What is inventory optimization?

What is inventory optimization?
What is inventory optimization?

Logistics companies are constantly striving to optimize their supply chains. Inventory optimization (IO) is one of the most important parts of the process. IO can be defined as "the act or process of identifying and reducing waste in an inventory system".

Key Elements of Inventory Optimization

Optimizing your inventory means you'll determine exactly how much and when of each SKU you need to order to consistently serve your customers. Inventory optimization takes into account seasonality and activity as well as supplier delivery times and schedules. That way, you'll always have the right product in the right warehouse without taking up too much inventory. This blog post will briefly describe the key elements of optimizing inventory and links to resources that will give you more details on each key concept:

1. Demand forecast

There are several ways to forecast demand, including looking at last year's or previous period's demand or a salesperson's request forecast. This works for some SKUs, but on other projects, these approaches can send you down the completely wrong track.

2. Inventory Policy

The next step is to determine your inventory policy, which means deciding which products to stock and how much to keep in each unit.

3. Replenishment

Last but not least is inventory replenishment. This is to calculate reorder points and order quantities and convert them into actual orders.

The benefits of inventory optimization in the logistics industry

Inventory optimization in logistics is a process designed to maximize the use of available space and time while minimizing the number of shipments. Achieving the best inventory optimization strategy depends on the supply chain, demand patterns, and inventory management systems. The main benefits of inventory optimization for the logistics industry are:

Improve customer satisfaction

In the logistics industry, one of the most important things is customer satisfaction. Not only is this because you want to keep your customers happy, it also increases your profits when they are happy with their purchase or service. It can be difficult for companies to figure out what customers are looking for. Businesses need to meet customer demand by determining how much inventory is needed and where it is located. Inventory optimization software can help solve this problem.

Reduce costs

By monitoring the time it takes for goods to move through the supply chain, you can reduce transportation costs such as storage and shipping fees. This means increasing the profit margin of your business. The logistics industry is always looking for ways to reduce costs. Inventory optimization is one of the best ways to do this because it reduces inventory levels and reduces storage and handling expenses.

Inventory management helps reduce your spending on warehouse space, labor and shipping costs. It increases productivity, thereby reducing overtime and turnover for driver-operators and customer service personnel in distribution centers. The store management course will teach you the techniques and knowledge to systematize a distribution center or warehouse.

Improve service quality

Service quality is an important factor in the logistics industry. However, achieving and maintaining a high level of service is difficult due to the complexity of managing inventory and assets in these systems. Improved service quality is one of the benefits of inventory optimization that can lead to more profits for a business like yours. The goal of any business owner should be to provide customers with high-quality service that meets their needs. Inventory optimization can help you do just that!

In conclusion

The logistics industry is one of the most important industries in the world. It is responsible for delivering goods to their destination on time and with less chance of damage or loss. Without inventory optimization, it would be impossible for these companies to effectively do what they need to do. Fortunately, implementing an inventory management solution into your company's processes brings many benefits!

3PL vs. 4PL Logistics Services

3PL vs. 4PL Logistics Services
3PL vs. 4PL Logistics Services

What is Third Party Logistics (3PL)?

Third-party logistics (or 3PL) refers to the outsourcing of e-commerce logistics processes to third-party operations, including inventory management, warehousing, and fulfillment. 3PL providers allow e-commerce merchants to do more and use tools and infrastructure to automate retail order fulfillment.

What are the benefits of 3PL services for your business?

-Cost Savings- Your company will definitely have less supply chain functions than a professional logistics company. Thanks to their exclusive relationship in the field of logistics, you can save a lot of driving costs.

-Expert Fulfillment - Supply chain logistics is not that simple and can be a daunting task without the help of experts. Expert shipping, warehousing and fulfillment is something you cannot ignore. That's what 3PL Logistics Services offers you while simplifying the entire process.

- Shorter lead times - 3PL service providers will definitely specialize in shipping services. Their large delivery fleet will expedite the entire delivery process and provide your customers with same-day delivery.

-Reverse Logistics - It's very frustrating when a customer returns your product. However, it is part of the business. Plus, you don't have to bother collecting returns because 3PL convenience includes reverse logistics in the transaction.

What is (4PL) Fourth Party Logistics Service?

