (especially in rural areas) are unable to vaccinate the local population at the same pace as doses become available, causing a build up of supply at the point of use, and potentially leading to spoilage.

Additional challenges such as patient issues with booking appointments, missed vaccination appointments due to no-shows, and possible apprehension from those receiving the vaccine could all contribute to a dosage-management whirlwind at vaccination sites. Without the proper equipment to ensure that no doses are wasted, the current order and distribution process may not be practical or sustainable as deliveries scale higher.

To further add to the situation, many of the top cold storage equipment manufacturers have a 6-8-week lead time in all of their products. Meaning, for vaccination centers that want or need more cold storage, they need to place their orders as soon as possible to meet the upcoming surge in vaccine supply and demand.

A Supply Chain Solution

For those companies manufacturing cold storage equipment, the supply chain itself should not be adding to any delays. Logistics and supply chain companies can help in a couple of ways:

1. The Front End – By providing local storage space in off-site warehouses, manufacturers can move raw materials, components and parts out of their facilities and create more room for additional production space. Also, provide timely deliveries of those parts back to the manufacturer when called upon.
2. The Back End – Having a single-source supply chain solution for the finished product can help mitigate any issues that may arise. This means working with a provider that can offer same-day white glove delivery, setup, installation and training for each unit, so it can be up and in working order as quickly as possible. Ideally, your partner can also offer services and repairs in the field to troubleshoot any issues.

With so many challenges and bottlenecks facing the current vaccination distribution supply chain, you don’t want the delivery, setup and operation of your refrigerator or specialized freezer to be part of the problem.

Working with a provider who can offer turnkey solutions and manage the successful shipping, delivery and installation of your equipment can ensure you are part of the solution for getting vaccines to everyone, everywhere.

Getting this right can potentially save lives, and TechTrans is here to help. Click here to contact us today.

Logistics Trends and Outlook for 2021

By Len Batcha,

CFO/President of TechTrans

Technical Transportation, Inc

The year 2020 has been challenging for most of us in various ways, but we’re hopeful that 2021 will bring new possibilities and opportunities for us all. As we head into next year, there’s still a lot of uncertainty in the market, but with the coming release of the COVID-19 vaccine worldwide, we anticipate things will start to trend upward in Q2.

With that said, and from where we sit right now, I see several major trends and issues that we can expect to see next year. Following is an overview:

The COVID-19 Vaccine Will Dominate the Supply Chain Early On

As expected, everything around the new COVID-19 vaccines from pharmaceutical players such as Pfizer, Moderna and Astrazeneca will drive supply chain topics and priorities through at least the first half of the year. Companies within the pharmaceutical and manufacturing space will all be focusing their development efforts to find a way to play a role in this major endeavor.

In the meantime, I think mitigation efforts, including social distancing, sanitization and other preventative measures will continue to prevail until the vaccine has been well established in local communities.

Cold Storage and Cold Transport Will be Essential Services

We’ll see a resurgence in service efforts of 3PLs to build out large-scale networks that focus on temperature control to keep vaccines at the required temperatures. This will include freezer farms, cold storage equipment, and temperature-controlled transport / vehicles.

There will also be pressure from end-users wanting assurances from shippers that the vaccines they receive have been kept safe. This will mean a surge in monitoring devices that ensure temperatures are being maintained at every stage of the supply chain.

Real-time Tracking Will Be a Requirement

The pandemic has also conditioned consumers to receiving real-time status updates on their purchases, and we believe this expectation will spill over to business buyers as well. This will include those purchasing complex equipment and technology.

This will likely translate to a big investment in devices and systems that can enable real-time tracking this year. Beyond tracking for vaccine delivery, this capability will become a requirement for any 3PL wanting to compete for business this coming year.

More Diverse Sourcing Partners Will Continue to Grow

Before COVID, the global supply chain was hit hard by tariffs imposed on China and other countries. The pandemic made the situation worse, causing lay-offs and furloughed logistics employees worldwide. Under a Biden administration, we believe some of those trade partners and foreign supply chains will be reopened, giving access back to suppliers and vendors that were cut off (most likely after Q1). We’ll also likely see more employees hired back.

