Morai-Logistics-Blog-Intermodal-ThreatsLast week, the Intermodal Association of North America (IANA) reported in its most recent edition of the Intermodal Market Trends & Statistics report, a strong full-year and fourth quarter 2014 performance for intermodal volumes despite harsh weather conditions, and continuing intermodal congestion.

An article from Logistics Management by Jeff Berman on the report noted that:

Total 2014 intermodal volume—at 16,276,892 containers and trailers––saw a 4.8 percent annual increase compared to 2013. Domestic containers—at 6,444,532—were up 5.7 percent, and international containers—at 8,166,010—were up 4.4 percent. All domestic equipment at 8,110,882—was up 5.1 percent, and trailers rose 2.9 percent to 1,666,350.

For the fourth quarter, total volume—at 4,111,401—was up 3.0 percent compared to the fourth quarter of 2013. Domestic containers were up 5.1 percent at 1,672,332, and international containers—at 2,011,754—were up 2.1 percent en route to leading all intermodal segments for the fourth year in a row and seven of the last eight years. Trailers eked out a 0.1 percent gain at 427,315, and all domestic equipment was up 4.0 percent at 2,099,647.

Based on IANA data, the report observed that 2014 marked the first time in three years that international, domestic containers, and trailers each saw annual gains, while showing the strongest overall intermodal growth since 2011. What’s more, international volume posted its largest annual increase since the economy was emerging from the depths of the recession in 2010, with the 4.4 percent annual growth rate almost double the previous three years, while total international volume was only 4 percent below 2006’s pre-recession peak. And 2014 trailer volume saw its first annual gain in three years, while seeing a 35 percent total decline in the past decade.

IANA President and CEO Joni Casey commented on the findings: “For the first time in four years, international, domestic container, and trailer market segments all posted year-over-year growth. And volume gains were widespread geographically, with eight out of nine regions recording increases during 2014.” IANA officials also suggested that the reason international growth exceeded expectations in the fourth quarter, was because of “stronger than expected container imports.”

Casey added that considering that the overall volume growth rate of 4.8 percent was above 2013, as well as higher than in 2012, 2014 intermodal industry performance modestly exceeded expectations.

The Skies Aren’t All Clear Yet

Although the findings in the report are very encouraging, an article written by Mark Szakonvi on JOC argues that caution is required going forward.

In particular, he noted that a number of threats from the reappearance of brutal weather conditions seen last year, to a West Coast port lockout could quickly derail the rail industry’s gains.

“The railroads aren’t out of the woods yet. Although the waterfront employers said on Jan. 26 that it had reached a tentative agreement on chassis maintenance and repair with the International Longshore and Warehouse Union— a major roadblock to a labor contract — there is still concern of a terminal lockout by employers. If that were to happen, BNSF Railway and Union Pacific Railroad, the two major U.S. Western railroads, would no longer accept marine container terminals. Analysts differ on the severity an embargo of international intermodal traffic would have on rail service, but they agree it would be negative.”

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-Blog-Bitcoin

Although it’s only February, there are already two global trends in the supply chain logistics industry that’ll play a big part moving forward into future years.

The first trend that has been taking shape in recent years is that next-tier economies (emerging countries that are not Brazil, Russia, India, China and South Africa, also known as BRICS) are having their markets currently experiencing an influx of what Agility’s press release for the 2015 Agility Emerging Markets Logistics Index calls “dynamism”. This is happening in a time when the global economy is experiencing a cool down.

The second trend, which has been ongoing for the better part of two decades, is the continuing evolution of the digital sphere. Specifically, in how Bitcoin has been gaining traction as a medium of exchange in many emerging markets (including ones in Agility’s Index) and what that could mean for even the most basic of financial transactions in those countries.

