As e-commerce and the global economy continue to expand, supply chains everywhere feel the strain. According to the Institute of Supply Management, manufacturing activity grew again in February, marking the sector’s 18th consecutive month of growth. The institute also revealed that the overall economy has grown for 105 consecutive months since the recession of the […]
Self-driving cars are all the rage these days, with everyone from Hyundai to General Motors getting in on the action. The technology represents big business, with Intel and Strategy Analytics reporting that the autonomous vehicles could add $7 trillion to the global economy by 2050.
We’re still a few decades out from that vision, but autonomous vehicles have already started to infiltrate the shipping industry. Startups such as Embark are using autonomous trucks to ship refrigerators 650 miles between El Paso, Texas, and Palm Springs, California. The trucks are fully automated, though human passengers ride shotgun in case of an emergency. Tesla, meanwhile, is working with major companies such as Walmart to test fleets of autonomous trucks.
Despite these exciting steps forward, it will probably still be at least 10 years before fully autonomous vehicles are a widely used method of shipping freight on American roadways. Even with prototypes logging miles on the road today, it’s still a bit early to say exactly how the industry will change. The only certainty is that the logistics industry will never be the same again.
The Benefits of Autonomous Trucks
To examine the short- and long-term future of this technology, we must first differentiate between fully autonomous and semi-autonomous trucks. Semi-autonomous trucks, including the vehicles Embark and Tesla are using, require partial engagement from humans in the truck cabs. Fully autonomous trucks that would require no human operators whatsoever probably won’t be hitting the roads until there are dedicated lanes for trucks.
Even a slight degree of automation can create opportunities for cost savings in transportation. Platooning, one semi-autonomous technique, enables carriers to save up to 10 percent on diesel fuel costs. Trucks use advanced sensors surrounding the vehicle to stick together in close lines. This minimizes drag, reducing the work that the engines must perform. When one truck leaves the line or another vehicle disrupts the line, the other trucks in the platoon automatically adjust for the changes.
Automation has incredible potential in the shipping industry, but many business leaders naturally gravitate toward how it can boost their budgets. For instance, some Caterpillar mining trucks in Australia have helped save 500 hours of work annually by handling small shipments. Imagine the results if automated trucks were to handle the entirety of your freight needs.
The benefits of automation extend beyond just cost savings and efficiency, though. Autonomous vehicles obey safety protocols to the letter, and they can operate during the middle of the night, when the roads are relatively free of drivers. That means fewer tired truckers, faster shipments, and a likely reduction in accidents.
Some drivers understandably fear that these trucks will take their jobs, but autonomous trucking will redefine what it means to be a truck driver rather than replace the position entirely. New skills, like logistics management and repair specializations, will take priority both within the cab and outside of it. Human drivers will still be necessary to take trucks to their final destinations, refuel the vehicles, and load and unload shipments.
Major fleets might experiment with the technology sooner, but the high cost of early adoption means many owner-operators will be slower to switch over to fully autonomous trucks. Independent contractors will be able to sit back and assess the landscape as new regulations, safety protocols, and other factors take shape. Once the dust clears, experienced drivers will still have a seat at the table — though their responsibilities will change.
How Automation Will Forever Change Shipping
While it won’t happen tomorrow — or even next year — autonomous vehicles are going to spark a dramatic shift in logistics. The technology will set off major shockwaves in three key areas: driver employment, delivery times, and costs.
- Evolving Job Duties
The ongoing driver shortage will not disappear with autonomous vehicles. Companies still desperately need drivers, and that won’t change before the autonomous shift or during the transition period. The fewer drivers that are available, the longer and more difficult the transition process will be.President Donald Trump’s plan to allow some form of apprenticeship for new drivers could help, but technology will play a larger role than policy in this issue. Fully autonomous trucks won’t need drivers in the traditional sense, but they will need human logistics managers, maintenance professionals, and other skilled laborers to remain operational. The drivers of today will be able to gain new skills and embrace exciting opportunities.
