@Risk

3PLs and their customers appear to be misunderstanding each other’s priorities.

For example, the recently published Global 3PL & Logistics Outsourcing Strategy Report 2011-12, from eyefortransport, found that:

• 36 percent of 3PLs believe lowest price is the most important factor for shippers when choosing a new 3PL, as opposed to best quality service (30 percent).  Shippers, on the other hand, rate best quality service as the most important factor (64 percent) and lowest price as far less important than 3PLs expect (15 percent).
• When it comes to the non-renewal of existing 3PL contracts, 3PLs overestimated the importance of their competitors offering a cheaper price by a dramatic 49 percent.

This kind of fundamental disconnect needs to be addressed so the industry can successfully face the challenges that lie ahead.

“This year’s survey findings really reinforced some of the trends we’ve seen for the last 18 months,” said eyefortransport’s Executive Director, Katharine O’Reilly.  “The insights are not really unexpected, but when you see figures like this, especially in areas where 3PLs and their customers are fundamentally misunderstanding each other’s priorities, we really sit up and take note.  These are gaps in understanding that need to be filled if the industry is to move forward and grow as it should.”

In other findings: (more…)

Even though the possibility of a double-dip recession is beginning to loom large, most shippers who took a recent Logistics Management readership survey appear to be adopting a “wait and see” attitude, rather than rushing to  significantly change the way they handle their supply chains or logistics operations.

Take a look at these poll results:

• 78 percent of the 339 survey respondents said they are concerned that the economy is on the verge of a double-dip recession.
• However, only 37 percent said that they plan on making changes to their supply chain operations or logistics planning processes. The remaining 63 percent indicated they have no such plans.

Among those who said they would make changes to their supply chains, the options being considered were quite varied. Some reported they may reduce inventory. Others said they may slow down manufacturing or production operations while waiting for a more sustained recovery. A sporting goods shipper said he/she would consider numerous alternatives, including evaluating supplier capacity, improving delivery time frame (particularly for international suppliers), reviewing internal procedures, adhering strictly to S&OP calendar and assessing systems used.

On the logistics side, survey respondents who are considering changes said they may: (more…)

Business logistics costs last year were on par with 2005 and still well below the pre-recession years, according to the 22nd annual State of Logistics Report from the Council of Supply Chain Management Professionals.

Since 1988, the report has tracked and measured all costs associated with moving goods through the US supply chain, and this year’s analysis shows that: (more…)

Trucking companies are preparing for the new Compliance, Safety, Accountability Act (CSA), particularly the new regulations for hazardous waste transporters, which are likely to directly impact driver retention.

According to ACE Westchester, the US-based wholesale-focused insurance operation of the ACE Group, the basic premise of CSA is simple: driver infractions, incidents, accidents, inspections – while on duty –will be aggregated and attributed to the motor carrier the driver worked for at the time of the incident. As a result, a motor carrier’s rating will be reflective of the drivers they employ.

Roger Murphy, Assistant Vice President, ACE Westchester Environmental, sees these new regulations as impacting every aspect of company operations for those hauling hazardous materials.

“CSA is our collective new reality, and it will only become stronger as the data is collected, aggregated, and translated into specific motor carrier and driver ratings,” he said. “While these new regulations may force some to rethink protocols, the end will hopefully justify the means: to have every driver return home safely, every day.”

If you’re wondering how these new regulations will impact your business, be sure to read ACE Westchester’s latest report, What Does CSA Mean for Commercial Trucking Companies?

This four-page white paper explains key aspects of CSA and how the new requirements will accelerate the uploading of data regarding roadside inspections, citations and accidents, thus enabling a motor carrier’s rating to be updated on a monthly basis. (more…)

Piracy concerns continue to plague shippers, and industry analysts now estimate that maritime piracy and armed robbery at sea cost the global economy between $7 and $12 billion each year.

Over the past few months, I’ve noticed more headlines in the news, as government agencies, international naval forces, the UN and even private firms announce plans to enhance efforts to help ensure safe passage of merchant ships in the Arabian Sea and Indian Ocean.

For example, a few weeks ago, the United Arab Emirates Ministry of Foreign Affairs and DP World hosted a high-level conference called Global Challenge, Regional Responses: Forging a Common Approach to Maritime Piracy.  The final declaration from this conference acknowledges that piracy is expanding and represents a threat to all nations.

In addition, on April 11, the UN Security Council adopted yet another resolution addressing piracy off the coast of Somalia. The tenth such resolution since 2008, Resolution 1976 calls for a comprehensive strategy for anti-piracy law enforcement, including “consistent with applicable rules of international human rights law, measures aimed at facilitating the transfer of suspected pirates for trial, and convicted pirates for imprisonment, including through relevant transfer agreements or arrangements.” (more…)