4PL or fourth party logistics service is a supplement to the existing 3PL logistics service.

In this operating model, not only 3PL services but also other supply chain facilitation are provided.

Manage the resources, infrastructure, technology and other related aspects of a specific business.

4PL Logistics consists of a partner (company) who is responsible for all outsourced logistics as well as accessing, building, operating and designing supply chain solutions.

What are the benefits of 4PL?

There are many benefits of 4PL logistics services, one of the main advantages is trusted publicity.

4PL providers make long-term commitments to customers. The association is a valuable partnership and is very effective in achieving the common goals of the business.

4PLs are responsive in terms of customer connections, utilizing online interfaces to meet the modern needs of customers.

The main idea of ​​this logistics service is to eliminate inefficiencies and simplify business work.

In short, business expansion is completely possible and feasible with the assistance of professional partners of 4PL Logistics Services.

3PL vs 4PL: What's the Difference?

When researching 3PL, you may come across the term 4PL. 4PLs add an additional level of separation between e-commerce merchants and the 3PLs that ship their products: When businesses contract with 4PLs, 4PLs manage and arrange 3PL services for customers. This is sometimes called "dual agency".

4PL companies typically provide customers with end-to-end supply chain management, including 3PL services, manufacturing, inventory procurement, and more.

Update on Brexit import controls
Update on Brexit import controls

The UK government has announced an updated approach to import controls to help ease current cost-of-living pressures, and has suggested that the remaining import controls on EU goods will not be imposed this year. Instead, traders will continue to move their goods from the EU to the UK as they do now.

The government will review how these remaining controls will be implemented and further details will be published in the new control regime, which is targeted to come into effect by the end of 2023.

Specifically, the following controls planned to be implemented from July 2022 will no longer be in place, they are:

  • Require further Sanitary and Phytosanitary (SPS) inspection of EU imports currently at destination for transfer to Border Control Points (BCPs)
  • Safety and Security Declaration Requirements for Imported Products in the EU
  • Requirements for further health certification and SPS inspection of EU imports
  • Ban and limit the import of chilled meat from the EU

The controls that have been introduced will remain the same, they are:

  • The highest risk imports of animals, animal products, plants and plant products will continue to apply to customs controls already in place
  • Safety and security checks introduced last year remain in effect as part of existing customs controls introduced in 2021
  • If businesses import goods into the UK from other non-EU countries, they are still legally obliged to submit an S&S Entry Summary Statement (ENS) for these movements

Regarding safety and security statements (also known as ENS documents or "EUICS"), the current requirements are:

  • UK and Northern Ireland to EU = EU requires ENS
  • Rest of world to EU = EU requires ENS
  • EU to UK and Northern Ireland = not needed, postponed now
  • Rest of World (non-EU) to GB and Northern Ireland = GB/Northern Ireland requires ENS
  • GB to Northern Ireland = ENS required for Northern Ireland
  • Northern Ireland to GB = GB No ENS required

A GB EORI number is required for any UK port application.

Any declaration at EU ports requires an EORI number from the EU customs authority.

New Implementing Regulations in the Turkish Strait

Below are the latest updates to the Turkish Straits Passage Regulations, which were published on April 18, 2022, and will come into force on May 15, 2022.

The most significant change is the tug escort requirement for tankers over 175m in the Istanbul Strait, which currently only applies to lengths over 200m, and there is still no daylight limit.

  • LPG vessel with LOA up to 150m. and above should use pilotage services to pass through the Turkish Straits.
  • LOA 150m LPG carrier. And only use pilotage services and tugboats to assist through the Turkish Straits during the day.
  1. Vessels with an LOA between 150m and 200m should use tugs of at least 60t bollard towing capacity to pass through the two straits.
  2. Vessels with an LOA of more than 200m should use tugs of at least 90t bollard towing capacity to pass through the two straits.
  3. Depending on sea/weather conditions, the number or capacity of tugboats may increase.
  • Tankers with an LOA of 250m and above should be escorted by pilots and tugs through the Canakkale Strait during the day*
  • Tankers with an LOA of 200m and above should be escorted by pilots and tugs through the Istanbul Strait during the day. *
  • Tankers of LOA 175m and above should be escorted by pilots and tugs through the Istanbul Strait. *
  • Vessels with an LOA of 250m and above should be escorted through the Istanbul Strait during the day by a tugboat escorted by a pilot and a tugboat*

Vessels that refuse to be escorted by tugboats will not be scheduled as usual and will wait until the VTS Centre deems it safe to pass, which will certainly result in long delays to the schedule given the current weather and sea conditions.

