Hospitality Insiders

The job of a freight broker is to connect shippers who have goods to transport and carriers who have the capacity to move those goods. Today’s freight brokerage market is rich with opportunity, but taking advantage of the ease of getting started and straightforward licensing requirements does not guarantee future success. With countless licensed freight brokers coming into the mix every year, it is essential to know what it takes to be successful — and profitable — from the start. That begins with recognizing the ten most common reasons why new freight brokers fail, and how to avoid these pitfalls whenever possible.

Every new business owner, whether operating a sole proprietorship or a large company, needs to know where they are headed if they want to be successful. Having a sound business plan is one way to accomplish this task, but it may seem like a daunting task when starting a freight brokerage business. Failing to create one can mean trouble for the business, and quickly. Be sure to take the time to project out the potential marketing strategies, customer acquisition methods, pricing models, and business financials before jumping into a new brokerage business.

One of the most important requirements in becoming a freight broker is the federal regulation that requires specific licensing. New freight brokers, regardless of how much industry experience they have, need to acquire a freight broker license as well as post a freight broker bond or trust to operate legally. Misunderstanding these requirements or failing to meet them before starting a brokerage can lead to negative consequences down the line.

The freight brokerage industry is highly competitive, with newly licensed brokers entering the market each year. With so many options, shippers and carriers need to know that your brokerage is both available and able to take on new business. Creating a marketing strategy is necessary if you want to remain relevant to your current or potential customers. Consider options for print or radio ads, as well as technology-driven marketing campaigns through e-mail, social media, or the web.

With the rapid growth of E-commerce over the past decade, air freight has become an essential link in the logistics supply chain for a lot of companies and organisations. But this link will only run smoothly and reward you if you are fully informed about events and circumstances that can affect your regular schedule. This means keeping yourself informed of local holidays and celebrations for the regions you ship to and from.

Doing your research is all well and good, but you have to know how to use the information if you are to avoid those extra costs or delays. Luckily, that is easier than it sounds. Once you know the dates of your planned air freight shipments, simply check these against your research and then readjust your schedule to allow for any possible delays.

It’s generally a good idea to book air freight shipments at least two weeks in advance. And, because of the increased demand around certain dates, shipping rates may go up. Bear in mind that you may have to pay extra if you want a guaranteed space on a specific date.

At Greencarrier, we’re constantly analysing market developments so we can help our customers plan their shipping schedule. In my experience, this makes it much easier to prevent bottlenecks and unforeseen expenses.

One of Greencarrier’s main logistics hubs is located in China, and it is the home market for many of our clients. Although we are in contact with China on a daily basis, it is easy to forget exactly when each cultural celebration or peak logistics season begins and ends. Which is why we’ve drawn up a handy list of Chinese holidays and celebrations – located at the end of this article. But it is a good idea to stay on top of this type of information for all of your logistics markets.

Regular communication usually leads to fewer misunderstandings and oversights. This is particularly true when it comes to logistics. Maintaining a close dialogue with your supplier or manufacturer reduces the risk of last minute surprises. It also enables you to provide your freight forwarder with updates to your anticipated air freight volumes and/or dates.

When your logistics provider is kept informed of any potential changes, this enables them to plan your shipments more precisely. Which means a smoother goods flow for everyone involved and, at the end of the day, fewer delays and a much more predictable budget.

Today, caring for our planet simply is a must. From an environmental point of view, rail freight is an excellent transport option compared to both air freight and the combination of sea and air. The major environmental advantage of rail freight is the reduction of exhaust emissions. When comparing the CO2 emissions of the different transport modes, it is clear that rail freight is the superior winner.

Looking at the distance between China and Northern Europe, air freight consumes 139 tons CO2. The combination of sea and air consumes about 77 tons CO2. Rail freight, however, consumes only five tons CO2. In comparison, it is a drop in the ocean, meaning rail is the most eco-friendly choice if sea freight takes too long.

Compared to ocean freight, rail freight is a fast and highly reliable transport mode with shorter lead times. Let us once again have a look at the distance between China and Northern Europe.

One of the biggest challenges for companies with production in China is the long lead times to Europe when shipping by sea. Ocean transports from China to northern Europe usually take about six to seven weeks. With rail freight, it is possible to more or less cut transport times in half, which significantly reduces the lead time. This is especially beneficial to companies operating in the fast-moving consumer goods industry with high demands on short delivery times. Shorter lead times also make it is easier to forecast business operations and costs and they can have a positive impact on capital binding. (I will cover that further down in this blog post.)

Rail freight is also a very punctual mode of transport. Unlike road freight and sea freight that is subjected to congestion and bad weather condition, there is little that can obstruct the path of a rail, which reduces the risk of sudden delays.

The digitisation of business processes and supply chains is one of the most dominant trends in the global business community. In the not-so-distant future, every organisational unit will experience the transformational change of innovative information technologies and the business models they enable.

