International Roadcheck is Almost Here: What That Means for Carriers

Between May 17th - 19th, carriers will undergo special inspections by local law enforcement across North America. This annual three-day period is also known as the “International Roadcheck” event organized by the Commercial Vehicle Safety Alliance (CVSA).

This year’s inspection is focused on wheel ends, the components that support heavy freight, maintain stability, control and are vital for braking. Part of the wheel ends includes the wheels, rims, hubs and tires. These North American Standard Inspections will take place at weigh and inspection stations, on roving patrols and at other temporary inspection sites. Wheel end violations have accounted for 25% of vehicle out-of-service violations discovered during past years of this event.

While focusing on wheel ends during the inspections, inspectors will check for:

  • Cracks or unseated locking rings, studs or clamps
  • Bent, cracked or broken rims on the inside and outside of the wheel rims
  • Loose, broken, missing or damaged wheel fasteners and elongated stud holes
  • Spoke wheels for cracks across spokes and in the web area or slippage in the clamp areas
  • Hub for lubricant leaks, missing caps or plugs
  • Inner wheel seal for leaks

This list is not exhaustive. Carriers should  prepare well in advance to ensure passing the CVSA inspections. In the next week, carriers should conduct thorough cab and trailer inspections to fix any issues they find.

The below list from the CVSA helps carriers for a successful inspection during the International Roadcheck event. There are many sections to inspect but carriers can begin with the following:

  • Check tires for proper inflation, cuts and bulges, regrooved tires on steering axle, tread wear and major tread groove depth
  • Inspect sidewalls for improper repairs, exposed fabric or cord, contact with any part of the vehicle and tire marking excluding it from use on a steering axle
  • Check for missing, non-functioning, loose, contaminated or cracked parts on the brake system
  • Check the safety devices for sufficient strength, missing components, improper repairs and devices that are incapable of secure attachment
  • Check fuel tanks for loose mounting, leaks, missing caps and signs of leaking fuel below the tank
  • Inspect for corrosion fatigue; cracked, loose or missing crossmembers; cracks in frame; missing or defective vehicle parts
  • Inspect the suspension for indications of misaligned, shifted cracked or missing springs; loose shackles; missing bolts; unsecured spring hangers and cracked or loose U-bolts

If inspectors find any out-of-service violations, carriers will be restricted from travel until such violations have been addressed. Carriers that successfully pass the inspection may receive a CVSA decal, allowing the carrier to not be inspected for the following three months when the decal is valid.

“We want every vehicle on our roadways to be in proper working order for the safety of the driver operating that vehicle and everyone traveling on our roadways,” said CVSA President Capt. John Broers with the South Dakota Highway Patrol.

Law enforcement personnel will conduct inspections following their departments’ health and safety protocols, in consideration of COVID-19. Since 1988, the CVSA has conducted over 1.4 million inspections, with on average 15 trucks or buses inspected every minute during the three-day period.

Drayage – The Linchpin from Port to Porch

highway intersection

As the number of shipping vessels waiting to enter the ports of Los Angeles and Long Beach decline in 2022 from highs of over 100 in January to around 75 or so in February, the number of ships on the east coast, specifically, the port of Charleston, is on the rise.

This see-saw market is expected to continue through the year as consumer purchasing habits remain strong and shippers place seasonal orders with overseas manufacturers and suppliers to replenish inventories.

However, as containers are unloaded, they sit, waiting to be picked up.

Some ports, such as Charleston, are slowing the unloading process by not using all of their cranes to unload containers because container space is limited. Meanwhile, the ports of Los Angeles and Long Beach are working with state and local officials to lease additional land for containers. For a number of ports including Charleston, Los Angeles and Long Beach, allowances for containers to be stacked up from the usual two to four high have been made. However, this presents safety concerns for the port worker and additional time needed to locate and load containers onto trucks.

This part of the supply chain, drayage, was spotlighted last year as shippers complained of fees for containers not being picked up in a timely manner. “We end up paying the bill for mistakes we did not make. It leaves a bitter taste in your mouth,” one shipper said at the recent TPM conference. The same shipper noted that 18% of his total shipping bill in 2021 were these fees, better known as detention and demurrage fees.

