Morai-Logistics-Blog-Labour-Dispute

It was around this time last year when the West Coast Port labour dispute was in full swing and many different businesses both in North America and abroad were feeling the effects. What had started as tensions between the International Longshore and Warehouse Union and the Pacific Maritime Association, led to negotiations failing over wage and labour conditions. From October 2014 to March 2015, the port’s ability to effectively and efficiently process cargo was severely impacted as several cargo-laden ships were not unloaded and instead left stranded up and down the coast.

Several companies were unable to ship their products in a timely manner leading to the accumulation of more and more extra supplies and products. This inventory glut crowded warehouses, eventually forcing companies to cut back on their new orders to clear out their backed-up storage facilities, costing several different businesses in the short and long-term. A new study by the Washington Council on International Trade came out this week and it analyzes the costs and impact of the labour dispute across multiple industries and sectors, including agriculture and food processing, retail, and transportation and manufacturing.

Several different estimates were forecasted at the time as to the cost of the slowdown. “Kurt Salmon consulting firm previously estimated the slowdown would cost U.S. retailers $7 billion. The Manhattan Institute conservative think tank projected apple farmers alone lost $19 million during each week of the slowdown. The North American Meat Institute estimated their losses to be more than $40 million each week” cites this article on USNews.com reflecting on the topic.

The study gives a breakdown as to the actual price tag for the slowdown which ended up being very significant for both the U.S economy, trade, and several different industries:

  • U.S. exports dropped by more than $11 billion (nearly 6 percent) between May 2014 and February 2015.
  • An estimated $558.8 million in exports were not shipped by water during those months. Some exporters diverted to air cargo, increasing shipments by air a total of $152.6 million.
  • The value of goods that were not shipped during the period was $403.2 million.
  • Importers racked up an additional $345.1 million in additional costs through reductions in inventory incurred by retailers, delayed delivery of components to manufacturers and so forth.
  • Demurrage (storage) fees that would not have occurred if there were no port congestion totaled $7 million, and truck-idling costs of $14.2 million resulted.
  • Fruit and meat rotted aboard idle West Coast ships, many of which were anchored off relatively warm ports like Los Angeles.
  • Shipping companies rolled out surcharges upward of $1,000 per container on some ships to help cover expenses related to failed deliveries.

The total cost the study determined, is $769.5 million, however the council is very clear that this is only the short term cost. Long-term costs will be more far reaching. “Future costs, such as damaged client relations resulting in the loss of business or sole source contracts, can have long-lasting impacts on Washington businesses,” said the study. “While these impacts are not quantified in this report, they are real and potentially much greater than the near-term costs presented above.”

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!

DictionaryThis Logistics Glossary Post is going to focusing on order fulfillment in the supply chain. In the logistics industry, we look at order fulfillment as a way to de-couple the supply chain and is especially important for companies that either offer product customization and/or have a variety of different products to offer. Looking at order fulfillment to minimize the amount of steps take along the supply chain and mitigate the impact of variety both on cost and time to produce.

Order Fulfillment

Hal Mather published a book called Competitive Manufacturing and pioneered the research behind order fulfillment. He was also responsible for defining the order fulfillment strategies that we are defining below:

Engineer-to-Order (ETO)

Definition: Engineer-to-Order refers to products that are designed and built to customer specifications. For example if I wanted a custom car built from scratch, a company that specializes in that service would have an engineer-to-order car. Companies that use this approach usually large construction projects or companies that offer one-off products such as the example above.

Build-to-Order (BTO)

Definition: Build-to-Order, also known as Make-to-Order (MTO), refers to products that have a standardized built. This means that the basic build of the product is the same throughout, but the production of components and the manufacturing of the final product is linked to the order placed by the final customer’s specifications. This is usually seen in the automotive industry, where customers can customize certain aspects of the car model that they have chosen to purchase (i.e. colour, type of interior, etc.).

Assemble-to-Order (ATO)

Definition: Assemble-to-Order products are built to customer specifications based on a list of items (i.e. a stock of existing components). This means that the base product itself has the type of architecture to allow the final product to be configured in such a way that the components can fit. The most common place this is seen is in electronics like laptops where you have the option to choose your hard drive space, the amount of memory, the type of graphics card, etc.).

Make-to-Stock (MTS)

Definition: Make-to-Stock, also known as Build-to-Forecast (BTF), is a production strategy that is most commonly seen in grocery stores and retail. The product is manufactured as is with no customization and its production is built against a sales forecast.

Digital Copy (DC)

Definition: Digital Copies are as they sound, the products are digital assets and inventory is maintained within a single digital master (i.e. source). Copies are created based on the demand and customers can download and save products on their storage devices. A common example is an e-book, where a digital copy is bought and downloaded onto an e-book reader for consumers to use.

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!

