2019 supply chain predictions challenges and opportunities

Technology has empowered supply chain practitioners to better understand the mechanics of logistics, across geographies and modes. Now more than ever, the promise of an automated, fully-digitized supply chain stands to deliver significant benefits.

With this promise hanging in the balance, manufacturers, retailers and other shippers will understandably have high expectations for the year ahead. In order to take full advantage of the advancements 2019 may have in store, companies need to prepare for the good and the bad. Despite inevitable challenges like the driver shortage, supply chains can maximize opportunities and provide real-time orchestration by anticipating the following trends and planning accordingly.

Capacity Crunch

Over the last decade, trucking capacity has continued to tighten, making it increasingly difficult for shippers to find trucks to transport their bulk products. In 2019, many ocean carriers will be forced to sit longer at port waiting for trucks to pick up the cargo, which will prompt some to impose emergency intermodal fees or stop door delivery in response. By embracing advanced technologies, trucking organizations will become poised to move from automation to orchestration as 2019 progresses. By using predictive analytics, organizations can begin planning for supply and demand and better their execution. Challenges like the driver shortage will be inevitable — but the right technology can help maximize opportunities, reduce empty miles, and provide real-time orchestration to contribute to a happy and successful new year.

Digital Culture as a Competitive Advantage

Predictive analytics will become highly useful to optimize resources within the supply chain in 2019. In late 2018, Gartner identified eight strategic technology trends for the supply chain and how they can provide a competitive advantage. Combined with AI and machine learning, data is the driver for predictive capabilities — with it, future performance can be optimized based on historical results. This data is powerful and has the potential to positively impact every aspect of the supply chain, from sourcing and compliance to production and quality control. Embracing the value of technologies such as predictive analytics is essential for a strong foundation, upon which to build a digital supply chain.

Tariffs and Global Supply Chain Networks

In 2019 the most agile and resilient supply chains are the ones that are going to be the most successful. Natural disasters, economic flux, and rising tariffs are going to remain a concern for the supply chain industry and therefore the C-suite may reconsider its current manufacturing strategies and its global operations. To help inform these decisions, companies should combine external and internal data. Predictive analytics uses historical data and machine learning to identify and anticipate certain outcomes that become increasingly valuable as the volume of data increases. When properly analyzed, this data is helpful for identifying patterns and areas for optimization, to fuel better planning and resource utilization.

Uberization of Freight

In 2019, new platforms will power increasingly-connected truckers and LTL providers into the gig economy. As technology advances, we can expect business models to evolve, which has the potential to drastically disrupt the trucking industry in 2019. Technology will help reduce the amount of empty miles driven, and with that the number of drivers needed. Fewer trucks on the road lead to less of an impact on the environment. In addition, movement of freight becomes more like a marketplace, a real-time part of the supply chain, much like Uber has become for consumers, by providing real-time inventory orchestration and allocation for inventory in motion and at rest.

AI’s Supply Chain Moment

In 2019 AI and machine learning will become more integrated with every aspect of the supply chain. This integration will enable automating repetitive tasks and bringing intelligence to supply chain networks and systems. Artificial intelligence and machine learning are both required to get the most out of Natural Language Processing. The complexity of human language requires smart algorithms and self-teaching systems to parse and understand language input and provide appropriate responses and actions. NLP provides many benefits to the supply chain including understanding and mitigating potential risks with supply chain stakeholders, ensuring compliance, monitoring reputations of supply chain organizations, and reducing language barriers.

source : https://www.inddist.com/article/2019/01/2019-supply-chain-predictions-challenges-and-opportunities

What to consider when looking for a warehousing and logistics provider

What should be the primary concerns when exploring warehouse space?

Many clients are asking the warehouse and logistics provider to pick and ship product orders to their customers. They want their partner to have a strong warehouse management system to manage orders so they can be confident orders are being sent out correctly. It’s ideal if the provider’s inventory management system integrates with the client’s system. That allows clients to keep an eye on their inventory and know when products roll out to customers. 