A closer look at Agility’s 2015 Index

Though the findings and highlights of the Index are interesting, what is important for the purposes of this post is the quote by Essa Al-Saleh, President and CEO of Agility Global Integrated Logistics concerning the trend:
“A year ago, there was talk of an emerging markets meltdown and of a new ‘fragile five’ based on concerns about weakness in South Africa, Brazil, India, Turkey and Indonesia. Emerging markets as a group turned out to be far more resilient – even vibrant – than expected despite continued sluggishness in the global economy” said Al-Saleh. “The factors driving growth are increases in population, size of the middle class, spending power and urbanization rates, along with steady progress in health, education and poverty reduction” he continued.

Bitcoins and their role in emerging markets

This upward trajectory ties into the rise of Bitcoins in emerging markets. For the purpose of brevity, we’ll forgo explaining how it works and instead recommend this Wall Street Journal article by Michael J. Casey and Paul Vigna which explains it, and the ways it’s not just a digital currency.

Although Bitcoins have had several confidence damaging scandals, it’s still seen as having high utility in developing economies as it offers faster, more transparent, and sometimes a more stable alternative to local currencies that are experiencing high volatility. Min-Si Wang’s article in Forbes on subject gives further detail about Bitcoin adoption in emerging markets (for example, the trading volume of Bitcoin in China grew from 0.4 percent in 2012 to 4.7 percent in 2014).

A more critical article in Euromoney gives more numbers

According to Jana, a mobile-payments company that serves as many as 2 billion people in emerging markets, some 58% of those surveyed, from Vietnam to Brazil, said they would feel comfortable investing in a virtual currency, rising to 75% in Kenya, home of the wildly popular M-Pesa mobile-money network. In fact, in some countries, as many as a fifth of respondents claimed that virtual-currency investments were a safer long-term bet than stocks and property.

What does it all mean?

At a fundamental level, Bitcoins offers a cheaper alternative to the financial transactions offered by those offered by banks and credit companies. If Bitcoin became a global standard, well…

… this model could slash trillions in financial fees; computerize much of the work done by payment processors, government property-title offices, lawyers and accountants; and create opportunities for billions of people who don’t currently have bank accounts” writes Casey and Vigna. “Great value will be created, but many jobs also will be rendered obsolete.

The non-BRICS emerging markets are set to have a heavy impact on global business trends in the near future as their economies and logistical networks continue to strengthen. As they do, so does the faith open-source systems and digital money. The future looks to be very interesting in the coming years.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-Blog-Amazon-Target

Target, the U.S retailing giant has recently been getting a lot of attention from the Canadian press. Unfortunately for Target, the discussion has been how in this year alone, it had a $941 million loss in the Canadian market due to the baffling mismanagement and miscalculations it made it its first foray into a foreign market.

While Target had peers that failed in foreign markets for similar reasons it could’ve learned from, the biggest lessons it should’ve studied were those of Amazon’s which managed to not only capture 7 % of all e-commerce in Canada, but also has the potential to account for 1% of total retail sales in the country. Although the business models of the two companies are different, the obstacles, opportunities, and logistical limitations are not.

Planning vs. Buying

Amazon did a lot of preliminary work before opening its first Canadian distribution center in 2010.

  • It had eight years of goodwill and visibility in the Canadian e-commerce market through amazon.ca
  • It worked closely with the Canadian government to override certain Canadian foreign-ownership rules that would’ve been barriers to its expansion
  • For its part of the partnership with the Canadian government, Amazon gave a $20 million investment commitment into Canada, $1.5 million of which went to cultural events and awards
  • It ran a number of interviews and press releases addressing a number of concerns and criticisms from its critics while also communicating its intentions of gradually branching product categories

Target’s approach was considerably different. Instead of a slow province-by-province rollout, it tried to achieve “critical mass” from the onset by sinking $1.8 billion into buying out Zeller locations (which didn’t include renovation costs) and opened 124 stores across Canada in 2013.

Logistical Adaptability

Both companies faced logistical complications when they entered the Canadian market because of the country’s vastly differing regional tastes, strict trade and wage laws, and geographical vastness. As a result, the initial offering of both Amazon and Target for Canadians was paltry, and priced higher than their respective American counterparts.

