Category Archives: Logistics

Do You Have a Chain of Custody in Your Global Logistics Operations?

If you have a significant global logistics operation, chances are that, by now, you have sophisticated tracking capabilities and can tell at any given time at least where your cargo was at one point during the last 24 hours. And this is good. But if you want to go beyond minimum import/export requirements that have emerged, and are continuing to emerge, in the US and EU, then you need more than continuous tracking and monitoring — you need chain of custody.

Chances are that, right now, you’re thinking this is nuts because “chain of custody”, thanks to CSI-like forensic cop dramas, is associated in your mind as a “police” or “forensics” requirement when a crime is being investigated and has nothing to do with your supply chain, but it’s a wrong association. And when one remembers that many of these laws were put in place to prevent terrorism and illegal goods (such as drugs), which regulators are expecting to occur in, or through, import/export operations, it starts to make sense. And it makes even more sense when one realizes that it’s (becoming) a requirement for C-TPAT, which is crucial for efficient import/export operations given the slowdowns that have resulted by all of the additional paperwork and inspections that have been added to the import/export process over the last decade.

So what is a chain of custody? It is a process that asserts:

  • the cargo is what it purports to be and in the quantity stated,
  • the cargo was in the continuous possession or control by the carrier who took charge of the cargo from the time it was loaded in the container at origin until the time it is delivered at final destination, and
  • there is evidence of the identify of each person or entity who had access to it during its movement and that the cargo remained in the same condition from the moment it was sealed in the container for transfer to the carrier who controlled possession until the moment that carrier released the cargo into the receipted custody of another.

This, in turn requires that the cargo is secured from the time it is packed, verified, and sealed at origin, as confirmed by an authorized agent, until the time it arrives at its final destination and is verified to have been secured the entire way. In addition, all information relating to the cargo, its container, its movement, the person(s) verifying and sealing the cargo, and the persons transporting it must be maintained securely in the container security control system.

This may require more work, and more certifications, but there are benefits to the shipper, consignee, carrier, and CBP, as discussed in this great article on Tracking and Chain of Custody: The Difference over on Maritime Executive Magazine. Select Benefits include the following

  • for the shipper
    • World-wide tracking and location of container for security and asset management
    • Lower insurance costs
    • Expedited entry of cargo by CBP and faster through-port time
  • for the consignee
    • Enhanced knowledge of shipper and carrier performance
    • Third-party verification of all supply chain data elements and reports
    • Increased or enhanced knowledge needed for 10+2 Program Importer Security Filings
  • for the carrier
    • Protection against claims by shippers that unauthorized contents were the results of carrier action
    • Automatic transmission to CBP of container data
    • Compliance with and protection within the new Rotterdam Rules impacting vessel carriers
  • for CBP
    • Knowledge of which containers need no inspection improving man-power efficiency
    • Elimination of third-party reporting of trade data
    • Evidentiary data for potential legal action

How Supply Chain and Fulfillment Services Improve Your Brand

Today’s guest post is from Jesse Langley, a blogger and self-professed internet geek who writes mostly about education technology, education reform, job searching, and all things internet, including business logistics. Today’s post discusses The Opportunity of Order Fulfillment and gets to the heart of Fifth Gear’s recent white-paper on “Branding Beyond the Sale”.

The connection between supply chains and fulfillment services along with branding success is becoming more popular and evident. Once considered only necessary “back office” cost centres, both functions are now held in high esteem as effective branding mechanisms.

Supply chain management attracts different definitions in diverse companies and industries. However, regardless of the definition in your company, there is a growing regard for supply chain gurus and efficiency. Observers who favour this position proudly point to Tim Cook, who was selected as CEO of Apple after Steve Jobs had to step down because of his terminal illness. Cook’s career at IBM and Compaq established him as one of the leading supply chain management talents in the U.S.

The sleek, strategic integration of related functions within a business or multiple companies that are components in the full supply chain reinforces and strengthens your brand as no amount of expensive advertising campaigns can. Managing your supply chains efficiently and in a customer-focused manner establishes your brand as one deserving of customers’ trust and loyalty.

Quality fulfillment services accomplish the same brand enhancement goal, often more effectively. The explosion of e-commerce has catapulted high qualify order fulfillment services to the forefront of brand awareness and trust. Effective order fulfillment, when used properly, can accentuate the natural customer anticipation while awaiting the arrival of treasured items ordered via the Internet or from catalogs.