How the product is shipped is a factor when choosing a warehouse. For example, some products move across the country by rail car, so to load and unload those products securely a warehouse needs a rail spur as well as special equipment to load and unload products. Some warehouses are built to bring train cars inside or at least under cover so that they can be loaded and unloaded while keeping the products out of the elements.

Not every warehouse can accommodate every client. Sometimes, in general warehouse space, certain products can’t be kept near others, so clients need to be assured that a warehouse can effectively cordon certain products off. Other products require a temperature-controlled environment that can be regulated for temperature-sensitive items. 

Generally, clients want dry warehouse space that’s secure, meaning the grounds are fenced off and there’s a security system in place, and that the warehouse has a proper fire suppression system installed. Whatever the need, it’s a must to inspect the facility before agreeing to store products in it. 

What services should prospective clients consider as they choose a warehouse? 

Many manufacturers and distributors aren’t experts on fulfillment or inventory management. Companies that have trouble managing those processes efficiently would benefit from partnering with a warehousing and logistics company that has that expertise.

Full-service third-party logistics providers can provide unloading, palletizing, shrink-wrapping, picking — all the services necessary to get a client’s product out to its customers safely and efficiently.

These services are performed as an extension of the client. The warehousing and logistics partner is working directly with its clients’ customers, making sure the product is wrapped correctly for delivery and that billing is accurate. On-time delivery and proper inventory management processes are necessary so clients can trust that products will be delivered to client customers on time and in excellent condition.

Everything the warehousing partner does on a client’s behalf represents the client, and that’s an important consideration when choosing between warehouse providers.

What’s the significance of building a strong relationship with the provider? 

From both perspectives, a strong relationship is about good communication. A free and open exchange of information means each party knows what’s going on with the customers, products and inventory mix. Communicating effectively also means making expectations clear so that goals and objectives can be met. 

What else should companies know as they search for partners in the distribution chain? 

Choose a provider that has the experience to handle specific products correctly and in compliance with any applicable laws. If a product is warehoused in a way that conflicts with the applicable regulations, an inspector could shut down the warehouse, which means the products don’t ship and customers and clients alike are negatively affected.

source: http://www.sbnonline.com/article/what-to-consider-when-looking-for-a-warehousing-and-logistics-provider/

Logistics & supply chain trends that will keep your biz ahead of the curve in 2019

Winter is here and so is 2019! The global logistics industry has only been advancing with time, equipping itself well to support the functioning and growth of multiple other industries, especially e-commerce. 2018 has really been a year of transformation for the sector, owing to the remarkable use of technology and the parallel growth of other sectors which depend upon logistics for their appropriate functioning. It is only natural that 2019 will see a meteoric transformation. Technology has moved from being an enabling function to a driving function.

Here are the key trends that we believe will transform logistics & supply chains in the coming year:

Blockchain - the use of which grew steadily in 2018, could prove to be a real game-changer in this space moving ahead. The use of this breakthrough technology allows industry players to efficiently track all types of transactions safely and securely. Besides this, the biggest advantage of using blockchain network is that it ensures complete transparency of logistics operations throughout the entire process until the goods are finally delivered. All this builds a greater level of consumer trust and saves time and cost in a great way. Currently, there are only a few companies which have implemented the use of this one-of-its-kind technology. However, moving into 2019, we would see a growing number of industry players leveraging the same to impart efficiency to their operations.

Hyper-Personalisation & Hyper Localisation

In continuation of chatbots, we saw a basic implementation of these bots at several instances in 2018. But the real challenge is how to humanise and hyper-personalised the experience. With email filters and SMS filters for ‘Notifications’, you don’t want the result of your million dollars of tech investment ending up in a place where they don’t even get noticed. 80% customers stick to a brand because they have managed to create personalised experiences How do you create near-human experiences with the help of technology? We all know clearly that a one-size-fits-all approach just doesn’t work in any scenario. Pushing the limits of AI-based bots with hyper-personalisation on top priority will be an interesting trend to watch.