Today, automated and connected vehicle technologies are among the most heavily researched automotive technologies. What we see now is only a fraction of what will be developed for the future. From a UK perspective, I think Brexit will force a major push for many companies toward automation, specifically within customs procedures, and toward a globally harmonised system.

The major global truck manufacturers are starting to invest in electric vehicle technology and preparing to put the first generation of electric trucks on the road. In late 2017, Tesla Inc. introduced its electric Tesla Semi with production planned for 2019 and Volvo Trucks recently delivered its first all-electric trucks in Sweden.

Also, autonomous technologies will have a dramatic influence on logistics in general and road freight in particular. Driverless trucks could very well be a regular presence on many roads within the next 10 years. We already see prototypes of self-driving cars being tested out, for example by Google, Uber, and Apple as well as by most car manufacturers.

Blockchain technology is another huge trend that has exciting potential for road freight. It may solve some of the most difficult problems in trucking with benefits such as efficient supply chains and simplified collaboration between carriers in a secure network. As annual spending on is expected to reach 8.6 billion Euro by 2021, it is only a matter of time before we can start seeing some of the benefits of blockchain technology.

Throughout the supply chain, the use of metrics to track and understand processes provides an invaluable resource for ensuring increased production and customer satisfaction. Additionally, the use of metrics fosters positive relationships with coworkers and adherence to rulesets and best practices for the respective third-party logistics provider (3PL). Many of the following distribution center metrics to track closely mirror those found within transportation and manufacturing, but this listing will focus on those involved in distribution centers. Distribution centers have a tendency to become like the lost cousin when compared to other aspects of the supply chain, but they play a valuable, constantly-needed role to ensure the timely delivery of merchandise to retailers, customers, and others.

The overall goal of the distribution center is to make sure that freight makes into the correct mode of transportation at the appropriate time. This involves monitoring for the late departure of shipping containers as well as premature completion of a specific freight loading time. While finishing a specific shipment load sounds like it would benefit the company, it may actually detract from duties to other shipments, which in turn results in a cascading effect of inaccurate departures.

The second most important distribution center metrics to track involves the accuracy during order picking processes. As workers are given their respective lists of items to pick, it would stand to reason that each employee should be able to complete the retrieval process quickly. However, impatience has a tendency to result in errors in judgment. Furthermore, this could lead to more than the requested number of product being included in shipment, which results in shrink of inventory. However, the alternative to this, not including an item, can anger an end-customer and permanently harm the customer-business relationship.

Throughout the year, warehouses experience changes in capacity due to increases and decreases in consumer spending. For example, shipping during the holiday season tends to increase as more people begin purchasing items online for gifts. However, distribution centers cannot possibly foretell how much of a specific product needs to be available unless the distribution center management has previous accounts of how much product has typically been required during similar time periods. This is where the metric of monitoring warehouse capacity and peak volume comes into play. Appropriate warehouse tracking must include monitoring of peaks in capacity.

Across all transportation-reliant industries, we see more experimentation with self-driving vehicles and related technologies. Focused on lessening their reliance on human drivers in the midst of a significant truck driver shortage and leveraging the capabilities of modern technology, these companies are leading a charge that one day could give autonomous vehicles a real presence on the world’s highways and byways.

Those vehicles won’t be limited to passenger automobiles. Also making their way into the autonomous realm are trucks, buses, and yard and shuttle trucks. In my opinion, these autonomous vehicles which operate in controlled environments, such as ports, manufacturing plants, and distribution center yards will be the first to go mainstream.

“Already, companies have made fully autonomous beer deliveries and struck alliances to operate autonomous trucks (ATs) jointly. The rigs these companies are using are typically new medium- and heavy-duty trucks, outfitted with lidars, sensors, and other technology to allow the vehicle to operate without human intervention. Basic versions of the kit cost as little as $30,000; high-end packages might cost $100,000,” McKinsey reports.

However most companies are in stealth mode. ZF revealed autonomous Terminal Yard Tractor to the world last year. Running defined lanes within a restricted area, the yard trucks present an easy use case for moving freight from point A to point B autonomously. An extended sensor set enables the Terminal Yard Tractor to monitor its surroundings, while the central computer – ZF ProAI – coordinates the functions of longitudinal and lateral guidance, allowing the tractor to take the trailer from the truck and autonomously maneuver it to the ramp for loading and discharging.

“These vehicles can prevent maneuvering damage and downtimes,” ZF’s CEO told CCJ Digital, “which gives logistics companies a competitive advantage. The functions presented in our current innovation vehicles are applications that are in high demand and pay off quickly. Automated driving functions will see wider use in commercial vehicles much earlier than in the passenger market. We believe autonomous technologies will become standard in areas where they increase operational security and reduce operational costs.”

It is the last step in the supply chain but likely the most important: last-mile delivery. Delivery from the transport hub to the shipment’s final destination has become one of the major focus points for logistics companies as more and more people head online to buy their goods. In fact, e-commerce is expected to hit $1.35 billion in sales by 2018, an increase of 28.8 percent from 2013. Quick delivery direct to door is no longer something that is “nice to have”, it is a customer expectation from the online shopping. But meeting such expectations has become an expensive operation with last-mile delivery comprising more than 50 percent of total shipping costs. People want their goods and they want them now.