Detention and demurrage fees are meant as incentives to keep the flow of containers moving from ports through the inland in a timely manner and are the result of interactions that go on between multiple supply players. However, these fees are not working in today’s environment – COVID impacts on supply chain workers, the need for more trucks and drivers, more warehousing space and more supply chain workers in general – all to manage the insatiable demand from consumers.

In addition, some of the supply chain issues that are occurring have been around for years and are exacerbating the current situation. As Drew Herpich, COO of NTG,, noted in a recent article for Refrigerated & Frozen Foods, appointment setting and honoring those appointments are obstacles for truck drivers, particularly when they must wait hours to pick up or drop off containers at ports and wait to deliver to or pick up from warehouses.

Despite ports and warehouses investing in technology and automation, Herpich writes that the long wait times and appointment setting still has not been solved.

A shipper at the TPM conference called for front gates to be fixed. “Get trucking in and out quickly,” he told the audience. But situations at ports differ. “When you’ve seen one port. You’ve seen one port,” quipped Daniel Maffei, Chairman of the Federal Maritime Commission (FMC) during a TPM interview.
Appointments are not available at all U.S. ports for example. In addition, some shippers are using containers as “mobile warehouses” because there is no room available at these shippers’ warehouses, Jimmy Newsome, president and CEO of the South Carolina Authority said.

Tips for shippers:

  • Establish long-term relationships with drayage partners.
  • Contract with drayage partners that can proactively manage detention and demurrage fees.
  • Work with partners that can manage container FIFO (first in, first out) programs and offer visibility, tracking and billing software.

A best practice a number of shippers cited during the TPM conference is to contract with drayage providers that are willing and able to proactively manage detention and demurrage fees.

In addition, shippers should work with drayage providers to help manage their container FIFO (first in, first out) program and those providers that offer visibility, tracking and billing software.

Shippers establishing relationships with drayage providers will benefit by keeping unreasonable charges at a minimum and containers flowing at a reasonable level through the supply chain.

Simplifying The Complexity – What Is Drayage?

When people ask, “What is drayage,” it usually gets defined as shipping goods over a short distance. But any short hauls are the least of what drayage involves.

In today’s transportation industry, drayage is tightly connected with containerized shipping. Thousands of shipping containers are departing and arriving at ports and rail terminals every day. Drayage is the task of getting those containers to or from those intermodal connections.

In fact, now might be a good time to go over a few key terms to really understand what drayage involves:

  • Dray: To haul a consolidated shipment (usually a container) on a chassis
  • Power unit: The cab and engine portion of a truck designed to connect to a chassis
  • Chassis: A wheeled undercarriage on which containers can be hauled
  • Last free day (LFD): The last day a container can sit in a yard before storage charges apply
  • Demurrage: The storage charge for a full container not picked up by its LFD
  • Detention: The “rent” for keeping an empty container beyond its free period
  • Clearing: Settling all the paperwork to get a container out of a port
  • Intermodal: Connecting different transportation modes to move goods

The actual hauling portion of drayage just involves the power unit and the chassis. All the rest is concerned with getting the most possible use from the shipping containers. The “short hauls” often associated with drayage are all about getting a full container out of a port or terminal as cost-effectively as possible and returning the empty container as quickly as possible. This is how you control the costs of drayage.

Power units and chassis are two different elements for the same reason: cost control and maximum utilization. Different sized containers require different chassis. By only using the chassis they need when they need it, carriers can dispatch available power units as needed for a variety of containers, and avoid having those expensive chassis sitting around unused.

Being able to juggle the equipment matching and the timing of pick-ups and deliveries requires knowledgeable and experienced professionals.  The driver is also the one responsible for clearing the cargo out of the yard. This can involve handling administrative matters like customs and duties paperwork, and settling any financial accounts (like demurrage).

Knowing this, you can see how central the carrier becomes in drayage. For all these reasons, drayage drivers are a distinct profession and require special licensing. Proper execution of drayage hauls also relies on proper logistics and communications between all the parties involved: Shippers, receivers, drivers, dispatchers, and port operations.