- Shortened Delivery Times
Robots don’t have to obey laws related to hours of service. Computers don’t need to sleep, eat, or live their personal lives off the clock. They will need a tuneup every now and then, but robots are able to stay on the road much longer than their human counterparts.Existing HOS laws exist to protect everyone from sleep-deprived truckers hauling loads to meet tight deadlines. Robots are able to adhere to incredibly rigid schedules, which are reduced thanks to the elimination of eight hours of sleep every day. With this increased efficiency, logistics managers will have a field day optimizing schedules.
- Reduced Costs
Not paying drivers is cheaper than paying drivers, but the savings extend far beyond shippers and carriers. Provided that autonomous trucks are safer than humans, we can expect to see insurance costs drop over time. As these costs go down, shipping organizations will be able to pass on the savings to their clients — all the way to consumer products in stores.
At Sheer, we aggressively vet the carriers in our network and rate them based on their levels of service. When fully autonomous trucks become a reality, we will continue to measure carrier performance to track the effectiveness of autonomous trucks. Once autonomous vehicles prove their potential advantages, we’ll be ready to leverage the technology to benefit our services and our clients.
Interested in learning more about the evolution of shipping and logistics? Download our whitepaperto discover how your company can get ahead of technological advances in the shipping industry.
Regardless of how tempting it might seem, the fastest and cheapest route is not always the right choice.
Think about the last time you bought a nice outfit. Snagging a suit off the discount rack at a department store will save you a few bucks today, but it’s not likely to impress anyone at your next job interview. You could also invest some extra money now to get a custom-made garment from a local tailor, ending up with an outfit that makes you look like a million bucks. Five years down the road, which suit do you think will still be in your wardrobe?
In other words, inexpensive fixes can come back to haunt you. A tailored option will be your new best friend, and a one-size-fits-all solution will not likely stand the test of time. Finding an ideal third-party logistics (3PL) partner requires the same sort of careful consideration and pragmatism as buying a treasured article of clothing.
Although most companies understand they need to look beyond price when it comes to shipping — “cheaper” often hinders scalability and affects consumer confidence — they are not always sure how to find a provider that will deliver superior results. A true logistics partner will understand your business, create a customized service for your shipping needs, and provide complete transparency in terms of where your money is going.
The Importance of Reading the Fine Print
If you need outsourced 3PL services, don’t instinctively put all your eggs in an off-the-shelf basket. Before you sign on the dotted line, spend some time reading the fine print to ensure you choose a partner that can design a strategy based on your operations, budget, and objectives. These four steps will get you started:
Focus on providers that understand your business.
One of the quickest ways to narrow your initial list of potential 3PL providers is to figure out which ones have worked in your industry before. Unless you operate in a completely unique and emerging business segment, you will likely be able to find firms accustomed to working in your sector. This foundational knowledge will decrease the amount of time 3PLs require to understand how to best serve you and your customers. Contact references in your industry to ensure other companies have had satisfactory experiences with your preferred candidates.
Prioritize accountability and transparency.
Any vendor should be turning a profit for its services, but you want a partner that offers complete transparency in terms of where your money is going. A credible 3PL firm will be transparent about its rates, aligning compensation with value shared by both parties.If a 3PL is reluctant to provide honest answers about its upfront and continuing costs, you should look elsewhere. Considering that about 90 percent of Fortune 500 corporations in America use 3PL providers, there are plenty of genuine companies out there that will be willing to stand behind their service.
Expect plenty of close interaction.
Does one of your top candidates claim it will not need much of your time? Consider that a major red flag. Any worthwhile 3PL partner will want to have multiple conversations with you and your team members from day one.Your internal teams will have a variable level of engagement with your logistics partner over time, but everyone should be highly engaged and working in tandem during the implementation phase, which can last up to three months. Be suspicious of firms that promise to have you up and running with minimal effort in a matter of weeks. If potential providers don’t prioritize communication and collaboration early in the relationship, that is not likely to change months or years down the road.
Be prepared to share information.
