DictionaryWelcome to our last Logistics Glossary Week post of the summer! This week we’re focusing on the different modes of transportation for logistics and we’re finishing with a look into the potential future of logistics with the introduction of a new, interesting mode of transportation!

Intermodal

Definition: In logistics terminology, intermodal simply means using two or more modes of transportation, usually this refers to truck and rail, but it can refer to any combination of different mdes of transportation. For example truck and oceangoing vessel.

Intermodal transportation is one of the most common ways goods are transported, especially when crossing borders or when transporting good for significantly long distances. Indeed, our biggest offer as a third party logistics provider is intermodal logistics services. News earlier this year suggested that the logistics industry is to experience slow growth over the next 5 years, but it seems that certain aspects of logistics are less affected. Chief Supply Chain officers look to 3rd party logistics providers and intermodal seems to be on the rise in certain parts of the world, for example Eastern Canada.

Truckload & LTL

Definition: We’re grouping these two because they are essentially the same, but differ mainly in the size of shipment. When you think logistics, you normally think truckload transportation; moving full truckloads of freight from the point of origin to its destination. Less-than-truckload (LTL) transportation services consolidate and transfer smaller shipments of freight, usually through a network of terminals and rally points.

Trucking is what makes good move across the world. It is the standard for logistics, hence why you might think trucks when you hear the word logistics! Because this is one of the most in-demand mode of transportation for getting good from origin to destination, there is a huge demand for truck drivers. This is no truer that today, when the addition of e-commerce has created even more demand for trucking services. This increase in demand, combined with the aging trucking population (the average age is about 40, with 20% of the total population over 55), there is a real need to increase the tuck driver workforce in order to keep up with tomorrow’s logistics demands.

Ocean and Air Carriers

Definition: Useful for global logistics, ocean and air carriers are what you would assume they are. They are cargo ships or airplanes that carry freight. Usually these types of transportation fit under intermodal logistics services because they tend to be combined with some form of ground transportation.

Drones

Definition: Also known as ‘unmanned aerial vehicles’ or ‘unmanned aerial systems,’ drones are best known for their military applications. They are aircrafts that can fly autonomously; they usually follow a set path from origin to destination using a form of GPS guide.

The development of technology has brought down the prices of drones to as little as $500-1000 USD. We found an article that takes a look at people in the logistics industry who have introduced the concept of drones as a means to transport goods. This could create a potentially hassle-free way that can transport goods speedily!

And that’s all for us this week! Hope you have a great Labour Day 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. 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!

DictionaryWelcome back to our monthly Logistics Glossary Week post! A couple of weeks ago we posted some great infographics that we found and a lot of them seemed to focus on trucking when we were searching for content. So this month we’re going to focus on the world of trucking. Specifically, we’re going to cover all of the different types of trailers. There are currently about 35 terms for the number of different trailers that is recognized in the American trucking industry. This month we will only be focusing on four types that we think are good to know about!

Dry van

Definition: What you first think of when you think for a truck with a trailer. A dry van carrier is an enclosed non-climate controlled rectangular trailer. It mainly carries general cargo, including food (but the kind that doesn’t require refrigeration). These types of trucks are loaded or unloaded via the rear doors and you would need elevated access for forklifts to put goods into the trailer.

Reefer or Refrigerated Van

Definition: Reefer trailers are truckload carriers that are designed specifically to keep perishable goods refrigerated. This type of carrier tends to be used by the food industry, but can also be used by pharmaceutical companies.

Reefer trailers are particularly important with regards to logistics because of their main purpose: preserving goods. Thus of all types of trailers, reefer trucks can be deemed the most time sensitive. This is apparent in certain governments attempting policy changes specific to the refrigerated vans. For example, India’s National Centre For Cold Chain Development (NCCD) has teamed up with the government to allow refrigerated trucks and vans toll-free access across all states.

Flatbed

Definition: A flatbed is a type of trailer that has no enclosures or doors. Sometimes known as a ‘haul brite,’ flatbeds can be loaded or unloaded from the sides and the top and doesn’t require elevated access for forklifts.

Tanker

Definition: Tankers have the primary purpose of hauling bulk quantities of liquid. They tend to be cylindrical in shape.

