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Logistics in these times of coronavirus – the importance of pulling together

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The coronavirus pandemic seems to be leading to ever-more chaos, uncertainty and stringent measures. Both in Europe and elsewhere around the world, nations are doing everything they can to stop the exponential rise in the number of cases. No one knows for sure how long this will take, but it could be a matter of months rather than weeks. This is a period in which our resilience and patience are being severely tested, as well as a period of previously unthinkable measures and also solutions. DSM has started producing hand sanitizing gel, local authorities are relaxing the rules on delivery windows, and carriers specialized in fresh-cut flowers are lending a hand to replenish supermarkets. These are just some examples of countless heart-warming supply chain initiatives in which organizations are helping each other to get the right goods to the right destinations. As IDS, we’re happy to do our bit too.  

We’re doing everything in our power to keep our customers’ supply chains up and running. The health of our employees, customers and suppliers is our top priority, of course. Freight transport is sometimes still possible in the regions where general travel restrictions are in place, but the situation is changing day by day and drivers often face extra border checks and delays. Therefore, we are in continuous contact with our suppliers to enrich the tracking & tracing information. As soon as we hear of new measures implemented by recipients to protect their own employees, we communicate them throughout the chain to avoid any nasty surprises.

The overall situation is very varied. The supply chain is functioning just as smoothly as before in some places, but struggling in others. We’re constantly looking for new and creative ways of improving the delivery reliability under the current circumstances. At the same time, we’re trying to ease the burden on drivers and warehouse operatives as much as possible, since we know that they are doing their utmost to keep supply chains up and running. Needless to say, we make shipments of essential raw materials for medicines and protective equipment our top priority. We strive to consolidate shipments and adapt our loading and unloading times to support social distancing.

One thing’s for sure: it’s going to be difficult to emerge from this crisis completely unscathed. But by pulling together, we can at least try to soften the blow a little.

If you have any questions or need any support, you know you can always contact us!

Kind regards,

Arno Spoek 
Business development manager

Traceability under pressure

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The logistics sector is collectively holding its breath now that coronavirus is tightening its grip on Europe too. The problems in China are already affecting manufacturing activities due to shortages of certain parts and semi-finished products. This is causing other stock to pile up in warehouses. In the meantime, retailers such as Blokker, Action and Coolblue are selling out of many items. Port of Rotterdam predicts its freight throughput will fall by 2 million tonnes. The chaos is mounting and traceability is under increasing pressure as the virus spreads throughout Europe.

Full and accurate overview

Last week, one of our customers asked us “Where exactly are my goods?” and “Are those people safe?”. The customer has clients in northern Italy and sends several large shipments there on a weekly basis. Reports mention around a dozen towns and villages in the area going into lockdown. That’s why our customer was keen to gain a full and accurate overview of all their shipments, cross-docking locations, carriers and delivery locations. In the case of international transport activities such as these, it is usually easy to gain a detailed overview of the entire supply chain. Even though the order quantities, volumes, dimensions, shipment types and dates as well as delivery addresses fluctuate from day to day.

Zooming in

Our tracking and tracing services are supported by dashboards, which enable us to provide our customers with clear insight into all their freight movements. We aggregate the data to present them with the complete picture. In response to the customer’s request, we zoomed in on northern Italy where 1,700 people are currently infected with coronavirus.

Besides reporting on the current situation, we were also able to trace where else the carriers and their drivers had made deliveries and which routes they normally take. That was no easy task because while some carriers have their own employees, others make use of sub-contractors. But eventually we managed to provide our customer with all the necessary information: no deliveries had been made to locations in the affected area in the past couple of weeks. Additionally, the contracted carriers are taking precautionary measures such as using antibacterial soap and face masks. Although the face-mask supply chain is struggling to cope with the huge surge in demand…

No guarantees

While such precautionary measures are certainly reassuring, they offer no guarantees. After all, truck drivers are human too. They need to refuel and take breaks, and they come into regular contact with their family, friends and colleagues. That’s why we strongly advise all our customers to follow health and safety protocols and to immediately alert the authorities in the case of any irregularities. In the meantime, our customers are taking various steps to prevent the virus from spreading. That includes working from home, avoiding non-essential travel, not visiting industry events, not shaking hands and performing extra cleaning. One of our customers has even introduced temperature checks at the gate. They are turning away any visitors showing signs of a fever. It is important that the industry does whatever it can to minimize the spread of the virus and optimally safeguard the continuity of transport operations.

