Category Archives: Logistics

One Hundred and Thirty Years Ago Today

The Northern Pacific RailRoad was completed when the last spike was driven near Independence Creek in Powell County, Montana off of Interstate 90 in the “golden spike” completion ceremony. The Northern Pacific Railway was a transcontinental railroad that operated across the northern tier of the western United States from Minnesota to the Pacific Coast. (Source: Wikipedia) The effort, which laid 6,800 miles of track, took 13 years.

The railroad, which had international branches to Winnipeg, Manitoba and southeastern British Columbia, was primarily used for shipping wheat, cattle, other farm products, timber, and minerals. It was one of the earliest railroads, and despite its troubled financial history, was an important element of supply management for well over one hundred years.

OMG! LCL is MTWI! Should I be ROTFLMAO?

LCL, or Less than Container Load, as noted in this article over on Inbound Logistics on Less Than Containerload, More Than Worth It, was, historically, slow, costly, risky, and nothing to get excited about. But that was before we had consolidators, freight forwarders, and 3PLs who had access to advanced route planning and optimization technology that can figure out the best way to consolidate LCL shipments from multiple vendors.

As the article notes, today’s LCL is much improved, with end-to-end pricing; direct routes and frequent sailings; increased visibility and control; streamlined processes; and packaged solutions that provide security, clarity, speed, and certainty. This is true, and has been for quite a while. Logistics, Inventory, Warehousing, and Route Planning solutions have been pretty damn good for almost a decade now, and this is old news.

The only thing that’s not old news is the fact that many a shipper, still operating on the 3 bids and a buy, using the phone, and doing it like they were 20 years ago, still don’t know the realities of the new reality and are not taking advantage of all of the options that are available.

Good visibility and optimization capability allows 3PLs to consolidate LCL shipments to make FCL for most of the shipment, take advantage of empty miles using services like BuyTruckload.com that allow shippers to save as much as 20% as a full truck is better than an empty truck, increase service frequency to meet demand, and take almost direct routes to the destination. So do what’s best for your business, be it LCL, FCL, LTL, or FTL. There are good options for all of them.

It’s Time for California to Update It’s Passenger Rail Solution

BART, Bay Area Rapid Transit, turns 40 today! While rail has more or less stood still in North America, High Speed Rail has been progressing rapidly in Asia (Japan, China, South Korea, and Taiwan) and Europe (Germany, Italy, and Spain). In fact, some high speed rail lines reach 300 km/h (185 mph). Considering a 767 cruises at 858 km/h, that’s quite impressive. In comparison, the top speed of BART is 129 km (80 mph), it’s definitely time for an update.

But things aren’t looking good, as per this recent post on SI which notes that despite the fact that the US has a 100 year lead on China on the rails, it will be at least 15 more years before the US has a decent high-speed rail line. And that’s only if the California High-Speed Rail Authority starts to build their high-speed rail line between Anaheim and San Francisco, which appears to be perpetually stalled as they continue their efforts to save a dime while losing the dollar. Otherwise, we’re looking at 25 years before Amtrak builds its high-speed rail line between New York and Washington.

California, please take the lead because we’re not going to get high-speed rail for cargo until someone builds a high-speed rail line for people.

Will Darrell Issa Save the Post Office? Or Put Another Nail in the Coffin?

Early last week, Darrell Issa, a Representative of California and chairman of the the US House Oversight and Government Reform, signed off on H.R. 2748, the Postal Reform Act of 2013 which is designed to bring the United States Postal Service (USPS) to financial solvency with cost-cutting reforms and innovative new sources of revenue.

SI has been asking if the US Post Office can be fixed for a while now, with its most recent post on the subject last summer (Source). Given that the USPS has more debt than 50+ countries have capita, fixing it is a tall order – especially when the US needs to identify immediate savings of almost 20 Billion plus (as it keeps bleeding red with losses of 15.9 Billion in 2012 and 3.2 Billion in the first two quarters of 2013).

Key points of the plan, as summarized in this Logistics Management article, include:

  • moving from door to curbside delivery and neighbourhood boxes, which could save 4 Billion annually,
  • ensuring small and rural post offices are protected from a disproportionate number of closures,
  • creating a Chief Innovation Officer,
  • protecting existing collective bargaining agreements,
  • recalculating projected liabilities for employee pensions, and
  • offering additional relief from retiree health care benefit payments.

While SI has to say it likes the first and third options, that’s not going to be enough to generate the savings required giving that costs are going to keep rising.

SI agrees with Rob Martinez, President and CEO of Shipware Systems Corp, cited in the Logistics Management article, who noted that a comprehensive plan that addresses multiple options is required if the USPS is to become solvent again. However, SI’s approach, which differs from Mr. Martinez’s, would involve the following:

  • maximization of neighbourhood box and curbside deliveries,
  • an immediate end to Saturday mail delivery,
  • global restructuring and consolidation of postal facilities until all are at least break-even*,
  • freedom to revise operational practices to take advantage of savings identified by Procurement and new sources of revenue identified by Marketing and Innovation, and
  • freedom to enter into co-opetition agreements with the major private delivery companies to share resources and routes, for both long-haul and last-mile deliveries, in ways that save both parties money.