However, one of the issues that surfaced from the tariffs and the pandemic is our over-reliance on China for the majority of our goods. The efforts started to find more diverse worldwide sourcing will likely continue to grow as companies put new contingency plans in place to help avoid future shortages, like we saw with the shutdowns last spring.

The Economy Will Stay Strong

We believe the economy will remain strong because consumer purchasing continues to remain strong. As an example, this holiday season saw spending off by only 1.1 percent midway through November compared to previous years, however, recent statistics show an increase in spending throughout the Holiday season.

The service industry domestically will still have the most uncertainty this year, including many small businesses and mom-n-pop stores. This is thanks to many big box retailers becoming omnichannel suppliers for everything consumers needed during the pandemic.

We believe, however, that small retailers will eventually make a comeback as shoppers look for more diversity in offerings and better service. This will be a hard road, though, for many small businesses–some of whom may never be able to recover from city-closure mandates.

Cyberattacks Will Be a Growing Threat

At this moment, we are experiencing a concerted and increased number of cyber-attacks and ransom-ware incidents throughout the industry, and we expect this to be a growing issue in 2021 as well. Logistics companies should ensure their IT infrastructure and technology are secure and communicate their security plans and policies to their stakeholders early in the year to build buyer confidence.

Driver Shortage Will Drive Price Hikes

Nationwide, carriers ranked the driver shortage as the No. 1 issue affecting the industry, according to a recent survey completed by the American Transportation Research Institute (ATRI), a nonprofit research organization of American Trucking Associations. The trucking industry has about 80,000 fewer available drivers compared to a year ago, due to the federal stimulus that increased unemployment benefits and “couched” a lot of drivers who discovered they could earn more by staying home than being out on the road.

In addition, the risks associated with COVID for an aging driver population drove many into early retirement. As many companies continue to play catch up from shipping delays experienced over the holiday season, the driver shortage will likely continue to affect transport times for the foreseeable future, while also driving price increases from an already stretched thin supply chain.

While 2020 threw everyone a major curveball, we are cautiously optimistic about 2021 as we look forward to new opportunities opening up, and a cautious return to a more business-as-usual environment toward Q3 of the coming year.

Last-Mile LogisticsConsiderations and Challenges Mid-Pandemic

By John Cox,

National Accounts, Technical Transportation

Technical Transportation, Inc

The logistics industry – like so many other industries around the world — has spent the past year surviving, adjusting and finding ways to forge ahead in light of the COVID-19 pandemic. And although we’re still working through this challenge, there’s hopefully a light at the end of the tunnel with the recent vaccine announcements.

Until then, the industry is still dealing with various challenges that have presented themselves this year — everything from shipping delays, infrastructure issues, and meeting demand for product. One such challenge has been how both businesses and consumers have adjusted their processes and decision making, which has had impacted the last mile sector.

Especially in places of brick-and-mortar businesses or in healthcare settings — where the safety of the workers and customers onsite is a pivotal concern – last mile and white glove delivery services have been met with some unique challenges this year. Following are some of the ways the industry has had to adjust.

SAFETY FACTORS

Safety has been a top priority and the main area of concern for everyone involved in human interactions during the last mile, including shippers, delivery crews, and consignees. Most customers have higher expectations in light of COVID-19, such as full visibility into your revised pandemic processes and the assurance that all safety checks are in place. If you can’t demonstrate those capabilities, then many manufacturers won’t work with you.

Safety processes include fever screening, symptom surveys, recent social interactions, and travel history statements for all persons involved in the shipment. This ensures everyone in the field and those they come in contact with are as protected as possible. Such processes have simply become a routine part of day-to-day operations, and will continue to be so for the foreseeable future.

These new measures and precautions have introduced additional expenses to last-mile operations, including the need for continuous:

• Personal protective equipment (PPE)
• Supplies and manpower for sanitization of equipment
• Staggered shifts to ensure appropriate employee distancing
• Additional employee time for documentation and assistance with health checks

Capacity is also an issue, due in part to government protocols and guidelines that are adding more pressure on the pre-existing driver shortage in the industry.

