Posted on Fri, Aug 20, 2010 @ 01:41 PM
On August 7th, two ships collided off the coast of Mumbai, India. A container ship, the MSC Chitra, and a break-bulk merchant vessel, the Khalija-III, were involved in the incident. The MSC Chitra was loaded with more than 2,400 containers, 2,600 tons of oil and 300 tons of diesel fuel. Within 24 hours, 300 loaded containers had already sunk into nearby waters. Some of these containers were reported to include toxic materials such as sodium peroxide. This Chitra had sailed to Mumbai from Dubai, and was outbound from the JNPT Port facility when the collision occurred.
The Khalija-III was reportedly towed into port after the incident. The Port of Mumbai is still closed while India’s Coast Guard and other governmental agencies try to salvage the Chitra and the spilled containers. The Port is expected to be closed for several more days due to some of the remaining containers still floating in the main ship channel. The closing of the Mumbai Port will undoubtedly cause supply chain disruption.
Supply chain disruption can be caused by any disaster, natural or man-made. Once the disaster occurs there is a snowball effect that can cause harm to all industries. With the ship collision in India, there was an almost immediate effect on every company that uses JNPT Port. After the accident 80 ships were waiting out at sea for the port to clear. Some of the ships that planned on using port were diverted to others. This detour delays shipments for what could be weeks. The Port was closed for several days which delays unloading ships that are already in port. On top of that the truck, rail, or any other method used for taking the shipments out of port and to a distribution center, will have to reroute their schedules and delivery plans. The whole process or distribution will be exponentially delayed with every link in the supply chain that is impacted.
The trickle effect that a disaster has on different industries can result in loss of customers and wasted inventory. Mitigate the effects of a disaster by having a strong supply chain logistics provider that has experience overcoming delays and breakdowns in the supply chain.
Posted on Tue, Aug 17, 2010 @ 09:57 AM
The Department of Transportation (DOT) sent its proposed Hours of Service (HOS) changes to the Office of Management and Budget (OMB) Monday (7/26) to settle yet another challenge to the rules drivers and trucking companies must follow.
Meanwhile, Transport Topics reported this week that 20% of truckload fleets increased driver pay in the second quarter of 2010 citing Gordon Klemp, principal of the National Transportation Institute in Kansas City, MO.
Continuing difficulties in attracting new drivers, a situation that will only be exacerbated by expected reductions in work and driving hours contained in the proposed HOS regulations, are contributing to this perfect storm.
Any reduction in driver working and/or driving hours will further reduce already strained capacity and require more drivers and trucks to move the same amount of freight.
Flatbed carriers led trucking with more than 30% of such companies raising driver pay, while 20% of refrigerated carriers and 11% of dry van operators did so in the second quarter according to Klemp. He also predicted significant increases in the third quarter.
With carrier margins already depressed as a result of market pressures during the recession, shippers can expect sizeable rate increases to fund these long overdue pay increases.
In a related story, transportation and logistics professionals predicted major changes and increased costs associated with any reductions in driver HOS. Shippers claim they’ve already adjusted their operations as much as possible and any HOS changes would require them to reevaluate their supply chain.
Reduced HOS = reduced capacity = increased need for drivers = increased pay rates = increased freight rates = increased end user costs.
As the economy rebounds and freight levels increase the pressures on the supply chain will increase as well. Shippers would be well advised to truly partner with shippers to tweak their operations and maximize driver/truck utilization. The alternatives are even more expensive than rate increases.
The perfect storm is churning on the horizon.
Written by Kevin Mullen, Directory: Safety
Posted on Tue, Aug 10, 2010 @ 12:58 PM
Supply chains are designed for efficiency, predictable timing, low costs, and reliability. A certain comfort level develops after years of working with vendors; lanes of service are honed and things seem to work with only a few wrinkles. Then it rains. Rains like Hurricane Alex rained as it cut its path out of the Gulf and across Northern Mexico.
Hurricane Alex hit land June 30th as a category 2 Hurricane with winds of 105 mph and began pouring its heavy rain as it began to move across Northern Mexico. The flooding was extensive in the Eastern states of Tamaulipas, Nuevo Leon and into Coahuila. The subsequent flooding wreaked havoc on the railway and roads in many regions. This area of Mexico holds many of the Maquiladora industries and is the gateway to much of the industry in Mexico and from there into the United States.
