5 Predictions for The Future of Third Party Logistics in 2020

The third party logistics (3PL) landscape has altered significantly in the last decade and is tipped to experience further growth and change as mobile technologies and ‘smart’ working practices develop. With growth in third party logistics markets forecast to be as high as 15 percent, the demand to service these markets in 2020 will generate fierce competition.

A greater consumer demand for 24/7 services and reduced costs means efficiency and accuracy will be crucial for the future of a successful 3PL providers. Businesses will remain focused on the goal to drive down their own operational and labor costs by outsourcing logistics to 3PLs but success will hinge on their willingness and ability to adopt new technologies.

The following are the first 5 predictions we will see in the next 7 years which will be common among most third party logistics companies and trends and practices shippers and supply chain managers should come to expect from their providers.

1. More Collaboration Between Shippers and Third Party Logistics Companies

Third party logistics companies will rely heavily on technology to collaborate, connect, and engage with customers. Electronic data exchange will be critical, not only for the performance and integrity of the data, but the flexibility and speed of change. Vendor managed inventory, where the supply chain vendor monitors the buyers inventory and makes periodic resupply decisions, will be common in even the smallest 3PL via web-based portals and access to the systems of the 3PL.

2. The Rise of Mobile Applications

Paper records in warehouses will be a distant memory, and everything in 2020 will be focused around agility through mobility. Mobile devices will be commonplace and used right across the board at all third party logistics firms. With the potential for RFID enabled devices to hold data so that the items carry information with them, for example. product and providence for identification and traceability. Customers will be able to order and process freight shipments anytime, anywhere, 24/7.

3. Smarter and More Dedicated Technology from Third Party Logistics

Third party logistics providers will see the benefits of investing in smarter IT and software systems which can deliver rapid ROI. Software, such as Transportation Management Systems (TMS), will drive cost and time saving, decreasing inefficiencies. Voice prompts and commands will be standard in the supply chain process, such as stock inquiries or freight tracking. Improved speech recognition software will also allow workers to communicate directly with their Warehouse Management System (WMS) to improve stock recording, speed up order turn-rounds and shorten staff training periods.

4. The Harnessing of Big Data and Information Sharing

Cloud-based technology will be used by the majority of third party logistics companies as they embrace the new age of ‘Big Data’. 3PLs will recognize the need to allow clients access to their own systems to improve efficiency in areas linked to seasonal trends and the demands of flexible operations. Shared data will also allow the traceability of an item in the supply chain.

5. The Globalization of the Economy

In 2020 the world economy will be more integrated and 3PLs will be expected to work on a larger scale with a distinctly global outlook. Distribution will expand globally with more opportunities opening up in other parts of the world creating an even more complex supply chain, varying costs, increased process and therefore an increase in expert third party logistics.

The 3PL industry will face many challenges in the future, but by 2020 the sector will have grown dramatically, largely down to the massive expansion of emerging global markets. This change will happen swiftly as we see more and more mergers & acquisitions over the coming 7 years in the third party logistics world, as well as more standardization in the expectations of shippers and supply chain managers.

What trends do you think we will see in 2020?

Service Advisory Report

We had hoped the past two weeks would bring significant relief to inter-modal and truckload operations, however, the compounding affect of several events has slowed the recovery process. For example, despite ongoing cleanup efforts, the Bethlehem and Philadelphia, PA ramps continue to experience delays of 36-72 hours. Additionally, early last week and into this week, there were several incidents which delayed or closed roads and inter-modal routes integral to specific locations.

On Sunday, March 2nd, Winter Storm Titan blew in causing hazardous road conditions in Missouri, Arkansas, Tennessee and up through the mid Atlantic. This prevented crews from reaching the trains. As a result, delays of 24-48 hours are expected for inter-modal traffic to and from the above locations. Titan also had an impact on railroad, dray and truckload operations in areas from Dallas, TX to Norfolk, VA. An example of I-40 gridlock outside of Memphis.

Sunday, February 23rd, marked the beginning of a series of events directly affecting Seattle, Spokane and Portland services. A BNSF non-inter-modal train derailment occurred on the main track at Saco, MT. The track was closed the majority of the day, causing 24-48 hour delays. On Saturday, March 1st, a BNSF non-inter-modal train derailed on the main track at Olney, MT. Service was halted for more than 24 hours, again causing 24-48 hour delays. Lastly, this past Monday, an avalanche in the Glacier Park, MT area blocked both main lines (see photo). The combined impact of the derailments and avalanche could result in continued delays of 24-72 hours in and out of these cities.

We and our transportation partners continue to work through the challenges presented by this winter’s extreme weather as both the number and length of delays have decreased over the past two weeks. With no further interruptions, inter-modal service will improve as locomotive, car, box and crew balance is restored. We anticipate a similar reduction in delays and a return to standard service for truckload, LTL, dedicated and home delivery services over the next one to two weeks.

