The SPL Group

You Need Help With Your Shipping Operation

Joel Moskowitz — Tue, 30 May 2023 18:17:35 +0000

You Need Help With Your Shipping Operation

Why going at it alone may not save you enough on your overall shipping costs.

If you are a company that ships products, you are well aware of the complex and time-consuming nature of the process. There are numerous variables and factors to consider, making it challenging for businesses to ensure the safe and efficient delivery of goods while keeping costs under control. This brings us to the age-old question; can I do it all myself? Do I hire a professional?

You hire accountants to file your taxes and attorneys to review your contracts, so why not consider a logistics professional to optimize your shipping?

SPL Group is a logistics company that provides white-glove, concierge-level service to businesses that ship products. With a wide array of services and discounts for Less-Than-Truckload (LTL), Full Truckload (FTL), invoice auditing, and small parcel, SPL Group is ideally situated to optimize your shipping while lowering your costs. We don’t replace your current operations; we enhance them.

Many service providers tout white-glove service, but few can compete with SPL Group’s personalized, high-quality service. Here is how SPL Group sets itself apart from its competitors:

Has account executives and account managers serve as your point of contact (not an outsourced customer service hotline) and are available when you need them (not just 9-5!).
Has close, long-established relationships with all the major carriers (UPS, FedEx, DHL, and many others) and a long record of solving issues with them when they inevitably arise.
Has proprietary software that finds you the best rate and the quickest time for your particular parcel.
Offers customized tracking and reporting
Gets you discounts on your freight rates, surcharges, and DIM Weight
No out-of-pocket cost invoice auditing

How does SPL Group do it? With its long-established and extensive relationships with the major carriers, SPL Group is able to negotiate better rates than most businesses can on their own. Its free shipping invoice audit also discovers other areas where discounts are available and carefully reviews your shipping to determine which services are necessary and remove redundancies.

SPL Group has over 8,000 trucking companies in its LTL/FTL network and operates in Mexico, Canada, and the US. Additionally, SPL Group has warehouse facilities on both the East and West coasts in close proximity to the busiest ports in the US, with drayage services available to our facilities or ones of your choosing.

Businesses that ship both domestically and internationally can benefit greatly from the services provided by the SPL Group. While the services and the discounts are great, the hands-on service is what has our clients raving about us. Here’s what some have to say:

“Before we met SPL, we would have to go and compare rates just to make sure our rates were pretty much competitive. With SPL, we don’t have to do that because they’re doing that for us, and we trust the fact that they have our backs.”
“SPL is doing a great job; knowing that they are there gives us a comfort level, and yes, SPL gets us the best rates, so that’s another reason why we are still here.”
“There is no one that can beat SPL Group’s availability and customer care; there was never a time they didn’t come through for me.”
“With LTL, it’s all about communication, availability, and timing. With SPL Group, everything is on point; when you need something to happen, it happens.”

The simple fact is, staying on top of your parcel shipping spend is crucial to controlling costs. The beauty of the service provided by SPL Group is that it comes at no direct cost to you. In the most recent issue of Parcel Industry Magazine, industry professionals advise that you continuously audit your invoices, renegotiate your carrier contracts, and take a fresh look at your parcel data. Having an experienced eye for reading voluminous carrier contracts and auditing parcel invoices, we can gain you an extra double-digit percentage in savings. Accessorial fees and surcharges are another area where our years of experience benefit our clients greatly.

Carriers have been cutting costs. Account reps and customer service lines are overextended. That is just the economic reality of the post-pandemic world we exist in. Challenges with pickups or package tracking can frustrate the most efficient shippers in an ideal situation. Relationships matter. Our clients are able to leverage SPL Group’s longstanding relationships with all the major carriers to get the top-quality, attentive service they deserve.

The post-pandemic world has also put pressure on businesses that ship due to lower volumes and higher prices on goods and services. The major carriers themselves implemented the highest general rate increases (GRI) at the turn of the year. In a competitive world where every penny counts more than ever, finding the right partner to optimize your shipping operation and lower costs has become an urgent necessity.

Can you do this all yourself? And if you can, can you do it better than someone who has been doing this for years and for thousands of companies? Two factors prevent shippers from hiring a company like SPL Group; cost and privacy. As mentioned earlier, there is no out-of-pocket cost to you. If we don’t save you money, we don’t get paid. Business owners are apprehensive about turning over internal documents, including shipping invoices, even for an audit. The uneasiness can come from not wanting to divulge information or simply not wanting to be shown that they could have lowered costs earlier and much steeper than they have been.

SPL Group guarantees your privacy and the privacy of your data. Our proprietary software emphasizes securing client data, and our professional staff treats your information as their own. Finally, SPL Group has invested greatly in our proprietary software that offers features like rate shopping across multiple carriers, tracking, bulk uploads, API capabilities, label printing, data aggregation, and more. Now is the time for SPL Group.

The post You Need Help With Your Shipping Operation first appeared on The SPL Group.

The post You Need Help With Your Shipping Operation appeared first on The SPL Group.

Environmental Regulations and Trucking

Joel Moskowitz — Thu, 11 May 2023 21:41:39 +0000

Environmental Regulations and Trucking

The State of California is known for leading the nation in regulations. So it is no surprise that California’s powerful Air Resources Board (CARB) has adopted the Advanced Clean Fleet rule after several years of proposals and hearings. The rule intends to eventually end using internal combustion engines (ICE) on California’s roads. This comes on the heels of regulations passed by CARB that require all vehicles sold in the state to be electric, hydrogen-fueled, or at minimum, plug-in hybrid by 2035. Southern California is home to the nation’s busiest ports, Los Angeles and Long Beach, which have strict environmental rules in place already. Recently, the Biden Administration released a new proposal on emission standards for all trucks and automobiles on a federal level, considered the toughest ever.

Protecting the environment is a noble cause; it’s also a complicated goal from an economic standpoint because of the financial effect on business. Furthermore, it is an issue that has been going back and forth for decades. Here, we examine both sides. One thing is certain, the move toward lower emissions of greenhouse gasses is plowing ahead. What is not fully clear is how fast it will go and who will lead the charge; the government or the private sector.

If it isn’t already, it is expected that Tesla will be the best-selling automobile in the world in 2023. Tesla is 100% electric, and what makes it stand out, besides its product’s quality, is the vision of the current CEO, Elon Musk.

Tesla was making electric vehicles before there was an infrastructure for charging and before there was popular demand. In fact, previous attempts by more experienced automakers were not successful. General Motors released the EV1 concept car in 1996, and its whole history is mired in controversy and conspiracy theories. But the reality is that the era of very cheap gas prices was starting around then, and there simply was no market or appetite for EVs.

Recently, while Tesla was taking off on its own, two events catapulted the automaker forward; Covid and Russia/Ukraine. In response to Covid and the lockdowns it brought, the government stimulated the economy with $trillions causing inflationary pressures to begin and prices on everything to rise. The Russia/Ukraine conflict and the resulting sanctions on Russia, one of the world’s largest crude oil producers, also caused gas price increases. Tesla is a prime example of the market leading on the issue, having invested heavily in a market that didn’t exist yet, betting on infrastructure that hadn’t been planned yet, getting built, and being in the right place at the right time.

The rise in gas prices may have helped bring more people around to EVs, but environmental changes have been on the minds of regulators for years. For a while, the science of climate change was questioned; now, few people dispute that climate change is real. In 2022, the US was hit by Hurricanes Ian and Nicole, the Colorado, and Mississippi Rivers experienced record low water levels, Europe had record heat waves, the Rhine River also had dangerously low water levels, and there were other major climate events around the world. This past winter, the US was hit with a Polar Vortex, and in California, flooding was caused by a rare weather event known as an “atmospheric river.”

Where people differ is the pace of implementing a solution. People of a certain age can recall the resistance to seat belts, 55 MPH speed limits, and airbags. At first, the objection to those things was portrayed as personal liberty issues. However, when the data was disseminated, and the benefits were incontrovertible, the objections came from the automakers and the gas companies who stood to lose money or have higher costs. Eventually, they became a reality.