For example, for any driver who is symptomatic or comes into contact with someone exposed, they and their team are required to quarantine for 10-14 days. With such a small pool of drivers and equally skilled field workers currently available, the potential for reduced capacity is very real, should COVID strike at your workplace.

ECONOMIC FACTORS

These safety observations and issues, combined with some unique economic issues, will make the fourth quarter of this year pretty interesting, and busy, for last-mile operators.

Traditionally, Q4 always rivals or takes the crown for the busiest final-mile operations of both B2C and B2B companies – primarily due to the hockey-stick demand with holiday spending and end-of-year purchasing patterns. There are a couple of wrinkles this year; however, that are expected to make Q4 potentially memorable.

The first wrinkle is the increase in online shopping due to the pandemic. According to a survey conducted by Salesforce.com, the COVID-19 pandemic has caused a shift in how people interact with companies, moving from a majority favoring offline interactions in 2019 to more people favoring online interactions in 2020.

The study specifically showed that in 2019, 58 percent of interactions were offline versus 42 percent online. That trend flipped, however, this year with 60 percent favoring online vs 40 percent offline.

More than 58% of those surveyed in 2020 said they plan to increase their online shopping post-pandemic versus pre-pandemic. Of all B2B purchasers surveyed, 80 percent expect to purchase more online, post-pandemic.

A second wrinkle is the timing of Amazon Prime Day this year. Typically held each July, this year it was held in October to the tune of nearly a 50 percent increase in sales activity from Prime Day a year ago.

What that means is the holiday rush began even earlier this year, and with many people turning to online shopping, the transportation industry has faced — and will likely continue to face — the threat of shipping delays and backlogs that could persist for much of the quarter.

A PERFECT STORM?

When you combine today’s more restrictive operating environment for safety reasons with an increasingly higher demand for delivery services, it can create a perfect storm for bottlenecks and delays.

While some logistics companies may not be directly involved in the consumer eCommerce supply chain, they will still be impacted by what’s happening in the industry.

Some B2B providers are actually taking advantage of this online purchasing trend by dipping their toes in the B2C eCommerce arena to boost sales. By doing so, however, their account management and logistics teams have been pulled away from their typical duties, thus stretching already thin resources and diluting their B2B operations. If not managed properly, this new activity level can cause errors and delays in areas that require more specialized attention and complex service as part of the last mile delivery.

For manufacturers who may be working with such partners, they may find their service levels affected due to a shift in priority from their logistics team. For manufacturers with complex 3PL needs, it is critical now, more than ever, to look for a provider that has remained dedicated to your space and has focused their full effort on your needs.

Slowly but surely, we will move beyond this pandemic, but for now we must focus on the issues and challenges that are immediately affecting the supply chain. At TechTrans, we continue to focus all our efforts on meeting the needs of our clients with complex shipments or specialized equipment to mitigate the challenging trends facing our industry, and to stay on track while we work our way through these unprecedented times.

How to Protect Your Supply Chain from Unexpected Disruptions

By John Cox,

National Accounts

Technical Transportation, Inc

If the COVID-19 pandemic has taught us anything, it’s the need for companies to better protect their supply chains from unexpected disruptions, whether caused by a pandemic or other natural or man-made disaster.

In this blog, we look at how manufacturers can better prepare their supply chain and logistics operations to help mitigate the impact of future adverse events.

Communicate Proactively, Clearly and Daily

First and foremost – and what should be your top priority – is establishing clear and open communications between all of your supply chain and logistics partners. To that end, here are some questions you should be considering:

• Do you have an existing cadence of updates from your partners regarding the current status of the products or services they are impacting?
• Have you been given access to reports by your partner showing real-time updates of service completion for the work they are handling?
• Have you clearly defined your expectations for services and outlined the metrics for the scope of work?

The best partners will reach out to you proactively and often communicate the status and capacity of their operations, how they can keep your products moving, and any potential impacts to your customers or the metrics of the scope of work.