Customer service is very important at Cassidy Transport and it’s our commitment to keep you informed of significant service information.
Please reach out directly to us at info@cassidytransport.com or call 352-503-2017

Diesel Average Tops $4 After Fifth Straight Gain

The U.S. diesel average pushed past the $4 level for the first time in almost a year, gaining 2.8 cents to $4.017 a gallon, the Department of Energy reported Feb. 24.

Trucking’s main fuel, which has risen 14.4 cents over the past five weeks, last topped $4 on March 25.

Despite the gain, diesel was 14.2 cents less than in the same week a year ago, DOE said after its Feb. 24 survey of filling stations.

The agency also reported the retail gasoline average price jumped 6.4 cents to $3.444 a gallon, the highest price in five months.

The fuel — which has posted three straight gains — spiked 13.5 cents in the two most recent weeks, the sharpest such rise since mid-July, when it rose almost 20 cents.

Last week’s price is 34 cents below a year ago, but the highest since it was $3.495 on Sept. 23.

The upturns came on the heels of oil prices that topped $102 a barrel, the highest level since October.

One analyst said the winter’s ongoing cold weather, coupled with seasonal refinery maintenance issues and higher oil prices, combined to boost pump prices higher.

“Nobody really thought we’d be up there at $4, but the weather has thrown everyone for a loop,” said Phil Flynn, senior market analyst with Price Futures Group in Chicago. “We’ve had refinery issues and supply issues. The good news is, someday it might warm up.”

In contrast to recent weeks, last week’s diesel upturns were led by gains in DOE’s West Coast and Rocky Mountain regions, where it rose more than 3 cents each to $4.035 and $3.95 per gallon, respectively.

The East Coast’s price rose 1.9 cents to $4.148 — remaining the highest regional average — and its New England and Central Atlantic sub-regions continued to have the highest overall prices at $4.386 and $4.358.

This story appears in the March 3 print edition of Transport Topics.

Manufacturing The Backbone of American Economic Growth

Today, manufacturing is poised for a comeback, but for the first time in history, manufacturing in the United States surpassed the $2 trillion mark. Taken alone, the manufacturing sector would rank as the world’s eighth-largest economy. Manufacturing output has soared since the end of the recession, and manufacturing employment surged in the last months of 2013

Manufacturers in America are making more products today and making them better than ever before. Innovation is a big reason. The ability to adapt, innovate and improve shows up in abundance in manufacturing.

The Backbone of the American Economic Growth, who would have thought, for example, that in 2014 the U.S. would be in a position to become energy independent and even export our energy resources? But innovation made it possible, helping to spawn the boom in domestic energy production. New technologies and techniques are allowing us to tap energy reserves that were out of reach not long ago.

Affordable natural gas has made production more cost effective for manufacturers across the board. The result is more jobs for workers and more economic growth in America. The American Chemistry Council reports that $90 billion of new private-sector manufacturing investments are planned, thanks to the shale boom.

From the CEO’s office to the shop floor, manufacturing attracts some of the most dedicated, hardworking, innovative and talented women and men in America.
But we don’t have enough of them. Eighty-two percent of manufacturers report that jobs are going unfilled because they can’t find people with the right skills.

The National Association of Manufacturers is helping to bridge this gap by developing a skills-certification program that enables American workers to receive a portable credential and by reaching out to veterans, many of whom have skill sets that are perfectly aligned with what manufacturers need.
But there’s also a need for public policy reforms that will broaden the pool of skilled workers and address a host of other challenges confronting manufacturers. For the past few years, manufacturers have succeeded in spite of Washington, which has stood still on manufacturers’ priorities or, even worse, enacted policies that make it harder to compete.

Manufacturers have a number of ideas to spur economic growth and job creation, but we’re tired of waiting on Washington.

Common-sense solutions abound. For one, policymakers should let the shale energy revolution continue to blossom. The energy industry is at risk of suffocation by regulation. It seems like all we hear from the administration—particularly the Environmental Protection Agency—and its allies in Congress is that they want to put a stop to the use of oil, gas and coal. President Obama could also score a major victory for economic growth by approving the Keystone XL pipeline.

If Washington stays out of the way, the United States will not only continue to decrease its reliance on energy imports from potentially unstable parts of the globe, but also will become a major exporter of energy.

Exports represent a significant growth opportunity for manufacturers. Ninety-five percent of the world’s consumers live outside the United States, so it’s encouraging that we are pursuing two major market-opening agreements: the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. However, to complete these agreements, Congress and the administration need to approve Trade Promotion Authority or risk falling even further behind our competitors in our efforts to reach and expand in new markets abroad.