The biggest objection to the CARB regulations in California and overall automotive emission standards comes from trucking companies that are either small companies or owner-operators. Unfortunately, these regulations create a considerable burden, forcing owners to make a substantial investment or close their operations. With higher prices, lower volume of sales, and thinning profit margins, these SMB truckers simply cannot afford the mandatory changeover. As of January 1, 2023, all drayage trucks over 26,000 lbs. vehicular gross weight must have engines from 2010 or later. And if you enter the facilities of the Port of Long Beach, your truck must be a 2014 model or newer. These regulations have obliged all operators in California to upgrade their fleets to comply.

The balance between necessity and economic feasibility has not yet been met in California or nationally. There is a strong argument that all of these regulations favor big trucking companies and harm the smaller ones. The counterargument is that the regulations are needed to provide regulatory certainty. Still, it’s not so simple. The issue of the environment needs a global solution. While the US is responsible for 14% of the world’s carbon emissions, China is responsible for 30%, more than the US and Europe combined. Russia accounts for 7%. With 50% of carbon emissions generated by three world powers with conflicting interests, finding a global solution is farther from reach than ever. It doesn’t mean the US should give up, stop or not do its part. It simply means that a global solution is beyond the horizon. The trucking industry, with some merit, feels like they are being scapegoated.

Meanwhile, with less regulatory aggressiveness put on them, ocean freight and air carriers are plowing ahead with going green. Still, the players in that arena are usually large, often public companies with multiple options to access cash for infrastructure investment. Ultimately, even ships and cargo planes need their containers unloaded and delivered somewhere. The need for trucking is not going away anytime soon. The question is, will there be enough trucks around to meet environmental regulations and deliver everything efficiently and cost-effectively?

The post Environmental Regulations and Trucking first appeared on The SPL Group.

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The Manufacturing Pivot

Joel Moskowitz — Thu, 16 Mar 2023 14:55:26 +0000

The Manufacturing Pivot

Whether the trend began with Covid or in light of geopolitical events, particularly tensions with China, manufacturers are seeking alternative solutions to continue their operations while minimizing risk. Many companies are shifting manufacturing away from China to locations closer to home or to places with friendlier relations. Offshoring to China took off at the beginning of the millennium when China became a member of the World Trade Organization (WTO), which offered the advantage of lower costs to produce goods. Nonetheless, the movement away from offshoring to friend-shoring and nearshoring offers several benefits while simultaneously addressing the need to move away from reliance on China.

Nearshoring refers to the process of moving production and manufacturing to a nearby country or region. Friendshoring involves working with trusted partners and suppliers. The objective of both is to reduce supply chain risk. Both strategies can offer significant advantages in terms of cost, efficiency, and management.

Firstly, nearshoring reduces the time and cost associated with transporting goods and materials across long distances. By choosing a nearby country, manufacturers can enjoy faster delivery times, save on transportation costs, and allows for greater flexibility in responding to changes in demand.

Secondly, friend-shoring enables manufacturers to build stronger relationships with their partners and suppliers, reducing the risk of supply chain disruptions caused by political issues and unforeseen events. By working more closely with suppliers and building long-term partnerships, manufacturers can ensure the reliable and consistent production of goods.

China has long been a dominant force in global manufacturing, but recent events, such as the US-China trade war, tensions over Taiwan, human rights, Hong Kong, the response to Covid, and intellectual property rights, have exposed the risk of overreliance on a single country.

By diversifying their supply chains and moving production to nearby countries, manufacturers can reduce their exposure to risks such as tariffs, trade restrictions, and political instability. Apple has led the way by moving the production of some of its products away from China to India and Vietnam. Mexico has already seen an increase in US companies transferring their operations there. These moves are intended to diversify operations and reduce risk and exposure.

Mexico, in particular, has emerged as a popular destination for nearshoring due to its proximity to the US market, existing favorable trade agreements, and a skilled labor force. Other countries in Central and South America are viable options. Brazil, for example, offers an attractive mix of natural resources, skilled labor, and favorable trade agreements.

In addition to the reshoring steps discussed above, manufacturers can also consider other strategies to mitigate risk and ensure the continuity of operations. Digitalization and automation can help reduce reliance on physical supply chains, making it easier to respond to changes in demand and minimize disruption. Advances in robotics, artificial intelligence, and autonomous vehicles have been a game changer in supply chain and logistics planning.

There are still challenges and risks associated with these strategies, particularly in light of the current banking crisis, which is reverberating on a global level. The recent government takeover of Silicon Valley Bank and Signature Bank highlights the risk of overreliance on one financial institution.

To mitigate these risks, manufacturers need to take a strategic approach to managing their banking relationships, diversifying their accounts across multiple institutions and increasing monitoring of risk exposure. By working closely with trusted partners and advisors, companies can ensure they are well-positioned to navigate crises as they arise and operate successfully in a challenging global environment. By expanding their supply chain and banking options, building strong, trusted partnerships, and leveraging digitalization and automation, manufacturers can reduce their exposure to risk and ensure the continuity of operations.

The post The Manufacturing Pivot first appeared on The SPL Group.

The post The Manufacturing Pivot appeared first on The SPL Group.

The Ever Evolving Last-Mile Delivery World

Joel Moskowitz — Thu, 02 Feb 2023 18:32:18 +0000

The Ever Evolving Last-Mile Delivery World

In the late 1970s, one of the most popular shows on TV was a sitcom called “Happy Days.” The show was set in Milwaukee in the 1950s, and the premise, as implied by the title, is a sentimentality for the simpler times of old. The past was portrayed as less complicated. If we take that premise and apply it to today, that things are simply more complicated now; nowhere is that more apparent than in the way we shop.

Not too long ago, people went to a department store, searched for the products they wanted, browsed around the store, and made a purchase. Retailers made lots of money, and customers were happy. Later, mail orders and catalogs added convenience, but it didn’t necessarily disrupt the way consumers bought their products overall. The Internet, Amazon, and the growth of eCommerce did though. The pandemic brought digital commerce to a whole new level. The evolution from mostly brick-and-mortar shopping to buying online was rapid, and the logistics of getting products from the factory to the front porch became complicated and costly. Covid and the demand it caused exposed supply chain inefficiencies but also showed how volume-based logjams can cause businesses to lose customers over inefficient delivery.

The simple fact is that we live in a world where consumers expect orders to arrive within a very specific timeframe. Customers became accustomed to quick and cheap delivery. Any weakness in fulfilling those consumer expectations results in the buyer shopping elsewhere. 59% of consumers will walk away after several bad retail experiences, and 17% after just one bad experience. Last-mile delivery is central to delivering a superior consumer experience. Consumers don’t care if the seller does not have the ability to deliver to their remote rural location, or on the flip side, to their congested urban locale; they will just go elsewhere.

Earlier, retailers chose a carrier, set up a pickup, and then the package was on its way. Now, the turbo-charged increase in volume and customer time expectations have added multiple steps to the supply chain. Whereas before, shippers felt at ease leaving the responsibility for the parcel delivery solely with the carrier, now being comfortable with the partnerships the carriers have within the supply chain is a constant worry.

The most critical, complicated, and expensive part of any delivery is known as the last mile. According to a study conducted by Bringg, a delivery management software company, 89% of shippers are struggling with their last-mile delivery operations. The term last mile was initially coined by the telecommunications industry to describe when a home was being connected to the main cables. Think of a grid. Phone, electric, gas, and cable companies would run their main pipes, wires, or cables along the main thoroughfares of the grid. Then when it came time to set up service in a home, a connection needed to be made from the main cable, which was termed the last mile. This entailed planning and was the most expensive part of connecting service.

Today in supply chain management, the same planning is used for the movement of goods. The last mile in the supply chain, like in telecommunications and utilities, is the most expensive part of the process; in fact, the last mile accounts for over 53% of the total cost of a shipment. Transporting goods via truck, ship, rail, or air is efficient. Large quantities are loaded onto the transport and go from point A to Point B. Once the goods arrive at a high-capacity warehouse or distribution center, they have to get to their final destination. That last leg is much less efficient, accounting for the high cost.

Last-mile delivery has become an ecosystem within a larger ecosystem of logistics and supply chain. This resulted in a number of issues that could only be addressed by innovation. The effect on the environment of the increased truck volume, optimizing delivery, traffic and parking challenges in highly populated urban areas, and parcel tracking over multiple links in the supply chain are a few of them.

