Reducing the Cost of Safety Stock with Proactive Empty Container Repositioning

Reducing the Cost of Safety Stock with Proactive Empty Container Repositioning

2020 has brought new challenges for the container shipping sector. In addition to the existing trade imbalances, the COVID-19 pandemic has negatively affected the industry, creating a new port and travel restrictions for shipping firms to contend with. All of this decreases profitability and puts additional pressure on operations, forcing shipping companies to make tough decisions such as letting go of some of their employees or cutting down trade lanes. The situation is worsened by the issue of empty container repositioning — an industry-wide problem which is caused by the above-mentioned trade imbalances as well as long relocation time, high costs related to safety stock, and unreliable commercial forecasts, which are mainly based on the gut feeling of planners and local managers.

According to the Boston Consulting Group (BCG), one out of three containers is shipped empty, for a total of nearly 60 million empty container moves per year at an annual cost of $20 billion to the industry—up to 8% of a shipping line’s operating costs. Furthermore, there are extra costs associated with storing and maintaining these empty containers, meaning the total cost of empty logistics is estimated by Transmetrics to be more than 12% of operating costs.

Just-in-Time Shipping: The Path to Container Efficiency

Just-in-Time Shipping: The Path to Container Efficiency

The 1970s played a pivotal role in the history of trade, shipping, and manufacturing. In this decade, Toyota revolutionized the manufacturing world with the wide adoption of its Just-in-Time (JIT) production planning process. In essence, that represents operating with low inventory levels where raw materials, goods, or even labor are scheduled to arrive or be replenished exactly when, or shortly before, they are needed in production. Having the system, Toyota could solve some of the problems associated with keeping high-inventory levels, free up a significant amount of capital, and reduce the opportunity costs. It could also minimize storage, service/maintenance, and inventory risk costs.

Nowadays, JIT and its equivalents are the industry standards in the automotive and are also universally adopted in the wider manufacturing and service verticals. However, if automotive or manufacturing sectors can afford to wait for an order to be placed and then produce, in many other business areas, in order to adopt JIT, highly accurate Demand Forecasting must be in place.

An obvious example of such an area is the container shipping industry, which in the 1970s has also experienced a renaissance with the wide adoption of containerization. However, improvident internal processes and trade imbalances led to huge inefficiencies. Empty containers had to be repositioned from big consumer centers such as Europe and the US to big manufacturing powerhouses like China and Southeast Asia. To be able to satisfy demand at any given time and location, and compensate for the long repositioning cycles, ocean shipping carriers keep excess container inventory. Traditionally, inland empty containers account for around 30-40% of the total container shipping fleet.

Safety & Efficiency: The Future Of Wearables In Logistics

Safety & Efficiency: The Future Of Wearables In Logistics

The logistics industry is no stranger to technological change. Few warehouses would consider using a hand-written ledger or other analog methods in 2020 when standalone digital kiosks and tablets have become the norm. These digital improvements have allowed for greater speed and efficiency, yet there are still gaps to be filled when it comes to logistics technology.

Seconds matter in logistics, where even a short delay in activity can cause issues further along the delivery chain. What’s more, the need for accuracy in identifying, handling, and processing packages is of keen importance. On average, businesses across the globe experience an average shrinkage rate of about 1.44%; given that the worldwide logistics industry is worth approximately 5.5 trillion euros, these losses and inefficiencies add up to billions missing from company balance sheets.

Major firms have begun the search for solutions to these issues. There’s a great deal of promise in wearables –  technology that, as the name implies, you can wear on your body and use to improve the logistics processes. Much of this technology is available here and now, while some remains just over the horizon. In any case, these devices could define the future of logistics tech and are already seeing increased adoption in companies seeking the next competitive edge.

How 5G Networks Will Create a New Era of Connected Logistics

How 5G Networks Will Create a New Era of Connected Logistics

Since its introduction, 5G has quickly become the hot topic of every industry, and for good reason. By 2025, 5G networks are expected to cover one-third of the world’s population, and a 5G economy study found that by 2035, 5G could potentially enable up to $13.2 trillion worth of goods and services and create up to 22 million new jobs.

But what exactly is 5G, and why is it going to make such a difference in the way the world works? You might remember that with 3G, or the third generation of cellular technology, mobile data has been pushed forward, and 4G brought in a new era of mobile broadband. Now, 5G — the fifth mobile generation — will usher in the highest mobile connection speeds and lowest latency rates ever recorded. The new levels of connectivity created by 5G have the potential to impact nearly every industry, making fully-remote healthcare, smart cities, digitized logistics, and more into a way of life.