SI does not agree with eliminating the pension prepayment mandate, freeing up a percentage of pension funds to ensure ongoing solvency, or cutting contributions to retiree health benefits. Not sufficiently funding these payment obligations is what got the USPS, and a whole bunch of other public and private organizations, into this mess in the first place. (However, SI fully supports a careful recalculation of the unfunded liability to make sure the payments do not exceed what is required.) Plus, it’s the USPS after all. Congress, who dumbly vetoed elimination of Saturday mail delivery, isn’t going to stop lending the USPS money until they find a way out of this mess, so it’s not like the USPS has to worry about bankruptcy. The USPS has to get it right, not exacerbate the problem.

And in SI’s view, the current plan will not save the post office and may even put a nail or two into the coffin because every provision except the provision to move to neighbourhood boxes and curbside delivery is likely to increase costs in the long run.


* SI agrees that every town needs a postal facility and that anyone in a rural area should have a post office within a reasonable distance, but doesn’t agree that this means that existing facilities stay open. They may need to be reduced in capacity and change locations. For example, here in Canada, many locations are sublet in retail establishments, and drug stores in particular (which are open long hours). These micro locations can be staffed by one person and cost next to nothing.

3PLs, Make Your Deliveries Click with Airclic

Real-time package tracking, routing, and route optimization isn’t new, as the big global delivery companies have been doing it for a while now, and neither is Airclic’s Transport Perform solution, but its tight integration with their new Route Planning and Route Optimization solutions, their enhanced support for multi-national organizations and international routes, and their improved end-user configurability is.

SI doesn’t review real time vehicle tracking, route management and last mile delivery software very often as it is not core Supply Management functionality for the average enterprise, that typically outsources this aspect of Supply Management to a 3PL which has this solution in place, but Airclic’s recent incorporation of support for simultaneous high-volume cross-docking, multi-driver cross-border routes, their new web-portal that makes their platform as easy to use as a multi-tab spreadsheet, and extensive configurability options attracted our attention.

One fact that comes through loud and clear in a review of their solution is that they understand the importance of a clear, easy to use, non-distracting, straight-to-the-point interface for dock workers and truck drivers, especially when all these people have is a small, primarily text based, mobile device. The application, which can be pre-configured with relevant supplier data, including whether the supplier is ASN-based or non-ASN-based (Advance Shipping Notice), allows the application to be customized to each supplier so that a dock worker or driver only has to enter the absolute minimal amount of information (which, for an ASN-based supplier, can be as little as scanning a barcode) and when additional data has to be collected, is presented with a minimal list of options to choose from. For an average ASN supplier, it’s select the supplier, scan the barcode, and, if the item is damaged, check a box, record the reason and, optionally, upload a picture. For an average non-ASN supplier, it’s select the supplier, enter the piece or item ID, an (optional) container ID, and destination. The application supports receiving, loading, migration of pieces/items to containers, container consolidation, returns, and depot transfers for dock workers and route selection, stop identification, pick up, deliveries, returns, depot drop-offs (for undeliverable items) and unscheduled customer stops for drivers. All data is collected and transmitted in real time to the web portal over the cellular network and updates and alerts are transmitted back to the driver in real time. In addition, alerts can automatically generated and sent to the supplier when a driver is getting close to their location.

Their web-portal allows the dispatcher to see the current status of every route, driver, dock-worker, shipment, and item. The routes are simultaneously displayed in text view and on a Google Map and either option can be used for drill-down. The interface allows the dispatcher to make changes in real time, and updates the drivers and dock workers as appropriate. If the organization has a route optimization solution, it can be integrated with the solution and optimized routes pulled in on the fly. If the organization does not have a route optimization solution, the dispatcher can manually define new and altered routes or use Airclic’s route optimization solution.

The built-in reporting is very extensive, with just about every report (template) that a dispatcher will need. There are route and route item reports, full chain of custody reports, complete item history reports, proof of service reports, inventory reports, order reports, GPS and container tracking reports, damage reports, route reports, stop reports, etc. They can be automatically generated and directed to the right individual.

But the best part of the solution is the administrative panel. Everything is configurable at a very fine-grained level of detail. Groups (which correspond to different regions, divisions, or locales with different operating rules), users, locations, handsets, workers, internationalization, routes, loading and delivery processes, can be defined and customized as needed – and the right version of the application that is localized for the driver and delivery location can be delivered to the right handset every time. When a truck is handed off from an English speaking driver to a Spanish speaking driver after a border crossing, the application can be configured to be smart enough to recognize the changeover and deliver the Spanish version for the Spanish handset pre-configured with the delivery options for the Mexican market. A multi-national will a lot of trucks, drivers, pick-up, and delivery locations will have to invest the time to integrate with it’s current Supply Management solution and to configure the Airclic solution to the appropriate level of detail, but it’s easy to see how a 3PL will easily save 400/month per truck. That savings, which approaches 500K a year for a 3PL with 100 trucks in its fleet, adds up fast!