You also need partners with the infrastructure to meet your needs. Your process needs to account for changes driven by the customer (such as requirements changes, scheduling changes) as well as changes driven by the environment within they operate (labor capacity, availability of equipment, accidents, human errors, natural disasters, and current events in the local market or nationwide that can cause disruptions to service). Questions to ask include:

• Do they have operational capacity that allows some flexibility during disruptive markets?
• Can they adjust their deliverables mid-stream, if need be?
• What is the expected communications strategy if something changes during the course of the project?

Communication is critical in these situations, and making sure your expectations are known and understood by your downstream partners will help you stay in a proactive state rather than reactive.

Put Contingencies in Place

You also need to understand your logistics partners’ contingency plans. Take logistics in the current market for example. What happens if a local driver gets sick with COVID-19? What does that mean for the other employees within that office? How will your products get delivered if the exposure triggers a shutdown of the facility?

Contingencies will be critical for ensuring your logistics needs can be met during times of disruption. Things to look for in a partner include:

• What processes are they proactively implementing to mitigate the risk of service interruption in light of current challenges (e.g., COVID-19 exposure)?
• What reserves do they have in any given marketplace, and how many resources do they have at their disposal should anything happen in a local market?
• In the event that the primary process for completing the service should be compromised, do they have secondary and tertiary support arrangements?
• Do they have a reliable network of partners and providers to lean on to keep your supply chain running smoothly, allowing them to commit to servicing your products and honor their commitment?

You also need to understand where the assumption of risk falls if unexpected issues arise. What exceptions are covered by your partner as part of your service agreement, and what issues are you responsible for as the shipper?

Understand the True Capacity of Your Partners

Another consideration is your 3PL’s personnel resources that are committed to their payroll (i.e. their own employees) because it’s important to know what true capacity they have to serve you.

What can they handle if they are placed with more responsibility, or if someone gets sick? What will be the impact if part of their team has to be furloughed? Can they perform any capabilities virtually, such as moving to online training for your products? Can they automate any of their processes to make it easier to manage virtually with fewer amounts of resources?

These are all considerations a logistics partner should be able to address with you, ensuring you have the right team who can handle your needs.

Make Sure Your Partners Have Good Technology

The logistics industry has not always been at the forefront of technology adoption; however, there are better technologies in place today that make the supply chain more streamlined and efficient. To help offset any issues that may arise from a major market disruption, you should have the confidence that your 3PL has invested in the technologies needed to minimize any disruptions to the supply chain.

In this current pandemic era, this has required 3PLs to have the ability to replicate a large part of their job function in a digital or virtual experience. Make sure your partner has documentation- capture capabilities for all of the critical points in the supply chain process, including:

• Access to the real-time status of your shipment throughout the transportation cycle
• Shipment updates provided at each major hand-off during transit
• Virtual access to proof-of-delivery capture and review through digital photos and signatures

The latest technology can perform these functions, so if your partner doesn’t have those capabilities, it can slow down all the functions in your supply chain.

In the end, there is no way to fully make your supply chain pandemic-proof. However selecting partners that have the infrastructure, team and technology in place to offset any potential disruptions will go a long way to ensuring your own company’s continued success during the most difficult of times.

Looking at the Remainder of 2020 in the Logistics Industry

By Len Batcha,

President

Technical Transportation, Inc

January seems so long ago, and like a different world. In many ways, it was.

When we wrote our Supply Chain Outlook for 2020 blog earlier this year, we were worrying about driver shortages and electronic logging systems, among other hot topics. The coronavirus, or COVID-19, was still in its infancy and confined to China at the time.

But as we all know, that has changed considerably. With the global spread of the disease and subsequent economic shutdowns and quarantines, our industry has also changed considerably, albeit hopefully temporarily. Most logistics companies today have 20-40 percent of their business on hold, and they’re having to adapt.

The Trump Administration economists were originally anticipating a V-shaped curve recovery for the economy, where things bounce back quickly after a brief downturn. But today, it seems the curve will be more of a U-shape, where the economy remains suppressed a while longer, but when it bounces back, the incline will be immediate and possibly overwhelming. Whether our industry is able to handle that remains to be seen.