You might feel hesitant discussing proprietary information with outsiders, but it’s absolutely necessary to let any 3PL you are considering know everything you can about your current supply chain. These conversations should cover everything from shipment volume to delivery locations to transit times. The more information you are able to provide, the easier it is for potential partners to evaluate your current situation and propose a customized solution to resolve any issues.
Finding a 3PL partner is not a simple process, but the time you put in at the outset will more than pay for itself later. Once you have developed a short list of potential providers, issue an RFP to ensure everyone bids from the same starting place.
Dedicate ample time to reviewing proposals and performing due diligence. Meet with top candidates face to face, tour their offices, and get to know their teams. After a thorough evaluation process, you will be free to sign a contract knowing you have made the best decision for your company and the customers you serve.
Want to figure out whether Sheer could be a great 3PL partner for your company? Contact us today to develop a plan for your business based on our extensive logistics expertise.
Companies that don’t have a dedicated logistics department don’t always have insight into how complex shipping their freight can be. Some of them, however, are aware of this shortcoming and, therefore, rely on big corporations with high brand/name recognition that they see as leaders in the transportation industry. Unfortunately, the biggest name in the business isn’t always the best partner for your company.
Instead of handing shipping responsibilities over to a brokerage firm, your company could benefit more from partnering with a consultant who understands the logistics of shipping your specific type of freight. At Sheer Logistics, we don’t come in and dictate how we’re going to ship your freight. We collaborate closely with you to determine the best approach, help you find carriers that best suit your needs, and help you handle as much of the operation as you want to.
Building a Better Mousetrap for Clients
Any professional working in transportation understands that the more complex your supply chain is, the more factors you’ll need to consider when looking at potential carriers. For instance, if you make a small product, how much should be shipped at a time? Shipping a less-than-full load could prove more expensive than you initially thought, and you could risk a loss if the carrier isn’t properly equipped to handle the small size of your freight.
Some carriers specialize in transporting certain types of products, while others are experts in handling different sizes of freight. Choosing the right providers can be confusing, which is why a logistics partner offers much more than just transportation. We share our expertise and apply it to helping clients determine which strategy works best for them and their unique situation.
To remain client-centric, our consultative approach focuses on three major factors:
Sheer combines specialized expertise, advanced technology, and powerful analytics to help you streamline your shipping operations. Yet what truly sets us apart is our dedication to engaging strategically with our clients, which begins with an unique level of transparency.
As your consultants, we’re able to engage with you from a project management perspective. When you have complicated freight to ship — like shopping carts, for example — factors such as multiple drops and steepness in the road can make shipping a challenge. We add value by analyzing the entire project, leveraging our systems to find the most cost-efficient shipping methods, and participating as one of several different carriers.
Transparency and engagement also allow us to provide a diverse range of solutions that truly empower you to drive the process yourself as much as you wish. You can be more confident in the process when you know that operations are in your control, and we can leverage our services accordingly depending on your desired level of engagement.
Rather than take over the shipping aspects of your operations, we empower you to work with existing carriers and even procure new carriers that offer the best service. We also participate as a carrier, but at the same time, we give you the option to be in charge of tendering your own freight. Our service complements what your program already looks like, and it drives value by helping you save money and be more profitable while remaining in control.
Giving clients options and power over their shipping processes is only possible thanks to our ability to personally qualify opportunity areas, which is driven by strategic reporting and analysis. We didn’t invent the wheel, and we don’t try to dictate which way you should turn it. Instead, we help you figure out how the wheel would work best for you.
The backbone of our versatility is the ability to provide business intelligence and technologythat’s best in class. The difference is that we use our resources to deliver relevant data points in a manner that’s tailored to your specific business needs. That means delivering the information you need, when you need it. Through our online portal, you can obtain real-time logistics data on carriers that are en route with your freight and receive real-time email notifications with customized updates.
The difference between working with a big-name firm and partnering with a more consultative company like Sheer is the customized approach that the big guys simply can’t provide. We’re consistently committed to engaging and empowering clients through excellent service, transparency, communication, and cost savings, regardless of their size.
Ready to team up with a true logistics partner? Contact us to discuss how Sheer can help you meet your transportation goals.