When you employ professional fulfillment services, that customer anticipation can morph into joy and new levels of trust in your company to deliver on its promises. While the popular phrase in force is “engaging” your customers to “care” about your products, services and company, this result is valuable, but only the start. Using superior fulfillment services can go far beyond simple engagement. These services create a level of trust in your products that every company, large and small, wants more than any other result.

Think of the brick-and-mortar retailers that have achieved this goal, e.g., Nordstrom. Unlike most other retailers, they need not spend valuable time on drastic sales, price cutting or specials that drop below desired price-points, they are so trusted that they can price their quality products to ensure profitability. Nordstrom has historically concentrated on quality and customer-oriented fulfillment services to create a loyalty that transcends classic “what have you done for me lately” customer attitudes.

Take advantage of order fulfillment services to harness their power to establish and fortify your brand. Pay close attention to your supply chains, though, as even the best order fulfillment company cannot package and deliver your product on time and as agreed if they lack the inventory they need.

You need to create a high-performing integration of products that customers want, at prices they are happy to pay, employ an efficient supply chain to ensure product availability, and use outstanding fulfillment services to deliver products to your customers when you promise them. Do not cut corners on talent, product or fulfillment costs. You may have a wonderful uptick in initial sales, but suffer the fate of much of your competition, fighting to entice these same customers to buy more products in the future.

Trusted companies have world-class products, outstanding customer service and quality products. Accomplishing these objectives allow you to proudly trumpet your brand, create loyal customers and continue to increase revenue and profits.


Thanks, Jesse.

If You Think You Have Supply Chain Problems, Think About Poor Santa!

Santa, who has to travel 2,860 miles per second in order to visit 1,700 homes per second to deliver over 2 Million Tonnes of gifts to boys and girls around the world, has supply chains and logistics challenges that put even the logistics challenges of the largest multi-national or US military (that has to support almost 1.5 Million people on active duty around the world that need everything from food and clothes to jeeps, tanks, and aircraft to do their job) to shame.

Reviewing a few simple stats, that we can compile from this article on The Science of Christmas in the Telegraph, this article on “Santa’s Logistics Challenge” in the Bangkok Post, and this article that asked “What if Santa Had a Supply Chain Problem” over on Open Kitchen, we find out that:

  • There are approx. 1.9 Billion children in the world.
  • Approximately 33% of these children have Christian parents.
  • The majority (defined as 90%) will be deemed nice by Santa.
  • In total, about 570 Million children need gifts.
  • If there are 3 children per household, on average, about 190 Million households will need to be visited.
  • Since Santa likely cannot start delivering gifts safely before 9 pm in a household, and since some children will not sleep more than 7 hours (on Christmas Eve), Santa has only 31 hours to make his deliveries.
  • This says he must visit almost 1,700 homes per second.
  • Since Christianity pervades our planet, he’ll have to cross most of the 510,000,000 kms of the planet’s surface.
  • Assuming the houses are equi-distant (which is a fair approximation as they’ll be dense in the city are far apart in rural areas), Santa will have approximately 2.7 km to travel between households.
  • That’s 513 M kms of travel in 31 hours.
  • That’s equivalent to 4,600 kms per second.
  • But this is just the delivery. He also needs to acquire the toys to deliver.
  • Let’s assume 2 toys per child, or 1.04 Billion toys.
  • Assuming a distribution where popular toys are distributed to
    tens of thousands, hundreds of thousands, or millions of children and where unpopular ones go to thousands, or hundreds, of children, we are probably looking at 10 Million toys.
  • While some vendors may produce 100 types of toys, others will produce one, and we can settle at about 10 toys per vendor.
  • That’s 10 Million vendors to manage!
  • If they are scattered all over the earth, and if each toy can go direct or through nearby 3PLs, and if each toy can go by a mix of truck, rail, sea, and air, that’s probably between 2 and 20 lanes per vendor, with 5 being a good number.
  • That’s 50 Million lanes by which goods could be arriving.
  • No wonder Santa needs a Super Spaceship and an army of elves!

Forget Mexico. Canada Will Take Your US Shipping Business!

A recent article in American Shipper quoted the head of the largest container port in the U.S. who said that the “U.S. [is] at fault for Canada diversion”. According to Geraldine Knatz, Executive Director of the Port of Los Angeles, Canada’s investment (of over 4 Billion) in its western ports to capture more Asian trade is smart policy and there should be a U.S. government inquiry into cargo diversion to the North that focusses on domestic impediments to U.S. port competitiveness.