For tankers with an LOA of more than 200 million, the fixed tug escort fee in the Istanbul Strait is USD 6.000 and the fixed tug escort fee in the Canakkale Strait is USD 6.500.

Tug escort charges for tankers in the Istanbul Strait are up to LOA 199,99m. is $4.000.

Please note that on May 9, 2022, Coastal Safety revised the Istanbul Strait tugboat escort fees as follows, which will be effective from May 15, 2022:

New Implementing Regulations in the Turkish Strait
New Implementing Regulations in the Turkish Strait

Using Big Data to Understand Shipping Rates

Using Big Data to Understand Shipping Rates
Using Big Data to Understand Shipping Rates

The trucking industry is a multi-billion dollar industry that keeps our economy going. Without freight services, businesses and households would have nothing, from food to toilet paper. However, most people don't really understand how big the industry really is. What's more, big data is critical to helping the trucking industry overcome two huge problems - driver shortages and fuel costs, two major factors driving freight rates. Take a closer look at both areas through big data.

Truck Driving Job Data

The biggest thing we hear from trucking is a shortage of drivers. The number of trucking jobs needed in the U.S. is projected to increase by 2025 so far, but what about the employment of truck drivers? The number of trucking workers has grown from about 1.2 million jobs since January 2010, according to the U.S. Bureau of Labor Statistics. As of May 2018, an estimated 1.5 million people worked in the trucking industry.

Operating cost of freight

Another key area to consider is the overall operating cost of trucking. In the trucking industry, trucking companies of all sizes get a share of the pie when it comes to freight costs. According to the National Transportation Institute, the cost of trucking includes:

  • Fuel costs about 40% of the total cost
  • 10% payment on truck lease or loan
  • 9% for truck maintenance and repairs
  • Truck insurance is 4%
  • 2% for licenses and permits
  • 2% of tires
  • 1% charge
  • Driver salary is 26%

All of these fees have an impact on the shipping price. For example, when crude oil prices rise, we see diesel prices and freight rates rising. When it comes to fuel, this is by far the largest part of any trucking company's budget. Therefore, it is easy to understand how fuel prices directly affect freight rates.

However, when interest rates rise, these loan payments and lease costs start to rise. The point is, as long as the economy affects the operating costs of trucking, it directly affects the cost that transportation customers pay.

Big Data Bottom Line

A shortage of drivers and rising fuel costs are just some of the reasons for the steady rise in freight rates. As you can see, it's a lot more complicated than any single answer. Other factors driving interest rates soaring include natural disasters, seasons and social disruption. Instead of trying to track the best shipping rates for your heavy equipment shipping needs, we recommend you turn to an expert.

How Electronic Logging Equipment Affects Freight Rates

How Electronic Logging Equipment Affects Freight Rates
How Electronic Logging Equipment Affects Freight Rates

Technology is dramatically changing the way the trucking industry works. From tracking shipments to managing service hours, technology plays a part in every shipment today. As a freight shipper, freight technology directly impacts how you manage your freight needs. A good example of industry-changing trucking technology is the use of electronic logging equipment.

Manage service hours

The biggest change that will happen with electronic recording devices is the time it takes to deliver goods. The new recording device uses wireless connectivity and electronic tracking equipment to record service hours for all commercial truck drivers. These logs record when truck drivers start and leave work as part of their service hours. According to service time rules, drivers can only drive for a certain amount of time before they need to stop and rest. One of the main reasons for the authorization of electronic recording devices is to reduce the number of fake logs recorded. Previously using paper logs, drivers could change their paper logs to change their HOS hours. Reasons Drivers do it, from driving over time to making up for lost driving time due to bad weather. Now, ELD has changed that.

Rate change

The longer it takes for your shipment to reach its destination, the more money you will spend. It depends on how long it takes the driver to manage your shipment. Loss of productivity coupled with ELD-related technology costs is expected to drive up freight rates. While the jury is still out on this, analysts predict a 3% to 5% increase in shipping. As a shipper, you need to be prepared for potential shipping costs as these affect your business.