DictionaryOur mission to provide little tidbits on the vast library of logistics terminology month by month continues! We love to educate those who are interested in logistics to know more in manageable chunks. This month’s Logistics Glossary Week post is on food logistics. What kind of terminology along the supply chain are used when transporting goods? This post on food logistics terminology is going to focus on regulating edible perishable goods.

Food Logistics – Part I

One of the main challenges for companies that have to deal with food transport is ensuring that the food coming from the origin stays fresh throughout its journey to its destination, no matter what the distance. On top of that, these perishable food items also have to arrive with enough time to be on store shelves and stay unspoiled for a particular amount of time to be bought and consumed by customers. Below are some terms that are commonly used in food logistics related to maintaining a level of standard (from origin and throughout the supply chain) for food once it hits the store shelves.

Food and Drug Administration (FDA)

Definition: The Food and Drug Administration, or FDA, is an agency of the United States Department of Health and Human Services. The FDA serves to protect and promote public health of food safety, pharmaceutical drugs (both prescription and over-the counter), as well as various other consumable goods like tobacco products, medical and veterinary products and devices, etc.

Every country has their own set of rules and regulations (e.g. the Canadian Food Inspection Agency enforces Canadian Food and Drug Regulations) and it is important to consider these as a logistics company as some differences can alter how a product should be transported and handled. This is why when doing food-related cross-border logistics, it is important to be aware of these governing bodies and their regulatory requirements.

Standard Operating Procedure (SOP)

Definition: Standard Operating Procedure, or SOP, in the general sense is a detailed written set of instructions for a process that must be followed to ensure standardization and compliance.

In the world of food logistics, the SOP of food is based on the type of food product and the recommendations of the governing body that regulates its best practices. This is important as it is the responsibility of companies that offer food or perishable edible goods to be able to ensure a consistent and desired outcome for the end consumer.

Hazard Analysis and Critical Control Points (HACCP)

Definition: Hazard analysis and critical control points, or HACCP, is a food safety system based on the principles of identification, evaluation, and hazard control. It is more of a systematic preventative approach to food safety, as opposed to a finished product inspection.

Time and Temperature Control for Safety (TCS)

Definition: Time and temperature control for safety food items, or TCS foods, are as the term suggest; food that needs time and temperature control to prevent a product from becoming unsafe due to biological hazards.

Food that is normally regarded as TCS foods are those that are high in protein, are moist, or are moderately to slightly acidic. Some regulating bodies recommend that these products be labeled.

Source: foodprotection.org
Source: foodprotection.org

The above example is from the International Association of Food Protection and serves as a label for potentially hazardous food that requires time/temperature control for safety.

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!

DictionarySpring is here! What better time to continue our end-of-the-month Logistics Glossary Week posts, to continue our mission to provide all who are interested in our industry to get savvy with our terminology. This month we’re going to continue our Border Crossing Logistics Terminology series!

Border Crossing Logistics Terminology – Part II

This month’s focus we’re going to be taking a more basic look at what cross-border logistics is all about and focus on the kinds of governmental initiatives that are involved in various cross-border logistics processes.

Cross-Border Logistics

Definition: The definition of cross-border logistics is pretty intuitive. It is simply any logistics processes that involves moving goods from one geographic boundary, usually separated by political entity (i.e. political entities or legal jurisdictions such as governments, sovereign states, federal states, and other applicable subnational entities.

As borders that separate these regions have their own system of governance, third-party logistics companies that specialize in cross-border logistics can take away any potential chaos with regards to compliance and the required documents to get your goods across from origin to destination.

North American Free Trade Agreement (NAFTA)

Definition: The North American Free Trade Agreement, or NAFTA, is an agreement between Canada, the United States, and Mexico. It was created in order to allow easier trade between the borders of each participating country through an ease of customs, regulations, and arguably most importantly: tariffs.

Because of the advantages that NAFTA offers to the participating North American countries, Canada and Mexico have been and currently maintain their place as two of the largest trading partners for the United States, and vice-vera.

Customs-Trade Partnership Against Terrorism (C-TPAT)

Definition: The Customs-Trade Partnership Against Terrorism, or C-TPAT, is a voluntary supply chain security program. Headed by the US Customs and Border Protection, it was launched in 2001 in order to improve the security of private companies’ supply chains with respect to terrorrism.

Companies who participate in the C-TPAT certification program undergo a documented process for determining and alleviating risks throughout their cross-border supply chain processes. The benefit to this program is that participating companies are deemed low-risk, and are eligible for expedited processing of cargo which in turn leads to fewer customs examinations.

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!

DictionaryWe’re ending February with our monthly Logistics Glossary week post. This focus is on maritime logistics terminology. Maritime logistics is essentially what it sounds like; it is the part of the supply chain that is primarily involved in the maritime environment. So anything involving the sea or ocean!

