Globalization continues to develop and refine many industries. It shapes the standards and best practices for many businesses. Supply chain and shipping, having so many moving parts, is affected by globalization more so than many.

Getting goods from A to B is a complex process, especially when the two locations don’t share a border. Globalization has made such journeys much more common. Whereas before countries and companies were limited to their immediate neighbours for trading partners, modern shipping allows them to take on a wider perspective.

The last 10 years has brought new technology to the world of shipping. It’s become much safer with improved safety standards and more efficient tools. However, while the current state of shipping is to be celebrated, new threats are on the horizon. If left unchecked, they may take a heavy toll on businesses and negatively impact entire supply chains.

A recent report was published by the Allianz Global Corporate & Specialty SE (AGCS), an international insurer and asset manager. AGCS’s fifth annual Safety & Shipping Review 2017 highlighted several important trends concerning the state of global shipping.

  • The last decade has seen a 50% reduction in large shipping losses.
  • There were 85 total shipping losses reported in 2016. That’s 16% less than the previous year.
  • The number of shipping casualties declined year-over-year around 4%.

Today we will be focusing our ebook on an analysis of this report and what it’s suggesting as today’s shipping standard based on the review on important trends in global shipping.

Today’s Shipping Landscape

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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-robo-boat

Two Norwegian companies are working together to build zero-emission, completely unmanned ships

Several companies have been very public about their race to introduce fully-automated cars to the marketplace by 2020. Did you know that two Norwegian companies have teamed up to do the same but with a fully-automated boat?

A Costly Start but Promising Future

The Yara Birkeland will be a short-range, fully electric coastal container ship. It will begin its career modestly as a “feeder” cargo ship, ferrying containers of fertilizer to and from larger ships.

It’s co-developers, Kongsberg Gruppen and Yara International, plan for the Birkeland to start operations by 2018 with a human crew aboard. Over the next two years, more of the ships’ functions will move away from human operation until its running remotely by 2020.

“At first, a single container will be used as a manned bridge on board,” Kongsberg’s chief executive Geir Haoy told the Wall Street Journal. “Then the bridge will be moved to shore and become a remote-operation centre. The ship will eventually run fully on its own, under supervision from shore, in 2020.”

The technology isn’t cheap though. The price tag for the vessel sits at $25 million, almost three times the cost of standard container ships of similar size. The cost has to do with the ship’s enhanced capabilities. It’ll be able to handle things like docking and navigation on its own (something regular container ships don’t do). Given the specialized systems onboard, the cost of on-site repairs will also be pricey further driving up the cost.

Despite the high initial investment, both companies claim that the benefits are worth it. The vessel will:

  • Eliminate 40,000 diesel trucks trips annually
  • Significantly reduce harmful carbon emissions
  • Improve the safety of local roads
  • Save up to 90% of its cost by what it reduces in crew member and fuel spending

Autonomous Vessels are the Future

The push towards autonomous sea faring vehicles isn’t being driven by Norwegian companies alone. An article in Arstechnica referencing the Wall Street Journal interview points out that Rolls-Royce Holding PLC has similar plans. Rolls Royce plans to launch robot ships by 2020, but its fleet may include tugboats, cargo ships and ferries.

SpaceX piloted a program to use uncrewed drone ships. However, their interest was in having the ship do the dangerous task of rocket landing and retrieval.

Kongsberg itself has been active with its investments in autonomous technology with its partnership with Automated Ships Ltd (ASL). They worked together in the past to develop a prototype unmanned utility ship and are now working with Bourbon Offshore to construct a robot oil rig support ship.

Autonomous vehicles are the future. Whether it be through land, air or sea, both people and cargo will soon be transported safely and efficiently to their destinations. While there are still concerns over the legal, moral and economic consequences of such technology, its benefits for supply chains and especially for the environment are too important to halt.

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-santa-ecommerce

eCommerce operations is the true Santa’s workshop and its logistics and supply chain professionals that scramble during the holiday season to make sure that your gifts and goodies arrive just in time for the holidays!

Most people are readying themselves and their bellies for the holidays, logistic providers are readying themselves as well. eCommerce businesses in particular, started preparing for the holidays back in August. Although Black Friday and Cyber Monday are behind them, there is still Christmas Day and Boxing Day still looming later this month.

Right now, operation teams across North America are making their lists (of inventory and personnel) and checking it twice (and several more times for good measure). Thanks to Black Friday and Cyber Monday they’ve found out which retailers and shippers are naughty or nice. This is because when the holidays come, customer shipments are comin’ to town (every town)!

Getting the Workshops Ready

According to a recent Wall Street Journal Logistics Report written by Loretta Chao, Transportation and warehouse companies added about 8,900 jobs across the U.S in November.