Amazon’s approach to offset this problem was to offer a modest selection while maintaining the convenience it’s known for. It focused mainly on books and smaller items and overtime, introduced 14 new merchandise categories that would receive a lot of Canadian press attention. Through this, Amazon.ca was able to build for itself a loyal customer base. This approach also drew attention away from the inflated prices, which is a common technique amongst the successful American-based companies doing business in Canada.

Target hadn’t really planned outside of creating a Canadian specific brand (which failed to launch on time), and sticking rigidly to the management, sale, and promotional models that it had in the U.S., even when it clearly wasn’t working.

Differences in Canadian packaging laws, protectionist tariffs on some foods and exclusive wholesale arrangements also meant that the Canadian stores couldn’t be serviced from the company’s American distribution network. Many of the 124 Target stores had whole sections that were empty of products, while other items were overstocked and congested the supply lines further.

The empty stores led to customers instead focusing on price, which is an area a U.S based company can’t compete in for the reasons mentioned earlier.

Lessons Learned

When comparing Amazon’s success in Canada with Target’s failure, there are several lessons that can be learned

  1. Do your homework –Amazon did a lot of preliminary work before it entered into the Canadian market whereas Target simply assumed the business climate would be similar enough to its home base.
  2. Be flexible—Amazon success international is largely due to its ability to adapt to changing tastes and trends. Target’s failure in Canada is in large part due to its insistence on rigidity.
  3. Patience—Target sought to control a portion of the Canadian retail market at the onset. It failed to remember that entering a foreign market is a patience game, and as a result it lost billions.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-Blog-TransparencyTransparency was one of the most predicted trends for the logistics and supply chain industry in 2015. In the past, it was usually prohibitively expensive in both time and resources for businesses and customers alike to trace the origins of each aspect of a product. Now, there are a number of sites, institutions, and apps dedicated to making supply chain networks more visible. Large, network-dependent businesses such as Starbucks and Amazon have also adopted, and have started championing this trend.

Greater transparency is no longer just a lofty goal for the logistics industry; it is an essential business strategy if a company wishes to remain competitive.

However, there is one small but important detail that is over looked when discussing transparency. That is that a transparent supply chain is not necessarily the same as an ethical supply chain.

Customers Want Ethical, Not Just Transparent Supply Chains

McDonald’s recently made the mistake of confusing transparency with ethical when it launched its “Your Food, Our Questions” campaign in October. The campaign involved having videos and a section of their site dedicated to answering common customer questions about their products in great detail. Despite their effort at being more candid with its customers, McDonald’s has still received a lot of criticism for not actually doing anything about making any meaningful commitments towards sustainability.

For an older, more cautionary tale about not pushing for an ethical supply chain, read the story of Nike and its PR disaster that was born from its unethical suppliers that ultimately had Nike’s earnings fall 69%. Despite Nike previous attempts at being forward thinking by being open with its customers that it couldn’t reasonably keep track of its suppliers, and its declared commitment to uphold a higher ethical standard within its U.S facilities, it did little to stop the fallout of the scandal.

Looking at the Numbers

This past August, Forrest Burnson and his associates at Software Advice, a company that analyzes logistics software, published a summary of research they had conducted meant to gauge which initiatives along different links of the supply chain would make customers more likely to buy—or pay a premium for—a company’s products. The research, which was a series of surveys, asked participants how much more they would pay for a product that was produced more ethically with respect to a particular link in the supply chain: raw materials, manufacturing and distribution.

