Category Archives: Logistics

The Logistics Shortage Keeps Getting Worse

At least if reports are to be believed. According to a recent Fortune article on “supply chain jobs”, the shortage is up to 1.4 Million jobs by 2018. Wow! Especially when estimates last year put the driver shortage at a mere 240K. While logistics needs talent in high tech, analytics, robotics, engineering, seasoned managers, marketers, data analysts, and maybe even human resources, it primarily needs drivers — no drivers, no shipments. No shipments, no logistics industry.

And when you think about it, big data scientists go where the money is; high tech workers go where the tech is; robotics engineers go where the robots are; marketers are attracted by cool message and money to burn; most industries are shedding managers, who need work; and HR is HR. I don’t think forwarding thinking logistics companies are going to have any trouble attracting high tech, engineering, marketers, managers, or even HR talent. They’re going to have problems attracting drivers and warehouse workers — the same type of people they’ve been having problems attracting for a decade, because, in North America, transportation ain’t sexy, doesn’t pay well, takes a toll on your health, and still puts you in risky situations. As explained in SI’s last post on the subject, until these issues are addressed, the problem will remain.

2 in 5 Fleet Owners Suspect Fuel Invoice Errors. What About the Other 3?

A recent article over on TruckingInfo that wanted to know if you are Staying On Top of Your Fuel Invoices noted that only 40% of respondents to a recent survey by FuelQuest suspected errors in their fuel invoices. SI’s question is, what about the other 60%?

According to the article, unaddressed, bulk fuel invoice error rates tend to hover around 25%, but some companies have rates as high as 55%. This is due to complex fuel and freight contracts as well as manual or sample-based reconciliation processes. This is because they lack the processes and technologies to insure complete, consistent, and effective invoice matching and review.

Furthermore, the lack of proper processes and technologies results in the business impact from invoicing errors including overpayments, increased operational costs, and lost trust in suppliers being significantly underestimated. If a large fleet company is consistently being over billed 3 cents/gallon, that’s up to $12 of over-billing on every fill up and up to $2,000 a year of over-billing for every 18 wheeler (with an older model getting an average of only 5 mpg). If you have 50 trucks in your fleet, that’s an over-billing at a rate of 100K/year until it is detected. And how much will be recovered?

Even if you are a 3PL/Logistics Carrier you need end-to-end invoice automation, m-way matching, and exception-based management. Otherwise, you don’t know how much money is being needlessly burned by your fleet.

The Board Gamers Guide to Supply Management Part XX: Le Havre, The Inland Port

You like being the harbour master, but getting in a rousing game of Le Havre is difficult because of the average playtime of one and a half to three hours and you want to get in a rousing game over lunch. Plus, sometimes only one person will dare to take you on. If only there was a more streamlined two-person variant, just like the All Creatures Big and Small variant of Agricola, things would be great.

Good news, there is! Based on the original Le Havre, Le Havre: The Inland Port is a streamlined variant of Le Havre that can be played by two people in thirty to forty-five minutes, allowing you to get a rousing game, or two, in over your lunch break as you both vie for the title of Habour Master — an important title given the importance of ocean logistics, cross-dock, and warehouse management in your supply chain.

As with All Creatures Big and Small, The Inland Port is simpler to learn than the full game, but is just as hard to master, especially since there are 31 building tiles and you will be able to play at most 12 each during the course of the game, and the order of play can change each game (as can the order of availability if you play a full random game).

As in regular Le Havre, the game consists of a fixed number of rounds (12 to be precise) and each round consists of a fixed number of turns (equal to 3 in the first 3 rounds, 5 in the next 3 rounds, 7 in the following 3 rounds, and 9 in the final 3 rounds for a total of 72 turns in all). As in regular Le Havre, one player has more turns than the other in each round, but each player still gets the same number of turns by the end of the game. However, the variable number of turns dictates that, in each round, one player will have one less chance to use available buildings, including two buildings that will become unavailable for use by the end of the round.

Le Havre, The Inland Port reduces the time and complexity required in the game by cleaning up the 3-biggest time crunches in Le Havre

  • Replenishment and Upkeep
    In Le Havre, at the end of every turn, available supplies are replenished and a lot of time is spent updating available inventory (and unlocking buildings now available for use). In The Inland Port, there is no replenishment phase as all supplies are increased (and decreased) through the utilization of available buildings (or the purchase thereof)
  • Feeding
    Although this is an important mechanic, as it represents the real-world need to maintain enough cash-flow to pay your workers, it is a time consuming one. In Le Havre, the feeding requirement is eliminated, but the net effect (of decreasing your cash reserves and/or food supply) is compensated for with the forced-sale mechanism. Any building that is built must be sold within 5 rounds at a loss equal to half of its value.
  • Resource Collection and Usage
    In regular Le Havre, when you use a building to take an action, you are often increasing or decreasing your available resources and moving a lot of resource markers around. In The Inland Port, you keep track of your resources using a resource board which only requires you to move a single resource marker to a different board location when a resource is acquired or disposed of (to buy a building, for example).

These three modifications, combined with the fact that a player has only two action choices on his turn — use an available building or build (or buy) one (along with the ability to sell an existing building at any time) — make gameplay fairly rapid once the basics of the game are understood by both players (and both players are familiar with what each building fundamentally does). The difficulty in this game is not in playing it, it’s figuring out what to do when to maximize your wealth. Proper building acquisition, utilization, and resource disposal sequences can generate tons of wealth (and a player can easily accumulate 200 Francs by the end of the game if she knows what she is doing and is not impeded by her opponent). On the other hand, poor choices will leave the player relatively cash poor throughout most of the game.

