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How to select the right Third-Party Logistics Partner

Three skilled personnel engaging in warehouse operations sealing successful partnerships with a firm handshake

In today’s fast-paced business world, effective supply chain management is essential for success. The complexity of logistics increases tremendously as businesses grow and enter new markets. This is where Third-Party Logistics (3PL) providers come in, offering expertise, resources, and efficiency to streamline the supply chain process. Based on a recent survey conducted in 2022 with over 300 participants from the shipping industry, 86% of shippers acknowledged the cost-effective benefits of collaborating with a Third-Party Logistics (3PL) provider for their logistics needs. In this article, we will explore the benefits of 3PL and provide insights on how to choose the right 3PL partner for your company.

Understanding 3PL and its Advantages:

Third-Party Logistics, or 3PL providers offer outsourced logistics services, including transportation, warehousing, inventory management, order fulfillment, and more.

There are many benefits that come with 3PL services. Firstly, it allows companies to focus on their core competencies by offloading non-core activities to experts. 3PL organizations are experts and can impart clients with their experience and connections to quickly streamline process. Moreover, partnering with a 3PL can lead to cost savings through economies of scale, improved inventory management, and reduced transportation expenses.

Selecting the Right 3PL Partner:

Choosing the compatible 3PL partner requires careful consideration and a thorough evaluation of various factors. Here are some key considerations to guide your decision-making process:

  1. Expertise and Services: Assess your specific logistical needs and ensure that the 3PL provider offers the required services and expertise to meet them effectively.
  2. Network and Reach: Evaluate the 3PL’s network of warehouses, distribution centers, and transportation capabilities.
  3. Technology and Integration: Ensure that the 3PL provider utilizes advanced software and systems for real-time tracking, visibility, and analytics.
  4. Reliability and Track Record: Look for a 3PL partner with a proven track record of reliability, on-time delivery, and exceptional customer service (references and client testimonials, …)
  5. Flexibility and Scalability: A flexible 3PL partner will adapt to your evolving needs, offering scalable solutions and the ability to accommodate growth or seasonal fluctuations.

Selecting the right 3PL partner can significantly improve your supply chain efficiency, reduce costs, and increase customer satisfaction. Collaborating with a reliable and capable 3PL provider will not only streamline your logistics processes but also allow you to focus on your core competencies, ultimately driving your business toward long-term success in an increasingly competitive marketplace.

At US Cargo Link, we are an asset-based logistics provider, meaning we own all the assets necessary to run a client’s supply chain. These could include trucks, warehouses, distribution centers, etc. Contact us today to see how we can fulfill your logistic needs!

Air Cargo Takes a Toll After the Coronavirus Outbreak

Air Cargo

The air cargo industry is bracing itself for the impact of measures taken to halt the spread of the deadly coronavirus in China. Overnight, British Airways announced that it would suspend all direct flights to and from mainland China, with others expected to follow. United Airlines, Cathay Pacific and Air Canada are amongst the other airlines that had already announced plans to reduce flight numbers.

Meanwhile, the Chinese government has extended the New Year holiday – a time when production in the country comes to a halt – by at least three days, until February 3. Businesses in the Guangdong province, which includes Shanghai, have been ordered to remain closed until further notice. Most flights into and out of Wuhan, the epicenter of the outbreak, were stopped last week.

It isn’t yet clear what impact this could have on air cargo, although supply chains are expected to be hit, with belly-hold air cargo capacity already reduced. Meanwhile, there has been some suggestion that there could be a surge in demand when factories re-open. Freight forwarder Westbound Shipping said that its staff in China would work from home, but supply chains would be affected as truckers, warehouse staff, cargo handlers, manufacturing staff would not be able to return to work for longer than expected

Read more on https://www.aircargonews.net/trending/coronavirus-set-to-impact-air-cargo/

[OPINION] Is Amazon Taking the Right Steps?

