Fortune 500 customers such as Kraft-Heinz and The Coca-Cola Company now leverage Loadsmart’s Dynamic Routing Guide technology within Oracle Transportation Management Cloud, which helps transportation teams take advantage of market conditions by inserting instantly bookable real-time rates alongside static prices in their routing guide.
Erica E. Phillips, supply chain reporter for WSJ Logistics Report, writes that the hiring binge for logistics and freight companies may only be just beginning. The sector added 18,700 jobs last month, giving transport and logistics operations 73,000 new jobs since the start of the year. Companies are scrambling to keep up with surging shipping demand in what they say is the hottest transportation jobs market in several years.
While positive news, the peak shipping season is not here yet. How can we support manufacturers and retailers, and ensure they can fulfil their supply chain?
The digital supply chain is being hailed as the way forward, yet this comes with its own set of challenges. Virginia Howard, research director, Supply Chain Research Group, Gartner, correctly notes that digital technologies are enabling and promoting changes that have a larger impact, greater unpredictability and increased frequency. And that now, more than ever, high-tech supply chains require digital skills and methods to deliver customer-driven solutions in an on-demand fashion.
The digital supply chain vs. ROI
If everyone is going to be confronted by disruption in the marketplace, how can manufacturers and retailers choose technologies that will bring real ROI?
Technology is transforming the automotive and logistics industries. But for many supply chain managers the biggest headaches are still the most familiar ones, such as driver and transport capacity shortages, lost containers, poor forecasting and incomplete visibility. Just this morning, The Wall Street Journal featured how Deere & Co. is raising equipment prices to make up for rising freight transport costs. The equipment maker is a host of U.S. manufacturers reporting rising expenses as a growing U.S. economy drives up prices for materials and shipping.
According to the study, 79 percent of companies with high-performing supply chainsachieve above average revenue growth. Yet, very few companies include supply chain managers in their boardrooms. Businesses that have applied big data analytics to their supply chain functions have seen a reduction in costs, improved risk management, shorter cycle times, more accurate forecasting, and an overall improvement when it comes to making informed decisions.
Loadsmart was the gold sponsor of Python South conference in Florianopolis, Brazil. Promoting Python as a programming language, the conference brings together the various communities in South Brazil.
As the region rapidly expands its reputation as a technology hub with a strong local Python community, our team joined in and shared its knowledge.
Klaus Laube, Loadsmart software engineer, presented Loadsmart’s case in the lecture API First Design, explaining how Loadsmart leverages APIs to distribute its pricing for truckload shipping in the US. His take-away: while an API First Design is a popular approach that provides best practices across industries and companies that prioritize a better developer experience, it’s also of strategic importance to the business.
Things are changing a lot in the trucking industry. Technology startups have flocked to tackle big and small problems in the supply chain. Venture capital funds are backing different solutions excited about the size of the market and historical inefficiencies. Meanwhile, traditional players are pledging hundreds of millions of dollars to improve existing processes to avoid being dethroned.
Surprisingly, very little has changed in the actual movement of freight, at least in outward appearance. There are a number of reasons for this, but chief among them is the industry’s complexity, which together with historical distrust of technology has lengthened the adoption cycle of new features among more traditional players. And where technology has in fact been adopted, it’s impact has been undercut by the sheer size and fragmentation of the industry; technology is only materially felt once a substantial number of players adopts it.
But timid technology penetration and slow adoption should not discredit or downplay the impact that technology and automation will have, playing a fundamental role in shaping the future of the trucking and freight brokerage industry. And what’s coming is really exciting.
There is a clear downturn tendency in freight brokerage margins. As they continue to shrink, the historical value proposition of freight brokers—selling and pricing each load and finding its truck—will decline heavily. Soon, brokers won’t need thousands of employees to power their operations; instead, new technologies like machine learning and artificial intelligence, ubiquitous data sharing, more secure and available chain of ownership (ie via blockchain technology) and real-time, over-the-air telematics will serve as potent force multipliers. All of this will dramatically reduce the actual cost of brokering freight and increase consolidation of small- and medium-sized brokers.
In the long run, things will change more dramatically. Several states will clear autonomous trucks for specific lanes (hub-to-hub). Carrier operational costs will drop significantly and drivers may move from carrier-based to warehouse-based. Huge consolidation on the carrier side will probably follow. Small companies will likely struggle to compete in this new environment, displaced, swallowed up, or put out of business by large enterprises with massive fleets of autonomous vehicles, where few carriers will be moving a very large portion of the total FTL shipments. The exact role original equipment manufacturers (OEMs) will play in creating this new trucking reality is, for the moment, less clear, but it will likely be important as they too want to become software and service providers. Some big enterprises shippers will end up running their own autonomous trucks fleet, but most companies will rely on third party autonomous truck providers.