Maritime Logistics Part 1

Egyptians are commonly credited to be the first recorded instance of maritime logistics dating back to 3200 BCE. Transportation in those days were primarily dependent on wind, and stayed that way until mechanized ships (i.e. using steam engine technology) were invented and developed in the mid-19th century.

Fast forward to today, we now primarily use a diesel based engine and maritime logistics is a booming business, with about 90-95% of international trade being carried onboard ships of some sort. This post will focus on the different shipping terms you hear in the maritime logistics world.

Maritime Logistics Management

Definition: Maritime logistics management is the part of logistics and supply chain that plans, implements, and controls processes in the maritime environments (i.e. ocean or sea transport). These processes include, but are not limited to, efficient and effective flow of goods, services, and other related information based on customer or client needs.

Liner Shipping

Definition: Liner shipping a type of shipping involving high-capacity, ocean-bound ships that go on regular laid out routes and schedules. Currently, there are about 400 liner services that function today. They are commonly routed to do weekly departures from all the ports that each service calls. Ships that do this type of service are called liner vessels and are usually container ships and roll-on/roll-off ships. This type of transport is known to carry approximately 60% of the goods (by value) moved internationally every year.

Tramp Shipping

Definition: Tramp shipping is similar to line shipping in that it also involves high-capacity, ocean-bound ships. The main difference though is that tramp shipping doesn’t involve laid out routes and schedules; in fact, there’s no fixed routes, itinerary, or scheduling involved. Tramp shipping is advantageous because unlike liner shipping, tramp shipping options can be available at a short notice (or fixture) to load cargo from any port to any other port. This is great for customers that require specific shipping options that main routes from line shipping services may not offer, or if the route options do not make sense (i.e. are too convoluted).

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!

DictionaryWe’re ending the first month of 2014 with our first Logistics Glossary Week post of the year. As you may already know, these posts focus on increasing your logistics and supply chain industry vocabulary as well as awareness about our industry. This month we’re going to focus on terminology that you might see at the border. This is Part I of our series on Border Crossing Logistics Terminology!

Border Crossing Logistics Terminology – Part I

This part will focus on the Importer of Record documents that are needed when crossing the border, for example an inbound shipment from the United States to Mexico. Now, depending on the border different documents might be necessary but this serves to give you an idea of what you would need to pay attention to.

Importer of Record

Definition: The Importer of Record is the person or company responsible for payment of duties and taxes and the maintenance of Customs records. For example, if your company was a US car parts manufacturer and wanted to ship to a car manufacturing plant in Mexico, you would be the Importer or Record and would need the following documents listed below.

Importer Tax ID

Definition: The importer tax ID is the identification needed for import duty purposes, where import duty is a kind of tax on levied goods which are being brought into the country. The duty to be paid depends on the country of origin of the goods as well as the type of goods. Rates can differ though, for example a standard rate could be 20%, but certain goods can be eligible for a reduced rate of 5% while some can have a no duty rate (0%).

Importer Product Specification

Definition: The importer product specification serves as a document that can be referred to when checking products at the border. This document allows the importer of record to define the custom product specifications of the goods that will be traveling across the border (i.e. the custom product specification group and product specification items to attach to any product). Attaching specifications with products need well-defined product specification groups and items for shipment security and risk mitigation practices.

Carta Encomienda Permits

Definition: The carta encomienda permit serves as the letter of appointment of the customs broker. The customs broker in charge of import operations must be able to present this this document (assigned by the importer of record) to Mexican authorities.

Other forms of documentation are needed, but we feel that they are pretty self-explanatory. These are the honourable mentions of what you need as an importer of record to cross the border: Voter’s registration, business registration, and address verification.

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!

DictionaryFor this week’s Logistics Glossary Week post, we’re going to focus on hubs! What exactly is a hub? Well, it actually has many definitions. In the computing sense, a hub can refer to a common connection point for devices in a network. For example, a web hub was one of the initial names to what we now refer to as a portal. But what about the logistics sense? We see articles today that are discussing possible new logistics hubs for manufacturing or where the best logistics hubs are per region. So we thought that for this month’s blog post, we’d give you the breakdown on the logistics ‘hub.’

Logistics Hub

Definition: In logistics terminology, a ‘hub’ is a reference for a transportation network as a “hub and spoke.” The term is commonly used in the airline and trucking industry. A hub in the logistics sense serves as the focal point; its purpose is to handle the flow of good and other resources between the points of origin to destination in order to meet transportation requirements.

Logistics hubs can be mainly one form of transportation such as trucking terminals, rail hubs, or even a hub airport. All refer to the same idea. For example, a hub airport serves as the focal point for the origin and termination of long distance flights (flights from outlying areas meet connecting flights at the hub airport). But, it can also be a…

Multimodal Logistics Hub

Definition: A logistics hub that has more than one mode of transportation (truck, rail, sea, air, etc.) that handles the flow of goods and resources between the point of origin to destination in order to meet transportation demands and requirements.