The study’s three key findings were,

  1. On average, consumers say they would pay 27 percent more for a product normally priced at $100 if it was produced under good working conditions.
  2. Consumers were split on whether improved working conditions, community involvement or environmental efforts would most convince them to buy from a firm.
  3. Twenty-eight percent of consumers said reducing water usage was an environmental initiative that would make them more likely to purchase a company’s products.
Source: Software Advice
Source: Software Advice

The implications of the study’s findings indicate that customers care most for “labor conditions for the workers who make their products” when given the choice to pay a premium for a better ethical standard in different areas. However, more importantly, the research also gives evidence that there is a very real market for ethical supply chains. This is a market that, in this writer’s opinion, will grow in tandem as transparency becomes ever more ubiquitous.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-Blog-Climate-Change

With January in full swing and the weather continuing to plummet, it is important to take a moment and discuss a topic that doesn’t receive as much mention as the more popular topics currently trending. This topic is the impact climate change is having on supply chain logistics.

According to The Associated Press’s study released in 2014 by the Intergovernmental Panel on Climate Change found that the increasing prevalence of severe weather will have negative effects on infrastructure, agriculture and the overall well-being of humans. As climate extremes continue affecting different parts of world, businesses and industries that are reliant on logistics networks are also at considerable risk.

A chilling look at a negative trend

A 2011 study released by EWENT (Extreme Weather impacts on European Networks of Transport) looked a number of detailed case studies and metadata to determine the costs and consequences of extreme weather on European freight and logistics industries and supply chains. The conclusion of the study was disheartening, as stated by the researchers:

The above attitudes indicate that business people in transport, logistics and infrastructure provision and management sectors did not have a good grasp of linkages between the probability of extreme weather and the risk of company damage

Although those surveyed in the study claimed they were prepared and had measures in place to account for weather extremes, they relied too heavily on government assistance claim the researchers,

Therefore, they could not carry out the risk tolerance appraisal and take decisions as to which preventive and risk mitigation strategies to employ. In the absence of understanding of their own risk tolerance threshold, they removed extreme weather hazards from strategic decision-agenda

… which as the study demonstrates, was to their own financial detriment. It isn’t all doom and gloom however.

New field of study and Weather-proofing

‘Adaptive logistics’ has seen major growth since it was proposed in 2010 by Alan McKinnon and Andre Kreie of the UK based Logistics Research Centre at Heriot-Watt University. Their paper on the need for this to become a field for the logistics industry outlined how, at the time, not enough research existed on the impact climate change was having on supply chains. The term itself, ‘adaptive logistics’, is defined in the paper as a field of study that will analyze how logistics will respond to environmental change, and then “this response can either be direct where logistics systems must be modified to minimise adverse climate impacts or indirect, where climatic change alters the demand for logistical services and systems must be reconfigured accordingly”.

Source: Logistics Research Centre, Heriot-Watt University, Edinburgh, UK
Source: Logistics Research Centre, Heriot-Watt University, Edinburgh, UK

Some companies have also begun taking a more pro-active approach to reducing the potential risks of extreme weather affecting operations or revenue.

An excellent article by Inbound Logistics’s Gary Hanifan summarizes and analyzes the findings of Reducing Risk and Driving Business Value, a 2012 survey conducted by the Carbon Disclosure Project (CDP) and Accenture and gives advice as to how to raise supplier awareness about the risks climate change is having on their business. Some of the more interesting points quoted in the article were the following:

  • A current or future risk related to climate change was identified by 70 percent of the 2,500 companies responding to the survey
  • More than half of the supply chain risks due to drought and precipitation extremes are already affecting respondents’ operations, or are expected to have an effect within the next five years
  • Other concerns include the potential for reducing or disrupting production capacity, reduced demand for goods, and even the inability to do business
  • Supplier awareness is an even greater concern. Nearly one in five respondents indicate that their suppliers are not aware of the water risks affecting operations. Another 38 percent say their suppliers are aware of, but not actively engaged in, addressing the challenge

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

We hope everyone has had a great holiday and we would like to wish all of our readers a Happy New Year! To kick off the year, we have finished compiling our infographic on the top logistics and supply chain facts from the news that we’ve collected throughout last year. As there is a large number of news items spanning the many large topics in the logistics industry, we decided to create our Top 10 by focusing on categories:

  1. Drones
  2. Same-Day Deliver
  3. Supplier Diversity and Women
  4. Sustainability
  5. RFID
  6. World Bank Institute’s Private Sector Platform
  7. Automation
  8. Online Retail
  9. Truck Driver Shortage
  10. Logistics Slow Growth

Each of these topics have some pretty interesting facts and statistics that may have been missed in the hustle and bustle of fellow logistics professionals and enthusiasts. And while we haven’t covered all of the interesting facts from 2014; we felt that these topics helped changes the face of the logistics and supply chain industry in 2014 and serves a good snippet to review the year.

Top 10 Logistics and Supply Chain Facts of 2014

Morai-Logistcs-Top-10-Logistics-and-Supply-Chain-Facts-of-2014

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-Blog-Reverse-Supply-ChainWith the hustle and bustle of the holiday season come and gone, many people are now returning to their normal work and home life. That is, if you in any fields that are not retail or logistics.

After the holiday season, and especially after Christmas, many shipping services, retailers, e-retailers, and 3PLs get inundated by deluge of unwanted or ill-fitting gifts that need to be returned to their retailer of origin in a process called reverse logistics.

By simply looking at some facts and figures from this Wall Street Journal article, it is clear that the post-holiday time presents major opportunities for many 3PLs, especially those with a specialization in reverse logistics.

  • 20 % of returns happen during the holiday season
  • The U.S Postal Service reported handling 3.2 million returns last year during the two weeks following Christmas
  • Returns policies are critical in driving purchase decisions. In a recent survey of 5,800 U.S. online shoppers, 82% said they were more likely to complete purchases if free returns via a prepaid shipping label or an in-store option were offered, according to comScore Inc., a data-tracking firm that conducted the study for UPS
  • About 66% of consumers now review a retailers’ return policy before making a purchase

The opportunities inherent in reverse logistics, stems from the current e-commerce boom. As demand for online shopping grows, so the does the percentage of customers dissatisfied with their purchases. A large number of retailers and e-commerce companies are ill equipped with the growing number of returns (which is up 15% from the holiday season only two years ago).

With reverse logistical networks being an inherent part of many 3PLs to varying degrees, it makes sense that they be the natural choice for providing the service for other businesses. In fact, the necessity to switch toward more customer-centric strategies (such reducing lead times, improving planning, improving fulfillment, and improving post-sales/returns capabilities) is the focus of an article on MarketWatch.

It is in this same spirit of reverse logistical capitalization that FedEx recently announced its forthcoming acquisition of GENCO, a leading third-party logistics provider in North America that specializes in end-to-end reverse logistics.

Through GENCO’s leadership position in reverse logistics, FedEx will be able to expand its North American presence in the e-commerce market as GENCO’s reverse logistics customer base includes some of the top companies in the technology, retail, and healthcare industries in North America.

An article in SupplyChain Management Review has very interesting information concerning best practice for reverse logistics when it quotes Gary Cullen, chief operating officer of 4PRL LLC:

“A growing trend of being “cheaper and nearer” seems to fit well within the cost sensitive and eco conscious reverse logistics chain of events.

Much efficiency can be found in near-sourcing third party service providers (3PSP) who specialize in the services of redeployment, repair, reuse, recycling, reclamation and resale. This appears to be a successful business model in today’s fuel conscious and green minded environment.

A closer country allows for use of cheaper modes of transportation as well as less overall time and movement.”

Efficiency and response time are the key terms to take away when discussing reverse logistics as the problem of potential value loss arises if items are delayed for too long, especially when it involves fashion items.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

2015_new_yearIf you were reading Forbes’ website last week, then you would’ve come across an interesting article concerning predicted trends for the logistics industry in 2015. Sarwant Singh, a Senior Partner in Frost & Sullivan lists a total of 15 likely trends to occur in 2015 with common threads between all of them being Information & Communication technology providing new avenues for production, solutions, and business models; and societal trends transforming the corporate, market, and personal landscapes.