For America to maintain our mantle of economic leadership, we need policies that harness the innovation and ingenuity that have created world-changing products as well as the incredible strength of people who work in manufacturing. The 12 million men and women who make things in America strive every single day to ensure the strength of our nation’s economy. It’s time for Washington to demonstrate that same commitment to our nation’s future.

Coming To a Highway Near You – Con-way Freight Deploys Nat-Gas Freightliners

Con-way Freight has started to add Freightliner Cascadia natural gas-powered trucks to its fleet, according to Freightliner parent Daimler Trucks North America.

The trucks will operate in Texas as Con-way Freight evaluates how they operate in real-world fleet operations, DTNA said in a Dec. 23 statement. They are the first Cascadia day cab trucks to feature factory-installed compressed natural gas tanks.

“Freightliner has been an excellent partner as we have explored how natural gas-powered trucks fare in our operating environment,” Randy Mullett, Con-way’s vice president of government relations and public affairs, said in the DTNA statement. “These new units will allow us to expand our knowledge base, particularly with respect to how the larger CNG-powered engines perform in our line-haul network.”
DTNA started production on the trucks in August 2013. They feature Cummins Westport ISX 12 G engines.

Con-way Freight has used medium-duty Freightliners with 8.9-liter Cummins Westport engines since 2011 in the Chicago area, DTNA said.

By Transport Topics

Trillium CNG to Have 77 Stations Open by June

Trillium CNG expects to have 77 compressed natural gas stations open by June, representatives said in a meeting with Transport Topics.
The company has 35 stations open across the country and said it will open 11 stations in the first quarter, with the rest expected to come online afterward.
The fueling stations will be built near major interstates as the company continues to develop a coast-to-coast network of CNG stations and has said it is “on the lookout for places where local trucking companies are ready to use CNG.”
The company previously announced it will build 101 stations in 29 states by 2016.

By Transport Topics

Trucking Adds 3,200 Jobs; Unemployment Rate Falls to 5-Year Low of 6.6%

Trucking accounted for 3,200 of the 113,000 jobs added in January, and the U.S. unemployment rate fell to a five-year low of 6.6%, the Labor Department reported Feb. 7.The job increase was below economists’ forecasts of 180,000, and employment gains for December and January were revised upward by a total of 34,000, Bloomberg News reported.
The transportation and warehousing sector, which includes trucking, added 10,000 positions in January, after a similar gain in December that had originally been reported as a small decline.The trucking industry’s 100-jobs gain in December was unrevised.The unemployment rate is the lowest since October 2008. Analysts had forecast it to hold at 6.7%, Bloomberg reported.More than half the added jobs came from the construction and manufacturing industries, both of which benefit the trucking industry.
Manufacturing added 21,000 jobs — more than twice economists’ forecast — following an 8,000 increase in December. Construction companies added 48,000 workers, after a 22,000 decline.

Retreads Help Wide-Base Tire Users Extend Life of Product, Say Fleets, Makers

Wide-base tires, new and retreaded, are providing an extended-mileage benefit for dry-van carrier Bear Trucking Inc., according to a company manager.
“The mileage is excellent,” said Wayne Jacobi, operations manager for the San Bernardino, Calif.-based company.

The fleet runs three brands of wide tires on about 45 tractors and 140 trailers, he added.
Singling out a recent example in which new wide-base tires on a tractor operated exclusively by one driver lasted more than 200,000 miles, Jacobi said, “When we finally pulled them off, they were still ‘capable’ casings.”

After being recapped, those tires have been running on a trailer and are expected to reach the same mileage. “We have been doing recaps on the wide-base tires since 2010,” he said.
Typically we would get between 150,000 and 160,000 miles on drive tires in a dual configuration, before retreading was needed. Quality retreads have been a staple for the trucking industry. Many retreads, though, use outdated equipment to remove the original tread from wide tires — a process called buffing. Retreads have been steadily replacing their machines with newer, computerized buffers that can be used on all truck tires

This makes the buffing step more precise, in order to remove the appropriate amount of original tread and yet keep a safe distance from the belt package.
David Stevens, managing director of the Tire Retread and Information Bureau in Falls Church, Va., said,“Continued adoption of wide-base tires by fleets that do careful [return-on-investment] analysis and have tire-maintenance programs shows that for the right application, wide-base tires can provide economic benefits — including successful multiple retreads.”

He added: “There really haven’t been changes in the retreading process for wide-base tires,” which he said has been in existence for more than 20 years.
What has changed, Stevens said, is that tire sizes that were predominately used on refuse trucks and saw “very little, if any, use in line-haul trucking” have evolved, and the retread industry “has adapted to take on the challenge of retreading these tires for line-haul use.”As with dual tires, casing is critical to retreading, tire manufacturers said.
Compounds, sipping, tread design, inspection equipment and processes are all areas where great strides [also] have been made,” he added.