In this situation, you can take some proactive steps:

  • Increase delivery times and schedule shipments more flexibly.
  • If desired, allow drivers to park during off-hours at your facility rather than having them leave the area to find truck parking.
  • Analyze your routes between 400 and 800 miles to determine how ELD directives will affect deliveries.
  • Visit the FMCSA website regularly to stay up to date with the latest ELD regulatory news.
  • Choose an ELD Compliant Carrier

Things to Consider When Researching Shipping Rates

Things to Consider When Researching Shipping Rates
Things to Consider When Researching Shipping Rates

 

When researching shipping rates, your task is to get the best shipping rates possible for your shipping needs. One way is to understand the makeup of shipping costs. Consider the different variables that affect rates and how those variables relate to your shipments.

Fuel cost

A common misconception is that if diesel prices fall, so will transportation costs. In addition to fuel costs, there are many other aspects such as FMCSA regulations and seasonal demands. Also, if you have a contract with a carrier that provides you with on-going freight service, you likely have locked in an inline shipping price that includes a fuel surcharge portion that reflects the price of the fuel pump.

Type of transport

The type of shipping service you need will also affect the overall shipping rate. You can expect to pay more for specialized freight including oversized cargo, tanker transport or refrigerated cargo. These types of transports require more time and effort, as well as expensive specialized equipment. You can save the most on shipping if you're dealing with flatbed freight or a basic dry van trailer, especially if the freight is touchless hitch.

LTL and vehicle

Another myth is that you have to fill a truck with 26 single stacks of pallets to get the goods out. Thanks to the boom in e-commerce, less-than-truckload shipping companies have increased bandwidth. LTL shipping is more accessible due to the supply and demand relationship between shipping customers in the commercial and residential sectors. This means you no longer have to wait until you have enough to fill a truckload to save on shipping.

Consider the cost savings and faster turnaround times you can realize if you choose to ship with LTL freight services. Whether you're shipping to warehouses, retailers, or directly to customers, your products get to customers faster. This enables your business to make more money faster and keep your products on the move.

Time of year

Certain seasons lead to peak shipping. Holidays and summer months are two of the busiest times of the year for operators. However, as produce picks up, spring freight demand will also increase. This also drives the demand for cargo trucks in the event of natural disasters such as hurricanes or tornadoes. Here's a good rule of thumb if you want to avoid skyrocketing freight rates in the spot market. Avoid shipping at the end of the month, before holidays, or at the end of the fiscal year.

Service Hours Rules

This brings us to the most important aspect of any shipping rate. The driver delivering your cargo is regulated by the Federal Motor Carrier Safety Administration as a commercial vehicle operator. FMCSA mandates regulations for truck drivers to ensure their safety and the safety of others. One of the latest regulations to come into force is the Electronic Recording Equipment Directive.

Save on shipping

All of these factors can change the price of shipping from one minute to the next. It is important to understand these variables so that you can prepare for a sudden surge in price.

Time-Saving Tips for Shipping Freight

Time-Saving Tips for Shipping Freight
Time-Saving Tips for Shipping Freight

For the best shipping rates, you want to start the process of preparing your shipment as soon as possible. Depending on what you're shipping, this may involve packing, packing, and placing your cargo on pallets for dry truck loading. If you have flatbed hauling, such as heavy equipment, you will need to collect the make and model, as well as the size and weight of the load. Once you have your load ready and have a solid plan for the size of the load, it's time to decide on shipping. By taking these steps before contacting the company for shipping costs, you can save a lot of backtracking.

Choose your shipping type

Do you ship by full truckload, including 26 pallets or 46,000 lbs? Or would you like to ship some of your shipments using less than full truckload (LTL) freight services? Either is possible, but you need to know which type of shipping service to request.

Choose a trailer

Determine the type of trailer required for loading. If the load requires weather protection and safety, a dry truck trailer is the way to go. However, your load must fit on a 53-foot wall trailer. If you're transporting oversized loads, heavy equipment or vehicles, a flatbed trailer is your only option. Unprocessed liquids and bulk commodities such as corn or grain require tanker trailers. A refrigerated trailer is required for cargo that must be kept at a certain temperature, such as frozen meat or fresh fruit. Know the basic trailer type you need to get a more accurate shipping rate.