Because of damage to rails and infrastructure caused by Alex, all of the railroads have embargoed rail crossing at Brownsville, TX; Laredo, TX and only and interchanges with the KCSM. (They had embargoed crossing to the FXE at Eagle Pass but partially lifted that restriction on July 8th.) The US railroads are sending crews and equipment to aid in the repairs but the damage is extensive. Cargo cars are backed-up and sidetracked far from the border and it will take several weeks to sort them out even after the crossings open again. Transportation and Logistics departments are scrambling to find ways to deliver their freight through alternate routes (some limited road access is still available). The railroads are working with customers to the extent they can, but when cars are blocked into yards with a hundreds of others, it can be hard to dig out a specific car for delivery.
After a disaster every company evaluates their emergency plans, and asks themselves if it is adequate. Hurricane Alex has proven to be no exception. Needless to say, these past weeks have been busy times for us logisticians. It serves as a reminder that despite all the best spreadsheets, flow-plans, and lean manufacturing practices, sometimes it rains, a cautious reminder that optimum planning should always remember that nature doesn’t pay attention to our flow-plans.
Written by Steve Klok, ADS Logistics.
Posted on Wed, Jun 23, 2010 @ 02:31 PM
A recent study has found that B2B Companies, which comprise many of ADS Logistics Customers, will likely face 5 key supply chain challenges as they seek to take advantage of the economic recovery, according to a new study by PRTM Management Consultants.
The study, Lessons Learned from the Global Recession, (you have to fill out a form to read the full report so we did it for you) found that most of the 350 manufacturing and service companies surveyed now believe there will be a significant upturn in demand from their customer base over the next few years.
However, the study also warns that many companies lack the supply chain infrastructure critical for meeting the emerging demands of managing an increasingly complex global market.
The 5 emerging demands identified by the study are:
1. Supply chain volatility and uncertainty have permanently increased
: Market transparency and greater price sensitivity have led to lower customer loyalty. Product commoditization reduces true differentiation in the B2B environments, and companies need to respect this reality.
2. Securing growth requires truly global customer and supplier networks
: Future market growth depends on international customers and customized products. Expanding supply chain globalization and complexity need to be managed effectively. Thus, finding supply chain management companies with integrated services such as ADS Logistics will play an increasingly important role.
3. Market dynamics demand specialized, cost-optimized supply chain configurations:
Customer requirements and competitors necessitate custom-tailored supply chains and product offerings.
4: Risk management involves the end-to-end supply chain:
Risk and opportunity management should span the entire supply chain—from demand planning to expansion of manufacturing capacity—and should include the supply chains of key partners.
5. Existing supply chain organization are not truly integrated and empowered
: The supply chain organization needs to be treated as a single integrated process. To be effective, significant improvements require support across all supply chain functions.
More than 85 percent of companies expect the complexity of their supply chains to grow significantly by 2012, yet many did not strengthen critical capabilities during the Recession. Additionally, more than two-thirds expect a higher number of product variations will be required to fulfill local customer expectations. Having an integrated and reliable supply chain process will be critical.
The study concludes with a 5-Point Agenda for Chief Operating Officers over the next 2 years to help them strengthen their supply chain process:
1. Improve customer access to supply chain data
2. Increase upstream and downstream supply chain flexibility
3. Focus on total supply chain cost engineering
4. Implement end-to-end supply chain risk management
5. Integrate and empower the supply chain organization
Ultimately, the main challenge for many companies is not to redefine their organization models, but to transition and manage the organizational change. When it comes to the metals industry, a company like ADS Logistics is ahead of the curve by providing integrated services such as their online inventory management system. The next 20 years will be particularly insightful as winners and losers emerge across all industries in this new economy.
Posted on Tue, Mar 30, 2010 @ 11:38 AM
Great News! We have finally made a breakthrough working with our two main database systems, ComData and Innovative, to bring all our flatbed truck drivers, (both Company and Independent Contractors) ComData fuel cards. We will be converting from driver assignment to the unit assignment in order to accomplish this task.
Effective April 12, 2010, Company truck drivers will need to enter a PIN number in place of their Employee ID when they get fuel. The PIN numbers have already been established with ComData. The last four (4) numbers of their Driver's License are their PIN. We will be sending out more information to our Company truck drivers of this upcoming change. Once the PIN number change is implemented, we will begin converting the fuel cards from the driver assignment to the unit assignment. New cards have been received in the Chesterton office and will be issued to Company drivers in the very near future.