The entire article is excellent and is a must read for anyone curious about the opportunities afforded by the evolving logistics industry. For this blog post, I would like to focus on three key trends listed in the article as, in my opinion; are the biggest deviations from the status quo in the logistics industry.

Moving toward Zero Latency

The world will prepare itself for faster processing speeds and faster response times. The next few years will see a move toward zero latency and human unnoticeable delays providing real-time experiences. This will increasingly be embedded into workflows and other processes.

The collapse in latency times in just the last few years has been astounding. The old expectation of same month delivery from traditional post service evolved to same week. This year saw same-day delivery become the standard for e-commerce companies such as Ebay, Amazon and even Google. However, even this hasn’t been quick enough with Amazon’s same-hour delivery service for its Prime members which it revealed last week.

The move toward zero latency is not only a massive drive for innovation in the logistics industry (such as Amazon’s delivery drones and DHL’s massive pledge of investment into creating more efficient supply chain networks in China), but also a key way in how many supply-side companies are marketing themselves to customers.

Transparency is the New Green

Increasingly pervasive analytics and collaborative platforms would make data and processes more transparent than ever before. Governments, corporations, organizations, communities, supply chains and even individuals will be more accountable and liable for policies, decisions and strategies.

Customer interactions with businesses of years past were very binary for the most part. A customer wanted or required a product, and a business provided it wholly formed. Questions such as where it came from, how it came to be weren’t asked and businesses weren’t forthcoming with the answers. The logistics industry was no different as the levels of supplier tiers, volume of oversee transactions, and technological limitations complicated the matter further for many companies in the industry.

The change in philosophy has been swift and pervasive in the last few years as large international companies such as Starbucks, Levi’s, and even McDonald’s and Amazon have embraced more open business models.

Our post last week focused on this trend, but suffice to say, greater transparency in the industry is good all-around as it offers customers more information, accountability, and ultimately better choices.

Women Focused Strategies

As the policymakers debate and implement policies increasing quota for women in boardrooms in 2015, we will see a lot more women focused strategies across companies in different sectors.

The industry of logistics has long been a “Gentleman’s Club”. As outlined in the Morai Logistics Infographic focusing on women in the logistics industry, compared to other industries women still have some room to catch up at all levels in the logistics and supply chain industry.

However, not only have more women been getting into the industry, but women focused strategies overall has been on the rise.

In a past article we wrote about how companies are realizing the benefits of supplier diversity go beyond the “social good.” We are now at an age where companies are starting to find that supplier diversity programs can be fiscally beneficial through ROI, and lead to bridge-building into the untapped force that is women-owned businesses.

All-in-all, 2015 will be an exciting year for the logistics industry.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Source: The Next Web
Source: The Next Web
A couple of weeks ago, we talked about The Amazon Effect and how it affects 3PLs. This week, we return to Amazon as the giant online retailer announced its launch of Amazon Elements, “a new line of premium, everyday essentials with transparent origins” in a recent press release.

The press release states that information such as “where items were made, why each ingredient was included, where the ingredients were sourced and much more” will be offered to Amazon Prime members. Furthermore, each package obtained from this new service will contain a unique code that can be scanned through an Amazon shopping app to track its specific ingredients and their origins, its date and place of manufacture, date of delivery, and ‘best by’ date.

Bringing Light to Something that is Already Happening

On the surface, what Amazon Elements is offering isn’t new. Other supply chain dependent companies have been offering similar levels of transparency for years. For example, Switcher, a Swiss textile company, labels each of its products with a code so that its customers can enter at the website to retrieve information about every firm and factory along the supply chain while also looking at the environmental performance certificates.

There’s also the Massachusetts Institute of Technology’s supply chain-friendly tool Sourcemap which is described as “the social network for supply chains” offers a very similar service to Amazon Elements (except it isn’t locked to Prime members and it doesn’t only cover diapers and wipes) as it too offers customers the ability to see the complete supply chain for a product or company. It also has the added benefit to calculate the potential impacts on the entire supply chain in the event of natural disasters or political unrest.

