Crowdsourced Logistics

The sharing economy and peer-to-peer network services open a completely new mental model. Old service industries can be reshaped with new data and mobile technology. One of those is the postal service. A service operating since the 18th century in many countries now experiences a boom in parcel delivery. A growing trend of internet purchases make sure that parcel deliverers flourish the last 5 to 10 years. But what if we just removed all those distribution centers? It’s just another object going from A to B in a society where there are already so many forms of transportation, movements of persons, cars and people searching for some extra job and cash. A networking platform such as AirBnB or Uber could easily connect a seller with the purchaser.
crowdsourced logistics
Traditionally a store has a distribution center and, within it, a fulfillment service of order pickers putting goods into packages, which will be taken by truck to a parcel service distribution center. The network of delivery addresses covered are huge, and the costs are shared by all of us. The business model is mainly driven on economy of scale and efficiency.

 

The two requirements needed for the current delivery logistics is a fulfilment service or location and a central distribution point. In case the goods are decentralized, or in the store itself, then a peer-to-peer system can be beneficial. Currently an ordered good or parcel from a store around the corner will travel hundreds of miles in order to be delivered at your door the next day. Which is not efficient at all. Wouldn’t it be easier if you can continue to do the shopping, and a neighbor can drive to the store and pick up your parcel? The only requirements here are: a marketplace function and deliverers who are on time.

 

Crowdsourced Logistics is born! Average citizens, and small entrepreneurs deliver parcels during their normal daily commute. The platform is a peer-to-peer app on your smartphone. This idea of a sharing economy offers even new possibilities. Same day delivery is now within reach. Parcels which normally would be picked up to be transferred to a distribution center have the ability to reach the customer instantly and for a competitive price.

 

Several companies start experimenting with these kind of new logistic solutions. The most notable is Amazon with their Amazon Flex Program. Also Start-ups as Uber Rush, Instacart, and Parcify in Belgium, and known logistic giants as DHL with the MyWays app in Sweden. Now the initiatives are there, only the legal and logistical implications need to be figured out.

Ecommerce: Logistics & 3PL Trends for 2016

With the ascendance of Amazon, major Ecommerce players and changing consumer/B2B purchasing behavior; the logistics landscape is forever changing

According to a recent study by ComScore 78% of of the US population purchased an item online last year and that is only expected to increase. And with the rapid expansion of same day delivery and even delivery within 1-3 hours, ecommerce is changing what logistics is capable of, while opening up major opportunities both for manufacturers, marketers and 3PL companies to better connect with their clients.ecommerce logistics 2016

Today on average e-commerce accounts for 11.85% of North American 3PLs’ revenue, according to the 2016 3PL Study. The CEOs of the leading 3PL companies project that in the next year this will increase to more than 20% of overall revenue with the continued focus and importance on next day delivery and the partnering with 3PL’s for last mile delivery. At the same time a growing share of last mile service is also starting to be taken over by the “sharing economy” with initiatives such as Amazon Flex and companies like Uber getting into the delivery space.

Another major area of growth noted in the study is international e-commerce. For example European ecommerce accounted for around 5% or North American 3PL revenue, but is projected to grow to 9 percent in the next three years. The APAC region will also continue to explode in the coming years as well. (China’s current economic woes notwithstanding)

There is a tendency to see the biggest opportunity being having the opportunity to partner with Amazon. That said longer term, ecommerce companies are looking to build out their global supply chains outside of Amazon and move to direct to consumer models. Especially in these formative years, 3PLs will play a major role in helping companies expand in their international market coverage

What are the keys to ecommerce success for logistics companies moving forward? An increased focus on providing innovative order fulfillment services, keeping up to date with the nimblest logistics software and providing reliable, disciplined same day delivery services.

It is an interesting time to be in the logistics industry for sure!

The Difference Between a Freight Forwarder & Customs Broker

Like all specialties in logistics there are often blurred lines between disciplines but there are key differences between Freight Forwarders and Customs Brokers that are important to understand.

Photo by Glyn Lowe

Photo by Glyn Lowe

Freight Forwarders focus on the movement of cargo from one country to another by either sea or air serving as a middleman between the shipping lines and air freight companies helping the importer/exporter to book space and to receive and load cargo. Freight forwarders also specialize in advising importers/exporters on freight costs, port charges, consular fees, costs of special documentation, insurance costs, and handling fees.

Customs Brokers on the other hand traditionally serve as agents of the importers/exporters providing their expertise in the clearance or “clearing” of goods through international customs checkpoints. As you can imagine customs clearance is a very technical and high regulated activity focusing on the entry and admissibility of merchandise; its classification and valuation; the payment of duties, taxes, or other charges assessed; or the refund, rebate, or drawback thereof.