In the meantime, not everything is bad in the logistics industry, and following are some of the trends we’re seeing.

The Driver Shortage is Solved for Now

The industry has done a 180-degree turn from when we had a driver shortage to an over- capacity situation at the moment because of COVID-19. Thanks to the U.S. government’s paycheck protection program (PPP), though, many layoffs in the industry have been prevented.

This surplus in drivers is good news in the sense that we’ll be better prepared when the economy bounces back. In fact, if demand takes a more V-shaped curve, then the current driver surplus may not be sufficient enough.

And we do believe demand in many industries will bounce back in a big way. We just don’t know exactly when.

A Focus on Training

Many companies are using this slower time to tackle items that may have been “nice to haves” previously, such as training, process reviews, and compliance initiatives.

At TechTrans, we’re using this time to dig deep and review our logistics processes and update them where it’s needed. We’re also making them available on our learning management system (LMS), so employees and partners can review them online and document compliance. With this approach, we’ll be in a lot better position to step on the gas and go without having to update or modify processes when activities increase.

The only downside is, you can watch a video or do virtual training on anything, but unless you’re handling that product and experiencing it in real life, you won’t develop true expertise on it. It’s similar to buying a piece of ready-to-assemble furniture, which, if you’re following directions, takes a long time the first time you do it. However, if you put together a second one, it would likely only take a fraction of the time. That hands-on repetition makes a big difference.

eCommerce Isn’t for Everyone or Everything

We’ve seen eCommerce make big gains during the pandemic, but largely with consumer goods. Our concern is growing over one vertical market: the big-box retailer. With the shutdown, people have gone away from the big box retailer, outside of a select few that have more robust online operations such as Amazon, Walmart, Target and Home Depot. And while this trend towards more online purchasing has worked well during the pandemic, I don’t think it will remain this high in the long term.

Once the pandemic is over, people will have a need to go outside, go shopping and get back to enjoying life outside the home. And the majority of consumers today still like the ability to see and feel things they are wanting to buy — even if they ultimately purchase it online. We only hope retailers–big and small alike–can survive this ordeal so commerce can normalize again.

But for the logistics industry as a whole, we also have to be prepared for not only a possible huge shift in demand, but the need for a ready-to-go infrastructure that is able to meet that demand. Companies that can position themselves for that growth now will be ahead of the curve, no matter which shape it takes.

Strategies for Reducing Logistics Costs During the COVID-19 Era

By Sean Horner,

VP Operations

Technical Transportation, Inc

The quarantines and stay-at-home mandates precipitating from the COVID-19 pandemic are causing hardships for many companies around the world. And the logistics industry is certainly not immune.

While providers that serve the food and medical sectors, as well as other essential industries, remain relatively active, other sectors have seen their supply chain operations grind to a near standstill.

So as companies are looking for ways to trim logistics costs, at least temporarily, we’d like to share some ideas that might help.

Stock up on fuel while prices are low

The reduced demand for fuel is a byproduct of the stay-at-home mandates, and combined with international oil price disputes, has led to some of the lowest gas and diesel prices in years.

For those logistics providers that keep a fuel supply at their terminals, now may be the time to look for deals to replenish your stocks while prices remain low.

There’s no set timetable for a return to higher prices, but as of this writing, WTI crude is already trending higher off of its lows in April, which means fuel prices may increase more as well.

Use this time to plan for the long term

While activity is lower for many logistics companies, it’s expected that things will bounce back later in the year. The main question is, how quickly it will happen.

What you don’t want is to be caught off guard by sudden, dramatic increases in demand as the economy normalizes, which often results in higher operational expenditures. For this reason, now is the time to begin thinking about what you can do to prepare yourself to meet customer expectations, and perhaps create a competitive advantage.

Take advantage and pre-position products now

Part of that long-term planning could be pre-positioning products in strategic locations that are near your customer base. This will help you respond quickly to new orders as demand begins to ramp up again, and it will help improve customer satisfaction through faster delivery when that time comes.