So, while it might sound funny to say so, the true answer to “What is drayage?” is: It’s complicated.

On The Clock – The Critical Timing of Shipping Container Drayage

Drayage shipping containers at a sea port

Drayage may literally be the “heavy lifting” of global supply chains. Navigating the complexities of port congestion, detention fees, demurrage fees, different requirements based on each port and the coordination to get the container back to the port after emptied requires an extensive amount of coordination.

Here’s how you or your transportation partner can manage the process to minimize costs and avoid bumps along the way.

Getting Ahead of the Container

You would think that putting a container on a ship or rail car would give you plenty of time to arrange for pick-up at the destination port or terminal. But that’s only half true. Because ships and trains can only give you windows for off-loading, often the best you can hope for is a date. Fortunately, you have a few days to retrieve your cargo. To avoid confusion and costly misfires, line up your carrier for that window. But—if at all possible–don’t hard book a pick-up until you know the container is landed.

In the meantime, share as much information and documentation as you have with the carrier or the transportation partner managing the pick-up.  In addition to the container number and bill of lading (or master bill of lading), this can include all customs declarations and proofs of payment of all fees. This will help assure a smooth pick-up.

Once you have confirmation the container is landed, execute the arrangements you’ve made with the carrier. Or if you have a transportation partner managing the operation, they should know based on your container number when the container has arrived. They can then start planning directly with the carrier on your behalf. If you are reaching out to the carrier directly, making sure you give them notice to retrieve the container without incurring any additional charges like demurrage or extra rental days for the chassis.

Of course, even the best plans don’t always go according to plan. If for some reason you don’t find out immediately when your container has been landed, having all your arrangements in place will improve your chances of getting it picked up and out of the yard as quickly as possible.

Getting The Load on the Road

This is where working with an experienced carrier or transportation partner who knows the port is critical. Port operations are like a maze, both physically and operationally. Experienced carriers or transportation partners not only know the physical layout, but the procedural steps necessary for a smooth pick-up and release of the container. You do your part by making sure they have all the documentation and information they need to clear these milestones with minimum fuss.

Once the container is safely out of the yard, the classic clock starts. But there can be opportunities for cost savings here that are unique to moving containers.

A direct haul from a port on the coast to an inland destination may not be the most cost-effective move, because you will still have to pay for the driver and equipment to get back to their point of origin. Depending on the distances involved, this can involve lay-over charges and per diem expenses on the shipping container itself.

You may find it less expensive to have the container unloaded at a warehouse near the pick-up location and then transload the contents onto a regional carrier for transportation to the final destination. Regional carriers are better set up to arrange back-hauls which will cut the round-trip cost or eliminate it altogether. This will also virtually assure you don’t incur excess charges for extended use of the container, chassis, or the carrier’s services. 

Getting There and Back

If using the container to carry the goods to their destination is the best option—for cost or timing purposes—you need to be sure the container is returned to the point of origin. While this is ultimately the carrier’s responsibility, the more you can do to simplify the trip and smooth the paperwork, the less time and trouble you’ll have closing out the move.

If for no other reason, this is where a transportation management system (TMS) or a skilled dray provider can really pay for  themselves. By having easy access to port information and all the documentation associated with a load in a single source of truth—that can be shared with all the parties—you can save countless hours of administration. In fact, because the TMS has all the details of the move and the associated costs, you can analyze your costs and identify any opportunities for savings moving forward.

Those savings may come in the form of time, costs or effort. But they will all contribute to a better bottom line.

For more on drayage management and how we might be able to help you, please click here!

What to Know about Reverse Logistics in 2022

Reverse logistics tends to see a spike in the first quarter of the year, and 2022 is no exception. Following the holiday season, consumers often have one item or more that they wish to return, so companies have to anticipate this trend as prices and online shopping increased. This past season, U.S. holiday sales jumped 8.5 percent, and online shopping specifically rose 11 percent. The more consumer spending occurs, the more companies can expect returns, also known as reverse logistics, to come into play.