Amazon is still shaking up traditional logistics as we know it since we last spoke about it.  Shortly after our last blog post about them, Amazon workers went on strike for Prime Day.  Two months ago, Amazon workers walked out again for climate strike.  Finally, last month Amazon announced they will be cutting ties with delivery companies linked to deaths resulting in more than 2,000 workers across eight states to be laid off. Yet, even with all these protests, walkouts, and bad publicity, Amazon has managed to stay in headlines of logistics news over new, exciting initiatives introduced this year.

Today, we’ll dive into the two highly publicized worker strikes Amazon experienced, the motivations behind them, and the new initiatives announced presumably as a response. We’ll also analyze the implication of the most recent mass lay off to hopefully answer the question: Is Amazon taking the right steps?

It is hard to discuss logistics news without acknowledging the omnipotent presence that is, Amazon.  Amazon has grown from an online bookstore to an e-commerce dominator where the smallest changes sends tidal waves changing the landscape of all other e-commerce, retail, and logistics business everywhere.  Let’s first talk about the July 16, 2019 Prime Day Worker’s Strike.

The Prime Day Worker’s Strike, though highly publicized, was not as successful as it was originally anticipated despite many social media posts from customers expressing that they would not divulge in the sale to stand in solidarity with Amazon’s employees.  Prime Day is one of Amazon’s largest sale outside of Black Friday/Cyber Monday with the ability to rake in up to $5.8 billion, globally in one day.  In the end, only 7 sites across Germany and Shakopee, Minnesota participated in the strike. 

The motivation for these strikes were sound.  Unions are much stronger in Europe, and German Amazon workers routinely strike during huge shopping events like Prime Day often because of low wages, inhumane working conditions, and almost impossible standards/quota.   More than 2,000 workers participated.  Minnesota’s motivation was more or less the same except Shakopee has a sizable group of East African Muslims as employees that claim even though they are federally allowed breaks for prayer, taking those breaks makes it extremely difficult to meet their quota.  With Prime Day coinciding with Ramadan, most find it practically impossible to fast and pray in their work environment.  It is already common knowledge that with low wages and individual religious practices aside, Amazon employees are often assigned so much work, it is already a difficult to find time to go to the bathroom without throwing their entire day completely off.  Even with Amazon’s raise of “industry-leading pay” to $15/hour for all full-time employees, a lot of workers are still fighting for job stability and full-time status to receive that rate of pay. Almost all who participated in the strike had the time taken off from their allotted 20 hours unpaid time off, of which if they surpassed, is grounds for termination.  Amazon went on record to say “roughly 15 associates” participated in the Shakopee protest though other news sources reported up to 78 participated.

In the end, the result of 2019 Prime Day Workers’ Strike barely put a dent in Amazon’s bottom line.  Considering there was a workers’ strike last year, this year’s strike was further propelled by Amazon’s announcement of their one-day prime shipping. 

Then, there was the thousands of Amazon employees that walked out for climate strike.  Amazon is arguably one of the least sustainable companies because e-commerce is inherently less green than traditional retail stores because of transportation emissions.  Amazon worsens it by utilizing van deliveries instead of full truckloads.  Currently, none of the vans are electric either.  However, strategically the day before the scheduled climate change strike, Jeff Bezos unveiled a climate plan for Amazon with the end goal of reaching net-zero carbon emissions by 2040 and purchasing 100,000 electric delivery vans starting in 2021.  The question still stands: Is this enough?

Amazon has also since added an “Amazon Day” shipping option that allows the customer to select one day of the week to consolidate all their purchases throughout the week to deliver on the selected day with the least amount of packaging as possible for waste reduction. However, this is an opt-in service and not a default setting at check out.  Yet, when customers choose to opt-in, they are eligible to receive digital credits. 

