Check Call: Supply chain bottlenecks are more than transportation’s fault

The Future of Freight Festival in Chattanooga, Tennessee, is the event of the fall. Subscribers to Check Call have a special discount code for F3 registration. This is going to be one of the best deals on F3 tickets. Use the code CheckCallF324 or go to this link, and the discount will be applied. There is no better party than a Chattanooga party. This is not one to miss.

Supply chain changes go all the way to the top. Most 3PLs offer a value add to shippers looking to improve their supply chains. Those improvements and changes might need to go a little further up the chain. A white paper titled “The shift-left logistics imperative” by Siemens highlighted some inefficiencies as well as some improvements that can be made when there are stronger end-to-end solutions.

The paper cited the DHL Logistics Trend Radar 2023 that found “The focus of digital solutions have shifted over the past decade. Originally, logistics companies sought out technology to streamline their business and optimize their processes. Today, however, technology is seen primarily as an enabler to address specific challenges. Using cloud-based platforms and other technologies to merge data with services gives businesses even greater insights, such as the emissions data needed to support efforts toward decarbonization, and it also unlocks planning and consultation tools such as the digital twin.”

The evolution is seen daily with shippers asking for more insights, more data and better solutions from their 3PL partners. It’s more than just a tracking tool that shippers are looking for. They want their 3PL partners to serve as their tech hub and do more than just move loads.

The white paper noted, “A 10-year McKinsey & Company study completed in 2021 found that supply chain disruptions cost businesses an average of 45 percent of their annual profits.”

The freight market has left a lot to be desired as carriers struggle to maintain profits, shippers try to combat the increasing costs of production and brokers are left to mediate between the two parties to squeak out something that resembles margin. It’s quickly becoming a value-add landscape instead of simply a transactional one.

Getting shippers to think through the entire life cycle of a product could be key to alleviating those losses to supply chain shortages. That means everything from production and transportation of raw materials to the end of the product life cycle when it’s time to retire one and replace it with the newest version.

The paper found that “Product design becomes the key planning factor for ensuring supply chain performance. Each component becomes a source of information that can be mined to optimize transport and storage processes and evaluated with an eye on alternative supply structures.”

Having shippers think about those bottlenecks and where possible improvements can be made, obviously with the help of a trusted supply chain partner, could be the key to improving supply chain inefficiencies and metrics for those looking to make quantifiable progress.

TRAC Tuesday. This TRAC lane goes just about coast to coast. Starting in Phoenix and ending in Philadelphia, this 2,329-mile trip has spot rates that are trending downward. Capacity is loosening in Philly, which is causing the spot rate to take a dive. Since the Labor Day weekend, rates have yet to rebound on this lane. Two dollars a mile is the going rate for this lane, well under the National Truckload Index of $2.28.

Outbound tender rejections in Philadelphia have risen 131 basis points week over week for an OTRI of 4.46%. That is the highest the OTRI has been for the entire year. Phoenix, on the other hand, has an OTRI of 4.59% and a week-over-week increase of 213 basis points. While spot rates leave a lot to be desired on this lane, an all-in rate of $4,652 before margin should secure this load with little issue.

Who’s with whom? Load boards have become a bit of a hot button issue lately in regard to the domestic freight brokerage market. Load boards have unfortunately become synonymous with fraud and double brokering. Learning from these issues domestically, Cargado has introduced a new type of load board for freight moving into and out of Mexico.

The new load board is invite-only and allows for users to post spot freight and consistent opportunities, like mini-bids and RFPs.

Noi Mahoney’s article quotes CEO and co-founder Matt Silver: “Our goal with what we’ve been creating is to build something that allows people to collaborate and communicate and do business together. We hope that people can kind of reframe how they think about the load board concept with what we’re introducing to the market with Cargado. It is purely for cross-border freight.”