The basics of this process is defined as the process of the return of products one or multiple steps back in the supply chain, either from final destination back to shipper or back to distribution center. There are many factors involved in the process, including keeping costs low, keeping the customer happy with an easy return process and helping plan for the unknown. Our team is working closely with customers and carriers to make this a smooth process with the right reverse solutions.

Process Challenges

E-commerce shopping is constant in today’s market, and consumer demand remains high. Limitations impacting those in the reverse logistics sector include mainly labor shortages and ongoing COVID-19 obstacles. Considering these drawbacks paired with the costs of labor, transportation and warehousing that are required, the average return will cost retailers two-thirds of the original price for the item. This not only impacts the actual profitability of a company’s sales, but it also affects the eco-friendliness of the supply chain, since reverse logistics require additional packaging and transportation. If this process is a hassle for the customer, they are likely to not shop with that retailer again, which will create a loss in business and future sales.

A big challenge that retailers face is meeting the expectations of their customers. In a world where one, two or three-day shipping is normalized, many companies feel the strain to get their products out to consumers to ensure loyalty and satisfaction upon delivery. Constant visibility of a shipment’s location and estimated time of arrival are also expected, and although delays are more understood in recent months, speed and efficiency are still very important. This expectation goes beyond the initial order if the customer opts to return a product for a refund. Retailers then must keep visibility and urgency top of mind to keep their customers happy with no disruption to business operations. That’s when the use of a 3PL partner can help. Our team works with our trusted network of carriers to find the best optimized routes for the return logistics process to benefit any business.

Technology in Reverse Logistics

Technology and reverse logistics go hand-in-hand to ensure retailers can keep up with the demand from both outgoing orders and incoming returns. Processing inventory efficiently maintains profitability and customer satisfaction, so investing in solutions that limit disruption or error are imperative. Manually processing inventory provides room for mistakes and potential delays that could equate to lost time and money. For shippers that desire assistance with their reverse logistics, a 3PL partner will provide peace of mind and support in both steady and overwhelming markets. 

NTG Solution

Reverse logistics is an important piece of the supply chain puzzle, both from a customer-facing perspective and an internal operations standpoint. It’s most often a necessary offering that companies have to plan for, especially after the new year as a follow-up to the holiday season. With the right plan in place and partner on your side, reverse logistics is more efficient and successful for any business in the retail space. 

NTG’s extensive carrier network keeps the reverse process moving and helps our team provide the best service to customers. Our team also works closely with customers by providing end-to-end visibility solutions so the customer can be prepared to adapt quickly to manage return loads.

To learn how NTG can help your business handle reverse logistics demand, contact one of our logistics experts today.

The State of the Market

State of the Market - Supply chain developments

State of the Market Analysis by Drew Herpich, NTG’s Chief Commercial Officer

The last part of this year is shaping up to end on a very volatile note. Everyone continues to focus on the capacity and demand challenges that supply chains continue to face. Multiple complex factors play a role for current developments, but three main ones have shaped our industry in recent months.

Demand Levels Continue to Remain High Since Last Year

Heading into this year’s holiday season, there is continued demand for goods, both from a consumer standpoint and inventory response. The pandemic pushed e-commerce to the forefront and created a digital demand that will surpass $206 billion in purchases this holiday season in the United States alone. We’re living in a “just-in-time” purchasing world where our orders are slated to leave the shelf as soon as we click the “place order” button. Because of this, inventory levels have been depleted. Inventory levels are at an all-time low relative to sales figures and have been for the better part of this year. They cannot currently catch up to the pace of sales, resulting in many of the product shortages we’re seeing today.

Fragmentation of Capacity Market

The last two years have pushed supply chains to the brink of efficiency with uncertainty, disruptions, shortages and overall supply chain pressures. This is not likely to alleviate anytime soon, but we possibly might see levels begin to soften in the second half of 2022, assuming consumer demand levels off and truck production ramps up by then.

In terms of equipment, both trailers and Class 8 trucks are in great demand across the board, and next year will be the “year of the trailer” in our industry. The backlog continues to grow for equipment production, spilling well into the next year. On the brighter side, used equipment purchases are on the rise, meaning smaller carriers are entering the market at higher levels than before.