Hyperlocalisation has been established as a growing need in today’s world, as the consumer demand for instant personalised services has been only growing with time. Businesses are therefore expected to be fast in delivering products and are focusing on building robust supply chains, which are located close to both, buyer and seller. Various big e-commerce players are already using hyper localisation as a part of their strategy and this is going to continue in 2019.

Lightning Deliveries Amidst Capacity Crunches

Same day deliveries and expedited deliveries are the new normal. 88% customers are willing to pay extra for these deliveries. However, brands cannot afford to place them at such a high premium to cover the entire cost of delivery – until and unless logistics becomes cheaper.The reality is that companies are facing serious challenges with regards to capacities. Volatile demand patterns, throat-slitting competition, rising fuel costs, expediting deliveries is if anything but a serious dynamic cost. Brands, especially consumer-facing e-commerce brands need to find a way to balance hyper-fast deliveries in a consistent manner without eating much into their capacity. Having real-time and predictive visibility, intelligent capacity planning and flexible process control mechanisms go a long way in helping them strike this balance.

Building your Logistics Arm

Walmart in the past few years acquired a couple of logistics companies. Amazon is expanding its logistics capabilities. This brings up an important question. Should all retailers have their own logistics arm? And is that the world we are gradually getting into.

As large players have started building their own logistics, then it can be safely assumed that it’s important and can generate significant business value. The kind of customer experience a business can provide by leveraging their own logistics arm will surely be better than someone else doing it for them. In other words, it’s always smart to own a customer’s delivery when you own the customer.

Predictive Multi-Modal Visibility

With global supply chain networks, multimodal transportation networks are only expected to grow. With this increasing complexity of such mesh networks, getting real-time and predictive visibility will be a core area where organisations will focus on. Even with the rising complexities, organisations can no longer take a reactive approach to manage exigencies and zero-day emergencies as it will have a domino effect in inventory management, service to the clients and go-to-market time. How cutting-edge, modern visibility platforms fit into traditional, manufacturing practices such as JIT, Kanban and how they adapt to each of these specific scenarios is an interesting thing to watch out for.

Optimised Reverse Logistics

It is interesting to note that as much as 30 per cent of all orders ordered online is returned compared to only 8.89 per cent when purchased from brick-and-mortar shops. Large volumes of returns can put unprecedented pressure on supply chain processes, especially in terms of logistics expenses. Poorly planned reverse logistics can cost businesses up to $260 billion dollars. Optimising reverse logistics cannot only save logistics costs but also help manage inventory better and increase an organisations ability to retain customers.

Here’s one easy tip to plan reverse logistics better by leveraging analytics. Businesses can align supplier and carrier data of a returned product with a reason behind the return. This can help businesses understand what’s exactly causing the returns and predict the same from reoccurring.

Omni-channel collaboration

 Users are empowered with several ways and means to communicate, interact and engage with brands. Now, to ensure a consistent omni channel experience and to make sure there is continuity of dialogue across multiple channels is a challenge. For example, a user may have a query about delivery and may post it on twitter. The updates and notifications that follow should automatically be coherent with his query and not stick to default formats. AI could be of great help here and the rise of chatbots will go through a whole new evolution in ensuring a seamless, consistent experience across multiple channels.

These are some of the key trends that will impact the supply chain and logistics industry in 2019. But only time will tell where we will be by the end of this new year. Till then we hope your business keeps thriving and innovating as it did this year. —by Kushal Nahata, CEO & Co-founder, FarEye.

Source: https://www.deccanchronicle.com/technology/in-other-news/160119/logistics-supply-chain-trends-that-will-keep-your-biz-ahead-of-the-c.html

Impact of tax reform on logistics is solid but comes with questions over long-term impact

A recent Logistics Management reader survey of more than 120 logistics and supply chain professionals had somewhat of a measured view of the impacts of tax reform, to date. Nearly 16% viewed it as positive, which, on the surface, appears low, but only 6.6% viewed it as negative. It was the more ambivalent respondents that comprised the bulk of the survey’s respondents, with 35.2% saying it has had no impact, and 42.6% saying they are unsure. 