This is one case where the doctor has to disagree. See, up North, we’re quite happy to take your shipping business. And what you need to understand is that Vancouver is only 200 km (that’s 125 miles for you metric-phobes) from Seattle, only 500 km from Portland, and less than 700 km from Spokane. And it’s a mere 2000 km from Los Angeles. Smart Logistics can get your shipment there by truck in two days even with driving limits if you team-up drivers or have them switch off at mid-points. And while Chicago might be 3500 km away, with an infrastructure that supports intermodal transport (including rail), it doesn’t take long to get your cargo to Chicago either. (As per the article, Canada’s value proposition is that can trim at least two days off the transit time from North Asia to U.S. destinations, with competitive intermodal rail service. The new port at Prince Rupert was designed to transfer all containers at the dock to Canadian National Trains which can reach Chicago in 100 hours!)

And if you’re shipping to the east, Halifax to Boston is only 1100 km — and the Port of Halifax, in the world’s second largest natural harbour, is undergoing continual expansion (and now has direct routes from Vietnam) — with two new super post-panamax cranes coming in 2012 (along with the Disney Cruise Line). In addition, to meet your air cargo requirements, the main runway at international award winning Halifax Stanfield International Airport is being extended.

We’re ready for your business! And we can handle way more than 7%. So send your business up North. We’ll take it — and save you money too.

Logistics Managers Need Scraps Too!

A recent white-paper by Management Dynamics Inc. on “Current Trends and the Potential for Automation in Transportation Management” noted that better informed decision-making on freight route planning, carrier selection, shipping scheduling and costing, load planning, guidelines compliance and auditing, invoicing, and reporting results in greater logistics operational efficiencies yields significant cost savings. No surprises here. We’ve known that for a while.

The research further shows that many shippers have yet to automate these critical freight management and transportation procedures. No surprises here either. That’s why we have leaders and laggards. Leaders have automated many of these procedures, or are at least working on automating these procedures, and laggards are, sometimes, still using phone and fax, like they did BC*.

The research also found that one fourth of survey participants claims their company spends more than 15% of their overall revenues on freight transportation shipping efforts and the percent paid out on international freight services is also considerable. This is to be expected considering how many companies decided to outsource half a world a way and the recent spike in oil prices (as well as piracy off the Somali coast). Similarly, only one fourth of respondents automates mission critical applications for calculating rates and selecting routes and carriers. The leaders do it, the laggards still do three-bids-and-a-buy. Finally those [shippers] that do [use a contract management solution] are lowering their transportation spend through improved carrier selection, fewer errors and risks, and greater compliance with approved shippers.

So what’s the problem? Especially when solutions have existed for most of the functions for almost a decade? Simply put, the logistics managers are overwhelmed. In order to manage a shipment, as alluded to in the first paragraph, a logistics manager needs to be aware of the contract (in the Contract Management System, CMS), the spirit of the bid (included in the bid package contained in the Request for Proposal, RFX), the rationale behind the selection of new lanes (which stems from the optimal model, stored in the Strategic Sourcing Decision Optimization solution, SSDO); get the current rates (from the Transportation Management System, TMS), calculate the number of LTL or FTL loads needed (based on product weight and volume, contained in the Product Life-cycle Management solution, PLM), gather the necessary data for the manifests, import, and export documentation (contained in the Global Trade Management solution, GTM); generate the shipping order and goods (in a customized e-Procurement solution, eProc), receive status updates (through a Logistics Management solution, LM), accept the invoice and make a payment (through a Procure-to-Pay solution, P2P), and insure the goods are recorded as current inventory (through the Inventory Management System or Warehouse Management System). Let’s recap, they need to be fluent with CMS, RFX, SSDO, TMS, PLM, GTM, eProc, LM, and P2P solutions, at a minimum, plus any systems that their 3PL and freight providers use to provide data, any enterprise resource planning (ERP) or manufacturing resource planning (MRP) solutions that contain data they need or capture data their internal customers want, and any visibility and risk management solutions used by the Supply Management group as a whole. For an average logistics manager with an Associate’s Degree, at best, who started his career where it was just a matter of getting a truck to the loading bay on time, this is overwhelming. Instead of making his life easier, modern supply management technology has overwhelmed him.

He needs a solution that not only tells him what he needs to focus on today, but that identifies where the data, and only the data, he needs is in these various systems — with wizards or workflows that take him through what he needs to do. And until he gets it, he’s going to defend that fax machine with his dying breath.

So if you really want your TMS, WMS, LMS, or 3PL system to gain widespread adoption, remember to throw the old-school logistics manager a few SCRAPS. If you do, you might find that the state of the industry changes seemingly overnight.