“The driver shortage has become more of a driver shift, where many carriers are choosing to go from Class 8 trucks to sprinter and cargo vans for more lucrative expedited and final mile opportunities.”

Drew Herpich, CCO of NTG

From a labor perspective, the driver shortage has become more of a driver shift, where many carriers are choosing to go from Class 8 trucks to sprinter and cargo vans for more lucrative expedited and final mile opportunities. More carriers are choosing to run shorter expedited routes in lieu of long-haul loads across the country. Expedited equipment is still very much in demand and carriers are gravitating towards higher premiums due to urgent digital commerce.

In addition, when the infrastructure law takes full effect, many carriers might shift from FTL & expedited to more lucrative construction opportunities. There could likely be large projects in play with this law, keeping drivers occupied with projects for 3, 6, 12 months at a time, which in turn further depletes the capacity.

Supply Chain Disruptions

By now, we’ve all heard about the congestions in some of our biggest ports across the country. Container volumes are at very high levels. Currently, the average wait time for a ship to berth off the coast of California is 17 days, which is extremely rare. The latest count shows over 80 ships and $30B dollars’ worth of goods are waiting to dock in CA ports. This makes the container costs surge for shippers, which in turn pass on those costs to consumers.

Just recently, the industry has received some relief with the port congestion. The federal government outlined port initiatives to increase efficiency and help unclog some of the congestion. At the Port of Los Angeles, hours of operation have increased but warehouse hours remain the same. That means the container goods might be offloaded late at night but the warehouses storing those goods are not open and they certainly don’t have enough people to unload the products during business hours. Nationally, the government will pay for port upgrades in the next 90 days and will allow ports to redirect grand funds to address the current supply chain issues. This allows ports to create more container yards to free up dock space and keep goods flowing faster. It’s too early to say how much relief these new initiatives will have in the short-term.

STAY PREPARED: The supply chain industry as a whole has been in a very unique and difficult place for the last two years. The disruptions, uncertainty and imbalance will continue for the first half of 2022 and every player in the industry – shippers, 3PLs, carriers – needs to stay alert and be able to adapt to the current supply chain landscape and any unknown challenges that still lay ahead.


RELATED

Click to Watch: NTG’s President, Geoff Kelley, explains how 3PLs add value to Peak Season shipping.

Streamlining Carrier Workflow with Digitalization

The supply chain industry is no stranger to evolving practices. Over the years, logistics professionals have had to review their processes to ensure they are working as efficiently as possible, considering market changes, advancing technology and more. Carrier adoption of digital resources, in particular, has progressed rapidly over the last few years in order to navigate the logistics landscape, streamline workflow operations and meet consumer demand.

Truck Driver Stock Photo

Digital transformation within the supply chain industry has taken off in recent years, especially during 2020. The year saw unprecedented disruptions and shortages that have had a lasting impact on the supply chain. For example, the trucking industry has about 80,000 fewer available drivers compared to a year ago. However, these issues pushed technology forward as the industry was forced to think deeper into how digital tools could solve some of the problems at hand. Industry users became aware that not only can these tools decrease error and increase visibility, but they can also save carriers time and money. Here are a handful of digital tools that carriers should utilize to enhance their day-to-day operations.

Paperless Solutions

Not only are companies going paperless to benefit the earth and become more sustainable, but they are also using the digitization of elements, including documentation and receipts, to avoid losing crucial information. Additionally, digital tools can move faster than paper and often limit error when tracking freight, such as delivery confirmation. Paperless digital solutions also provide an extra layer of health protection with less physical paper exchanges during a pandemic, decreasing the risk of exposure.

Digital Carrier Portal

An interactive online portal is a carrier’s best friend. This valuable tool increases shipment accessibility by providing enhanced search capabilities, expanded equipment availability, and visibility on all necessary load information. An optimal carrier portal will also provide document management and real-time payment status and can be accessed from anywhere – allowing carriers to have full 24/7 business transparency.