Amazon is a good example of an early innovator, because they turn over so much volume they were able to scale a program to be efficient and less expensive. One such program, the Amazon Delivery Service Partner (DSP) program, taps into what is known as the gig economy. The gig economy is a labor market that relies on temporary or part-time contractors rather than full-time employees. The major carriers now have similar programs. The trucks have the Amazon, UPS, or FedEx logos and look just like any of the company-owned trucks, but in reality, they are privately owned. Some of the gig workers are entrepreneurs who own a few trucks and hire workers and make a business out of it. These gig workers added much-needed personnel to cover the higher volume at the lowest possible cost to the carrier. The gig worker benefits from independence and flexibility, while the carriers do not have to hire these drivers for full-time positions, a costlier proposition.

Electric vehicles (EVs) are in wide use to help alleviate the problem of pollution caused by the increase in local trucking. Other environmentally safe alternatives exist. Bicycles often deliver the last leg of the journey. Drones, robots, and in some places, barges are employed for last-mile delivery, reducing the carbon footprint. EVs, scooters, bicycles, etc…serve the dual purpose of being efficient and environmentally friendly.

The evolution of last-mile delivery has made up-to-date parcel tracking more difficult.

The parcel is not only handled by multiple people but more and more of those people are employed by different companies, each with its own tracking and communications software. More effective GPS with live updates on traffic is needed to make last-mile delivery more efficient. Improved communication between carriers and last-mile deliverers is crucial. The accumulation of data from each and every delivery is employed to create greater efficiencies and improved communication. FedEx is now rolling out a grading system that evaluates its delivery contractors. Poor-performing ones will be dropped.

Some last-mile solutions are more analog. Delivery lockers are in wide use in Europe, Asia, and parts of Africa. In the US, Amazon pioneered the use of lockers. Recently, FedEx partnered with Walgreens in selected locations where the pharmacy chain accepts drop off and facilitates pickups of the carrier’s packages.

Suddenly, sellers need to be supply chain and logistics experts. When planning a delivery strategy, shippers need to be cognizant of all the steps and various handlers along the parcel’s route. Previously, a business might look at its shipping needs once a year, now with the variables in the supply chain always changing, it’s a constant concern. Even pricing and accessorials which were once predictable and consistent are changing more rapidly. Peak shipping surcharges for example, have taken on a whole new meaning in the eCommerce era.

Some larger companies are expanding their shipping departments to include experts in the field. Most small to medium enterprises can ill afford such luxuries; margins have gotten thinner as a result of the fast and quick delivery expectations of consumers. Choosing the right third-party logistics (3PL) company is crucial not only to save on the costs of shipping but also to guarantee that deliveries are made on time as promised. SPL Group is a white glove, concierge level 3PL that gets you the best rates on shipping with the highest level of service. Contact SPL to find out more.

The post The Ever Evolving Last-Mile Delivery World first appeared on The SPL Group.

The post The Ever Evolving Last-Mile Delivery World appeared first on The SPL Group.

The Sustainability Factor

Joel Moskowitz — Thu, 05 Jan 2023 10:52:25 +0000

The Sustainability Factor

As we enter 2023, there is one issue that will be focused on very strongly in the shipping/logistics world; environmental sustainability. Environmental issues are generally politically fraught and often elicit opposing visceral views. However, the free market has become a major factor in the move toward greater sustainability. Legislation and regulation have always played a role, but the pendulum that is politics swings from more government intervention to less. The free market, on the other hand, sees an opportunity and seizes it.

In years past, environmental issues were divided between those that cited scientific data about climate change, sea levels, and melting snow caps in Antarctica and those that felt the data needed more research or doubted the science altogether. Today, few people doubt the science.

The division is between those seeking a more rapid response and those who prefer gradualism, claiming that it’s too costly to rush into as it hurts businesses and the people whose livelihood depends on those companies affected. The other aspect of environmental policy is a public health one. When issuing new emission standards for trucks recently, the EPA cited public health rather than climate change as its primary mission. The new EPA standards claim to reduce premature deaths, reduce hospital and emergency room visits, help lessen asthma cases, cites fewer lost days of work and school, and an economic benefit of $29 billion annually.

For the first two years of the Biden administration, the political winds blew towards greater government intervention in regulating environmental issues. In fact, back in August, President Biden signed into law the Inflation Reduction Act. In that bill lies the most significant piece of climate legislation in the history of the US, which earmarks $400 billion towards clean energy production. The bill also marks a key change in strategy, from taxing carbon emissions to subsidizing clean energy production. This is a huge strategic pivot that incentivizes clean energy development and use rather than taxing or fining carbon emissions. While it does not satisfy the gradualists, it does remove one of their arguments about the cost of environmental regulation to commerce.

Greenhouse Gases

When we speak of environmental regulations related to shipping/logistics, we refer primarily to carbon emissions. Gases that trap heat in the atmosphere are called greenhouse gases. Greenhouse gas emissions from human activities strengthen the greenhouse effect. The greenhouse effect is a process when energy from the sun goes through the atmosphere and heats the Earth’s surface to make it habitable for humans. But high levels of greenhouse gases in the atmosphere prevent some of the gases from returning back to space, which is part of the natural process, resulting in changes to Earth’s climate.

There are a number of greenhouse gases contributing to climate change. Carbon Dioxide, or CO2, is responsible for 79% of our greenhouse gas emissions. CO2 enters the air by burning fossil fuels like coal, gas, and oil. It also enters the air via trees, solid waste, and chemical reactions from certain activities like manufacturing cement. There are other gases, like methane CH4, which enters the air through livestock and fossil fuel production, and nitrous oxide N2O, which comes from agricultural land use and industrial activities that contribute to climate change, but as mentioned, on a lower level than CO2.

According to the Environmental Protection Agency (EPA), transportation accounts for 33% of all CO2 emissions, followed by electric power, 31%, industry, 16%, and others, 20%. Faced with the challenges of lowering emissions, targeting the transportation sector makes sense and will result in the most impactful changes in the least amount of time.

Market Solutions

One solution to lowering carbon emissions in the transportation sector is increasing the use of electronic vehicles (EVs). EVs are a case and point in how the free market produced a solution. EVs were preceded by hybrid cars. Hybrid electric vehicles are powered by an internal combustion engine and one or more electric motors, which use energy stored in batteries. A hybrid electric vehicle cannot be plugged in to charge the battery. Instead, the battery is charged through regenerative braking and by the internal combustion engine. Hybrids were introduced in the US as early as 1999 and gained in popularity when gas prices trended higher because hybrids get better mileage than non-hybrid cars. Hybrids are generally costlier than similar-sized cars. So while there are those that purchase or lease a hybrid primarily for environmental reasons, the main reason seems to be economic.

EVs are a recent phenomenon and were popularized but not originated by Tesla. Tesla EVs are now one of the best-selling automobiles in the world. Tesla has also entered the trucking business and recently ran a successful 500-mile test run of a fully loaded semi on one charge.

Electric vehicles (EVs) emit 60-68% less CO2 than those that are powered by fossil fuels; hybrids emit 48-50% less. The fact that EVs emit less CO2 does not mean they are not controversial. In countries with coal-intensive electricity generation, the benefits of EVs are smaller, and they can have similar lifetime emissions to the most efficient conventional vehicles – such as hybrid-electric models. As the technology develops, the CO2 let out into the atmosphere as a result of charging the batteries for EVs is lessening as well with programs like Automated Emissions Reduction (AER), which automatically shifts the timing of charging to sync with times of cleaner energy being produced by utilities.

But in order for EVs to begin reversing the effect of greenhouse gases so the US can meet its climate goals, the market would need to add 50-70 million EVs (that’s one in 4 cars) to our roads before the end of the decade. The challenges of evolving to wider usage of EVs are numerous. Charging takes longer than filling up a tank of gas. The mileage range is shorter on EVs, and weather affects the range. Until a more robust charging infrastructure is put in place, the inconvenience of owning an EV will prevent people from opting in.