In order to maintain some complexity and keep the game challenging, The Inland Port maintains the unit concept, and extends it to all base goods. So, just like you’d waste one unit of energy using coal to power a building that took two units of energy (if you did not have two wood available), if you only have a 3-block of resources, and only need 1 or 2 units, you will have to over-utilize. This dictates the need to balance the utilization of buildings that give you 3-blocks of resources with the utilization of buildings that give you multiple units so as to maximize your resource utilization.)

Each building in The Inland Port:

  • moves one or more good counters a multiple of one unit or three units,
  • generates Francs,
  • exchanges Francs and/or resources for other resources,
  • sells one or more resources for Francs (at the end of the game), and/or
  • increases your wealth.

The amount of goods and/or Francs generated, exchanged, and/or sold varies according to the building type and each building available for use can be used 2 to 4 times by a player on his turn, depending on how long it has been available. (A building, which can only be in play for five rounds, can only be used in at most four rounds as it can not be used the round it is played. It can be used up to 2 times in the following, round, up to 3 times in the round following that, and up to 4 times in the final two rounds it is available for use. Finally, if used in the last round it is available, it also generates 1 Franc.)

It’s a complex little game, and one that will force you to balance your strategic planning and resource utilization skills, as your plans might not always come to fruition — just like wrenches get thrown into your supply chain at the most unexpected of times.

Will Increased Cargo Theft be the Next Impact of MAP-21?

MAP-21, the short-hand for Moving Ahead for Progress in the 21st Century Act, took effect October 1 of last year (and shortly thereafter we asked if your supply chain was compliant in Part I and Part II). This 584 page monstrosity had ramifications across your transportation-based supply chain and included, among other things, in the Commercial Motor Vehicle Safety Enhancement Act: Subtitle 1, section 32918, a requirement that each broker subject to the requirements of this section shall provide financial security of $75,000 for purposes of this subsection, regardless of the number of branch offices or sales agents of the broker, a seven-fold increase for the average small carrier.

As a result of this requirement, we asked if the act should be more accurately renamed RIP-21 as the act led to the forced closure of over 9,800 freight transport brokerages that were unable to put up the significantly increased bond. Overnight, 46% of independent brokers disappeared! Some eventually came up with the bond and reopened, but the number of independent brokers is down 40% year over year.

So what does this have to do with increased cargo theft? One of the fastest growing forms of cargo-theft is deceptive / fictitious pick-ups. The scheme, as described in an AP article last year on how “thieves pose as truckers to steal huge cargo loads”, works as follows.

 


Thieves assume the identity of a trucking company, often by reactivating a dormant Department of Transportation carrier number from a government website for as little as $300. That lets them pretend to be a long-established firm with a seemingly good safety record. The fraud often includes paperwork such as insurance policies, fake driver’s licenses and other documents.


Then the con artists offer low bids to freight brokers who handle shipping for numerous companies. When the truckers show up at a company, everything seems legitimate. But once driven away, the goods are never seen again.

And now thieves have over 9,000 cargo companies, many of whom with good safety records, to work with. Now more than ever, you need to keep a close eye on your cargo on American soil, or you may not see it again! Makes you wonder just who MAP-21 is for, eh?

One Hundred and Ten Years Ago Today

The United States began construction of the Panama Canal, one of the seven wonders of the modern world.

The Panama Canal, completed 100 years ago this August, is a 77.1 kilometre ship canal in Panama that cuts across the Isthmus of Panama and connects the Atlantic Ocean to the Pacific Ocean. It has 3 locks at each end to lift ships up to Gatun Lake, which is an artificial lake created to reduce the amount of excavation work for the canal that sits 26 meters above sea level. (The current locks are 33.5 meters wide, but a wider lane of 55 m locks is under construction as part of an expansion project that is scheduled to complete next year. More information is in the 2012 Progress Report).

One of the largest and most difficult engineering projects ever undertaken, the shortcut considerably redoes the amount of time taken for ships to travel between the Atlantic and Pacific Oceans, which up until then had to take the lengthy, hazardous Cape Horn route around the southernmost tip of South America via the Drake Passage or the Strait of Magellan. A ship can traverse the canal in 20 to 30 hours vs the 20+ days it would take to sail the thousands of kilometres to go around the Cape. (For example, ships sailing from New York to San Francisco save nearly 13,000 kilometers going through the Canal. This saves an average slow-steamer cargo ship 20 days of sailing time!)

The Canal was managed by the US until the 1977 Torrijos–Carter Treaties provided for handover to Panama. From 1977 to 1999, the canal was jointly controlled by the American and Panamanian governments, until the canal was taken over entirely by the Panamanian government in 1999.

The amount of traffic that flows through the Panama Canal on an annual basis is staggering. When it first opened in 1914, about 1,000 ships went through the Canal a year. In 2011, total traffic reach 14,685 ships that generated $1,730,052,192 in tolls on 222,358,944 long tons of cargo with a net tonnage of 321,845,065! (Original table no longer available, updated transit statistics available on the Panama Canal site.)

It’s not only a modern wonder, it’s a major empowerment to the ocean trade that your global supply chains are so reliant on!