NTG’s carrier portal, NTGVision, provides access to thousands of daily shipments across the country. The advanced search capabilities optimize carrier options with the best routes to match carrier preferences. Access NTG’s load board to unlock enhanced route guidance today!


Load Matching and Carrier Profiles

To match loads with carriers that meet the standards and capabilities required, certain tech-enabled 3PLs utilize load matching technology. At NTG, our digital infrastructure includes detailed carrier profiles with available equipment, lane preferences, past history and service notes. Each of these elements allows NTG to identify the best transportation options available for every single load that helps carriers streamline workflow operations.

Route Optimization

Profitable and efficient routes are imperative, and carriers rely on technology to provide the necessary information to create the best route for their journey. Route optimization tools limit deadhead miles and wasted time, which is important for carriers to complete a profitable haul. A tech-advanced 3PL partner helps carriers optimize routes through custom-built technology that uses AI capabilities, adding value by creating and recommending the most optimal route for carriers’ desired locations.

Carrier Representative

Luckily for carriers, they do not have to know every piece of the supply chain and market developments at any given moment. They can rely on an experienced and knowledgeable 3PL partner to provide industry insights and assistance when any disruption or delay takes place on their journey. When exploring a potential partnership with a 3PL, look for one who offers dedicated representatives who understand the sector you work in and the solutions you need to be successful. Such representatives work on a carrier’s behalf through various digital resources in order to help access more freight opportunities so carriers can spend that crucial time on the road.


“Working with NTG has opened us up to opportunities that have grown our business. Before partnering with NTG, we never had the chance to book loads with a major multinational shipping service. Now, not only do we book loads with this major service, but we have so many other load opportunities as well. Thanks to our rep at NTG for making this happen! NTG is one of the best partners helping carriers run their business.” – Nick Jones, ZNS Cargo


Quick Pay

Quick Pay is a payment option that allows carriers to go completely digital and receive payment quickly after delivery. At NTG, we provide our carriers with the option of enrolling in our exclusive carrier payment program, RhinoPay – a program where carriers will receive payment on every load via ACH direct deposit just two days after delivery paperwork is received.

It’s important to remember that not all carriers have access to the digital tools they desire, whether that’s due to company size or the cost of advanced technology. However, partnering with a 3PL often provides important access and gives carriers the exclusive opportunity to enhance their operational workflow and streamline solutions for their own customers and employees while increasing overall business growth.

RELATED: Read NTG’s blog on How Carriers can Enhance Business Growth

October Highlights National Cybersecurity Awareness

Recognized annually during the month of October, National Cybersecurity Awareness Month is hosted by the Cybersecurity Infrastructure & Security Agency (CISA) and the National Cyber Security Alliance (NCSA). This year’s mission is to encourage all Americans to “Do your part. #BeCyberSmart.” Efforts for the 18th annual event are centered around raising awareness for the importance of cybersecurity and sharing resources with individuals and organizations alike to grow knowledge and preparedness.

Every day, our world is more and more dependent on technology and the digital world. It’s best to understand any risks associated with cybersecurity so users will stay safe and secure. Taking steps to gain knowledge around this topic means learning from the past, being aware in the present, and preparing for the future. This month, CISA and NCSA created themes for each week to share valuable tips and provide a focus for all following along.

Week of October 4: Be Cyber Smart.

Attackers often rely on human error in order to find a way into a corporation’s system. No matter how tenured or green an individual is, their smallest oversight or mistake can cause a major disruption. Simple steps to increase privacy include adding multi-factor authentication, creating strong passwords and sharing on social media wisely. Proper security means staying vigilant and aware at all times.

Week of October 11: Fight the Phish!

The added convenience of having one’s phone connected to other personal devices unfortunately creates more room for cybersecurity risk. It’s important to keep all devices safe whether they’re located at home, at work or on the road. For example, refrain from connecting to unknown or unsecure networks in public locations.

Week of October 18: Explore. Experience. Share.

With the ever-growing demand of digital solutions and software, the need for cybersecurity professionals is endless. The impact of one person’s knowledge and expertise can mean saving an entire company from falling victim to a cyber attack. Cybersecurity jobs are necessary in a wide range of industries, so those interested have the opportunity to explore different fields to find the right fit. Companies also need to invest in their cyber infrastructure and be proactive in safeguarding critical company and consumer data.