The Regulatory Environment

While the regulatory pendulum swung towards tougher standards from the Biden Administration, some states often enact tougher standards than federal regulations. California requested a waiver under the Clean Air Act during the Obama Administration, and it was granted. California’s waiver allowed it to set standards tighter than the federal standards, which have been adopted by more than a dozen states and became the de-facto nationwide standard because automakers do not design different sets of vehicles to meet different standards in different states. President Trump revoked the waiver in 2019, citing reducing the cost of cars for the consumer as his motive. President Biden just reinstated it.

California has its own motives for the tougher standards. Until recently, the two Southern California ports of Los Angeles and Long Beach were the busiest in the country and accounted for 31% of all US container-based imports and exports. The ships and the trucks that move those containers to and from the ports pose an environmental challenge that concerned the California Air Resources Board. The board issued regulations to reduce several types of emissions from trucks, buses, and tractor-trailers. These regulations aim to both reduce greenhouse gas emissions by requiring aerodynamic designs and low-resistance tires and also to reduce toxic emissions from diesel exhaust by requiring newer engines. As of January 1, 2023, all drayage trucks over 26,000 lbs. vehicular gross weight must have engines from 2010 or later. And if you enter the facilities of the Port of Long Beach, your truck must be 2014 or newer. These regulations have obliged all operators in California to upgrade their fleets to comply.

Critics of California’s regulations claim that these regulations create a considerable burden, particularly for small to medium-sized trucking companies, forcing owners to make a substantial investment or close their operations.

Shipping is another sector grappling with intense pressure worldwide to reduce carbon emissions. In July of 2022, the Clean Shipping Act was introduced in Congress. The goal is to set a zero greenhouse gas fuel standard for shipping and to reach a 100% reduction by 2040. European Union policymakers are raising their ambition for lower emissions from shipping. Chinese legislators are also looking to reduce emissions in shipping. Reducing emissions in shipping poses its own set of challenges. The lifespan of a ship averages between 24-30 years. It is far more expensive to build and maintain than a truck and, therefore, to replace should regulation be enforced. There is a movement in Europe to build solar and electric-powered passenger and cargo ships.

The International Maritime Organization (IMO) is the United Nations’ specialized agency with responsibility for the safety and security of shipping and the prevention of marine and atmospheric pollution by ships. The organization is proposing a carbon levy for 2023 but, as in the past, is getting pushback from shippers.

Moving Forward

International corporations are either innovating solutions by creating greener products or partnering with companies that can provide cleaner solutions. Ford and General Motors are going head-to-head in the EV delivery van space. DHL just ordered 2,000 of them from Ford. FedEx is furthering its sustainability agenda with an e-cart pilot in NYC. Corporations may balk at government intervention and regulation, but they can see trends. If going green can be profitable, they will lead rather than follow in implementing it.

Inflation, higher gas and diesel prices, and the conflict in Russia/Ukraine have intensified the economic incentive to go green. For years, low gas prices made driving vehicles powered by fossil fuels the cheaper alternative. Suddenly, the prices at the pump went up, and hybrids, EVs, and the tax subsidy that came with them seemed the more attractive alternative.

There is little doubt that the world is moving toward environmental sustainability in all sectors, particularly in transportation. The questions that remain are, how fast will they be implemented? At what cost? And, will it be enough to start reversing the damage already done?

The post The Sustainability Factor first appeared on The SPL Group.

The post The Sustainability Factor appeared first on The SPL Group.

Disruption

Joel Moskowitz — Thu, 15 Dec 2022 16:58:36 +0000

Supply Chain Disruptions

In our last blog post, we explored the journey a hypothetical $20 T-Shirt purchased online takes to get from the factory to your front door. We touched on how multiple disruptions to the supply chain during Covid exposed the unpreparedness of the whole supply chain to numerous simultaneous failures. Here, we try to parse why a previously resilient system collapsed and what to look out for in the future. Some of the solutions and innovations are not yet available to everyone. We all wanted a VCR, microwave, or smartphone when they first came to market. But their commercial viability hadn’t been tested, and they weren’t affordable to everyone. With time, the technology became available and affordable. Pretty soon, everyone owned these devices. Covid necessitated and sped up technological solutions for problems we did not anticipate. Its development is still being fine-tuned and scaled. Widespread use still might be in the future, but the future is starting now.

Any analysis of what happened to the supply chain during Covid must take into consideration three changes to the overall marketplace that took place in the preceding decade; the pace of technological innovation, the exponential growth of eCommerce, and the use of “gig workers.” Technological innovation took eCommerce from the desktop to the smartphone. As a result, eCommerce became ubiquitous and, therefore, more popular and accessible. The growth of online shopping necessitated greater efficiency in an overtaxed supply chain, which ushered in the wider use of gig workers.

When Covid precipitated the systemic breakdown of the global supply chain, it was magnified by the sheer volume of transactions the system was now handling and the increased number of people operating it. Of course, another factor in the meltdown was the increased demand for products, particularly products purchased online and delivered to the home, that the pandemic engendered.

A postmortem of the Covid supply chain crisis didn’t reveal anything new, but it did expose how little attention was paid to the complexity of the system before. For example, the interconnectivity of various firms, the number of intermediary firms within the supply chain, and how dense it is. As we mentioned in our previous post, the vastness of the system cushioned the process from one or even a few interruptions. Despite severe challenges and the resulting shortages, the global supply chain exhibited resilience for such a widespread crisis.

At the beginning of the pandemic, there were shortages of everything from toilet paper to yeast. Initially, the shortages stemmed from simple supply and demand. Manufacturers, distributors, and retailers were not prepared for the wholesale shutdown of their facilities and transportation modes. Despite the lockdowns and dealing with the unknown (the pandemic), manufacturers and suppliers recovered quite well. Still, it exposed flaws in the overall supply chain that we are still recovering from today.

Manufacturing

Prior to the pandemic, the manufacturer of our hypothetical T-Shirt slept well knowing that her product was being manufactured at a factory of her choosing, most likely somewhere in Asia at a cost where she could make a decent margin selling it. She also took comfort in knowing that she had options to make her product elsewhere if the need arose and that she held enough inventory in her warehouses for a few sales cycles.

The factory knew it could easily and cheaply procure the textiles, thread, and fabrics needed to produce the shirt and spare parts for its machines. It also was able to rely on a predictable workforce, a consistent order pipeline, and the necessary energy to keep the machines operating. All in all, any interruptions to any of those steps could be easily remedied. The manufacturer can move production to another factory or even to a different country. The factory can purchase spare parts or textiles from a different supplier.

What the pandemic exposed was the possibility of whole countries closing down. Access to a different factory or another country was not guaranteed. Raw goods and materials were not easily replaced.

Road Freight

Road freight, or trucking, appears multiple times in the production to sales cycle. A truck will pick the product up at the factory and deliver it to a river barge or directly to a port.

Once it arrives at its destination country, it will likely be trucked from the port to a distribution center and from there to a carrier, where it will be trucked again to the customer’s home.

Trucking is one of the more predictable links in the supply chain. There are over 800,000 trucks on the road in the US, from single-vehicle operators to large fleets. But trucking has been evolving since 1980, when the industry was deregulated and more rapidly with the growth of Amazon and eCommerce. What was once a simple, easily explainable process has become a complex ecosystem. The major carriers have drivers whom they employ and operate company-owned vehicles. They also contract out some of their routes to third parties who operate their own vehicles. The pandemic exposed shortcomings in the system when confronted with multiple disruptions.

Warehousing

The pandemic saw a major uptick in on-demand warehousing, already rising steadily due to the popularity of eCommerce over the previous decade. Sellers were looking for even more flexibility and agility in their operations. Like trucking, previous notions about the warehousing industry quickly became outdated. Warehouses, once parking spots for products before being shipped out to brick-and-mortar retailers, now also act as fulfillment centers for direct-to-consumer transactions.

Warehouses have people working side-by-side in close proximity, which is not the ideal environment for a pandemic. Companies like Amazon grew by offering quick and inexpensive or free shipping. This caused work in warehouses to become more difficult and less desirable. Those factors made warehouses one of the most vulnerable links in the supply chain during the pandemic. Innovation and automation are slowly improving that situation, but access and widespread use of the technology has not yet been achieved. Robotics may one day succeed in replacing all or most humans in the warehouse, but right now, automation increases the efficiency of workers; it doesn’t replace them.