Why 4PL is especially relevant today

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The logistics market is large and fragmented, with a wide variety of services on offer from all kinds of companies. From multinationals with a comprehensive portfolio, to small, nationally focused carriers and ‘hyperspecialists’. In fact, it can be difficult to see through this maze of complexity. The sector growth slows due to uncertainty about Brexit, the nitrogen discussion, disruptions such as cyberattacks, the corona virus and a shift in the logistics landscape. ING predicts ever-greater demand for information about the movement of goods. Information holds the key to eliminating supply chain friction – and it is precisely how 4PL suppliers add value. Read on to find out why it has become such a relevant topic today.

The ongoing search for efficiency

Freight flows have been increasing for the past two decades, and so too has the number of companies that outsource their transport activities. Their 4PL partners are continuously searching for logistics solutions that add value. They strike the optimal balance between supply and demand, time and money, and people and resources. With each customer’s interests as their top priority. 4PL partners take control, utilizing an ever-bigger network to keep their customers’ freight flows running smoothly and above all efficiently. Accurate and accessible information plays an essential role. The following trends are making this more important than ever nowadays:

The growth of e-commerce

The tremendous growth of e-commerce, which is also known as the ‘Amazon effect’, has put supply chains under immense pressure. Advancements in fulfilment systems, inventory management and goods transport have resulted in larger volumes of – and luckily also more reliable – data.

Specialization

In industries such as high-tech, automotive and chemicals, the demands are so high that specialized logistics service providers have emerged who are focused solely on these sectors. To seamlessly align and switch between modalities, some of which they also operate themselves, requires a deeper understanding and optimum visibility of all the available data.

Innovative technology

Innovations such as robotization (IoT), autonomous vehicles and augmented reality are becoming ever-more common in the supply chain and generate extra data flows of their own.

Sustainability and CO2 reduction

Reducing CO2 emissions or consolidating shipments are increasingly important selection criteria in major tenders. When it comes to securing new business, detailed management reporting has evolved from a nice-to-have extra to an absolute necessity.

Complex landscape

4PL partners are the linchpin in this complex landscape. At IDS, it revolves around on providing full supply chain visibility and consolidating shipments for optimal efficiency. But above all, we are focused on not only planning but also execution. We’re happy to tell you more about how our services can help you manage your supply chain down to the finest details.

Contact Arno Spoek for more information.

The same, but different

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Over the past few months, I’ve written a series of blogs exploring the similarities within the various logistics-related disciplines. And it seems that even when people are working at different companies and in different sectors they are faced with the same challenges.In the case of transport managers, for example, irrespective of whether they are working in the manufacturing, chemicals or agricultural industry, many of the challenges they face are almost identical. It’s about time pressure, the unpredictability of fluctuating transport volumes, tight budgets and carbon reduction targets, and disruptive events beyond control such as the corona virus, to name but a few. Since the summer, my blogs have outlined how IDS eases the burden for transport managers as well as supply chain managers, finance managers, IT managers and customer service managers within a wide range of different businesses.

Handling hazards for chemical companies

But although the challenges for each discipline are largely the same, each industry faces its own unique challenges too. Therefore, it’s not as easy as taking a ‘one-size-fits-all’ approach per discipline. If only it were! Let’s consider the chemical industry, for instance. Chemical companies often have to ship hazardous substances which require special handling to ensure safety. Therefore, it’s essential that they have access to experienced and reliable carriers. Carriers who have the necessary ADR certifications for the transport of dangerous goods in combination with specific equipment for temperature controlled transport and routing restrictions. Managed transport solutions can help them to deal with the extra complexity of their carrier management activities.