Week of October 25: Cybersecurity First

Cybersecurity starts with the individual. As they learn the importance of incorporating secure practices and policies, employers and customers alike will also reap the benefits and improve resiliency. Knowledge is truly power, and understanding threats and taking the steps to proactively fight against them is key.

Unique among the group is Week 3, also known as National Cybersecurity Career Awareness Week, which aims to inspire and promote awareness and exploration of cybersecurity careers. Not only does this week focus on recognizing the contributions to society and innovations that cybersecurity practitioners make, but also the demand and opportunities within the industry. For those interested in working with supply chain or logistics, cybersecurity and IT professionals are highly valued and greatly appreciated for all that they do with day-to-day operations and digital capabilities.

Cybersecurity is an important investment within the supply chain. As an industry with the vulnerability of global interdependence, one cyber attack against a single organization can cause delays beyond that organization’s home base. From a partner’s misstep to an internal employee clicking on an unsecure email link, the smallest mistake can introduce the largest problems. Keeping a security system and team in place to monitor and combat attacks is a great way to protect finances, information, partners and teammates.


RELATED: Check out our shipper blog: How to Counteract the Impact of Supply Chain Disruptions

How to Counteract the Impact of Supply Chain Disruptions

As the global supply chain has witnessed over the last few years, disruptions, both expected and unexpected, can have an overwhelming impact on each sector of the supply chain. Some disruptions only affect certain pieces of the supply chain, while others cause issues across the board. Let’s take a look at some of the major types of disruptions the industry may experience and explore ways shippers can mitigate such challenges.

Forces of Nature

Natural disasters may be felt from an international standpoint, but those that take place within the United States are certainly from coast to coast. Not only are they somewhat unpredictable in terms of potential damage to be caused, but they also come in varying forms that can dismantle transportation resources in the blink of an eye. For example, exactly sixteen years after one of the country’s most devastating hurricanes in history, Hurricane Katrina made landfall in Louisiana, Hurricane Ida arrived with sustained winds of 150 miles per hour. This type of natural disaster brings intense flooding and powerful winds over a short period of time, which often results in loss of power, limited access to roadways and other infrastructure obstacles. With hurricanes and similar disruptions, such as floods, tornados and wildfires, the supply chain must stay aware of where and how they will affect various regions to both prepare, adapt and react in a safe and efficient manner in order to minimize disruptions to supply chain operations.

Cyber Attacks

Cybersecurity is an important investment within the supply chain, no matter which sector a company falls under. As an industry with the vulnerability of global interdependence, one cyber attack against a single organization can cause delays beyond that organization’s home base. From a partner’s misstep to an internal employee clicking on an unsecure email link, the smallest mistake can introduce the largest problems. In 2014, Target experienced a major breach when a partner was hacked through a phishing scheme, resulting in a loss of $148 million for the retail giant. Keeping a security system and team in place to monitor and combat attacks is an optimal approach, and many companies that may not have previously felt the urge to execute such tactics are finding it imperative to keep their finances, information, partners, and teammates safe. 

Pandemics

While much less common than natural disasters and cyber attacks, one of the most obvious global disasters that can occur is one we have all experienced as of late. Over the last two years, the current global pandemic has seen highs and lows with the fluctuation of shipping delays, port congestion, lack of supplies, employee shortages and more. The list goes on, and the impact continues. The effects of pandemics, such as COVID-19, or public health crises at a more regional level have the ability to hinder movement of freight at each stage, from production to delivery. If one stage experiences a delay, the rest will likely follow suit. In addition to extended wait times for transportation and missed production deadlines as a result of the COVID-19 pandemic in particular, shipping prices continue to rise as supply and demand remain out of sync, which will certainly translate beyond this calendar year.