Of course, down the road, brokers as we currently know them will all but disappear, crippled by the continued advance of technology and growing use of automation across the industry, which only debase a broker’s value as they become more popular, lowering or removing thresholds that were once gatekeepers. Once this happens, the age of logistics technology platforms will truly begin.
Loadsmart is positioning itself for this upcoming future: a future based on data, artificial intelligence, and automation of load movements. We have nurtured good relationships with logistics players across Asia, Europe, Latin and North America, and are sharing knowledge with these trusted partners to transform the logistics business.
Felipe Capella is co-founder and Chief of Product at Loadsmart
The Fixing America’s Surface Transportation (FAST) Act is actually a compromise between the Senate’s Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act that was passed in July and the House’s Surface Transportation Reauthorization and Reform Act (STRR) Act that was passed in November. According to the Department of Transportation, this five-year, $305 billion plan intends to: “reform and strengthen transportation programs, refocus on national priorities, provides long-term certainty and more flexibility for states and local governments, streamline project approval processes, and maintain a strong commitment to safety.”
Help ensure that Americans can get where they’re going more safely and spend less time sitting in traffic.
Help raw materials and products can get to their destinations more efficiently.
Ensure that the cost of goods and services we depend on every day are not needlessly inflated by poor infrastructure and freight bottlenecks.
Ensure that programs work better for states and local partners.
Help American businesses can be more competitive and enabled to create more jobs.
3. A Lot of “Big News” Provisions Were Removed
Throughout the last quarter of 2015 there was hot debate over several proposed provisions of the highway bill. It seems that many of these were thrown out of the final version of the FAST Act, including:
The proposed increases in maximum weight and length were both thrown out. These provisions faced opposition from major groups like the Truckload Carriers Association and Truck Safety Coalition, who cited increased investment for limited benefits and safety concerns, respectively.
The provision that would have encouraged brokers and shippers to hire carriers based off of a set of criteria was thrown out. If this provision had passed, over 450,000 motor carriers would have potentially lost business based on just one criterium- a “Satisfactory” safety rating. Data suggests that nearly half a million small trucking companies and owner-operators are simply unrated and would have been disqualified unfairly.
4. Major Changes are Possible Depending on Research
While quite a few widely discussed provisions were thrown out, others were placed in a sort of legislative purgatory: pending dependent on the result of research.
The provision that would have essentially allowed individual states to create compacts with one another to allow motor carriers under the age of 21 to cross state lines was not in the final version of the bill. Instead, the FMCSA will conduct a controlled study on under-21 drivers who served in the military or who serve in the reserves to determine safety and
The FMCSA is also required to do research on how detention time impacts drivers, their schedules, their pay and how it impedes the flow of U.S. freight.
The FMCSA will also be conducting research to determine whether or not there should be a raise in the minimum $750,000 in liability insurance required for general freight haulers.
The FMCSA had to make the compliance and safety scores of drivers private. They must now commission a Transportation research board to “study of the accuracy of the CSA Safety Measurement System (SMS) in identifying high-risk carriers and predicting future crash risk and severity.”
5. Many are Happy With the Provisions that Were Passed
While no one expected anyone to be completely satisfied, many expressed satisfaction with the measure that were passed, including: a path to reform the Federal Motor Carrier Safety Administration’s CSA safety monitoring system, potential for the use of hair testing for federally mandated drug tests, an easier process for veterans returning from service to transition into the trucking industry, and dedicated funds for important highway freight projects.
American Trucking Associations’ President and CEO Bill Graves said in a statement that “[Tuesday]’s announcement that House and Senate leaders had reached an agreement on a long-term highway bill is welcome news to those of us in the transportation world. While we all, of course, wish there was more money to be had, this bill takes important steps to re-focus the program on important national projects and takes critical steps to improve trucking safety and efficiency.”
Anthony Foxx, Secretary of Transportation and a long-term advocator for improvements in infrastructure said in a statement that, “After 36 extensions, hundreds of congressional meetings, two bus tours, visits to 43 states, and so much uncertainty, it has been a long and bumpy ride to a long-term transportation bill. It’s not perfect, and there is still more left to do, but it reflects a bipartisan compromise I always knew was possible.”
Christie says there’s no transportation crisis but many disagree stating potholes are opening everywhere, there’s another possible fare hike for New Jersey commuters, and bridges in New Jersey were ranked 6th worst in the country.
Christie and lawmakers have been struggling to find sources of revenue for the New Jersey Transportation Trust Fund, refusing to commit to increasing the state 14.5 cent gas tax to support the $1.6 Billion they spend a year on infrastructure.