Boosting OTIF for manufacturing companies

In contrast, time pressure often causes the biggest headache for industrial companies, such as suppliers to the automotive sector. Whether because of just-in-time manufacturing, tight delivery windows or the importance of having the right spare parts available at the right time to minimize machine downtime, the focus is on on-time in-full (OTIF) deliveries. Therefore, such companies benefit from a single source of real-time insight into the status of their shipments. That includes automatic alerts in the case of potential problems so that they can find a solution, quickly. Moreover, detailed reporting helps them to identify areas for further performance optimization.

Supporting safety for food companies

And then there’s the food sector. That often requires freight forwarders and carriers with the right facilities such as temperature-controlled trucks and refrigerated warehouses. Only they can handle the transport and storage of fresh, chilled and frozen products. To comply with food safety regulations, it is essential to ensure that the products are kept within the required temperature parameters at all times. That creates the need for a system offering excellent supply chain visibility and track & trace reporting.

Respecting the differences

That’s why, at IDS, we regard all our customers as being the same, but different. We look for common denominators so that we can transfer proven successful approaches from one industry to another. That way, we can share our knowledge and experience and help companies to learn from one another, creating benefits for all. Our transport managementsystem (TMS) enables all types of companies to manage complex carrier networks. It monitors performance and discovers new insights as the basis for improved delivery reliability, greater cost savings and further efficiency measures. But at the same time, we also respect the differences that create unique needs in each sector. We work closely with each of our customers to find the optimal, sector-specific solution for them every time.

I’ve been delighted to hear that so many people in various roles have read and enjoyed my insights over the past few months. If you’d like to discuss any topics in more detail, feel free to contact me. And you never know, you might even inspire me to write another blog in the future!

Brexit: A seismic shift for logistics

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The British prime minister, Boris Johnson, has now cleared most of the hurdles so that the UK can leave the European Union (EU) on 31 January. As things currently stand, 1 February will mark the start of a transition period. This period is aimed at reaching a new trade deal and various other arrangements with the EU. Both sides will want to get the maximum out of these negotiations. They want to make sure that goods and services can continue to flow as freely as possible between the UK and the continent. But irrespective of the final outcome, Brexit represents a seismic shift for the logistics sector. As a result, it is important for many businesses to not only implement short-term measures, but also to make long-term strategic choices.

Multiple scenarios

At IDS, we have helped numerous companies with Brexit-related scenario planning over the past three years. We start by thoroughly reviewing the end-to-end supply chain and analysing the risks. We then model various ‘what if’ scenarios, to ensure their supply chains would continue to run as smoothly as possible even in the case of a ‘hard’ Brexit. In our transport management system (TMS), we can incorporate amendments to routes and lead times at the touch of a button. Our customers can then see the impact of those changes on their incoming deliveries or planned orders in the Control Tower. And if clients want, we can relieve the burden on them completely. We take care of ensuring they are properly prepared in terms of the changing requirements for export documents, audits, certificates, procedures or import duties and taxes.

As a precaution

Those companies now have a valuable head start as another factor is making the situation even more complex. The centre of gravity for the manufacturing and storage of products in Europe is set to shift in the long term. And so too will the way those products are transported throughout Europe. Many shippers are transferring their warehousing and distribution capacity from the UK to the European mainland, often to the Netherlands. Besides that, many American and Asian companies with a manufacturing facility in the UK have started to look for a base on the continent. Others are running two inventory locations, one on each side of the Channel. They want to minimize the risks in the case of border chaos. But the biggest change is that major companies are moving the bulk of their production activities to continental Europe as a precautionary measure. They want to avoid labour shortages, customs checks, and additional red tape and hence costs. This trend is likely to affect your supply chain too.

Anticipating shortages

The changes to regulations, paperwork and processes will inevitably cause some delays at the border. Industry experts predict that the delays will increase the demand for goods vehicles such as trucks and trailers. The same goes for warehousing and distribution capacity in Northwest Europe. Especially in the Netherlands and Belgium. But that capacity is limited. And so too is the availability of goods vehicles. That’s why our scenario planning includes consideration of transport options in times of shortage. We analyse your supply chain and help you to calculate whether it could be beneficial to consolidate your shipments, for example, both now and in the future.

Have you already thought about what will happen to your supply chain after Brexit? Do you know where the weak spots are? Or would you just like to exchange thoughts and ideas with one of our transport experts? Feel free to contact Arno Spoek: arno.spoek@idsnl.com.