Current Disruptions

The current market is absorbing the impact of multiple global disruptions at one time. To date, the industry has witnessed heightened port congestion and transportation disruptions, in addition to hurricane season and the pandemic. Two of China’s major ports – Port of Yantian and Port of Ningbo – have been unable to operate at full capacity due to various reasons, including employees testing positive for COVID-19, increased waiting times for ships to be loaded and unloaded, and a heavy backlog that remains a strong obstacle for teams to rebound anytime soon. Recently, Port Yantian was operating at 70% capacity with the hopes of a slow but steady return to normal. In August 2021, Port Ningbo experienced the temporary shutdown of a critical terminal due to a single COVID-19 case, with that terminal accounting for roughly 25% of container cargo through the port.

Helpful Tips for Shippers

Through the eyes of a shipper, it’s important to learn how to mitigate the cost of disruptions, considering some are avoidable while others are not. Tips to consider when looking to increase resiliency include:

Stay proactive

Thoughtfully build up inventory in advance of fulfillment to avoid lack of supply in the future.

Operational audit

Conduct an audit to locate current or looming shipping vulnerabilities that may cause a disruption down the road. Prepare contingency plans well in advance of possible disruptions based on audit insights.

Identify plans B and C

Identify backup suppliers to counteract shortages with a primary supplier that may occur on short notice.

Secure a reputable partner

Explore a partnership with a third-party logistics expert to gain enhanced visibility. 3PLs have a wide network of carriers with a diverse equipment options that allow shippers to mitigate disruptions.

Determine all shipping options

Explore alternative modes of shipping your freight in a tight market. If you have time-sensitive cargo to that needs to travel over the ocean, then air freight might be a possible option for you. Looking at alternative methods of shipping your freight helps with shipping challenges as well as providing cost-saving options.

Additionally, instilling characteristics and practices that encompass agility and adaptability, market awareness and enhanced communication promote overall operational effectiveness and efficiency.

From the threat of COVID-19 to the product and employee shortages that have followed, the current market is up and down depending on the day. While the lack of stability is intimidating, the industry has learned a lot from the major disruptions, from where to improve policies and procedures to how diversifying a business model can save money and time ahead of future disruptions. As members of the supply chain, shippers and their partners now understand more than ever that preparing for the unexpected and improving performance and technology benefits the work of today and the results of tomorrow.


RELATED: Read our blog on how shippers can prepare for this year’s Peak Season

How Shippers Can Prep For Peak Season

This year’s peak season will definitely test supply chain efficiencies across the industry. Shippers need to study the market to understand what to look out for and how to prepare. While a knowledgeable 3PL can provide insight to its partners and customers, there are measures that shippers can take to ensure they are well prepared for this year’s unprecedented peak season.

Proactive, Not Reactive

For shippers, staying on top of trends and supply chain news is important in adapting to potential disruptions. Being proactive is better than being reactive, and some peak season issues, such as limited capacity, require more advanced planning than usual. Lengthening lead times and looking to alternative ports are some ways how companies can shift their strategies to maintain expected timelines and avoid congestion/

Leverage Partnerships

Peak season disruptions have the ability to cause increased strain as the supply chain industry works through the next few months. Shippers can utilize a 3PL partner’s vast carrier network to access the right equipment for their freight, ensuring that lingering disruptions do not cause further delays. One such disruption could be when shippers have to pivot to a different carrier last minute. 3PLs have vast access to thousands of carriers from coast to coast who are ready to haul at a moment’s notice. This exclusive partnership advantage allows shippers to handle a surge of freight with ease when shipping strategies do not go according to plan.

Prioritize Freight Based on Deadline

Another tip for shippers is to prioritize freight to meet each load’s delivery deadline. With increased demand and tight capacity, sending shipments out earlier than usual or on alternative routes may be necessary to meet customers’ expectations. Shippers can utilize warehousing services or drop trailer solutions that can store products for an extended period of time during peak season. Such advanced preparation will help shippers handle increased volumes from an expected demand surge and allow for managing of disruptions far easier than otherwise.

From prioritizing shipments and leveraging partnerships to simply staying up-to-date with current industry news, shippers can prepare for this year’s peak season and look toward a successful stretch as we head into the last quarter of the year.

RELATED: SHIPPING TRENDS TO EXPECT THIS PEAK SEASON

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