FedEx Surround – It Is All About Microsoft vs. Amazon but the Winner Is…. Logistics

FedEx Surround

In May 2020, the CEOs of FedEx and Microsoft announced a partnership aiming to “revolutionize commerce”, “transform logistics”, etc. The aim of this initiative seems to be not only to enhance the capabilities of both parties but also to rival a common enemy. Dimitar Pavlov, Head of Business Development at Transmetrics, discusses the implications of the partnership as well as the hidden potential for the logistics industry.

Disrupting Route Optimization: Last Mile vs. Line Haul

Route Optimization

In 1959, American mathematicians George Dantzig and John Ramser proposed a question: “What is the optimal set of routes for a fleet of vehicles to traverse in order to deliver to a given set of customers?”

We’ve come a long way in the past 60 years in solving this problem. While other mathematical questions remain unsolved, Dantzig & Ramser’s Vehicle Routing Problem lies in the core of the modern route optimization algorithms. Moreover, these changes are not just theoretical – companies with more optimal route times could cut overhead, idle time, delivery costs, and save on fuel, all while reducing delivery times across sectors.

Route optimization’s major benefits depend, at the highest level, on whether you’re refining last-mile or line hauling operations. Let’s look at how this works in each of these two sectors that reveal the power of optimization – but first, a primer on the terminology.

The Future of Fleet Optimization

fleet optimization

While innovations in data and technology solutions have the potential to completely transform fleet management operations, a whopping 85% of shippers and consignees believe their industry is still lagging behind others when it comes to implementing these new technologies. Meanwhile, the logistics companies who have been early to embrace tools like artificial intelligence (AI), predictive analytics, and Internet of Things (IoT) devices are realizing high ROI and improved efficiency for their businesses. Now, digital enterprise tools are becoming central to the monitoring, analyzing, and execution of sustainable fleet optimization.

Logistics Data Standards: Challenges and Benefits

logistics data standards

Just a few short decades ago, it was nearly unimaginable that we could ever turn vast amounts of data into actionable information for logistics providers around the globe. But fast forward to today, and data has become the cornerstone of any modern logistics operation. Improved operational efficiency, last-mile and real-time route optimization, strategic network and capacity planning, customer service improvement and more product innovation are just a few of the major benefits now easily produced by a data-driven business. 

There are both pros and cons that come with this access to massive quantities of information: While this data has the potential to inspire exciting business transformation, it’s often more difficult for logistics organizations to sort through it to discern what’s useful and what’s not. If your company has piles of data in various formats and systems which aren’t being used to create actionable insights, its storage will only become useful when a data-driven solution is implemented later on. This is why many organizations are starting to rely on industry data standards, which dictate how data should be recorded, stored, and shared. Standards may vary by industry, but the governing principle is that any crucial information must be exchanged in a common format that makes collaborating and extracting insights simple and straightforward.

10 Best Logistics Blogs You Should Follow

10 Best Logistics Blogs You Should Follow

When you are looking for news and expertise in logistics technologies and companies, where do you typically go? The truth is, there is such a big influx of articles and “expertise” that it can be difficult to find the relevant, actionable, and most importantly, up-to-date articles on logistics.

While logistics and supply chain publications with relevant information certainly exist, some of them are locked behind a paywall, making it hard to easily access valuable industry insights. Luckily, there are plenty of free logistics blogs that are just as valuable and filled with expert interviews, latest industry news and opinions, product highlights, and so much more. In this article, we have decided to make a list of the high-quality logistics blogs to help you get the information and news you need — without wasting any time or effort.

Technologies Disrupting Logistics Order Fulfillment

Technologies Disrupting Logistics Order Fulfillment

Today’s logistics providers are, by now, all too aware of the fact that e-commerce business is booming: Online sales are estimated to take up 24% of total sales by 2027. This rapid growth has, in turn, created huge challenges for order fulfillment and reverse logistics in recent years. Companies have been forced to redesign their warehouses and distribution centers in order to meet consumers’ demands for fulfilled orders as quickly as possible. These days, if a supplier can’t keep up with the quick shipping needs of consumers, it’s all too easy for those consumers to simply switch to a competitor who can meet their needs.