As you pre-position, consider using cheaper transportation methods to move items. For example, if you traditionally use air freight, consider ground or rail transportation in the interim. The current downtime may give you the lead time needed to use these less expensive transportation methods, thus saving you money in the long run.

And if you don’t have warehouse space in a targeted area, consider temporary, flexible warehousing options offered by some providers. You’ll only need to purchase the amount of space you require, and then scale up or down as needed. This could give you a tactical advantage over the competition as the economy bounces back.

This is a tough time for many, but if you take some prudent steps now, you can come out ahead on the other side.

Providing Essential Services During These Unique Times

By Len Batcha,

President

Technical Transportation, Inc

The coronavirus, or COVID-19, has been one of the biggest disruptors the world has seen in some time. Just weeks ago, the U.S. economy was running full steam ahead, and as of this writing, we’re virtually shut down. It’s an unprecedented situation, albeit a temporary one, but it still hurts.

For the logistics industry, though, this creates an opportunity for companies to shine excel during this dark hour. As an essential business sector, defined by the Department of Homeland Security, we’re charged with keeping the supply chain running for other vital sectors, including the healthcare and food industries.

That means that we keep working. Not just for ourselves and for our employment, but by knowing there is something bigger at stake: the lives of the most vulnerable. Being an essential business means our industry is in a position to serve a higher purpose for our fellow man in this time of need and uncertainty.

Whether it’s sending critical healthcare supplies such as beds, ventilators, testing equipment and personal protective equipment (PPE) to the hardest-hit areas, or by making sure each grocery store in each community is well-stocked to serve its local citizens, we are called on as an industry to meet these unique and timely challenges with prudence and with courage.

We are fully operational at TechTrans, and we’re helping companies in other essential business sectors respond to their urgent needs. Our internal COVID-19 Task Team is ensuring that our entire network is following CDC recommendations to reduce the chances of spreading this contagious virus at our carrier locations, our customers’ locations, and your customers’ locations.

We certainly look forward to the day this crisis has passed — and it will pass — so we can get back to more normal business activities and purpose.

But in the meantime, we’re here to help you. And we’ll do it in a way that is safe for you, your customers, our employees and our collective families.

Together, we’ll get through this. As an industry, and as a nation.

Godspeed.

Reducing Costs When Relocating Equipment and Technology

By Phil Burnett,

Vice President, National Account Sales

Technical Transportation, Inc

When organizations and businesses purchase big equipment and technology (think complex equipment such as diagnostic analyzers laboratory refrigerators & freezers, and CT scanners), that equipment often means a significant capital expense, sometimes in the millions of dollars. In other cases, the machine itself may just be on lease from the manufacturer, with the consumable/dispensable products being the focus of revenue for the retailer or end establishment (examples being pharmaceutical drug dispensing machines, or retail-front coin & cash recyclers, POS kiosks, and vending machines).

Given the high price tag of the equipment in either scenario, many companies who bought or own those machines naturally try to extend the use and value of that equipment for as long as possible. This could mean that there may come a time when the equipment must be moved for repurposing, everything will be done to carefully and safely relocate the equipment rather than scrapping it altogether and buying the latest-and-greatest.

For example, in a healthcare setting a hospital lab may choose to move its equipment from one building to another as part of an expansion. Or a clinic might be opening a satellite office and must relocate certain machines to the new location, to make room for newer equipment coming in.

Relocation may also make sense in a leasing situation, where the machine is on loan by a retail or other similar establishment; since the manufacturer still owns that machine, in most cases they will want to extend the life of the machine for as long as possible, and will look to relocate the equipment — rather than destroy it — if the retailer wants to make room for a newer model or other equipment.

Unfortunately, moving this big equipment from Point A to Point B is not as simple as moving furniture from one house to another. It requires specialists for each phase of the move, including disassembly, packaging, white glove delivery, set-up and even software installation / calibration.

It’s a situation that can be costly – and unnecessarily so – if not handled properly.