Tankers are special trailers that require quite a bit of attention and care as tankers can carry liquids that may be dangerous, for example oil. A fair chunk of accidents in the trucking industry result from tanker type malfunctions or accidents. And even when tanker trucks are being maintained gas leaks from flammable substances such as oil can lead to severe accidents.

We hope you’ve enjoyed our third Logistics Glossary week post. To keep up with our posts, and to see other content related to logistics and supply chain don’t hesitate to follow us on Twitter or subscribe to our blog! If you’re interested in what we do as a company, feel free to check out our services. Looking forward to seeing you in July!

Oil Rail Train
Source: Geograph
Last month we took a look at the retail industry and how its supply chain is affected with regards to recent news. We’re continuing the series this month by exploring the crude oil industry. If you have been keeping up with recent news, last Saturday the town of Lac-Mégantic experienced an unexpected tragedy when 73 black rail tankers carrying pressurized containers of crude oil was derailed.

The train was parked for an overnight shift change, the tankers decoupled from their locomotives for an unknown reason (as of yet) and rolled downhill without any drivers into the town centre, derailing and setting off a series of explosions. The explosions caused fires that lasted for hours; about 30 building were destroyed and a death toll of at least 15 with dozens unaccounted for.

This tragedy has given light to concerns of the logistics behind crude oil transport and below we will take a look at how development in the crude oil supply chain has changed with regards to the modes of transportation and the factors that affect crude oil costs.

Crude Oil Transport Shifting to Rail

The revival of oil trains in North America stemmed from the Bakken shale in North Dakota due to fracking (i.e. hydraulic fracturing) creating a huge amount of product that needed to be moved without too many options with regards to the pipeline. This led to the oil industry turning to rail to move crude oil to refineries at the East and West Coasts as well as the Gulf Coast. This growth led to huge shipments of oil. For example, in Canada’s railroads alone rail transport for crude oil has gone from 500 carloads in 2009 to a predicted 130 000 to 140 000 this year, according to the Railway Association of Canada.

Apart from being a highly efficient mode of transport for crude oil, costs for train transport can also be lower due to the crude oil in trains being made entirely of tanker cars of oil. This effectively creates an above-ground pipeline and is more cost-effective than traditional the traditional mixed cars of boxcars, flatbeds, etc. (a.k.a. ‘manifest trains’).

Supply Chain Factors that Affect the End Cost of Oil

We’d like to finish this off with a look at two main factors, with regards to the logistics and supply chain aspects of oil transport, lead to changes in cost for the end user.

Mode of Transportation – As discussed above, consumer end cost rises if we limit train movement. If you change the cost from intermodal/rail to truck transport, costs will increase. Equipment shortages can also affect the prices of oil as in order to supply the demand, companies will have to seek alternative modes of transportation in order to meet consumer needs. Disasters along the supply chain can have a devastating impact on the price of oil, something we have already been made aware of in 2010 when the BP oil spill on the Deepwater Horizon rig happened.

Supply & Demand – Obviously one of the biggest factors that affect the end cost of oil is how much we have available to distribute and how much we need. There are also global oil inventories that affect pricing. Global oil inventories exist to balance the supply and demand. When production exceeds the demand for oil, the excess oil is stored. This way, when consumption exceeds the current supply of oil, the oil inventories can be tapped to meet the demand but could end up increasing cost for the end user.

We hope you enjoyed this month’s industry focus on the oil industry. If you liked this blog post and you want to read more of our content, don’t hesitate to subscribe to our blog. Or if you want more logistics and supply chain content throughout the day, follow us on Twitter! If you’re interested in what we do as a 3rd party logistics provider, feel free to check out our core services. Otherwise, we’ll catch you next week!

Distribution warehouse centerWe’ve reached an era today where people are becoming more and more aware of how companies move their goods and where they are manufactured. There is even a Kickstarter company that gives you the breakdown of where your shirts are coming from! We are also starting to get more and more aware of how supply chain services are affecting our environment by increasing efforts to create a more sustainable supply chain. This includes taking advantage of new technologies in order to accommodate today’s large transportation and supply chain demands. New advancements in e-commerce and the changing trends in global logistics has been a player in these shifts.