Without increase in revenue all the money raised by gas tax and tolls will go to paying off funds debt after June 30.
To see what they plan on spend $1.5 Billion on and more info go to NJ Spotlight
Highway projects received just 3% of 2009’s stimulus package ($27 Billion of $787 billion). For years we’ve been hoping for a long term bill. In the 6 years Obama been in office no major progress has occurred in the nations transport infrastructure. Although Obama did say infrastructure investments help a stagnant economy and expand economic competitiveness.
But Obama might be redeeming himself, his administration just proposed a $478 billion over 6 years infrastructure package. It plans to pay for half of the cost with a one-time 14% tax of the repatriation of foreign earnings held abroad by U.S. corporation.
The Secretary of Transportation Anthony Foxx stated that the DOT has been working for more than a year on the plan to improve the nations infrastructure in a 30 year plan. The 30 year plan moves us forward into the future of transportation. Predicting technological advances such as Driverless Cars, Drone Delivery and further Ride-Hailing services.
At the rate we are going we will have a plethora of technological advances but we will also have run down infrastructure and that is unacceptable. The Secretary of Transportations choice to announce the plans with Google shows their plans to go past government speeds and work with the transportation technology in Silicon Valley.
While we wait for the Bi-partisan bill from Senators Rand Paul (R-Ky.) and Barbara Boxer (D-Calif.) the independent Senator Sanders (Vt.) has filed a $1T, 5 year transportation infrastructure spending bill. He did not give further details on how it would be funded but did discuss the importance of “rebuilding America.”
With the stopgap measure that funds the U.S highways expiring in May, Senators Rand Paul (R) and Barbara Boxer (D) are working together to form a bill that would attain tax money from companies’ overseas earnings. There is expected opposition from the Republicans says Paul (R).
Although Obama didn’t go into funding specifics on how to execute his goals for Infrastructure nor did he discuss raising fuel tax he did say this.
“Twenty-first century businesses need 21st century infrastructure — modern ports, and stronger bridges, faster trains and the fastest Internet…Democrats and Republicans used to agree on this. So let’s set our sights higher than a single oil pipeline. Let’s pass a bipartisan infrastructure plan that could create more than 30 times as many jobs per year, and make this country stronger for decades to come.”- Obama SOTU 2015
The American Trucking Association has been pushing for Congress to find a long term highway funding solution however, Obama does not believe that it will get done this year, suggesting Congress concentrate on finding a short-term highway funding fix instead. Obama challenges congress to “redesign and think through how, what is a sustainable way for us on a regular basis to make the investments we need… we’ve got to figure it out”
Raising the gas tax seems like the quickest and most rational fix, which is probably why a bi-partisan pair in the house is pushing for a fuel tax increase. Their bill proposition suggests raising the gasoline and diesel tax by 15 cents over the next three year and more importantly indexing the tax to inflation. They quoted another president, “We simply cannot allow this magnificent (infrastructure) system to deteriorate beyond repair.”- Reagan. He then raised the gas tax from 4 to 9 cents a gallon two months later. The bi-partisan pair might have some support but there are huge challenges.
The reason Obama believes they will not find a highway fund solution anytime soon is the current lame-duck session that Congress is in. Plus, even if they weren’t in a lame-duck session Congress hasn’t raised the gas tax in over 20 years and there’s a reason for that, it’s strategically frightening for members of Congress. It seems the challenges for this simple solution to a major problem might actually be detrimental.
Before the Panama canal, there was a Nicaraguan canal project that failed. Now more then 100 years later the Nicaraguan canal might become a reality. After 5 years in the works, a Chinese company has gotten the approval of the Nicaraguan government to start this massive project on December 22. There are concerns for the 30,000 people that will be relocated, as well as concerns that this $50 billion project will get abandoned, leaving Nicaragua picking up the pieces. How they would do so is unconceivable considering that $50 billion is 4x the size of Nicaragua’s economy. This project has been very secretive and mysterious for awhile, inciting curiosity in some who do not understand why we need another canal when the Panama canal expansion is almost done. Some believe this is just China’s way of gaining control in shipping its exports, as well as gaining more influence in Central and South America.
The Nicaraguan Canal if completed will be wider, deeper and longer than the Panama Canal. This canal will double the cargos shipping capacity and quadruple capacity in 10 years. This will surely have an imposing effect on the transportation industry in the United States. There are concerns that the trucking industry is not ready for the increase in capacity.
For more on the shift in Superpowers and Conspiracies go to CNN>
For the shift in the trucking industry go to CCJ>>