So why then does Amazon’s announcement merit any press interest let alone any from anyone in the logistics industry?
The answer is that unlike the efforts of other companies which have transparency as a value-added part of production, the transparency is the product when it comes to Amazon Elements.

Although supply chain transparency is important as demonstrated in classic case of Upton Sinclair, or the more recent crisis of Lululemon, many companies are still luke-warm on the idea.

This is because historically, both customer and retailer largely didn’t care about the history of an item. They were content that it was reasonably priced for what it is. The production and supply chain behind it was effectively invisible. Even if a business wanted to be transparent with its supply chain, it was incredibly difficult outside of its immediate suppliers due to technological and resource limitations.

Going back to Amazon Elements, Amazon is testing what sort of ROI it will get by selling transparency. The actual diapers themselves are more expensive than those on offer by their competition. However, Amazon has seen the move by supply chains in recent years from invisibility to transparency and its ready see how much it can capitalize from this trend.

Steve New, a writer for The Harvard Business Review puts it best when he describes the opportunities available to firms that make the switch,

As customers take greater interest in the origins and authenticity of the things they buy, providing them with tools to track provenance will become an important part of the marketing mix and will give producers and retailers new ways to capitalize on brand value. A key consideration is how much data to make publicly available, and in what degree of detail. Many firms have made bold assertions about how seriously they manage their supply chains. Transparency, at a granular level, gives credibility to those claims.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Social-PRNext week marks the anniversary of one of the most damaging data breaches in recent history. During the Black Friday of last year, retail giant Target Corp.’s had the credit and debit card numbers and personal details of over 40 million of its customers compromised. The public relations nightmare that followed resulted in profits plummeting upwards of 46%, Target shares slumping approximately 8%, and Chief Executive Gregg Steinhafel resigning after over 20 years with the company.

Stories such as these are unfortunately not that unique which is why it is critical for companies and organizations, big and small, to invest strongly in strategic PR. For those in the 3PL market, this means being aware of the ongoings of all suppliers and business associations; once a crisis happens, it can be difficult and costly to identify a problem’s source in the supply chain.

Other than a crack PR team, there are two ways that 3PLs can protect themselves from the toxic fallout of bad publicity.

Keeping your friends close

One of the most frightening things about a damaging PR crisis is that not only can it ruin a company business overnight, but that it can be unrelated to the original brand due to the nature of upstream supply chains. The best way to counter this is to ensure that oversight of all aspects of a supply chain can be conducted with as little lag in communication as possible. It is for this reason that nearshoring has become so essential.

There are a lot of financial and logistical benefits to nearshoring. However, a key benefit that is often overlooked is that by conducting business so relatively close to home, a 3PL company can better establish a strong and resilient social network which at the end of the day “is not really about socializing, but about facilitating people to people communication and collaboration” according to an interesting article on SupplyChain247. The added degree of security because of Mexico’s increasing growing infrastructure and business-friendly economy is also a welcomed factor.

Staying social means staying connected

In a similar vein to nearshoring, the power of social media doesn’t end with crisis management. The immediacy of information and two-way discourse between company and customers is essential when handling a crisis. It is for this reason that the benefits that social media provides when it comes to damage control cannot be overstated. From JC Penny to Fontaine Santé, case study after case study shows a demonstrable advantage for companies that are actively engaged and have a focused strategy when it comes to social media.

There are of course many other reasons outside of crisis control for a business to be connected. By effectively utilizing social media, a business can:

  • Increase traffic to its website
  • Enhance brand awareness
  • Contribute to search engine optimization
  • Position the company as an authoritative voice in its industry
  • Provide an avenue for improved customer relations by allowing a company to directly engage with individuals interested in their brand or product.

It is through this engagement that companies can tell their commercial journey and invite stakeholders into sharing their own stories.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!