River Barges

River barges are likely the least thought-about link in the supply chain. However, over the past 6-months, the Rhine River in Germany and France and the Mississippi River in the US both suffered from drought-induced low water levels. Those record-low levels either slowed down or halted river barge shipping for a period. In the US, the Mississippi River is an artery that moves products inland on a north-south axis and is the main mode of transport for corn, wheat, and soy, grown in the Midwest to get to the ports for export. It also carries imported goods that arrive in the US at the port of New Orleans. In the case of the drought, much of the slack was picked up by rail freight and trucks. Thankfully, the water levels only caused a slowdown and not a shutdown.

Rail Freight

Rail freight holds a nostalgic and iconic image in American culture. The rails opened up the West for settlement and were the primary source of travel and freight for decades. Rail still delivers 30% of all US freight. At one point, there were over 100 Class I (doing more than $300 million in 21st-century dollars) railroad companies operating in the US. Today, after deregulation and consolidation, there are just 7.

The railroad’s history and the outsized role it played in the US economy from the mid-1800s until well into the 20th century caused much legislation to be written governing it. The Railroad Labor Act of 1926 is still on the books today, and one of its main powers is the ability to force rail workers back to work if they go on strike. That power was invoked 18 times over the past 100 years, and last week, congress used the RLA to prevent a work stoppage. The point of the RLA is to prevent the economic calamity that would result from a rail strike. But there are other factors that make the rails a very vulnerable part of the supply chain.

Deregulation of the industry not only caused consolidation and mergers of rail companies, it also ushered in an era of shareholder vs. stakeholder capitalism. Railroads focused on shareholder value and returns, and one way they did that was by implementing Precision Schedule Railroading (PSR). PSR involved cutting the amount of staff operating trains. Needless to say, with fewer people, any interruption, like a pandemic, will have a larger effect on the sector.

Geopolitics

Just as the supply chain was beginning to recover, geopolitics came and made everything more complicated. Russia invaded Ukraine and caused shipping routes to be adjusted. China continued a Zero Covid Tolerance policy that had the country locking down large cities at a time well after the rest of the world ceased doing so. Companies like Apple started moving production away from China and to other countries to mitigate risk. Others started “nearshoring” (moving manufacturing closer to home). Brexit is reducing market access to the UK. The EU is importing less from Russia, primarily oil and gas. All of these add stress to an already strained supply chain.

Inflation, higher interest rates, high diesel prices, and reduced demand has given the marketplace an opportunity to recalibrate and prepare for what comes next. What is apparent, though, is that resilience brought on by experience and innovation keeps us going and the supply chain strong.

There is an old adage about never wasting a good crisis. The pandemic was such an opportunity. Many have called Covid a once in a 100-year pandemic. But the world is showing that events don’t wait until they are convenient to happen. The pandemic, droughts, geopolitics, and lingering supply chain issues have necessitated our adjusting to multiple interruptions. Only time will tell if we have prepared enough.

The post Disruption first appeared on The SPL Group.

The post Disruption appeared first on The SPL Group.

The Journey of Your Online Purchase

Joel Moskowitz — Mon, 03 Oct 2022 21:44:10 +0000

The Journey of Your Online Purchase

Let’s follow the path of a theoretical $20 T-shirt you’ve bought online. The journey begins in the overseas factory it was likely produced in and ends at your home. The shirt is manufactured at a factory in Vietnam, packed, and loaded onto a container which is placed on a truck, and from the truck onto a river barge which delivers it to a port. From the port, the container it’s in is loaded onto an ocean freight liner and makes a 2-3 week trip to the shores of the USA.

At the port of entry, the container is unloaded onto the dock, sorted, and stacked to await pickup by a truck that takes it to a local fulfillment or distribution center. At the distribution center, it is unloaded. The products (your T-shirt) are sorted, counted, inspected, and stored until it is ordered. At that point, it will be loaded onto yet another container where it will make its way by long haul truck to a distribution center closer to where you live. Again it will be counted, inspected, and stored. When you order it, it will be picked and packed and make its way to the Last Mile delivery vehicle.

You placed the order for the T-shirt yesterday and received it today, but the journey the shirt took to get to your home most likely lasted two months. You probably encountered no human being in the transaction, save the Last Mile driver, and that is only if you were home at the time of delivery. Your T-shirt, however, has been handled by multiple people; factory workers, inspectors, haulers, truckers, sailors, merchant marines, longshoremen, warehouse workers, and more truckers. All in all, our figurative $20 T-shirt has been “handled” by as many as 100 people, perhaps more.

Not too long ago, we didn’t pay much attention to this process at all. After all, these systems were built for our convenience and are made to be as affordable as possible. Covid and the lockdowns that came with it put a spotlight on the vulnerabilities of this process which is known as the supply chain (logistics) and the costs associated with it. Before Covid, any single disruption to the supply chain caused minimal to no disruption in the process or the price, because of the vastness and complexity of the overall logistics ecosystem which had organic fixes built into it. Covid basically caused a power outage in the supply chain with subsequent rolling blackouts that we are still trying to repair.

Disruptions

As the above flow chart illustrates, the process is vulnerable to disruptions, possibly multiple disruptions. As a consumer, you may feel the disruption by either not receiving your T-shirt or getting it later than you expected. So, if there was a fire in a factory in Vietnam, one or two containers got lost in a crowded port, a truck crashes, a ship disappears in the Bermuda Triangle, or any other scenario we can create – occurs, this will affect hundreds perhaps thousands of buyers. Consumers can turn to other sellers or wait to buy the T-shirt sometime in the future, but the global supply chain continues.

The above examples of delivery glitches don’t really speak to the resilience of the supply chain in the pre-Covid world. Pre Covid, the worldwide supply chain was able to withstand severe weather episodes, labor strikes, material shortages, and other large scale events. A strike by dockworkers on the West Coast might have detoured sea freight traffic to the East Coast for a time. A Tsunami in Asia might have forced retailers to accept low levels of inventory in their warehouses for a time etc….

Covid exposed one key weakness to the supply chain that has been developing for 40 years. That weakness, of course, is the failure of the global supply chain to withstand multiple large disruptions at once. Let’s be clear about one important fact, the supply chain failure did not occur solely in the vacuum that was Covid, it has been building over time with deregulation, technological innovation, purchasing habits, and consumer expectations. This became the inevitable perfect storm.

In our next post, we will explore how Covid interrupted every step of the supply chain from factory to Last Mile delivery.

The post The Journey of Your Online Purchase first appeared on The SPL Group.

The post The Journey of Your Online Purchase appeared first on The SPL Group.

LTL Explained

Joel Moskowitz — Wed, 17 Aug 2022 20:28:40 +0000

LTL Explained

Shipping, logistics, supply chain management, and a whole slew of other terms have been around forever. The popularity of eCommerce, the Covid related lockdowns, and the subsequent demand for online shopping has made them part of our regular discourse. As our logistics vocabulary has expanded, so has the popularity of services that have also been around for quite some time but weren’t well known before. LTL or Less than a TruckLoad shipping has been an active component of road freight since at least 1980 when the trucking industry was deregulated via the Motor Carrier Act and signed into law by President Jimmy Carter. The act, which basically ended a trucking monopoly allowed for competitive pricing and new and innovative ways for products to be shipped. Once such innovation was LTL.

What is LTL?

On a very surface level, LTL seems obvious and simple. You have a shipment of products that is too large to ship with a small parcel carrier but too small to fill a whole tractor trailer. Hiring a full truck for less than a full truckload is too costly. At the same time, trucking companies have deliveries to make but the trailer isn’t always fully booked. Putting the two sides together makes sense on multiple levels the crux of which is; more revenue for the trucking company, and lower costs for the shipper.

But LTL is anything but simple. The LTL market in the USA was $46 billion in 2021. A majority of that market is serviced by large, well known national and international freight companies. They serve large national accounts on a contract basis and smaller accounts on a need-by-need basis.

In fact, FedEx has a division, FedEx Freight, that is the largest LTL concern in the US market and reported $8.2 billion in revenue in 2021. FedEx Freight’s operating profit grew 67% year-over-year in the last quarter of 2021, by far the biggest margin of any FedEx unit. If FedEx Freight was an independent company it would be a multi-billion corporation in its own right.