Value Proposition

Definition: value proposition is particularly important to the definition of logistics hubs because in order for a logistics hub to be truly effective, there has to be value in using a particular location as a hub. Ideally the proposition is two-sided; meaning that the hub is a benefit to both buyers and sellers.

Hubs can be created organically due to pragmatic solutions stemming from a particular location. For example, logistics hubs can be near or around many manufacturing plants and companies that offer warehousing solutions. Furthermore, it could also be easy access between different modes of transportation such as truck and rail. This provides easy intermodal exchanges, like transporting goods from truck to rail. Because of this, routes are created and these hubs offer the benefit of convenience and potential cost savings for both suppliers and consumers.

And that’s all for us this week! Hope you have a happy Halloween and a great weekend! 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! See you in November!

DictionaryWelcome to our first Logistics Glossary post of the Fall season! This week’s focus: factors that affect trucking costs! One of the things that we’ve written about before is the difference between calculating the lowest rate and the lowest total cost when quoting a delivery from point A to point B. Today, we can provide a real concrete example of factors that can make calculating a basic rate misleading. Any good third party logistics (3PL) providers can provide a rate for transport, but to be able to consider these factors below to generate a lower total cost (even though it is not the lowest rate in the market) is what makes them great! But let’s start with the definition of what getting a rate is in the logistics sense:

Rate/Pricing

Definition: In logistics terminology, getting a rate or pricing from a 3rd party logistics provider simply means that you are being given the established charges for the transport of certain goods.

So, if I want to transport a package from New York City to Mexico City, the rate would simply mean how much the service would cost to move these goods from origin to destination. But that doesn’t really cover all aspects for what your total cost could be. What is usually being calculated is the line haul cost.

Line Haul Cost

Definition: What is usually given to you when you as for a rate from origin to destination. Exclusive to trucking terminology, it is incurred in transporting goods over a route but not including costs of loading and unloading. Line-haul costs vary directly with distance.

Sometimes, because rates are Below we’re providing a list of some common, additional costs that should be taken into consideration when getting rates to have a better idea of total cost.

Loading/Unloading Costs

Definition: In logistics terminology, loading and unloading is the process of putting shipments into or taking shipments out of containers respectively. The main reasons that these costs apply to your shipments is primarily because initiatives taken to minimize problems that may occur during these phases, especially the loading phase. Problems such as inadequately sized docks and rough terrain can lead to load damage and more costly delays.

Fuel Surcharge

Definition: A fuel surcharge is an additional charge for motor carriers like trucks to cover fuel costs and is dependent on the line haul. There is some controversy with how fuel charges work as having a line haul cost and the fuel surcharge in flux makes it hard to calculate total freight spend and makes carrier relationships more difficult to maintain. There’s an old blog post from Inbound Logistics Magazine that gives great insight into the standardization of fuel surcharges.

Stop-Off Charge

Definition: A stop-off charge is an additional cost to cover trucks having to make specific stops between origin to destination. In some cases this ‘stop-off’ might be conveniently on route to the destination, but it is not necessarily always the case. These factors obviously affect the cost for the line haul as we affect the distance and the route that trucks have to travel through. The main reason stop-off charges happen is primarily due to packages in the truck having to be delivered to more than one location (i.e. Toronto – Montreal, but with a stop-off in Ottawa). But another common reason is due to warehouse space capacity issues. Sometimes the destination has an overflowed warehouse and a stop-off is needed to accommodate for it.

Bond Fee

Definition: A special type of storage fee for ‘legal’ reasons and is usually seen in cross-border shipments. A package ‘in bond’ means that the goods under customs control (for clearance, inspection, or other form of legal involvement) either until import duties or other charges are paid, or to avoid paying the duties or charges until a later date.

We hope after looking at some of these cost definition you have a better appreciation of our earlier statement:

A good third party logistics (3PL) providers can provide a rate for transport, but to be able to consider other cost factors to generate a lowest total cost (even though it is not the lowest rate in the market) is what makes them great!

If, for example, I wanted to take a load from Vancouver to San Francisco and I have been given Rate A at $100 and Rate 2 at $120 from just the line haul cost. I could obtain estimates on the additional cost factors and find out that other charges are similar except Rate A has a high fuel surcharge of $50 and a bond fee of $30, while Rate B has a those costs at $20 and $10 respectively. We can see that Rate A actually has a total cost of $180 while Rate B has a total cost of $150. Thus the lowest total cost would be Rate B. This is something to definitely keep in mind when getting rates for transport. It pays to know your logistics terminology!

And that’s all for us this week! Hope you have a great weekend! 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’ll catch you next week!