Once the PIN change is implemented we will test the process with the Independent Contractor Cards to ensure a smooth operation. We anticipate May 3, 2010 as a start date for our Independent Contractors to be able to sign up for a ComData card and begin using them to reap the benefit of a discount on their fuel purchases.
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Posted on Thu, Mar 25, 2010 @ 03:01 PM
Are you a Customer Service person? You may not think so at first but if you interact with your company's customers or potential customers, then yes you are. Your job may not be in the front office, meeting and greeting customers or fielding phone calls all day; but it is just as important that your actions make good first impressions as those who are. Are you a salesperson who makes sales visits or a driver who enters a company's premises? If so, read on…
Remember the phrase, "you never have a 2nd chance to make a 1st impression?" Unfortunately, that is so very true. It has been stated that a customer will develop a 1st impression within the first 7 seconds and make a judgment in several different ways. Areas in which an employee or company can leave a positive 1st impression are:
- Cleanliness: Is your work area, facility, or equipment clean?
- Knowledge: Do folks meeting/talking with customers understand the company and realize the importance in what they say and do?
- Professionalism: Are you following through with what has been committed to, and educating drivers about these commitments?
- Friendliness: How is your tone and/or greeting? What does your body language say?
Making that good first impression is huge in gaining and/or retaining customers. So, put on your happy face, dress and act the part, and show them you know your stuff!
Posted by Rose Cyphert, Manager – Billing & Collections, ADS Logistics Co, LLC
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Posted on Mon, Mar 15, 2010 @ 03:56 PM
Much has recently been made about a perceived recovery in the supply chain arena. A recent blog by Bob Trebilcock, MMH Executive Editor- Logistics Management cited anecdotal evidence of this recovery.
Left unsaid in all the hype is the looming capacity shortage in the trucking sector of the supply chain. Since no other modality can completely replace trucking this issue is and will remain the 600 pound elephant in the room that no one wants to acknowledge or talk about.
Capacity (trucks) has depleted the trucking industry over the past two years at a pace never before seen. According to experts [Avondale Partners, LLC] some 5,000 carriers and 175,000 trucks were lost over the past two years and unlike prior cycles, most if not all of these trucks are not coming back.
This cycle saw many independent contractors (owner/operators) not just park their trucks as in the past but sell them or lose them to repossession and walk away from the industry. Even if they wanted to return, the realities of the post-crash credit markets preclude them from financing another truck.
Likewise, many carriers put off capital purchases, extended maintenance schedules, reduced head counts and pay and took other actions to conserve cash and have so depleted their balance sheets that purchasing replacement trucks (let alone additional trucks) is simply not an option. Many shippers forced rate reductions down the throats of their carriers further exacerbating the cash crunch. Shaky carriers who avoided bankruptcy by these actions may not find their lenders as forgiving in 2010. Factor in CSA 2010 and its’ expected impact on the trucking industry and the stakes are raised even higher. I fully anticipate capacity to continue to shrink for the foreseeable future.
On the other hand every other overhead cost for carriers has increased, from licensing and permit fees levied by cash-strapped states, to Unified Carrier Registration (UCR) fees, equipment and maintenance costs and fuel. Pressure on carrier margins has never been more intense. They have captured every economy they can. The only option left to them is increased rates. We are already seeing shippers offering premium rates in order to get their product moved in markets around the country.
Shippers, looking for concessions in hard economic times, shoulder much of the blame and will shoulder much of the cost of the cure. Of course the cost will ultimately be passed along to the consumer. The pendulum is about to swing the other way.
Shippers will now need to take a serious look at truly partnering with carriers in order to ensure sufficient capacity to take advantage of the recovery. True Partnership is a concept foreign to most traffic managers. It’s different than just selecting a “core carrier” or a consortium. Shippers are going to have to ensure they pay carriers rates sufficient for them to attract and retain good, safe, professional drivers. Gone are the days of trying to squeeze every last cent of rate concessions from carriers. That business philosophy will result in product sitting on docks with no prospects of getting it to market.
The Supply Chain may well be recovering but it also changing forever.
Article submitted by Kevin Mullen, Director-Safety ADS Logistics