Is Amazon Taking the Right Steps
Source: Amazon.com

While these two sustainable initiatives sound great, it Is also worth mentioning that earlier this month they have announced that $1 items can be delivered for free with this one-day shipping as well.  Previously, an order that was under $25 was not subject for free prime shipping.  That is all about to change with huge ramifications for one-stop grab-and-go retailers like drug stores.  There are other implied ramifications…

On October 11, 2019 Amazon announced that they will be cutting ties with a few of their delivery-service partners (DSPs) because of deaths resulting in more than 2,000 layoffs. You can find the list of layoffs here. This does not come as a surprise since Amazon hold their DSPs to a standard of delivering an upward of 300 packages a day. This is not the first time Amazon has decided to terminate contracts with delivery firms on short notice. Amazon has disclosed that has around 800 delivery firms under contract and at least three Amazon DSPs have filed for bankruptcy since 2018. Since 2014, Amazon has contracted DSPs rather than hiring their own drivers and control a lot of the delivery process. That being said, they also deny any and all liability when people get hurt. It is speculated by Business Insider that “the layoffs could be a sign that Amazon is moving to rely more on these newer, smaller companies over its older partners.” However, smaller and newer 3PLs have no experience in delivering the quantities Amazon expects and may even rely on loans from Amazon to get started. Amazon essentially controls the financial wellness of all these 3PLs without ever being responsible to pay their DSPs’ drivers wages and benefits. This year in 2019, Amazon has become it’s own largest delivery provider surpassing even USPS.

So, is Amazon taking the right steps?

It is an opinion that Amazon is trying to do too much at once.  It’s hard to wrap your head around strategies for a such a large and wealthy company like Amazon.  Seemingly all set goals are reachable but also….contradictory.  It is possible for a company like Amazon to reach net-zero carbon emissions by 2040 since so many companies are already there right now. For example, Unilever, Apple, and soon, Ikea.  However, I do tend to side with the opposing idea that it is not soon enough, and they should be pushing for 2030 especially with their recent introduction of $1 and one-day Prime shipping.  Even though 100,000 electric delivery vans sound better than 20,000 gas powered delivery vans, their “Amazon Day” shipping is still not the default setting during checkout and the incentive to opt-in seems lackluster.  It’s almost as if every time they find a solution for one hot button issue, they counteract it with another premium service literally nobody asked for.  Their recent shift from older and larger partners to smaller 3PLs suggests their interest still lies in self-preservation and maybe to take advantage of smaller DSPs with their continuation of denying safety liabilities and exploitation of workers. Considering absolutely everything, Amazon must sort out its internal issues and focus on the wellness of their employees before trying to heighten their customers’ experience and expectations further.   


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What’s the Difference Between Asset-Based & Non-Asset Based 3PL?

The purpose of logistics and supply chain providers are to increase overall efficiency of a company, cut both hard costs and soft costs, decrease errors and mitigate risk, and accomplish everything on time. Logistic companies are typically sorted into two categories: asset-based and non-asset based.

A non-asset based logistics service provider does not own assets to manage and implement a supply chain. Their specialty is more for negotiating contracts with carriers and maintaining carrier relationship management programs to manage your supply chain at the lowest cost. Since they are non-asset based, they don’t have to utilize an inventory of assets to remain profitable and are generally more flexible. Even though clients work closer with a non-asset based 3PL provider, the execution of it is all up to the provider in the end. One of the disadvantages of working with a non-asset based logistics provider is that they may find difficulty in finding cost effective solutions.

At US Cargo Link, we are an asset-based logistics provider meaning we own all the assets necessary to run a client’s supply chain. These could include trucks, warehouse, distribution centers, etc. A well-established asset-based 3PL company should be able to lower the expense of moving and sorting goods for their clients. However, because this type of 3PL has made investments in their physical assets, they are somewhat attached and obligated to use those assets when devising ways to manage logistics. This limits options for customization and flexibility. In terms of hard costs of procurement, most of the time asset-based 3PL service providers offer lower costs on warehousing and transportation because they are not paying a third party and are setting their own prices.

We take pride in servicing our customers by providing solutions that addresses every unique concern in a project. We offer competitively low prices, end-to-end solutions for your supply chain, and one-on-one attention for every client– large or small. Contact us today to see how we can fulfill your logistic needs!

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What’s the Difference Between Customer Experience and Customer Expectations?

We hear it all the time in meetings or in sales pitches. Every business claiming to, “exceed expectations and heighten the customers’ experience”.  But, what does it really mean?  When talking to other businesses regarding how they create an excellent customer experience, most resort to describing typical customer expectations.