The Basics

LTL ranges in weight from 100-15,000 lbs and like all of the following criteria varies from carrier to carrier. Typically, an LTL shipment is packed in pallets and the average pallet is 4×4 ft. The pallets are shrinkwrapped. The idea here is to free up the most possible space on the truck. LTL theoretically, could take longer than if it was a single shipment and is likely to be handled more times, especially if the drop-off is to a local distribution center. This is known as the Hub and Spoke Model and many LTL shipments require the added step of pick-up at, or delivery from, a local drop-off site.

Getting Started

Small to medium businesses that ship, face the same issues that large national brands do. While the large national brands have logistics departments and can hire an LTL company on a contract basis, small to medium businesses typically don’t. They also lack the leverage and cash flow that bigger companies possess to negotiate the best rates. So many small to medium businesses book their LTL shipments through a broker. This saves time and in most cases costs less than booking it alone.

A good broker will use Digital Freight Matching software (DFM) which gives you a highly competitive, quick quote from one of the large national LTL companies. Sometimes, it is more cost-efficient to use a regional trucking company for some of the shorter LTL runs. Brokers have access to 80,000 independent interstate trucking operators in addition to the large national companies. Additionally, a good broker will have Transportation Management Software (TMS) that enables the broker to track your shipments throughout the process and update you accordingly.

Finally, as anyone who ships knows, the devil is in the details. The paperwork needs to be as exact as possible otherwise the final bill will look nothing like the estimate. Product description, weight, dimensions, loading dock accessibility, and addresses just to name a few, need to appear on the Bill of Lading correctly. A good broker will ask the right questions to gather the information and fill all the paperwork out properly.

Is LTL For Me?

Figuring out if LTL is for you should be obvious, you’ll know it’s for you as soon as you need it. With all the recent supply chain interruptions and demand increasing, the need for LTL keeps growing. According to the US Census Bureau, eCommerce sales have been rising quarter after quarter since 2013 and a Forrester report predicts U.S. online retail sales to reach $1.6 trillion by 2027. Therefore, replenishing inventory has become more complex in the post-Covid supply chain challenged world. Even small to medium businesses have had to adjust their logistics planning to accommodate a more dynamic, multi-layered, and fast growing business landscape.

Shipping is complicated. It always has been but even more so now. Having accurate information, quality service, and the best pricing is paramount to running your business. To learn more about LTL and to get a competitive quote, speak to one of our experts today.

The post LTL Explained first appeared on The SPL Group.

The post LTL Explained appeared first on The SPL Group.

Supply Chain Whiplash

Joel Moskowitz — Thu, 30 Jun 2022 20:21:12 +0000

Supply Chain Whiplash

Before Covid became a worldwide pandemic, most people never gave much thought to these two words; supply chain. At the outset of the lockdowns, it seemed that everyone was struggling to find toilet paper, flour, yeast, Lysol wipes, alcohol, and hand sanitizer to name a few.

Eventually, things stabilized and the stores were stocked with those basics we needed. Simple supply and demand theory can explain what happened. There was an unanticipated uptick in demand for certain products and the companies that produce them didn’t have enough stock to keep up with it. Additionally, production was hampered by quarantines and the uncertainty of the crisis at hand.

Fast forward to the present. Covid has evolved. It hasn’t gone away, it keeps coming back in some way, shape or form, yet the drastic measures of early 2021 seem to have gone away, for now. For the most part, lockdowns are infrequent, vaccines are readily available and people are back at work.

Yet we find ourselves once again struggling to find certain products. The news is filled with stories about items that at one point or another are in short supply; baby formula, sriracha sauce, microprocessing chips, and others. If all of this has your head spinning you might be experiencing a case of Supply Chain Whiplash.

One dictionary definition of whiplash is “to affect adversely, as by a sudden change.” Medically, whiplash is a symptom of pain that occurs hours or days after a traumatic event or physical impact. The expression “you don’t know what hit you” might be an apt analogy. We seem to be going from one thing to another, by the time we realize what is going on we can feel overwhelmed. We are experiencing a confluence of supply chain traumas and somehow right now we seemingly have come to the realization that isn’t going away tomorrow.

I am reluctant to invoke the “S” word – shortage because that implies a scarcity of the product and a hindrance to producing more to make up for the shortfall. As someone who lived through the gas lines of the 1970s, this glitch doesn’t even come close.

Back then, the US did not have the oil production it has now, there was an embargo put in place by OPEC who had no intention of increasing production, and even if they were inclined to, the US refineries would not have been able to handle the influx. That was an actual shortage. Unwinding it was not resolved simply by turning on the spigot, it took years.

I prefer a more optimistic view and see what is going on today more as sporadic interruptions. Understandable, explainable, albeit frustrating interruptions. Most of them make sense. In simple terms, Covid threw the whole supply chain off the tracks. Much of it was corrected but certain issues remained.

Products were still stuck in China with not enough ships or containers to get them here. When they got here, dockworkers could have worked 24 hours a day and still wouldn’t have enough trucks to load them on or drivers to take them away.

Other things came into play; China’s zero tolerance policy for Covid shut down Shanghai. Geopolitical events (among other factors) caused disruption to the flow of oil causing an increase in the price of diesel. Warehouse space was filled with items that hadn’t yet been sold leaving little room for new products coming in. Any further disruption to this very precarious situation could cause more interruption. So for example, contamination at a baby formula factory, coupled with everything else we just mentioned caused an “S” word for that very important product. Credit cooperation between government and business for a quick response to help relieve that crisis.

Now it seems everywhere you turn there is a news item reflecting some sort of disruption to the supply chain. At the same time, some experts repeatedly say that these disruptions may continue for a bit and others are more optimistic. This space is meant to disseminate information and is not meant for predictions. What I can urge for now is to be on the lookout for crucial information that can have a huge impact on your own business’ supply chain.

Stay tuned to this column for updates on what is happening to the supply chain. For now, a large real estate company conducted a survey that shows demand for warehouse space at all-time high levels. The largest port in the US, in southern California, is facing a possible labor disruption as early as July 1, 2022 that would have a profound effect on the supply chain. The “S” word keeps showing up in the news.

The major carriers are adapting to the current situation. It’s always best to have The SPL Group help you sort through these complexities. Our white glove service ensures that you are up to date on the latest from all the carriers and if there is money to be saved, we will find it for you. Contact us to see how one of our shipping concierges can help your business with all your shipping/logistics needs.

The post Supply Chain Whiplash first appeared on The SPL Group.

The post Supply Chain Whiplash appeared first on The SPL Group.

Returns – Here’s What You Need to Know

Joel Moskowitz — Fri, 03 Jun 2022 14:20:17 +0000

Returns

Consumers have come to expect two basic things from retailers, particularly online eCommerce/omnichannel sellers; free and quick delivery and free returns. Those are the Holy Grail you need to offer in order to be competitive in the digital economy. In previous submissions, I addressed how free shipping isn’t always free. While retailers are savvy enough to either make up the cost of free shipping or make it worth their while, the same cannot yet be said of returns.

The whole concept of returns is a complicated one for retailers. Prior to the rise of eCommerce, many retail outlets offered exchanges only or no returns at all. Remember those “All Sales Final” signs? Even returns, back in the day had to make sense, so to speak. Most returns were “exchange only.” Electronics, large appliances, and the like might have come with a limited-time return policy. Clothes could only be returned if the label was still attached and there were no signs that the garment had been worn. Shoes simply were not returnable. Very rare was the 100% guarantee that allowed a full refund no questions asked.

Big box retailers like Walmart, Target, and Costco changed that paradigm. Before the Internet, those large companies offered liberal return policies to keep an edge over the mom and pop shops they were competing against. However, to return those items, one had to go back to the store and usually stand in a long service line and like in the confessional, had to deal with the judgemental looks of the clerk accepting the return.

eCommerce changed things up from a practical point of view. Few would chance buying a product online and risk that it didn’t fit or work properly without the assurance they could return the item. If one was already returning an item they certainly did not want to pay for shipping it back. eCommerce sellers incorporated this convenience into their business models in order to remain relevant in this very competitive space. Like the proverbial genie escaping the bottle, once out, it’s difficult to put back in.