The number of warehouse operator jobs grew by 3,100 jobs from October to November. Payrolls have also increased as its grown by 47,000 jobs over the past 12 months.

It wasn’t only fulfillment centers that saw an influx of newly hired associates. As Chao points out,

Courier and messenger companies, including the package carriers that deliver online orders, increased their payrolls by 5,700 jobs last month, expanding employment in the industry by some 26,300 jobs from a year ago, according to the U.S. Department of Labor jobs report. The gain followed the addition of 12,200 transport and logistics jobs in October

Big Business in Gift Giving

The reason the holidays are such a scramble for retailers is because of the amount of business they stand to gain. In the U.S alone, the holiday season generated over three trillion dollars for the retain industry in 2013. The holiday sales accounted for 19.2% of retail total sales that year.

Increasingly, people are turning to online shopping. In terms of numbers, by 2010 B2C ecommerce sales totaled $283 billion USD in North America. By this year’s end, ecommerce sales are predicted to reach nearly $600 billion according to Statista.com.

In 2015, the holidays season saw desktop retail e-commerce spending in the U.S reach over $56 billion USD. Most of that money was spent online on Cyber Monday.

Cost of Late Deliveries

Understandably, customers will be upset if the items they ordered online don’t arrive on time. The main draw of purchasing gifts online is the promise of convenient and speedy delivery after all. Failing to hit deadlines means not just having angry customers, but also losing their trust when they need to do their holiday shopping in the future.

The holiday season of 2013 is the worst example of this. A shortened holiday season and erratic weather were cited as the reason for delays, but the damage was done. Customers were angry. It took costly good will gestures to regain their trust.

As 2016 ends, remember all the people that helped make your holiday special. Receiving gifts is great, but more amazing is the gift’s journey and the people around you!

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-zombies

Zombies are undead creatures, popular in many modern books, movies, television, and as Halloween costumes. They are the monsters that just won’t stay down. No matter what happens to one, it will eventually get up and continue its hungry lurching. Unlike more classic monsters, zombies cannot be waited out or ignored. Every passing hour increases the size of the horde as more people fall and become zombies themselves.

We have our own zombies in the world of logistics. Logistical zombies are issues that just never seem to go away. Like the classic zombie, these zombies can be very hard to put down. Just when you think it’s been taken care of, it rises again. These zombies generally start small. The problem is that like its movie and film counterpart, it will escalate and multiply if ignored, becoming a much bigger problem later on.

The go-to recommendation is to take action. This may just waste resources. Without a strong understanding of the core issue its likely time and effort will be wasted on a symptom and not the true cause. What’s needed is a root cause analysis.

Here are the 3 steps necessary for an effective root cause analysis:

Build Your Root Cause Analysis Diagram

To start, you’ll need a root cause analysis team. With a dedicated and varied team, a better root cause diagram is more likely because of the different perspectives.

Choose which root cause analysis diagram to use. Two popular diagrams are the fishbone or Ishakawa diagram, and the 5 Whys. Both diagrams have their advantages and disadvantages.

It’s important that everyone on the team understands that participation will not result in disciplinary action or peer ridicule. Management must stand by this agreement.

Walkthrough the Story and Verify Observations

Once the diagram is complete, the team needs to run through the diagram from every angle. Conditions and sub-causes need to be checked against verifiable evidence. Unsupported items need to be removed.

The aim is to have a list of actions (5 Whys) or diagram with items within verifiable contexts. A clear and cohesive story needs to come from the team’s diagram that leads to the primary event.

Depending on the resources available to your team, financial or technical constrains may restrict how far they are able to go.

When this happens, TechRepublic advises “… there are two possible solutions. First, the team can identify another point at which they can improve or implement a control. The goal is to arrive at the desired probability of occurrence with a combination of changes instead of a single root cause remediation.”

Consider Implementation and Create Action Plans

With the root causes analysis diagram complete, now it’s time for a formal action plan. List the tasks necessary to reduce the likelihood of the issue or increase your organization’s ability to detect the issue.

For each task, the plan should list the resources assigned and expected completion date. Don’t forget to assign someone to own and manage the plan!

Film and TV zombies may rise again, but by using root cause analysis your company/team will be able to put down logistical zombies permanently!

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.

On February 4, 2014, we released a white paper detailing the different ways the logistics landscape had changed. Developments in the industry had created new challenges and opportunities all along the supply chain, shifting the world of transportation.

The last few years has seen many developments in the realm of logistics. The recent carrier, port, and labour issues; rate instability, primarily in ocean carrier; and rising costs in other areas of the world, specifically China, has led a number of global companies to reconsider their outsourcing strategies.

This week on the blog, we are taking a look at these changes in the logistics landscape and what progress has been made since 2014.