When the Tax and Jobs Act legislation was signed into law in late 2017, expectations for the benefits it could bring for corporations were fairly high. And now more than a year later, it is becoming clear that was largely for good reason, given the subsequent positive factors that the bill has helped to deliver, in tandem with solid underlying economic output that has been occurring during that time. 

Among the expectations cited by freight transportation logistics stakeholders, in the form of shippers, carriers, and logistics services providers, regarding their expectations for where tax reform would provide a boost for them were for things like increased investment into their businesses, asset depreciation benefits, boosting job numbers and employee pay, and improving their bottom lines, among others.

A noted freight transportation agent stakeholder that has been ringing the bell of the benefits of tax reform is American Trucking Associations (ATA) President and CEO Chris Spear.

At the NASSTRAC conference in May 2018, the nation’s top trucking lobbyist said that, at that time, the tax reform bill had already seen $3.8 billion reinvested back into the trucking industry in the form of wages, benefits, and new, safer, and more environmentally friendly equipment.

And at the ATA’s October 2018 Management Conference and Exhibition, Spear lauded the trucking industry’s role in driving the first tax reform to the President’s desk in more than three decades, calling it “a measurable victory…for the industry,” while better providing trucking concerns with the ability to “purchase safer, more environmentally-friendly equipment, technologies, and services,” adding that tax reform is “now fueling our nation’s economy.” 

While tax reform has received a positive reception, a New York Times report noted that its impact may turn out to be overstated, observing that the economic growth spurt which occurred during the second and third quarters of 2018 can be viewed as fairly common, while noting that for the same period in 2014, there was higher growth activity. And it added that the growth in 2018 was paced by both consumer and government spending, as opposed to corporate gains.

A recent Logistics Management reader survey of more than 120 logistics and supply chain professionals had somewhat of a measured view of the impacts of tax reform, to date.

Nearly 16% viewed it as positive, which, on the surface, appears low, but only 6.6% viewed it as negative. It was the more ambivalent respondents that comprised the bulk of the survey’s respondents, with 35.2% saying it has had no impact, and 42.6% saying they are unsure.

Reasons cited for tax reform being positive included: a depreciation in assets; having more capital to invest into upgrading operations; customers spending more; savings being used to improve compensation packages and employee retention.

“Tax reform has directly decreased the cost of doing all business, including and positively affective all levels of logistics operationally and managerially,” said a Northeast-based shipper. “As far as we can tell, there is no argument against this evidence-based conclusion.”

Those respondents viewing tax reform as a negative pointed to increased uncertainty, due to the pairing tax reform with tariff concerns, and an increasing amount of resources being pulled away to focus on tariff impacts on supplier shipments, and an increase in payment for freight transportation services.

Richard Armstrong, chairman of supply chain consultancy, Armstrong & Associates, said that, overall, tax reform has provided a nice stimulus for businesses, in helping freight transportation and logistics service providers create more capital for them to work with.

“There are also nice deductions in there for the purchase of new equipment, which can help, but the problem is not equipment and the purchase of equipment, the problem is still driver availability,” he said. “The depreciation deductions are helpful, and it certainly creates some additional working capital for companies. Another place it is helping is with the pass through deductions because a lot of companies, like domestic transportation management service providers and freight brokers, are subsidiaries, allowing the bigger companies to move money around internally. On a whole, it’s been beneficial.”

Lee Klaskow, senior transportation analyst for Bloomberg Intelligence, agreed with Armstrong, noting that tax reform initially was viewed as a positive for boosting economic activity, acting as a near-term stimulus and driving economic activity, as evidenced with 2018 GDP showing an annual gain by 70 basis points. But he also explained that not all businesses leveraged it to the same degree.

“Some companies used it as a one-time bonus, while some bought equipment to take advantage of the accelerated appreciation,” he said. “In 2019, I think a lot of those positives that we saw [from tax reform] last year won’t have the same kind of benefit because we are dealing with a lot of headwinds that are impacting the global economy, whether it be the U.S.-China trade tension, increased protectionism around the globe, Brexit and Italy, and the Federal Government shutdown as things that are weighing on the economy. They are more market-focused in terms of what is going on and the policy levers that are driving that.”

