Data Interoperability and the Logistics Technology Stack

Logistics technology has made huge strides in the last 8 to 10 years. Once thought of as an industry that always lagged in the adoption of technology – both shippers and service providers now have access to applications that can transform the way they run their business.

This is a topic we’ve written about a lot on this blog. Throughout this post, we’ve linked back to several of them.

Blog Post – Overcoming the Hurdles of Logistics Technology Adoption

Blog Post – How Do You Choose the Right Supply Chain Software

Not so long ago, that was not the case for several reasons. For one, the technology that did exist was really expensive. The term logistics technology was synonymous with TMS (Transportation Management System) or WMS (Warehouse Management System) – with these usually just being a module within a huge ERP system. The advent of smaller, more easily implemented SaaS based solutions has changed this for companies of all sizes and made many types of #logtech infinitely more accessible.

A second reason is that there are many specialized applications that satisfy a more narrow range of functions. This has enabled companies to build their own “Logistics Technology Stack”, which combine technology from different providers to create a customized solution. The benefit here is that this stack serves a company’s needs better than a more expansive software that may do a lot, but not not any one thing all that well. These new types of solutions are made possible by using applications that help facilitate data interoperability and make the experience seamless for users – who can then “cherry pick” the solutions they want.

Blog Post – How Freight Forwarders Can Use Gap Analysis to Fix Missing Pieces in their Logistics Technology Stack

Freight rate and contract management is a great example of a process within shippers and service provider’s operations that can benefit from specialized technology.

Blog Post – 6 Ways Freight Forwarders Profit From Rate and Contract Management Technology

Take a freight forwarder – most rely on technology (such as Cargowise One) to manage many parts of their business operations. Our platform, QMS, integrates with Cargowise so that the ocean rates and contracts managed in QMS can be accessed seamlessly in Cargowise. Similar examples also include rate sharing that is possible between QMS and 7L for air freight rates, and a similar connection for pulling in LTL rates from Banyan Technologies.

Blog Post – It’s Time to Gain More From Your Logistics Technology Stack

The point is this – companies are no longer beholden to large TMS or other types of technology platforms that try to be everything to everyone. Functions like ocean rate and contract management are highly specialized and have NOTHING in common with other modes like Truckload. And like it or not, there is no one system that does everything all that well.

Taking advantage of the web services and APIs provided by different types of technologies allows both shippers and logistics services providers to build a combination of logistics applications that do exactly what they need it to do. This makes for a better solution for users, while keeping costs low.

Overcoming the Hurdles of Logistics Technology Adoption

For logistics services providers, it’s never been more evident that embracing technology is a requirement. It’s normal today for any company evaluating a new vendor to expect they’ll offer innovation and more than just a commoditized service. Which, for most freight forwarders and NVOCCs, can be an unfortunate perception of what you provide. Standing out in your industry is hard. The good news is technology is an investment that can instantly fix this in a potential customer’s eyes and provide a significant ROI at the same time.

Unfortunately, it’s also normal that suggestions your company add technology are met with resistance from within. Successful technology implementations always require, at minimum, a “champion” and buy-in from a core group of users. Understanding the reasons behind reluctance is the key first step in overcoming objections. So why is it so hard to get buy-in when it comes to adding new technology?

Rigid Business Culture

Some organizations are structurally more rigid than others. It’s normal that routines develop between departments and between employees. The status quo becomes safe and easy, and over time every organization becomes less flexible as a result. 

When a company has a set structure, adapting to change is that much more difficult. This can also be true in more casual business environments in that any large change will disrupt the normal business flow. People tend to assume disruption is always for the worse, even those it’s not always that way. In these circumstances, making a business case for adding new technology must appeal to the big picture benefits to the company in a quantified way.

Self-Interests

Some level of buy-in from employees is always necessary for any project to be successful in the long term. Key employees that cannot see the long-term benefits of a new technology are often difficult to persuade. For example, an employee who helped develop a current process or is too comfortable with the status quo is likely to resist change.

The same goes for new technology – often these employees are concentrating on their own situation and not the overall goals of the organization. A focus how they’ll benefit from the new technology is the first place to start.

The Unknown

Many businesses are resistant to technological advances because they know it will change their business but they don’t know how. Being transparent about the what will differ and setting clear goals while keeping the lines of communication open is important.

Of course, technology always comes with hard costs – both in terms of the cost of the software itself and the time to implement it. These days, deployments are easier than ever with hosted solutions that minimize the IT infrastructure needed to run them. Focusing on the success other companies have experienced with the new technology helps to sell the idea of change, as does speaking in quantifiable terms like money and time saved, or expected sales growth.

Fear of change should not be a reason to avoid technology. In an industry as competitive as logistics, technology is a must have advantage to set your company apart from other providers. Surprisingly it’s often people’s resistance to change, not cost, that prevents companies from adopting new logistics technology that will undoubtedly improve their business.

Container Shipping Celebrates A Milestone Birthday

Few recognize the shipping container as an invention that revolutionized the logistics industry – much less the world – but it has in a major way. For 60 years, container shipping has made the global transportation of almost everything we use in our daily lives easier and more efficient, as well as enabled economic growth worldwide.