Blog: Taking the pressure off the customer service manager

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I always have the utmost respect for people who work in the high-pressure environment of Customer Service at any company. Recruited for their good communication skills and helpful nature, they are the very public face of the whole team working behind the scenes. They ensure customer orders are dispatched on time and in full. They are expected to know everything… And if they don’t know it, to be able to find out immediately. Above all, they are there to pick up the pieces whenever things go wrong. In the case of a problem, all eyes are on them to come up with a satisfactory solution – and sometimes even to perform miracles!

It can be a thankless job. That’s why I’m happy that IDS helps to make the work of customer service managers a little bit easier. Thanks to our advanced IT systems, for example, they have a clear view of all shipments at their fingertips. This real-time visibility of what is where, and when it is expected to arrive enables them to answer clients’ questions quickly and effectively.

Proactive approach

Increasingly, customer service managers are taking a more proactive approach to keeping customers informed throughout the whole process. Automated solutions such as track and trace are invaluable in this respect. In the case of any potential delivery problems or irregularities, the IDS system automatically issues alerts. That way, the employee can contact the customer to pre-empt a bottleneck and discuss an alternative solution if necessary – before panic strikes!

It probably comes as no surprise, but customer service is important for us at IDS too. Our specialists work closely with you to actively look for improvement areas and opportunities. For example, with our managed transportation services (MTS), we can even take things a step further. We relieve the burden on your Customer Service department by taking care of certain tasks on your behalf. Thinks like handling disputes with carriers, for example. Together, we optimally align your activities with your clients’ needs in order to further raise your service level.

Fewer miracles required

In fact, if we zoom out a little, all of our solutions make life easier for the Customer Service department. After all, by helping to keep things running smoothly and efficiently for transport managers, supply chain managers, IT managers and financial managers, we improve delivery performance, keep costs down resulting in lower prices for customers and reduce the number of errors in all departments – including invoices. All of this ultimately boosts customer satisfaction. And, if nothing else should hopefully mean that customer service managers are required to perform fewer miracles!

Feel free to contact me if you’re interested in exploring how we can help to take the pressure off your Customer Service department. Or read our tips on how to develop an outside-in mindset when it comes to customer satisfaction and your supply chain.

How will rates change in 2020?

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The start of a new year is a natural turning point and it is traditionally the time when any rate changes come into effect. It is important for companies in the transport and logistics sector to be aware of these changes. That’s why this article outlines what to expect in 2020 – including the potential impact of Brexit.

Facts and figures

In 2019 the costs for road freight rose less steeply than expected, mainly due to the low interest rate. The researchers at Panteia and Evofenedex expect this trend to continue in 2020, with increases of between 4.1 and 5.6%.

Besides that, the researchers forecast that:

  • Fuel costs will fall on average by 2.1%
  • Depreciation costs will rise by 1.5%
  • Insurance costs will increase by 9.0%

Employee shortages pushing up labour costs

The figures predict that labour costs will rise by an average of 1.4% for drivers and 3.0% for other employees. According to Panteia, this difference is due to the fact that 

drivers received an average one-off payment of €750 this year to compensate them for a discrepancy in paid annual leave. The research firm assumes that employees in other roles have not received such a payment. For some companies, the labour shortage will cause extra cost increases due to the need to hire temporary workers, higher staff turnover, the payment of extra compensation and bonuses, and the time spent onboarding new employees.

Eastern Europe catching up

A striking, but not unexpected detail is that labour costs in Hungary, Poland and Slovakia are growing at a greater rate than in Western Europe. It seems that the labour costs in Eastern Europe are slowly catching up, with rises between 5 and 8%.

Secondary effects of employee shortage

The secondary effect of the employee shortage is difficult to quantify. Nevertheless, companies should not underestimate its impact on workloads, absenteeism, customer satisfaction and business growth. Business Development Manager Arno Spoek from IDS explains: “The IDS Control Towers are often a good solution in such situations. A control tower immediately provides better visibility and facilitates faster and more efficient order fulfilment. That creates much-needed breathing space for the overstretched workforce. Once all the transport flows are running smoothly again, companies can turn their attention to looking for an optimal longer-term solution.”