Source: https://www.logisticsmgmt.com/article/impact_of_tax_reform_on_logistics_is_solid_but_comes_with_questions_over_lo

Setting up a separate logistics department and introducing one permit-one tax system for trucks, among other measures, will boost the transport sector and improve ease of doing business, the Economic Advisory Council to the Prime Minister (EAC-PM) has suggested. These suggestions form part of the Bibek Debroy-led Logistics Development Committee's report titled 'Key Challenges in Logistics Development and the Associated Commerce - Policy Reforms for Ease of Doing Business/Trade in India' which wa .. 

Outlining the need for supporting the truck industry, the committee has suggested that the government should create an independent department focusing on logistics and trade facilitation space by upgrading the existing Logistics Division under the Ministry of Commerce and Industry. 

"Introduce the One Nation, One Permit, One Tax system by amending Motor Vehicles Act as recommended by the Parliamentary Committee. 

"Also suitably amend the provisions of Motor Transport Workers Act to incentive trucking industry to increase its scale and size," the committee suggested. 

As per the one permit-one tax system, all truck permits will be valid across the country. 

It also pitched for reduction and rationalisation of rail freight tariff structure, at least on select pilot routes (Delhi-JNPT, Delhi-Mundra etc). 

According to the report, the government should target increasing rail modal share by improving predictability in railway services, rationalising railway tariffs and expediting Dedicated Freight Corridor (DFC) commissioning. 

The committee also pitched for developing Common Development Plans for revival of railway sidings near major airports for promoting multi-modal air-rail connectivity and easing last mile connectivity to airports. 

To improve trade facilitation at borders, it said the government should shift towards fully facilitated trust-based clearance processed through state of-the-art risk management system (RMS) and make physical examination an exception. 

It pointed out that while the physical infrastructure augmentation projects (like Bharatmala, Sagarmala, DFC) are transformational in nature, some major governance and procedural reforms are incremental in nature. 

Findings of the World Bank's Doing Business (DB) report 2018 suggest that it took more than six days to export and more than 13 days to import in India, considerably higher than the time taken in the developed world. 

Meanwhile, India saw a jump of 19 positions in International Logistics Performance Index (LPI) -- from 54th rank in 2014 to 35th position in 2016 out of 160 countries. 

The prime minister has set an ambitious target to realise a quantum jump in Doing Business and LPI ranks within the next 2-3 years. 

"This will be difficult to achieve if we fundamentally do not reorient the way we have looked at logistics and trade facilitation space," the committee said. 

It also noted that the requirement of physical paperwork and multiple documentation continues despite push towards digital governance. 

According to the report, the road freight cost per ton per km in India is almost double (after adjusting for PPP) than that of US while the average speed is substantially lower than in developed countries. 

Source:  https://economictimes.indiatimes.com/industry/transportation/shipping-/-transport/set-up-separate-dept-for-logistics-to-improve-transport-sector-pms-advisory-panel/articleshow/67510473.cms

3 key areas that will drive growth in India’s logistics sector in 2019

By Deepal Shah

Indian logistics sector is presently estimated to be worth around $160 billion and is poised to grow phenomenally over the next two years and reach a size of $215 billion by 2020. Here are the three areas for creating a sustainable roadmap for the growth of the logistics sector in 2019.

Infrastructure enablement

The government has reiterated its steadfast commitment to modernizing the functionalities of Indian logistics with a key focus on infrastructure development. With a view to improving supply chain efficiencies and enhancing connectivity to help logistics players tap the underleveraged markets in the country’s hinterlands, key infrastructure development projects have been rolled out.

The ambitious Bharatmala project holds the promise of strengthening the countrywide road network and improving connectivity with the interior and backward areas of the country. The Sagarmala initiative is a key step in doubling India’s coastal shipping share in the country’s broader modal mix and aims at formulating a comprehensive shipping policy and optimizing the country’s maritime assets. It places heavy emphasis on improving maritime linkages and promoting port-led industrial development by setting up industrial clusters and manufacturing hubs along coastal zones.