We’ve narrowed our list down to three main trends to watch for, and these trends will definitely affect the end user hopefully by being able to create a more efficient and cost-effective supply chain in the near future.

1 – Synchronizing Tracking on the Supply Chain

There is a lot of buzz in the logistics community these days on Radio-Frequency Identification (RFID) technology. Companies are starting to look into synchronizing how packages are tracked especially when it comes to services that involve global logistics or supply chains that involve multiple modes (i.e. intermodal services).

So what does this mean for both manufacturers and customers? The main benefits of RFID implementation in the supply chain are laid out quite nicely via a case study post on RFID for international supply chain management. Essentially, RFID tags can be read from a distance (with no line of site needed) and are easily tracked. This allows for a more visible supply chain that increases tracing on internal shrinkage, thereby reducing it, as well as makes it easier to detect counterfeit products (all authentic products can be given a unique ID).

For the manufacturers and distributors, the ease of tracing and tagging reduces the number of mistakes along the supply chain and the scanning process can also reduce the time it takes for shipments to move. On the customer end, there is less hassle when it comes to tracking and receiving products. While this may sound like a win-win, RFID technology is still not a perfect solution due to two main issues: reader collision and tag collision. The scanners can get easily confused when two tags overlap, so there has to be a system in place that allows for scanning tags one at a time.

2 – Creating a Sustainable Supply Chain

There is a new trend for consumers to want to be more aware of the process by which goods arrive at their door. This arose out of consumers wanting to be able to make informed decisions when purchasing with regards to both sustainability and fair trade issues, and a growing prevalence in ‘bringing products back home’ (i.e. keeping things local). So it is not surprising that companies have started to think about and even implement some changes in order to have a greener, sustainable supply chain. Concurrently, government run initiatives are being put in place to help set in motion its development such as the Clean Energy Manufacturing Initiative (CEMI).

Companies are now taking advantage of said initiatives by having wind and solar powered manufacturing plants, which in turn have been shown to not only reduce their carbon footprint but also, in some cases, cut costs for end consumer prices. This creates a win both for the environment and the consumer.

Apart from environmental concerns, part of the sustainability trend also involves fair-trade. This issue, while mostly prevalent in the food industry, is becoming critically important in consumer buying decisions. The desire to buy ethically clean products is extending to more and more products to the everyday consumer. As mentioned earlier, the Kickstarter project is one that attempts to fully focus on this for their brand imaging, but major retailers are starting to participate as well even in the luxury sector.

There are plenty of benefits on the logistics end apart from satisfying consumer buying trends that further stimulate the initiative to go for greener and more sustainable supply chain practices. It can protect market share and reduce risk premiums as well as cut costs for both manufacturers and consumers while increasing supply chain efficiency. Thus it seems like in the future we will start to see more and more companies striving for producing sustainable products at every stage of the process and promoting their initiatives to create transparent ethical business conduct and sustainable products.

3 – Nearshoring and Bringing Manufacturing Back Home

Finally, with our current globalization trends we are noticing that more and more companies have started thinking about bringing their manufacturing closer to home. Nearshoring is the transferring of business processes to nearby country, often bordering your own. It is a trend that has taken precedence in companies due to the fact that certain costs have been increasing in typically low-cost countries like China.

Recent research has shown that more and more manufacturing executives would like have the US or Mexico as their preferred location for nearshoring. This is due to the fact that these nearshoring initiatives led to a 5-10% reduction in ‘landing costs’ already. The trends suggest that by 2015, US manufacturing costs will match that of China while manufacturing in Mexico and India stay strong. These trends suggest a move out of Asia with a focus on the US and Mexico as new manufacturing hubs.

At the end of the day, there are many developments that have not been discussed as current trends for the future of logistics (but be sure to stay tuned for future posts!). But these three issues are currently trending and should be watched carefully. It will be interesting to see how these factors will tie in to manufacturers, third party logistics providers, and all other parties along the entire supply chain up to the end consumer.

If you have any questions, please feel free to give us a shout. Otherwise, feel free to see where we fit in the supply chain as a 3rd party logistics provider by checking out what we do. Otherwise, have a great rest of the week and enjoy the long weekend!