In logistics, that means delivering to load on time through the appropriate channels and modes of transport, and having it arrive undamaged.  In this situation, the “customer experience” isn’t the ease of access to tracking information, having a point of contact throughout the transport, or even a smooth and headache-free delivery. Believe it or not, those attributes are still a part of customer’s expectations.

So, what is customer experience and how do we cultivate it? 

 

Unfortunately, there isn’t a straight answer to this question.  However, there are a couple of examples you may be familiar with.  For instance, the “missing bookmark” concept.  You go to a hotel, you expect the room to be clean, the bed to be made, and maybe even a mint on the pillows!  However, the missing bookmark alludes to coming back to a room, seeing a book you’ve been reading bookmarked by scrap paper that came from wherever, and finding a hotel-branded bookmark sitting on top of it.  You didn’t know you needed it, but now you have it!  That is really the essence of creating a customer experience. 

Another well-known example also involve hotels.  You go and check-in, there’s a long queue but you patiently wait along with the others. When you get up to the front, the person working the counter is calm, treats you with the upmost respect, and even manages to make you crack a smile.  Despite the slow service, it’s so incredibly pleasant you forget about the long wait.  Months past, and you find yourself at the same hotel, different location.  This time, instead of waiting in a line, there’s a second hotel worker suggesting people in line to sit in the lobby and help themselves to a complimentary cup of coffee. When it’s your turn, a concierge approaches you and escorts you back to the front desk area to check you in.  Both approaches are correct. However, the latter approach really enhances the customer experience. 

In short you can enhance the customer experience by:

  1. Anticipating what your customer needs outside of your typical service.
  2. Going above and beyond to meet those needs.
  3. Making the experience so incredibly thoughtful and unforgettable they convince themselves they wouldn’t be able to obtain that level of service anywhere else.

US Cargo Link makes an effort to treat any business—large or small—with the same amount of attention.  We assign one sales representative for each move or project, so you always have one point of contact and rest easy knowing that they understand the entire scope of your company’s goals.  Contact us today to see how US Cargo Link can be your link to success.


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New Study Reveals Threat of Automation Isn’t That Bad?

If you’re in the logistics industry, then you are all too familiar with the shortage of truck drivers.  Already, there have been reports of us currently being short by about 60,000 drivers with that shortage possibly tripling by 2026. With automation just around the corner, there are now new studies suggesting maybe the threat isn’t so serious?

“Drivers do a lot of jobs other than drive and those still need to get done, and those really are the trickiest things to automate,” states Kristen Monaco, co-author of the study titled Trucking Driving Jobs: Are They Headed for Rapid Elimination? Monaco also blames the media for hyping drivers’ fears.

The study is worth the read and debunks a lot of myths regarding the driver shortage.  In it, Kristen Monaco and Maury Gittleman covers:

  • How the numbers are inflated due to the misunderstanding of the occupational classification system used in federal statistics. 

In the study, it discusses how light truck delivery trucks are included in “trucking jobs”.  They also note how the estimates uses the total number of CDL holders even though many of the people who hold the appropriate license no longer drive at all. 

  • How truck drivers are responsible for non-driving tasks that will continue to be in demand as they are incredibly difficult to automate.

These tasks include pre-check inspections and other safety compliances, operating non-truck equipment like forklifts, tarping, fueling, customer service, paperwork, loading, and unloading.

  • How, if any job is in jeopardy with the advancement of technology and automation, it would be long-haul trucking which is roughly only one-quarter of trucking jobs.

“Our case study of truck drivers suggests, however, that, at least for now, any loss of jobs as a result of automation will be more limited, especially compared with journalistic accounts but also as anticipated by a number of experts.”

– Kristen Monaco

As discussed in previous blog posts, fear that new technology will lead to massive unemployment is not new.  This study suggests that truck automation will be comparable to the first introduction of automated teller machines (ATMs).  While it first decreased the number of employees required per bank branch, the increase in productivity made it less expensive for a bank to open a branch. In the end, it created more jobs and reshaped the teller position as part of customer service.  So instead of anticipating the end of truck driving jobs, automation may reshape the position to something new and useful. 

To read the whole study by Maury Gittleman and Kristen Monaco, click here.

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