It’s also important to understand that there are also firms which offer both freight forwarding and customs brokerage services. In these cases, these firms will typically have completely separate team/departments handling these activities due to the differences in the skill sets and expertise needed.

The 20 Busiest Container Ports in the World

As supply chain and logistics activity continues to pick up speed worldwide we are seeing aggressive surges in traffic in the APAC region over the last decade. China, Port of Shanghai9 out of the top 20 busiest business container ports are based in China. Curiously only 1 out of 20 of the busiest ports is based in the United States with the Port of Los Angeles coming in 16th.  Singapore continues to be a major container port coming in 2nd, but Shanghai has been continuing to grow and will likely remain the World’s largest port for the foreseeable future.  Note: Traffic measurements are conducted in TEUs or “twenty foot equivalent unit” (the closest measurement to the size of a standard shipping container.)

The Busiest Ports in the World 

Rank Port Country TEUs
1 Shanghai China 32,530
2 Singapore Singapore 31,650
3 Hong Kong China 23,120
4 Shenzhen China 22,940
5 Guangzhou China 17,740
6 Busan South Korea 17,040
7 Ningbo-Zhoushan China 16,830
8 Qingdao China 14,500
9 Dubai United Arab Emirates 13,300
10 Tianjin China 12,300
11 Rotterdam Netherlands 11,866
12 Port Klang Malaysia 10,001
13 Kaohsiung Taiwan 9,781
14 Hamburg Germany 8,863
15 Antwerp Belgium 8,635
16 Los Angeles United States 8,078
17 Dalian China 8,063
18 Tanjung Pelepas Malaysia 7,494
19 Xiamen China 7,202
20 Jakarta Indonesia 6,217

The Top Books on Logistics

The best logistics books

Image credit: Alberto G.

Whether you are a seasoned logistics practitioner or an undergraduate student working towards a degree in logistics it is always valuable to stay up to date on the latest trends in logistics and supply chain management.

In order to advance your career in logistics it is important to first master the fundamentals and then continue to evolve by reading/exploring more challenging concepts and trends and look for opportunities innovate within your organization.

For those looking for some good books and resources to get started we’re happy to share our new list of some of the Best Logistics Books available out there today. Check it out here

Chicago, The Nation’s Logistics Hub

Chicago is well known as one of the most important logistics and transportation hubs in the United States. With its superior access to all major modes of transportation and its central location and proximity to one of the largest metropolitan areas in the country it has long been a sought after location for distribution hubs.

chicago-logistics

Image credit: Seth Anderson

Trucking Services
With 6 interstate highways that cross the region, connecting both east and west for more than 2,000 miles there are only two states in the US that have more interstate highway miles than Illinois. (California and Texas) Chicago is also conveniently located within a day’s drive of 70 percent of the country’s population making it a very common location for companies to locate their main distribution centers and is home to most of the country’s leading logistics companies in at least some capacity.

Rail Transport
Chicago is home to six of the seven major railroads and more than 50 railroads in total, accounting for a quarter of all rail traffic in the US.

Water Transport
Chicago is one of the largest inland cargo ports in the country and is the world’s third-largest handler of shipping containers (after Hong Kong and Singapore) with the Port of Chicago

Air Transport
86 million passengers and nearly 1.6 million tons of cargo pass through Chicago annually with two highly trafficked airports in O’Hare and Midway.

Warehousing and Distribution
With more than 1.3 billion square feet of warehouse property, Chicago easily has one of the largest concentrations of industrial space in the United States. As with any major metropolitan area, the costs of maintaining a physical distribution center in Chicago proper tend to be prohibitive so it is very common for companies to locate their distribution centers in the suburbs of Chicago as part of what locals call “Chicagoland.” It is also not uncommon for distribution centers to be located as far away as Indiana.

There is no question that over the years there are a number of different key cities in the US that can lay claim to being one of the most important from a logistics perspective at a particular moment in time but from a strategic level Chicago will endure as one of the top markets that just about anyone working in the logistic and supply chain function will end up engaged with at least on some level one way or another.

Top 10 Supply Chain Technology Trends

Technology continues to change the supply chain in profound ways, as mobile and wireless technologies take root in everyday work streams and innovative approaches to warehouse management emerge. 10-supply-chain-trends

Learn about the top 10 logistics and supply chain trends that are changing the way logistics companies do business in this new white paper from Intermec.

Drawing on over 40 years of experience, the Intermec team has identified the top technology trends in mobile, industrial and supply chain environments. Learn how they apply to supply chain operations and hear results from users who have adapted the technologies to improve their businesses.