Last year, Michelin launched a wide-base retread for the line-haul drive position. And Continental Tire has introduced a retread for its HTL1 wide-single retread.
Additionally, the Goodyear Tire & Rubber Co., based in Akron, Ohio, has wide-base tires with “DuraSeal,” — a feature that “instantly seals punctures of up to a quarter-inch in diameter in the repairable area of a truck tire’s tread,” said Brian Buckham, commercial brand manager, adding that the feature “helps ensure casing integrity” for retreads by not allowing the tire to go flat.
“If the tire continues to roll while losing air, its casing durability will begin to degrade over time — similar to running a tire at a low air pressure,” Buckham said.

Although retread-ability plays an important role in the purchase of wide-base tires, the products offer other benefits that are driving a perceived sales growth — such as weight and fuel savings, tire makers and fleets
“Our sense is that [sales are] growing, slowly, the wide-tire market is described as a niche that can be profitable for manufacturers targeting weight-sensitive carriers.
For such fleets, the product makes sense. “There is no disputing that these tires save fuel, tanker fleets and bulk haulers see an immediate increase in payload capacity due to the weight savings from wide-base tires.

There is a fuel-savings advantage as well, but that can be a bit more difficult to accurately track and document unless the fleet keeps very good records.”
But a problem with wide-base tires and their wheels involves the possibility of a blowout on a truck traveling at highway speed.
“If you’re doing 65 or 70 miles an hour down the road and one of these tires goes down, by the time you realize it and are able to pull over,” the tire and the rim are destroyed in many cases.
“If you have a blowout, you’re guaranteed you’re going to lose a rim,” Bear Trucking’s Jacobi said. “The weight just drops down on the rim, and the rim’s gone.”

He also said such events were infrequent: “We just don’t have very many road calls on them.” the rate of such occurrences — losing tire and rim — was very low in the six years the fleet has been running wide wheels and tires. The fleet consists of 24 tractors and 32 refrigerated trailers, running on two brands of tires.
“I’ve had two situations out of maybe 30 tire issues on the road [where] we ended up needing a rim,” he said.
Overall, the switch to wide-base wheels has been good, saving over a thousand pounds per combination. That’s allowed us to put more product on our trailers

Article in Transport Topics

Obama Orders Another Round of Greenhouse-Gas Rules for Trucks

Speaking at a Safeway Inc. distribution center in Maryland on Feb. 18, President Obama ordered his staff to develop a proposed rule further tightening greenhouse-gas emissions by heavy- and medium-duty trucks by March 2015 and to complete the process a year after that.

Obama chose the Safeway facility in Upper Marlboro because of the grocery chain’s commitment to cleaner freight transportation, calling it an “early leader.” As he spoke, he pointed to Safeway tractor-trailers parked nearby.
Safeway ranks No. 26 on the Transport Topics Top 100 Private Carriers list.

The president was accompanied by Transportation Secretary Anthony Foxx and Environmental Protection Agency Administrator Gina McCarthy. EPA and the Department of Transportation’s National Highway Transportation Safety Administration developed the first greenhouse-gas rule that set standards for truck fuel economy and carbon dioxide emissions, first for 2014 and then for 2017.
The president did not specify timing for when the new rule would take effect.

Obama praised several major companies in his remarks that lasted almost 20 minutes. He said that if competitors such as FedEx Corp. and UPS Inc., Coca-Cola Co. and PepsiCo Inc., and AT&T Inc. and Verizon Communications could join in the effort to use cleaner trucks, “maybe Democrats and Republicans can get together, too.”
The president also suggested offering tax credits to manufacturers of clean vehicles and to fuel-stop operators selling clean fuels. While the fuel standards can be done within the executive branch, changing the tax code would require congressional action.

By Transport Topics

Drivewyze Launches Weigh-Station Alert Service

Drivewyze Inc. said it is offering a free alert service to go with the latest version of its PreClear weigh-station bypass mobile app.
The new Weigh Station Heads Up alert service, available without a subscription to PreClear’s bypass service, provides audio and visual alerts two miles and one mile before a weigh station so a driver knows when to move to the correct lane to pull in to the station.
Truckers can get the notifications by downloading PreClear from the Google Play store on their Android smart phones and tablets.
The alerts are free, but PreClear’s weigh station bypass service requires a subscription starting at $15.75 per vehicle per month with free trial offers and volume discounts available, Drivewyze said in the Jan. 30 announcement.
With the bypass service, drivers receive not only alerts but also the opportunity to request bypass at 252 weigh stations and inspection sites in 19 states.
Drivewyze said its customers’ bypass rates range from 50% to 98%, based on the carrier’s credentials and safety record.
The initial release of the Heads Up service is available only for Android devices, but the PreClear bypass service remains available for iOS and Android.
The Drivewyze alerts work in all 50 states and recognize permanent weigh stations and temporary inspection sites at more than 700 locations, Drivewyze said.

By Seth Clevenger
Staff Reporter