The First Container

Prior to the shipping container, goods were shipped in barrels, sacks, boxes and wooden crates, which created a very labor-intensive (and slow) loading and unloading process. Since all these types of items were small and had to be handled multiple times, many were often lost, damaged, or stolen.  While over time some advances were made in the laborious process of commercial shipping, it wasn’t until the 1950’s that the first shipping container was used. 

Malcolm McLean, a trucking tycoon, is the man credited with starting the practice in 1956. He used a converted tanker to move the first container filled with cargo from New Jersey to Houston by sea. As simple as it sounds, this demonstrated the basic idea that cargo could be handled just twice – once at origin and once at destination – a significant improvement.

A few years later, Sea-Land created the first transatlantic service using shipping containers, and after that Overseas Container Lines launched in the United Kingdom. Since that time, companies have been utilizing large cargo containers for shipping all types of goods overseas.

Enhanced Efficiency

The advent of shipping containers led to increased efficiencies in the shipping industry by eliminating the need for many manual operations associated with transportation, particularly at the docks. Most significant was that less personnel were necessary for the loading and unloading of the ships. 

Containerization helped to speed up cargo handling dramatically, and allowed for the standardization of port handling equipment. Today, full containers can be loaded at a shipper and delivered to the consignee almost anywhere in the world intact and unopened. In addition, it improved cargo safety, both in terms of security and a decrease in damaged goods. 

Global Impact

While containerization has resulted in major advances in the shipping industry, it’s had an even greater worldwide impact on globalization.  Emerging markets have been able to make their resources, and competitive advantage in labor and costs, available internationally. 

As outsourcing and relocation of manufacturing continues to grow, global container transportation becomes increasingly important as well. Shipping containers and supply chains reach destinations around the world thanks to ocean cargo networks that grow in volume every year.

Overall, the innovation of the shipping container has developed and changed the global supply chain to operate more effectively, and drive costs down for all stakeholders.

Lower Costs

Prior to containerization, the costs for port operations and cargo handling accounted for most of the cost of shipping. Now, the ability to ship items in containers has lowered the cost per unit of many items. Operating costs have dropped because the larger container ships can hold more cargo, and reduce the number of trips taken. 

The use of container shipping has revolutionized the logistics industry over the past 60 years, changing the supply chain dynamic and opening up global markets for shippers and producers everywhere. The humble shipping container is arguably the most important single ‘technology’ in the world’s supply chain.

6 Cutting Edge Innovations That Will Shape The Future Of Logistics

Each coming year brings along new innovation and technology to the world. The global supply chain market is no different, and the future is bright. Here are some new technologies that are certain to shape the future of logistics and the global supply chain marketplace. “6 Cutting Edge Innovations That Will Shape The Future Of Logistics” more

3 Tips For Negotiating Ocean Freight Contracts

If you’ve ever been involved in negotiating a contract with an ocean carrier, you know how complicated it can be.

You’re bombarded with hundreds of surcharges, and each carrier uses their own system, structure, and rates.

These contracts are comprehensive because they have to cover every possible contingency. But that doesn’t make negotiating them any easier.

So how do you make sure that you’re not chained to an unfavorable contract for years?

Take a look at what to do BEFORE you negotiate any ocean contract for the best results.​

First – Find Out What You Actually Need​

Do you only ship freight during certain seasons? How much capacity do you need?

Do you need extensive customer service or do you just want barebones freight?

These are questions you need to ask yourself before you begin negotiating. Carriers assume certain things when you’re getting a quote. If you don’t go in knowing exactly what you’ll need you’ll be slammed with charges and fees for services that are completely irrelevant to your business.
Know the level of service, security, and price that you’re willing to accept and you’re already halfway to a favorable outcome.​
Second – Take Current Market Conditions Into Account
The key to getting what you want in a contract negotiation is being able to anticipate the responses of the other party. How are the rates looking in today’s market? Are they likely to try to lock you in to a yearly contract? Will they be trying to push more services on you than you need?
The more you study, the more likely you’ll know what they’re going to offer before you even begin to talk with them! This will let you lead the conversation in the direction you want, and most importantly, to the price you want.
It’ll also let you avoid any surprises when they start naming numbers.
The last few years have been terrible for ocean carriers, and they’ve raised rates tremendously to combat that. Experts suggest that you always look for short-term contracts in today’s climate, simply because the pricing is so volatile. Certain carriers have been dropping prices quite drastically to attract more business.
Short term contracts will also let you slip out of any agreements if the conditions on the ground change suddenly (as they have recently).
Third – Don’t Just Focus On Price
Whoever you’re trusting with your freight is going to be responsible for a major segment of your business. Any problems on their end will mean problems on yours.
Therefore, don’t just look at price when you’re looking for a carrier.
Are they reliable? What level of product security and insurance do they offer? Would they be able to accommodate your needs in terms of capacity during peak seasons?
There’s nothing worse than having tons of willing customers who want to buy your product – and not being able to get your product to them.

All these tips share a common factor if you want the best results from ocean contracts…

Do your homework.
Proper research and planning before a contract negotiation will ensure that you come out ahead.