Instead of finding different specialists to handle each part of the project, or using a manufacturer’s internal resources to handle this non-revenue task, it is often optimal to find a logistics partner that could efficiently and cost-effectively take that burden off the manufacturer’s hands.

Finding a single-source provider with a turnkey relocation solution is important if looking to reduce costs, because they likely have the processes and partnerships already in place to get the job done efficiently.

And if at all possible, you need to find a logistics partner that has experience in your industry, and preferably with the type of products you provide. This will help reduce the learning curve and offer another layer of quality assurance to the process.

Have Questions?

At TechTrans, we have the expertise to offer turnkey relocation services for multiple industries. If you have questions about your equipment’s relocation needs, feel free to contact us today.

Supply Chain Outlook for 2020

By Len Batcha,

President

Technical Transportation, Inc

Each year brings new opportunities and new challenges, and 2020 is no different. So as we start this new decade, below are some trends we can likely expect to see this year.

1. The U.S. economy remains in the “Goldilocks” zone.

This year kicks in with a healthy economy, and there are some great economic indicators that show that the gross domestic product is going to be somewhere in the 2 to 3% range, which is — as they say — “just right.” However, economies in other parts of the world face more uncertainty, which can reverberate back to the U.S., and we need to keep watch for that.

Part of that uncertainty revolves around tariffs and how they’ll play out this year. Many large businesses, including some top manufacturers and shipping companies, are holding off on large capital expenditures while waiting to see how this is all going to shake out.

Other events that will play a role in the economic outlook include the U.S. presidential election and the emerging coronavirus outbreak in China, which has temporarily halted a lot of manufacturing in that country as of this writing. Those two wildcards have the potential to make big impacts this year.

2. Technology Takes Stage

For the past few years, electronic logging devices (ELDs) were the buzz of the supply chain industry, and as of December, all carriers were required to have them implemented in all of their trucks.

Sadly, these regulations bankrupted some smaller providers in 2019 because many were unable to increase their rates enough to offset the capital equipment costs, in addition to other factors. That said, we believe competitive pricing will come back into play in the transportation industry this year.

Technology-wise, we also believe that the large transportation companies will look to make a bigger investment in electric vehicles to replace their aging fleets, and to reduce their carbon footprints. While technologies like driverless vehicles are still years away from being in the mainstream (if at all), advances in smart car technologies will be changing the landscape over the next decade.

Manufacturers could take these tasks on themselves, however, it will likely be more efficient and cost-effective to engage with a logistics partner that already has the knowledge base, skill sets and processes in place to handle the entire process seamlessly. An ideal partner should also serve as a single-source logistics provider for all the moving parts and take the management burden off of you.

3. Infrastructure Enables Quick Deliveries

In consumer-based logistics, the infrastructure in most urban areas is already set to easily address and ensure delivery on the same day, next day, or second day. This helps many companies compete against the Amazon Effect. However, when you get out to the farther suburban areas, it’s still an issue that many logistics companies will need to deal with this year.

In B2B logistics, where the size and scope of many products (think large equipment and technology) might not rival the speed seen in the consumer sector, I think the supply chain infrastructure is well-enough established and set up to transport and deliver products faster and safer than ever before. From where I sit, however, I think the demand for B2B logistics likely will remain flat in 2020 compared to the last couple of years.

Many changes in the B2B space over the past three to five years have addressed several of the pertinent issues the industry faced. This includes recommendations for the LTLs and changes to the requirements for drivers, upgrades in equipment, and better wages for drivers, which has improved the driver shortage. Because of these initiatives, I think we’re going to see a lower accident rate in 2020.

4. Industry Changes Are Paying Off

In summary, I think the logistics industry today has higher quality equipment and has built in flexibility to address any anomalies to shifts in the supply chain. I also think the logistics arena has been growing for years and there’s a lot more opportunities in it. Companies are embracing analytics to improve operations so we can plan and predict better now.

The whole supply chain has gotten significantly smarter and has become a strategic asset for most industries, and we see that trend continuing strongly in 2020.

Have Questions?

If you have questions about logistics for smart lockers, then contact us today and we can give you more insight.