Determine the distance

The biggest determinant of shipping costs is how far the goods need to be transported. Get the shipping and delivery destination addresses before contacting anyone for shipping costs. The freight company will calculate the exact mileage based on the actual mileage or short distance mileage. The difference between actual and short mileage is the mileage required to deliver the load. Typically, short-haul miles cost less than actual miles by up to 5%.

While you might be inclined to choose shipping rates based on short mileage, keep one thing in mind. Carriers who pay actual miles are generally considered higher-paid freight employers. These high-paying companies are able to attract higher-quality drivers who are more experienced and ready to work with the company long-term. This means for you usually a more specialized fleet to handle your freight and represent your brand in front of your customers.

Contact a shipping agent

You can contact individual shipping companies or independent contractors to obtain shipping charges for your shipments. However, time is of the essence, and you want to determine shipping quickly to avoid last-minute shipping surcharges. The easiest way is to contact a freight forwarder such as TJ chinafreight. We'll do the heavy lifting for you to shop around. Our team, working in over a hundred countries around the world, is always ready to help you. This enables you to get the most competitive price possible.

Make sure your load

Whether you hire a freight carrier or work with a shipping agent, you need to protect your cargo. This is where cargo insurance comes in. The shipping company will have its own liability insurance. However, you also need to make sure that the person you choose to ship the goods has adequate cargo coverage to cover the value of the goods you ship. If your load values ​​exceed your coverage limits, consider increasing your coverage.

Flatbed and Heavy Equipment Shipping Guidelines

Flatbed and Heavy Equipment Shipping Guidelines
Flatbed and Heavy Equipment Shipping Guidelines

Flatbed and heavy equipment shipping has unique requirements and considerations that organizations may not realize until they have a pressing need. In today's "just-in-time" supply chain, it's increasingly important to be prepared for the unexpected, as any delay or error can be catastrophic, potentially costing thousands of dollars. Even minor missteps can strain customer relationships and result in business being awarded to competitors. The purpose of this guide is to detail some of the things you need to know in order to transport heavy equipment safely and efficiently while making the most of your resources.

Learn about shipping types

Here's a breakdown of shipping types to help you understand where heavy equipment shipments apply:

Legal load

Legal load is the load that does not exceed the allowable dimensions of the trailer and the weight limit of the trailer

Fully loaded

This is a situation where the shipper's cargo is only moved on a trailer.

Partial Load/LTL

A partial load (or LTL) is when the shipper's cargo is moved on the same truck with someone else's cargo. This helps split the cost of the truck and reduce overall shipping costs. This may increase the time required to deliver the goods.

Oversized cargo

Oversized cargo is any load that exceeds the trailer width and/or weight limits. In the US, most states consider oversized loads wider than 8' 6" or wider than 13' 6". Loads that are too long (combined length) or too heavy (total or per axis) are also classified as oversized, although specific regulations often vary by state.

Flatbed freight

Flatbed freight is any load placed on a flatbed trailer. Flat loads need to be secured by the driver and exposed to the elements. Since the load on the flatbed is open, a crane can be used instead of a forklift, allowing many large industrial commodities such as large generators, bridges, prefabricated houses and steel pipes to be loaded more efficiently and safely, simplifying transportation. Flatbed trailers can Loads from the sides and top and can accommodate full width loads. Flatbeds are very common in the United States and Canada and are widely used in construction and industrial loads.

Flatbed trailers do not require a permit to carry cargo up to the length of the trailer. This is usually 48 feet to 53 feet long, 8 feet 6 inches wide, 8 feet 6 inches high and no more than 48,000 pounds. It's usually best to reduce the overall weight to 47,000 pounds or less to find a truck, as not all trucks can be extended up to 48,000 pounds, and they generally don't want to haul very heavy loads because they cost more to fuel.

Lowboy Freight

Lowboy and flat mounts are similar. Low-profile trailers - also known as double drop or RGN - have a significantly lower deck height. This essentially reduces the overall height of the load, which prevents the load from falling into an excessive load limit. These trailers also allow higher loads to be transported without the additional cost and safety concerns of oversized heavy equipment loads.