The high-speed, freight-only Dedicated Freight Corridor Project aims at decongesting a heavily saturated road network and reducing freight transit times from industrial heartlands in north India to ports on the eastern and western coast of the country. Optimizing freight transport times, the dedicated corridor initiative will promote economic growth and generate employment through the setting up of industrial corridors and logistics parks along the corridor routes.

Regulatory boost

Key reform measures and policy interventions like the unveiling of the Goods and Services Tax, (GST), relaxed FDI regulations and granting of infra status has boosted the core competencies of the Indian logistics industry. GST was a game-changer for Indian logistics. It laid the foundation for the setting up of large format multi-modal logistics parks along key consumption and industrial centres which can function as freight aggregation and distribution hubs.

The ongoing trade war between the US and China presents India with the key opportunity to expand its export trade and correct its trade imbalances with the Asian economic powerhouse. The development has provided India with the advantage of gaining an upper hand in renegotiating the terms of economic engagement with its regional neighbour. This is an opportune time for India to improve trade relations and economic cooperation with China and gain inroads into its vast consumption-led economy.

Deeptech leverage

The emergence of new-age empowering technologies like artificial intelligence, internet of things, and machine learning will disrupt the conventional workings of the country’s logistics sector. The impact of these technologies is anticipated to enhance productivity across the supply chain spectrum and streamline operational processes. These technologies will largely play an enabling role in boosting efficiencies of supply networks, reduce wastages and lead to supply chain optimization.

The speed and scale with which we align our supply chain strategies to tackle the complexities of a changing global trade order will be key to determining our position in the global logistics ranking.

(Deepal Shah is the CEO – Custom Clearance and Freight Forwarding at Avvashya CCI Logistics. Views are the author’s own.)

Coimbatore to host Shipping sector conference ‘CCC2019’ on Feb 8

Coimbatore to host Shipping sector conference ‘CCC2019’ on Feb 8 Chennai, Jan 2(UNI) Federation of Indian Export Organisations (FIEO) jointly with India Sea Trade will be hosting the first Cargo Connexions Conclave (CCC 2019), a unique, market-specific event that brings together various stakeholders in Southern Region on to a single platform at Coimbatore, on February 8, this year.

A FIEO press statement here on Wednesday said that the event will address the various challenges confronting export import cargo, logistics and shipping industry and to lay a road map for a well-established logistics infrastructure and services that will add immense value to the last mile connectivity which is the major issue faced by Indian trade and industry today.While announcing this initiative, newly elected Southern Region Chairman of FIEO Israr Ahmed said that this is the first and a unique market-specific event that brings together various stakeholders on to a single platform.

The event will be an effort to address the various challenges confronting especially for the cargo originating from hinterland, logistics and shipping industry’ needs and to lay a road map for a well established logistics infrastructure and services that will add immense value to the last mile connectivity. Irrespective of various initiatives of the government to reduce transaction costs and faster movement of export import cargo, logistic cost in India still a major challenge. Unless we address it immediately, industries find difficult to compete in the international market, Mr Israr said.

Apart form key shippers who are among the list of eminent speakers and panellists expressing their views at this shippers and users conclave , senior officials participate in the session includes Special Secretary (infrastructure) Union Ministry of Commerce, Chief Commissioner of Customs/GST, Chairmen of major Southern Indian Ports, CONCOR, ICDs, CFS, major logistic providers.The conclave is expected to be attended by more than 200 leading logistic providers and shippersform across all Southern Region States.

The logistics sector in India is going to play the crucial role in the economic development. It has occupied the centre stage, as the government is keen to bringing in massive investments in building logistics infrastructure.Within the sector, multimodal transportation holds immense potential and is waiting to be tapped.

This segment of logistics can help in reducing costs and increasing efficiencies. Nevertheless, it requires immediate attention from the policy makers to create the right business environment for the multimodal transportation to open up to its full potential. The FIEO conclave will focus all these aspects, the release added.

Reference: http://www.uniindia.com/~/coimbatore-to-host-shipping-sector-conference-ccc2019-on-feb-8/Business%20Economy/news/1456009.html