Thankfully, there are many logistics companies worldwide who are working to streamline this process using the latest tech and methodology. Forget about the postman coming to your door, these last-mile delivery startups are rethinking the last step in the supply chain to include drones, electric vehicles, robots, driverless cars and more. Smart solutions are the way forward.

It was only a matter of time: delivery robots. One of the last-mile delivery startups, launched by Skype co-founders in London and headquartered in San Francisco, is one of the better-known delivery robot companies out there hoping to revolutionize last-mile deliveries. The company has custom-built their own delivery robots, and while they might look more like ice-coolers than human-like androids, are changing the way goods come to your door.

The concept is simple: customers order through an app before the little robot makes its way through urban streets. Customers can then live track the six-wheeled droids, with their range of two miles and ability to deliver within 30 minutes, as they make their way for drop-off.

This solution has a potential to introduce a great last-mile delivery option for small areas, removing some of the traffic from the roads at the same time. The startup has already partnered with such companies as Swiss Post, Domino’s and Postmates and claims to have driven 100,000+ km on public sidewalks.

Agriculture equipment maker Deere & Company is producing protective face shields for healthcare workers in Moline, Illinois, in collaboration with the United Auto Workers, Iowa Department of Homeland Security, and the Illinois Manufacturers’ Association. Deere expects to produce 25,000 face shields initially, and ordered supplies to provide an additional 200,000.

Food distribution center McFoods partnered with LogistiCare, a nonemergency medical transportation company and transportation vendor for New Jersey Medicaid participants, to create a home delivery program that serves local food pantries, community members, and those who previously relied on public transportation to buy food.

The Port of Seattle plans to reduce its carbon emissions by 50% by 2030 per a contract with U.S. Gain for Renewable Natural Gas, a natural gas alternative that recycles existing carbon. The port can purchase enough fuel to heat 55% of the Seattle-Tacoma International Airport terminal and power its entire bus fleet.

FourKites launched new sustainability dashboards to provide customers with visibility into the environmental impact of their supply chain operations. The dashboard identifies specific areas contributing high levels of greenhouse gas emissions so companies can develop effective sustainability strategies.

Domino’s is constructing a 59,000-square-foot supply chain center in Katy, Texas. The building will produce fresh pizza dough for more than 300 Domino’s stores in the region. The space incorporates automated technology, including ingredient batching, mixing and portioning, weight adjustment, and tray stacking.

Fundamentally different from previous generations, 5G, the next generation wireless network technology, is engineered to greatly increase the speed and responsiveness of wireless networks. It promises data rates 100x those of 4G, with network latency around 1 millisecond, support for 1 million devices/sq. km., and 99.999 percent availability of the network. A connected world enabled by 5G is expected to generate data at unprecedented velocity and volume. This “fast data” will fuel a wide range of data-driven services and digital business models.

5G will drastically affect many industries, but the sector that stands to benefit most from the increased connectivity and speed is the logistics industry. With the lower frequency band providing wider coverage in suburban and rural areas, and the higher frequency band providing better coverage in high density urban areas, the logistics and supply chain industry will finally be able to provide end-to-end continuous coverage for monitoring, tracking and theft detection. Historically, a plethora of challenges around lost signals and insufficient coverage in rural areas have plagued the industry, leading to revenue leakage and bottlenecks for re-establishing inventory checks. 5G will solve many of these problems, positively impacting logistics and supply chain management for freight solutions buyers, cargo owners, and others in various ways, including:

5G will enable organizations to track their valuable cargo across all regions by optimizing coverage in areas that were previously far reaching and considered “dead-zones.” Improved geo-location technology will allow for better visibility into delays and unforeseen travel circumstances, ultimately enhancing location intelligence and mitigating resulting problems. 5G will allow organizations to optimize their routes through improved visibility, and avoid unnecessary trips and inefficiencies. In addition to better tracking in large rural areas, highly trafficked areas will also see benefits from the implementation of 5G networks. As shipments traverse through highly populated metropolitan areas, tracking abilities won’t be slowed down by a strained network. Ultimately, 5G facilitates the ability for logistics managers to account for cargo from end-to-end, during all points of its trip.

According to a survey from Moor Insights & Strategy, 90% of logistics and shipping providers believe the lack of supply chain visibility is one of the biggest challenges in the industry today. With 5G, the implementation of cheaper sensors will allow better single item tagging and tracking, and near edge computing on small footprint infrastructure will allow faster inventory checking. 5G will help provide end-to-end visibility, not just at an aggregate level, but into every product, helping avoid revenue leakage via theft and loss. 5G will improve traceability by providing the ability to track and gather data at every step of the way, including if a truck changes weight (indicating a potential problem). This advancement will allow cargo owners to have high amounts of visibility into the shipping process that were previously difficult to access or nonexistent.

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