A big step closer to Brexit

In addition to the rate changes, Brexit is another factor that will play a major role in the coming year. Now that the Conservatives have won the general election in the UK, it looks increasingly likely that an orderly Brexit will happen on 31 January 2020. This means that companies can start putting their carefully prepared plans into action. Any companies that have not yet registered with the customs authorities should make a point of doing so as quickly as possible!

Effects of trade agreements

Over the past years, IDS has helped numerous customers to gain insight into all their transport flows, and the scenarios we’ve developed for them are coming in particularly useful now. Even so, it remains to be seen how Brexit – and the new trade agreements the UK must subsequently reach with the EU, the USA and other countries – will affect international business in practice. But it will undoubtedly have a substantial impact on the transport sector and lead to extra costs.

To learn more about how control towers and/or Brexit could affect your organization, feel free to contact our Business Development Manager, Arno Spoek: arno.spoek@idsnl.com or +31 (0) 88 437 4370.

Blog: Lightening the load for the IT manager

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Although it is widely acknowledged that technological solutions can considerably improve the efficiency of transport and logistics activities, few IT managers have a carte blanche to spend as much as they want. If only! According to the findings from the 30th Computer Economics IT Spending and Staffing Benchmarks 2019/2020, for example, 48% of the IT executives in the USA and Canada feel that their budgets are either “somewhat or very inadequate” to meet business needs. Therefore, IT managers obviously need to think carefully about how they invest their money. When sourcing an IT system such as a transport management system (TMS), it’s not only the initial outlay that matters. Internal applications come with an added responsibility for the IT department to perform regular maintenance and updates. These can be costly in terms of both time and money and significantly increase the total cost of ownership (TCO).

Strategic outsourcing

The Computer Economics study mentions strategic outsourcing as one way that IT managers are creating room in the budget rather than having to ask the CFO for an increase. At IDS, we’re seeing evidence of this trend here in Europe too. More and more of our customers are taking advantage of our state-of-the-art transport management and control ‘software as a service’ (SaaS) as part of our managed transportation solutions.

Straightforward setup

Thanks to our focus on IT connectivity, the initial system setup is straightforward. Our system is always up to date with the very latest functionalities. It can be easily adapted and scaled in line with the customer’s specific needs. Application management, technical infrastructure, maintenance and installation of new software all become things of the past. And that really eases the burden on you as an IT manager.

Minimizing variable costs

In addition to saving on investment costs and labour costs, you minimize your variable costs thanks to our pay-per-use model (pre-agreed fixed fee per transaction). This model gives you transparency and control. Furthermore, the IDS system puts an end to investment discussions. No more debates about when (and how!) to replace your own IT system or servers and the associated project coordination and costs.

Small and midsize companies are leading the way

The survey also found that small and midsize organizations are leading the way in terms of SaaS adoption. One reason is that they tend to have fewer legacy systems. That makes it easier for them to adopt cloud systems at the core of their applications portfolio. I agree, but I also believe that smaller IT departments benefit most from the peace of mind gained by outsourcing their TMS infrastructure. So, if you’re an IT manager at a small to midsize company, contact me to discuss how we could lighten the load for you!

Arno Spoek

Business Development Manager

Approach your supply chain with an ‘outside in’ mindset

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Although the customer journey is starting to become somewhat of a cliché, that journey is still at the heart of all decision-making in many marketing departments nowadays. Now that the online market is growing by 12% year on year, success is measured in terms of how customers arrive at a buying decision, their reasons for not going through with a purchase and the speed with which they complete a transaction. But that doesn’t mark the end of their journey. In fact, the supply chain manager holds the key to customer satisfaction and repeat business from that point onwards – which is why the customer journey is increasingly featuring on Supply Chain’s agenda too. 

 

From the outside in

According to Gartner, logistics planners and transport managers should have a stronger ‘outside in’ mindset. In other words, when looking to make supply chain improvements, they should start by thinking about issues such as the customer journey, customer satisfaction and repeat purchases. That requires visibility, but also goes much further because that visibility provides better – and faster – insights into the opportunities and threats. By taking a proactive approach, Supply Chain can play an increasingly important role in achieving the corporate objectives and safeguarding the company’s future.