As eCommerce grew in popularity the return aspect of the transaction grew with it. According to the National Retail Federation (NRF) online sales accounted for $1 trillion dollars of retail sales in 2021 and 22% of that was returned. That’s a whopping $218 billion. All of this return volume has created its own ecosystem but more importantly a whole set of challenges. Here are a few:

Cost to retailers affecting bottom line
Fraud
Environmental
Operational

Cost

According to the same NRF report, for every $1 billion in sales retailers incur $166 million in returns. That number has gone up every year over the past few years. According to the Wall Street Journal, returns cost businesses $10-20 per item PLUS freight costs. Return shipping is known to cost more than regular shipping.

Generally, return shipping is not itemized in volume discounts offered by the major carriers and carriers generally have a surcharge for residential pickups where most returns originate from. As a result, some of the larger retailers like Walmart and Amazon often find it cheaper to refund the cost of the item and let the customer keep or donate the product rather than process the return. This is especially common in apparel where people tend to order 2 or 3 sizes of the same item to find the best fit and then return the ones that don’t. According to an eMarketer poll, 59% of internet shoppers returned an item in the past year and in another survey, 79% of consumers expect free return shipping and make purchasing choices based on that option being available.

Fraud

Liberal return policies are an invitation for the dishonest to exploit the system. According to the NRF report, for every $100 in returns, over $10 is lost to fraud, that’s a little over $23 billion lost annually based on the data in the survey.

Return fraud is committed in various ways including returning a different item than purchased, returning a counterfeit item, returning an item purchased at another seller, returning depleted items or items that are obsolete.

Environmental

Much of returned items end up in a landfill. As eCommerce grows and with it the rate of returning items, retailers have few options of what to do with the returned items. While some will be donated and some resold in bulk to developing countries, 80% of returns will go into a landfill according to Arizona State University professor Hitendra Chaturvedi, that translates into 5.8 billion pounds of waste each year.

Operational

The term Reverse Logistics has gained prominence in the past few years. Reverse logistics is the process of accepting returns and refunding the customer or replacing the item, basically a reversal of the transaction. Many retailers have gotten by by handling those transactions manually. Unfortunately, that is not a sustainable business model. The bigger retailers have adopted and implemented reverse logistics operations. 3PL (Third Party Logistics) providers (like SPL Group) have adapted to the returns environment by offering to manage reverse logistics for their clients.

If you are a business dealing with returns that are an operational nightmare and costing you too much, CONTACT US. One of our professionals will show you how SPL Group can help with your returns and as always, how to save you money on shipping costs.

The post Returns – Here’s What You Need to Know first appeared on The SPL Group.

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Why New Software? And Why Now?

Joel Moskowitz — Mon, 23 May 2022 16:25:39 +0000

Why New Software? Why Now?

Change does not always equal customer satisfaction. But in the digital age, change is ubiquitous, inevitable, and predictable. Yogi Berra once famously said, “if it ain’t broke, don’t fix it.” Well, Yogi didn’t live in the digital era. These days, software needs updating. Whether to keep up with the latest hardware or to incorporate more functionality, software needs to be fluid, adaptable, and flexible.

The SPL Group is a service-based business and as such strives to keep its customers happy. Our current Version 1 of operating software is proprietary and built in-house. SPL Group is now transitioning from it to Version 2. Think of it as our Windows 95 or iOS 8, or switching from a diesel-powered car to an electric one. Sure, you can still drive the diesel and it will work, it’s just that the world is moving away from it and to electric. Our software is a newer, more utilitarian version going in the direction change is taking us.

When to Patch vs. When to Scrap

Software need not be great, possessing all sorts of bells and whistles to remain relevant and functional for a long time. So long as the software competently functions within the ecosystem it services, you can get years of use. Like anything else, it needs the occasional maintenance, but if it is resilient it will last.

Shipping had for years been a relatively complacent and straightforward business. You had a parcel, it needed to get from Point A to Point B. You opened up a shipping program on your computer, printed a label, ordered a pick-up, and moved on. Simple patchwork was certainly enough to keep your software running efficiently, staying updated, and keeping its functionality.

On the surface shipping is still a straightforward business but it is no longer complacent. Amazon, eCommerce, Covid, and a host of other factors have made shipping a more integral part of doing business. With the exponential growth comes changing regulations, varying carrier requirements, increased functionality, and the need for tighter security. Patchwork may just not be enough to adapt. Companies like SPL Group which invest heavily in technology, employ a combination of vision, common sense, and practicality when deciding to completely overhaul their perfectly functioning software.

Creating a new version of the software is an ideal opportunity to implement customer feedback. At SPL Group, we have incorporated many refinements our clients have told us will make their operation run smoother like more detailed billing for example. With all software updates, the goal is to provide more, efficient capabilities. At SPL Group, we prioritize our investment in technology and will continue to make improvements and adjust to the latest capabilities, trends, and efficiencies our new technology offers.

Improved Infrastructure

Shipping needs are growing, FAST! With growth comes the need to be able to add features and adapt to changing regulations. For example, seamlessly integrating new carriers or services onto the platform. And, your business is growing too. You need to be able to ship through multiple entities, whether different branches, locations, or corporations. Maybe you need separate billing for each, or perhaps they have different names but you need one consolidated bill.

Version 2 technology allows for either but would have been difficult or impossible to create with simple patchwork. Software capable of pivoting and adjusting to these modifications in real-time is only made possible by employing newer coding and programming.

New Features and Old Features Improved

SPL Group has added or improved many features including the following just to name a few: Predictive search, auto-fill labels, direction swapping, address save, custom dimensions, additional shipping options, pick-up scheduling, filters on searches, and more.

Since cyber security is paramount, it is important to focus on the fact that those who seek to hack and break into commercial web-based programs are getting more sophisticated and bold; SPL Group’s new software gives you added protection against online predators.

These changes enhance user experience even while the old version still functions efficiently and safely. It’s not just about today, it’s also about being prepared for the changes that are coming down the road and having adaptable software in place for them.

SPL Group’s Version 2 will also make international shipments easier to navigate and offers alerts to fill in required fields so as not to cause delays. It has also added downloadable instructions for printing labels and technical resources to guide you through the process. It offers additional shipping options and easy access to tracking your parcels.

Pick Your Service vs. Rate Shopping

Consumers of technology take for granted pointing, clicking, and receiving a list of choices based on their specifications. Think of websites like Expedia, Hotels.com, Kayak, and Booking.com to name just a few. When you search on Expedia for a flight from New York to Miami, it does not give you say, only the United Airlines flights, it gives you all of the airlines flying on the dates you are looking for.

SPL Group’s Version 1 was a powerful and successful software that efficiently got parcels delivered but the code it was written in necessitated our clients to pick the service they wanted or needed. Version 2 now gives more choices. One can search by cost or delivery time and the results seen on the screen include multiple carriers with various times of delivery and price ranges.

Investing in technology is crucial to remaining competitive, knowing what changes to make and when to make them requires foresight. Striking a balance between the cost and the necessity is well, a necessity.

We feel that now is the time to move forward with our software because the future is calling to us and letting us know – what worked yesterday may not be enough tomorrow.

The post Why New Software? And Why Now? first appeared on The SPL Group.

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Shipper Frustration III

Joel Moskowitz — Tue, 10 May 2022 14:50:27 +0000

We now operate in an eCommerce world where our customers have certain expectations. They have gotten used to things like free or inexpensive shipping. Others perhaps, expect next-day or 2-day delivery on items they purchase online. Either way, your customers demand choice and to stay competitive you need to offer what they want. They have also grown accustomed to knowing where their package is at each step of the journey. Domestically, this is relatively easy as the major carriers offer online tracking. This can be a bit more complicated if you offer cross-border eCommerce, a market that 54% of US shoppers have accessed due to lower prices.

Consumers seek choices on where their parcels are delivered to. While a majority of customers still want their packages delivered to their front door, an increasing number want them delivered to a delivery locker, their workplace, or a retail store. Additionally, consumers have come to expect the return process to be seamless. What is a convenience and major expectation for them is a logistics nightmare for you. It is worth noting though that 58% of eCommerce shoppers want a hassle-free no questions asked return policy.