White Paper: Third-Party Logistics and Mexico Nearshoring Still Growing

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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-relationships

The 3PL industry has come a long way in a few short years with its evolution from tactical service providers to collaborative partners that take on greater accountability and control.This week on the blog, we wanted to focus on the relationship between shippers and 3PLs.

In the past, the question was why a company should hire a 3PL as many companies had their own in-house logistics teams; then the question became if a company should hire a 3PL as the cost-benefit of outsourcing certain functions was weighed. And now in 2016, the question is which 3PL a company should partner with as a growing number of companies have as best practice, the outsourcing of some or most of their logistics functions.

The 2017 21st Annual Third-Party Logistics Study, which was released recently by Capgemini Consulting, Penn State University, and Penske Logistics at the Council of Supply Chain Management Professionals Annual Conference in Orlando, Florida sheds light on the change in strategy.

Data for the study was based on feedback from 194 usable responses from both shippers, or users of 3PL services, and non-users of 3PL services, as well as a separate, related version of the survey by 148 respondents from the 3PL sector.

One of the focuses of the study was looking at the 3PL and shipper partnerships in tandem with the strategic nature of relationships.

Of those surveyed, 91% of shippers and 97% of 3PLs indicating they have successful relationships that are bringing about positive results, which is up from 2012, which showed that 88% of shippers and 94% of 3PLs cited successful relationships.

75% of shippers and 93% of 3PLs also indicated that using 3PL services has led to over all logistics cost reductions, and 86% of shippers and 98 percent of 3PLs said that has led to improved customer service.

Big data, the new core competencies of 3PLs

A selling point for 3PL partnerships is the effectiveness such a relationship provides in preventing visibility “black holes”.

By selecting the right 3PL provider, a company gains in-transit visibility for all inventories from point of origin to final destination, information concerning production status, and projected inventory at destination distribution centered as well as accurate ETAs and data that would allow for easy comparison of expected performance to actual performance.

Big data, the study indicates, is the new way visibility is ensured and the new core competency 3PLs are providing.

Key Area for 3PLs

The biggest focus areas related to big data cited in the study for shippers included: improving integration across the supply chain; improving data quality; improving process quality and performance; increasing levels of data transparency; improving customer interaction and service; and improving logistics optimization.

98% of 3PL’s indicating that improved, data-driven decision-making is essential to the future success of supply chain activities and processes, which was supported by 93%of shippers.

86% of 3PLs and 81 percent of shippers also noted that effective use of big data will become a core competency of supply chain operations.  

The study ultimately explains why so many businesses have turned to 3PLs for their logistics needs. Strategic shipper and 3PL relationships create value throughout the supply chain.

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.

It was just under three years ago that Amazon.com CEO Jeff Bezos revealed plans for “Amazon Prime Air,” a drone-based delivery system that would’ve been a game-changer for delivery services. At the time, there were a number of news outlets and commentators divided on the topic, with some being excited at the implication of drones that could theoretically reach you anywhere, while others had safety and privacy concerns. 

This week we thought we’d focus on the impact drones are having on the future of supply chains.

The Fight For Flight: Commercial Drones May Soon Deliver Your Next Order Online

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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.

RMS Inc., a risk-modeling firm, recently released a report that looks at the top ports at risk of a disaster. The predictions are primarily based on cargo type (e.g. autos, bulk grains, electronics, etc.), precise location, storage infrastructure and the dwell time.

The report was released a year after the Tianjin port explosion in China, a man-made disaster that led to more than $3 billion in claims after damaging property, disrupting supply chains and killing more than 170 people.

This month we decided to focus on the most at-risk international ports.

8 Interesting Facts about the Most At-Risk International Ports

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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-Cold-Chain

Being well into the summer, we thought we’d take a moment to look at the challenges faced by an often under-appreciated branch of our industry: cold chain logistics. We might find it difficult to stay comfortable in the hot summer months, but it is the job of those involved in cold chains to ensure that the temperature sensitive cargo of their clients not only arrives safely but also fresh (if food or drink), or viable (if pharmaceuticals).

Cold Logistics turning into Gold Chains

A recently published report, titled “Global Food and Beverage Cold Chain Logistics Market 2016-2020” by Technavio defines a cold chain as “a temperature-controlled supply chain process used to maintain ideal storage conditions for different products and commodities.” The report details that cold chains,

…provide temperature-controlled warehouses for surface storage and refrigerated transport vehicles for physical distribution of products at optimal temperatures. It is used widely to store and transport fruits, vegetables, drugs and medicines without spoilage. Cold storage increases shelf life and maintains product quality.

As you can imagine, there are a lot of items that require a cold chain for it to arrive in a satisfactory/sellable state. This is why the global food and beverage cold chain logistics market is estimated to grow at a CAGR of 11.18% in revenue between 2016 and 2020, according to the report.