Know exactly what you're shipping

When transporting heavy equipment—especially machinery like excavators, motor graders, and rock trucks—you have to know exactly what you're transporting. Not sure what details or information are important to your shipping provider? Here's a quick breakdown:

The make and model of the device. Knowing the basics is essential for transporting heavy equipment.
Have any modifications been made to the device? Any information that may change the basic specifications of your shipment should be noted.
Exact size and weight. An inch or two off can mean your load requires a different truck or a different route, which can create significant cost differences and delays. Having an accurate weight is just as important, especially when handling any heavy loads, as the difference can mean a different type of trailer may be required to move your load. It can also greatly affect how fast your shipments can move and your delivery schedule.
Package. Be sure to let your shipping provider know how your heavy equipment shipment will be packed. Is it palletized? boxed? Need to cover with tarp?
Photos/any other details. Any other information you can provide to your shipping provider will help that person provide you with the best service and results.

Make sure everything runs smoothly

Bill of lading

Completing the bill of lading for your heavy equipment shipment helps ensure all your i's are dotted and your t's are crossed.

A bill of lading is a document that contains the details of the goods, the place of pickup, the place of delivery, the carrier responsible for the shipment, etc. It may also include pickup and delivery numbers, purchase order numbers, and specific information about what the item is and what is being shipped. If applicable, it may contain customs broker information for cross-border shipments.
If you want to ship consistently, does it make sense to create a PDF document with directions, as well as a contact name and phone number you can give the driver to help avoid additional question calls.

Choose someone you trust

I know it's hard for people to understand what we're doing to help them from a transportation provider's point of view. Hopefully this guide has provided you with the information you need to make better heavy equipment shipping decisions that will benefit your company long into the future. Along the way, I hope I can provide you with insights and information, and TJ chinafreight helps you understand how your shipping partners can help you achieve better results.

Details to remember when transporting heavy equipment

Details to remember when transporting heavy equipment
Details to remember when transporting heavy equipment

Understandably, most customers want the best combination of price and service to ship heavy equipment. Often, the company with the most detailed information gets the best prices, the best service, and the most loyal truck drivers. Unfortunately, it doesn't take much to make truckers want to pass on your cargo.

In order for shippers to have the opportunity to receive the best price and best service, they need to ensure that their heavy equipment shipments are attractive to as many trucks as possible. Having as much information as possible - including small details that can have a big impact on truckers and shipping - can help make your shipments more attractive and give you the best results (pro tip: working with a shipping partner can make a big difference Influence how truckers view your shipments and help you get the best price, service and delivery schedule).

Gather important but small details about the actual heavy equipment you are shipping.

When transporting any type of heavy equipment, having as much information as possible is essential to ensure safe and efficient transport. Here is a list of some of the most critical data to share with your shipping partner (or review it with your shipping partner so he or she can help you fill any gaps!):

  • The value of the commodity. How much is your heavy equipment worth, literally?
  • The make and model of the device. Be sure to know exactly what you're shipping.
  • Any modifications made to the equipment. It is important to be aware of any information that may change the basic specifications of your shipment.
  • Precise size and weight. An inch or two off could mean a different truck or a different route for your load. This has the potential to cause significant cost variances and/or delays. For heavy equipment, the exact Weight is also important, which affects which type of trailer is required. Ultimately, size and weight also affect your shipping costs and schedule.
  • Package. Will your heavy equipment be palletized or boxed? Need to cover with tarp?
  • A photo of your device. Photos are a great reference point to make sure everyone is on the same page.
  • Relevant names, phone numbers and emails. Having this information at your fingertips prevents scrambling. This information should be collected for delivery and delivery and customs brokers (together with account numbers).
  • Pickup and delivery routes. Likewise, having direction at hand can keep everyone on track and set expectations.
  • Hours and days of operation for pickup and delivery. If the driver arrives with heavy equipment and the recipient isn't ready or unable to receive it, these details can help prevent a big headache!
    Customs documents. This is especially important for heavy equipment that will cross the border between Canada and the United States.

Take the stress out of transporting goods.

Gathering all this information can be time-consuming. If the thought of collecting and organizing all this information is overwhelming, you may want to consider working with a trusted shipping provider.