Download FREE Top 10 Supply Chain Technology Trends Whitepaper

Managing Volatility Through Smart Inventory Planning

The supply chain is facing volatility on a scale and level of complexity almost never seen before.

IBM has recently released a new white paper covering the latest developments in inventory optimization technology, including a look at how leading consumer products companies use next generation inventory management tools to minimize working capital, improve inventory positioning and management, redesign network stocking nodes, and improve customer service and overall profitability.

To learn more about smart inventory planning strategies for evolving your supply chain, get your copy of this informational whitepaper free from IBM.

Download FREE IBM Inventory Planning Whitepaper

Top 10 US Logistics Markets of 2012

It’s been an interesting year in logistics with continued advancements in logistics software in it’s move into the cloud and logistics companies expanding and innovating on their approach to supply chain management. In this move forward organizations are continuing to look for creative solutions to their warehousing, transportation and logistics challenges.

When companies go about selecting the ideal number and location of distribution warehouses, there will always be a compromise between the limitations and costs of transportation vs. minimizing the distance needed to travel for goods. Whether using a direct delivery or hub and spoke distribution model finding the right location to best serve your customers is critical to success.  The following is our list of the top logistics markets of 2012 as selected by Logistics List readers.

Chicago, the top logistics market of 2012

1. Illinois

With the third largest metropolitan area in the US in the Chicagoland area with more than 9.5 million people it is an ideal mid-point in the country for distribution. Chicago is home to the Belt Railway the largest intermediate switching terminal railroad in the United States serving just about every railroad through Chicago and has a comprehensive highway infrastructure making it a hotbed for trucking services with 23 interstate highways in Illinois in which commercial trucking accounts for 60% of all traffic.

2. California

As the largest state in the country in terms of population with ideal access to the Port of Los Angeles and the Port of Long Beach, extensive air cargo facilities, and multiple large metropolitan areas such as Los Angeles and San Francisco, it’s no surprise that California continues to be a favorite location for logistics services.

3. Texas

With Houston which is the 5th largest metropolitan area with over 6 million people and its Port of Houston which is the second busiest port in the US in terms of Ocean Freight and Dallas which is 8th most populated city in the US with a strength in both transportation and rail; Texas is a state to look at closely. Its proximity to Mexico and extensive interstate system make it a desirable location for a distribution center.

4. Georgia

Atlanta continues to evolve into a vital logistics hub with national prominence. Atlanta is one of only five cities in the U.S. served by three major interstate highways. It also has a coveted rapid rail station inside an airport terminal. Atlanta is called home to more than 75 Class-A scheduled motor carriers and more than 2,000 irregular intrastate route carriers, contract haulers and commodity carriers. With more than 5 million people it is the 9th most populous metropolitan region in the US.

5. Florida 

The Panama Canal expansion project underway will allow the Canal to accept ships nearly twice the size of current capacity allowance. This could likely transform the US port system from what we we know it today and Florida has the potential to become one of the most important logistics hubs in the country. With its 15 public seaports, cargo activities account for almost 9% of Florida’s GDP. Miami, Jacksonville, and Orlando were the three most sought after metropolitan areas from a logistics standpoint this year.

The last 5 of the top 10 for 2012 was 6. New Jersey, 7. Tennessee, 8. New York, 9. North Carolina, and 10. Washington.

Looking for a Logistics Company? Check out our guide

What is Reverse Logistics?

Reverse logistics is a niche service commonly provided by specialized logistics companies. While it is definitely possible for a typical third party logistics provider to provide some level of reverse logistics, this is a particular niche that some logistics companies focus exclusively on.

So what is reverse logistics? Quite simply it is any logistics process or management that takes place after the sale of product.

Examples of Reverse Logistics Services Include:

  • Returns Processing
  • Return Center Management
  • Return to Vendor Management
  • Flow Management of Returned Product (retailer to vendor)
  • Product Recall Management
  • Product Recycling
  • Test, Repair and Refurbishment Operations
  • Product Inspection, Repair and Testing for Resale

A more detailed definition of reverse logistics

“Reverse logistics is the process of planning, implementing, and controlling the flow of raw materials, in-process inventory and finished goods from the point of consumption to the point of origin for the purpose of recapturing value or for proper disposal/end of life recycling.”

If you are looking for any type of reverse logistics services it is highly recommended to work a company that has previous experience in reverse logistics. That said if you have a strong pre-existing relationship with your logistics company and believe in their ability to invest in building out a new reverse logistics service offering to meet your needs there are just as many success stories there.