Cold Chains Turnaround for Emerging Economies

A researcher for the report noted that much of this growth is coming from emerging economies such as those of India and China, despite the industry still being in its developmental phase. This is the result of the high populations in each country. India’s tropical temperature also makes it one of the leading producers of food grains and food products worldwide.

Given the climate of some emerging economies, lack of proper infrastructure, the presence of minimal logistic support and lack of proper warehousing facilities, a substantial wastage of food products in these countries means that proper storage and cold chain logistics would greatly benefit these economies. Other factors affecting the need for proper storage and cold chain logistics include limited presence of service providers and lack of skilled workers.

The Technavio report goes on to state that:

According to the United Nations Environment Programme (UNEP) and World Resources Institute (WRI), about one-third of the food produced every year is wasted. Fruits and vegetables are products that are wasted the most; about 25% of them are wasted at the production level. In addition, perishable food products are often exposed to fluctuating temperatures during transit and handling, which adds to the wastage. The global population is expected to increase at a rapid pace in the future, which is expected to increase the demand for food products.

Although the cold chain market continues to grow, it isn’t without its hurdles. Lisa Terry highlights in her article of ten trends that are putting a damper on the growth of cold chain logistics.

Cold Supply Chains still shackled

Among the issues highlighted are that cold chains are becoming more global, there’s an increasing focus on quality and product sensitivity and the rising regulations in places like the EU. Other trends she notes are driver shortages and capacity restraints, fluctuating fuel pricing and subsequent mode shifting, and the industry drive to adopt better and upgraded technology

So while you’re busy trying to find some shade, or a place with the right level of air conditioning, remember the people whose job it is to keep things cool whether it’s ensuring that a bag of ice arrives intact to your local super market or life-saving medicine arrives where it is needed most. The world is a better place because of cold chain logistics.

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-top-5-carrier-switch

With the increase of transportation management systems, tighter driver availability, and growing regulatory guidelines, it is essential to collaborate with carriers to ensure you are adding profitable business to their network. This will solidify a long-term relationship that will save you from costly changeovers.

Building important long lasting relationships with a carrier is an important part of maintaining a strong supply chain network. Capacity shortages and other carrier-related service issues will inevitably occur and carrier change-over can be costly. But sometimes, the business arrangement is simply no longer mutually beneficial and it’s time to switch carrier.

Here are 5 signs to look out for that maybe it’s that time.

1. The Last Time Your Carrier’s Technology was Updated, iPhones Didn’t Exist.

In order to stay competitive, it is key that your carrier embraces technological changes. Implementing the latest technology helps to continuously gather intelligence regarding your market and assists in mitigating risks. Even embracing technology as simple as RFID can help improve supply chain visibility from start to finish. It is essential that carriers are capable of evolving as consumer demands evolve, allowing companies to take advantage of potential in new markets and quicker react to opportunities with current consumers.

2. Uncompetitive Rates

Competitive rates are a no brainer. In order to build a strong relationship with clients, carriers must offer competitive rates. This gives the ability to negotiate and strategize the best possible options and plans based on your needs. Rate shopping can be a daunting task, and your carrier should be able to provide rate costs that best fit your budget and shipping requirements. By providing competitive rates, your carrier is acknowledging that they want to give you the best benefits at the best prices. If your carrier refuses to budge on your rates, it’s definitely time to find a carrier that has your best interests in mind.

3. Instead of PB & J You’re More Like Pickles and Marshmallows.

The relationship between carriers and clients is important. Your business needs are important, and you should be a priority to your carrier. Long term relationships can often result in better plans and rates based customized to your specific shipping needs, and can help when evaluating bottom line. A positive carrier/client relationship can often offer discounted rates over the course of time, in addition to more carrier options and credibility to your business which can minimize risks of shipping nationally/internationally.

4. Mistakes are More Common than Actual Completed Shipments

Everybody makes mistakes, and everybody has those days. While service issues are a reality, recurring service issues should not be. Frequently experiencing issues and service problems is not necessary and is costly to your business. When you find yourself constantly addressing service failures that your carrier refuses to acknowledge with no signs of improvement, it’s time to find a provider that takes places importance on the level of customer service they provide.

5. You’ve Outgrown Your Carrier

You have now become a big and beautiful business, but your 3PL and carrier requirements have outgrown the capabilities of your current provider. It’s important to understand that not all carriers provide the same scope of services. Some carriers provide specialized services that might be exactly what your business requires, while others offer customized warehousing or global partnerships. It’s nothing personal, you’re just in different places, and it’s best to consider a carrier that matches your needs on all levels.

The nature of business relationships are not always win-win. The ability of both parties to give-and-take to serve customer needs is more important for a lasting business alliance.

However, sometimes a partner may take too much either through limited capability or limited ability. Depending on where your business is at present, and where it needs to be, it may just be time to switch carriers.

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.