Tips to help Supply Chain develop a new mindset

It is not always easy to take an ‘outside in’ approach in your day-to-day business, so we’ve put together a number of tips to help you:

 

Tip 1: Put yourself in the customer’s shoes

What do your customers want to accomplish? What are their goals? Deploy solutions that truly help your customers, such as fully automated order handling, clear tracking & tracing or smart dock scheduling. That means customization rather than one size fits all.

 

Tip 2: Listen carefully

Open your ears and listen attentively to your customers – and not just literally, when talking to them, but also in terms of analysing their data. Study the steps in the customer’s supply chain and bring all the data together in a user-friendly dashboard. Choose clear KPIs and analyse performance on a daily basis. IDS helps customers to gain supply chain visibility by offering them clear dashboards and reporting.

 

Tip 3: Make good use of feedback

If customers actually go to the effort of providing feedback, they do so because they hope it will prompt you to take action. So use customer feedback to make improvements in your supply chain. Reflect on their experiences of your supply chain. Which touchpoints ran least smoothly, and why?

 

Tip 4: Reduce hassle

How can we minimize the ‘hassle’ for our customers? They have to deal with things like time slots for loading and unloading, safety regulations and seasonal peaks, and get annoyed by suppliers who make things unnecessarily difficult for them. At IDS we help our customers to relieve the burden on their own customers, such as by consolidating shipments, selecting the best carrier per shipment or simplifying administrative processes.

 

Tip 5: Take control

Last but not least, logistics planners and transport managers have a natural talent for aligning goods flows. Therefore, they are ideally positioned to take control on Supply Chain’s behalf and ensure that all internal efforts support the perfect customer journey. The IDS Control Tower provides insight into any bottlenecks and their underlying processes. Scenario planning enables you to identify the best ways to improve the customer journey, and hence to have a direct impact on the end result.

 

If you’re keen to discuss how this works in practice, contact Arno Spoek, Business Development Manager.

 

Blog: How do we reduce costs for financial managers?

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A press release promoting the Gartner Supply Chain Planning Summit (4-5 November 2019 in Denver, USA) recently caught my eye. It quotes a senior Gartner analyst as saying that, when trying to reduce costs, “…companies usually aim to negotiate better prices with their carriers and logistics providers regions. Those negotiations can be difficult, and success is not guaranteed. What is often overlooked is that there are plenty of actions logistics leaders can take to optimize costs from within their organization”. 

As I see it, this message is very closely aligned with how we at IDS help our customers to make continuous improvements across all aspects of the supply chain, e.g. in transport planning, IT, supply chain management, customer service, and even when issuing tenders. But in my experience, in this respect, finance is often seen as one of the less urgent priorities. This is particularly ironic, because streamlining the transport-related work processes to improve your administrative efficiency is a source of ‘low-hanging fruit’. In other words, you can make relatively big gains with relatively little effort. 

Avoid unnecessary errors 

So how exactly do we help financial managers to save logistics-related costs? It all starts with our IDS Connectivity Centre (ICC), which gathers data on your freight movements as the basis for reporting and further analysis. Needless to say, in terms of your direct costs, our state-of-the-art transport management system (TMS) ensures the maximum consolidation of goods flows and hence the best prices. But perhaps more interestingly, we use those insights to help you improve your administrative efficiency and avoid unnecessary errors. Invoicing and invoice checking, payment management, dispute handling… these are just some examples of repetitive, time-consuming transport finance-related tasks we can streamline for you.  

Thanks to our pay-per-use model based on a pre-agreed fixed fee per transaction, you have full transparency and control. And if you want to save maximum time, we can even take these tasks off your hands completely with our managed transportation services (MTS). 

Guaranteed compliance 

As an extra benefit, use of our TMS ensures that you always comply with the latest accounting regulations without having to invest in the purchase and maintenance of your own IT system. So this is a great way for financial managers to reduce their IT costs, in addition to their direct logistics costs and indirect administrative costs. 

Feel free to contact me if you’re interested in uncovering new ways of driving costs down in your Finance department while improving your efficiency and raising your customer service levels too.