Consumers know and understand that Covid or geopolitical events have caused disruption to the supply chain. They also know it’s not your fault, but in the eCommerce/Amazon age, brand loyalty is a thing of the past. In order for you to stay competitive, you are forced to master all of these points and then some.

Let’s start with free shipping. An old adage tells us that nothing in life is free. Yet another says that if it looks too good to be true, it probably is. Think about discount air travel. The base price of the airline ticket you just searched for and found online is super cheap. Want a window or aisle seat? Want to sit closer to the front of the aircraft? Want more legroom? Want to check a bag? Those all bump up the fees. Psychologists call this the reference price. We humans just can’t help ourselves, we want to believe we are getting a good deal. While some of us would prefer things the way they were; pay for a ticket, choose a seat, check in 2 bags and get from point A to point B, that’s unlikely to happen soon because most of us have grown accustomed to getting the reference price and the feeling that we got a deal.

With eCommerce free shipping isn’t free. Still, in order to stay competitive, you need to be able to offer it. You might offer free shipping so long as it is not overnight, 2-day, or priority shipping. If you do charge for any of those options, how much do you pass on to your customer and still stay competitive? If you price your product to incorporate some of the cost of shipping, how much can you build in and still stay competitive? Finally, can consumers get your product at one of the major retailers? If so, are they undercutting you?

Then there is the issue of returns. On the surface, returns seem like an obvious offering. If all you had was a retail location it would be simple, but you sell online and many of your customers are not close by. Do you ship from your own warehouse and therefore accept returns there? Do you ship with a return label just in case? Do you have a warehouse take care of your returns? If so, how do you price that into your business model and stay profitable?

If you don’t have satisfactory answers to some or all of these questions you are not alone. You are a successful business person and have gotten this far weaving through all sorts of new realities. You can handle this! However, you don’t need to become a logistics expert, you just need to be an expert on your own business. Being that expert means knowing when to go outside and get the help you need to be successful, or in your case, MORE successful.

At SPL Group our professionals can negotiate discounts from your carriers on shipping, accessorials, and surcharges. We can review your invoices for billing errors (they happen a lot) and get you refunded. We have relationships with all the major trucking companies and can arrange for large shipments using our LTL (Less than a Truck Load) or FTL (Full Truck Load) services at competitive pricing. Our Warehouse / 3PL (Third Party Logistics) specialists can store your inventory at one of our facilities on either coast, fulfill your eCommerce orders, and handle returns. Contact us today to speak with one of our team.

The post Shipper Frustration III first appeared on The SPL Group.

The post Shipper Frustration III appeared first on The SPL Group.

Shipper Frustration II

Joel Moskowitz — Tue, 03 May 2022 14:39:22 +0000

Freight Costs at an All Time High

We all know and understand why freight costs keep going up. You would have to be living under the proverbial rock not to comprehend what has happened to shipping logistics these past few years. Yet knowing the how and why doesn’t ease your frustration at what is happening to overall freight costs.

Carriers offer transparency in the shipping rate by publishing them annually. The same is true of accessorial surcharges. However, fuel surcharges, peak season and emergency situation surcharges can fluctuate and that can be frustrating. Since 2017, Peak Season surcharges for residential delivery have gone up over 300% at FedEx and UPS. Free shipping is not free for you and let’s be real, it does get passed on to your customer as well.

Other recent cost increases enacted by FedEx and UPS were made in the form of new surcharges, fees and rules on everything from parcel dimensions to zones. These were in addition to the 5.9% general rate increases both companies introduced for 2022. Thus, with the increased surcharges, actual shipping is up closer to 10% if not higher.

The increase in surcharges makes sense when just considering the size of the global eCommerce market which hit $4.9 trillion in 2021 and is projected to hit $7.3 trillion in 2025. In fact, the consulting group McKinsey, published a paper in 2021 showing the growth in omnichannel shopping (both in store and online) and how the major retailers are refocusing their selling strategy to accommodate it.

This too has a huge effect on shipping costs particularly for small to medium businesses who have to compete with larger well financed competitors.

Covid and geopolitical events have created uncertainty in the shipping industry the effects of which are still being felt and if the experts are to be believed, will be with us at least through the middle of 2023. This begs a chicken/egg question; is the high cost of shipping a cause or result of inflation? Certainly, the supply chain interruptions have caused prices on consumer goods to go up but the rising cost of oil, particularly diesel, has caused shipping costs to rise.

There is a lot to unpack here. Most small to medium business owners don’t have the time or bandwidth to stay on top of every nuance in the logistics market. What they need to focus on first and foremost to get a handle on shipping costs are three basic things; where they ship to, what they are shipping and what strategy they need to employ to remain competitive.

Distance a parcel travels, its size and how well you compete with others in your vertical market are the main data points one needs in order to set a shipping strategy.

In short, it’s a good idea to understand the events going on around you so we can make sense of the economics surrounding your business. However, it’s more important to keep your eye on the ball – your business and to how best deal with the economics.

The SPL Group offers a wide range of shipping logistics solutions with white glove, concierge level service. Whether you need packing strategy, shipping discounts, invoice auditing, 3PL/LTL, a last mile strategy, warehousing or just to wrap your hands around the latest events in the freight market – SPL Group’s experts are here to help. Contact us today to speak with one of our experts.

The post Shipper Frustration II first appeared on The SPL Group.

The post Shipper Frustration II appeared first on The SPL Group.

Shipper Frustration

Joel Moskowitz — Wed, 27 Apr 2022 15:03:07 +0000

Shipper Frustration? You Are Not Alone!

Shipping is an integral part of your business, yet the ever changing landscape is confusing, perhaps even frustrating. Some of the irritation is very obvious and some you haven’t yet realized affects you. It helps to know you are not alone. It’s even more comforting to know that if you want it, there is a solution to pretty much every one of your grievances.

Here is an open secret; billing from carriers can be confusing. Sometimes really confusing! Here’s another one; additional and sometimes unnecessary spending is hidden in the details of your carrier contract. In the current environment, small and medium businesses are in the unenviable position of competing with large retailers for the best prices on freight delivery and frankly for space on their trucks.

On top of everything else, carriers are not perfect. It is not uncommon for them to make billing errors. In fact, experts will tell you that finding billing errors can be a large part of optimizing your shipping costs and be a source of great savings to your business.

Carriers are not going to keep track of their calculation or input errors for you, so audits should be undertaken on a regular basis. A thorough one will typically uncover savings of one to three percent on everything from late deliveries to erroneous and/or mitigatable surcharges. Carrier invoices are complex, and software options that now exist are costly.

Let’s face it, as the world transitions to more eCommerce, large retailers employ more omni channel offerings, the world is still dealing with supply chain challenges from Covid and geo-political events, shipping has become a more integral and expensive part of your business operation.

With the increased volume of parcel shipments, sellers have had to adjust to the disruption to the freight ecosystem. The carriers are certainly doing their best to acclimate to the new reality but service failures (shipments not arriving on time) are more frequent. Getting pick ups or reaching someone at the freight companies has gotten more difficult.

The freight companies have transitioned to incentivising shippers with discounts for higher volume, though it is still possible for small to medium businesses to negotiate cost reductions. In fact carriers still offer you a price concession on shipping if you ask.

This all begs the following questions:

Am I getting the best discounts on parcel shipping?
Am I getting any or considerable price concessions on accessorials and surcharges?
Am I able to get through to my carrier/s consistently to order a pick up or discuss my invoice?
Is the volume discount I currently receive from my carrier optimized?
Do I ship enough to have a dedicated logistics professional on my payroll?
Do I spend too much time reviewing my invoices?

There are plenty of companies that will negotiate discounts from freight carriers on your behalf and there are a plethora of firms that will audit your invoice to get your money back for misbilling. Only one company will do both while also giving you white glove – concierge level service for all of your small parcel shipping/logistics needs. At SPL Group, we have saved our clients millions of dollars on their shipping costs while providing a level of service unmatched in the industry.

Contact us to learn more about our services and get a free audit on your freight invoices to find out just how much you can save. Shipping is complicated, SPL Group makes it easy.

The post Shipper Frustration first appeared on The SPL Group.

The post Shipper Frustration appeared first on The SPL Group.