Independent agents are partners in growth for logistics providers

Agents act in much the same way as manufacturers reps. They represent logistics providers and are deeply ingrained in the industry, using their experience and knowledge to help their clients grow their operations.

“Logistics agents are recruited when a logistics provider is looking to grow into new markets or otherwise expand their business,” says Kevin McLaughlin, vice president of sales and business development at AMWARE Companies.

“Agents can be productive partners if logistics providers work with them in identifying the right industries and markets for growth. Two-way partnerships with the right agent are worth their weight in gold.”

Smart Business spoke with McLaughlin about independent agents and how they help logistics providers grow.

Why does a logistics provider typically work with an independent agent?
Typically, providers decide to work with agents when they want to gain access to customers that are outside their current reach, often because those customers are in new geographic or vertical markets.

Agents offer expertise in reaching these targets and have valuable relationships that can be leveraged to make introductions. They provide tremendous return on investment as they are normally compensated solely on their ability to produce results.

What are the two types of independent agents and how does one differ from the other?
The two types of agents are traditional and non-traditional. Both types of agents work closely with logistics providers to grow their businesses, but in slightly different ways.

Most agents would be considered traditional. They have myriad industry relationships, deep industry knowledge and a background of success in business development or sales.

Non-traditional agents may operate their own businesses and use the provider’s service as a platform to add logistics support to their existing suite of services. As an example, a 3PL may physically house and move materials, but not offer a robust logistics solution to its end user.

Acting as an ‘agent,’ that organization increases its value to its customers within a proven model. The types of organizations are endless, and effectively apply to any company selling goods into a specific vertical.

What should a logistics provider consider as it goes through the process of choosing an agent?
Choosing an agent should be done with the same care a company would use to hire an employee. The person should fit culturally and have strong professional integrity, which are important because agents are out in the field representing them in the market, so it’s important to know they’re acting on shared core values.

Experience also matters. Companies should consider agents’ past experience in the vertical they’re looking to enter, as well as their success in sales or business development in that vertical.

But the key is relationships. Agents can only be effective if they’ve developed a network of relationships that enable them to bring a provider into conversations that it hasn’t been in before.

What should logistics providers understand about the agent/client relationship that will help them get the most out of the arrangement?
Regardless of their industry experience, connections or sales ability, agents are only as good as the service and support that their logistics providers give them.

Agents need partners that are working as hard as they are, otherwise they’ll become hesitant to spend the time it takes to grow a business and might be unwilling to put their hard-earned relationships at risk. Providers that can’t or won’t support agents working in the field on their behalf won’t get their full effort, and that can lead to disappointing results.

Insights Logistics is brought to you by Amware

Low price doesn’t mean greatest savings with LTL shipping

When it comes to less-than-truckload shipping (LTL), companies are looking for the right carrier with the best transit times, rates and services.

“It’s a challenge to find the best carrier because there are so many running the same routes,” says Brad Mullins, COO at AMWARE Companies.

When searching for an LTL shipping provider — of which there are many — companies tend to spend a lot of time online visiting carriers’ websites, typing in the same information over and over to get their rates and transit times.

“Shippers that have 100 orders a day are often getting three to five quotes per shipment. The time it takes to do that becomes a challenge,” he says.

Given the consolidation that’s happened in many companies’ traffic departments, finding a third-party logistics provider (3PL) that can not only find competitive rates, but offer other time-savings services, can bring real bottom-line value.

Smart Business spoke with Mullins about how the right 3PL can make shopping for the best LTL carrier easier.

What challenges do companies typically face when it comes to finding an LTL carrier?
Not every shipment is built the same. There are myriad product types under many National Motor Freight Classification designations, all of which are factors when negotiating shipping costs with carriers. And only when carriers have been contacted and specific rates have been negotiated can rates be compared against all others to find the best price and transit time for a particular shipment.

Because the traffic departments of a lot of companies have been consolidated, there’s no longer multiple personnel available to deal individually with all the aspects of the department — loading trucks, finding and comparing shipping rates, scheduling production, etc. It’s often the case that one person is loading trucks and negotiating rates with carriers. This is why 3PLs have become such a key partner in recent years.

How can 3PL companies help with LTL shipping?
Having a shipping partner that has the experience needed to compare shipping costs among LTL carriers is important, and it’s a service that can be found in some 3PL companies. These companies can gather the information and find the best quotes for each LTL shipment, eliminating the time burden while quickly finding the best prices. They’re a partner and a consultant that has the technology combined with an understanding of shipping characteristics to narrow down the choice of carriers.

Some 3PL companies have a full team of dispatchers who can help move freight. They will find the best LTL carrier for the job, schedule the pickup and complete all of the paperwork that goes along with the delivery and deal with any discrepancies to ensure the price quoted is the price charged. They’ll even handle the billing.

Not all 3PLs have a team. Some just have software tied to their websites that traffic department personnel can use to manually search rates.

Companies can also find 3PLs that are able to integrate their shipping software with a company’s existing Enterprise Resource Planning systems. That enables the provider to populate shipping characteristics the moment an order is received, and begins the routing process.

What benefits can companies realize by partnering with a 3PL to handle their LTL shipping?
Partnering with a full-service 3PL company offers relief to a company’s traffic manager, enabling them to get back the time needed to make sure the right product gets on the right trucks rather than managing carriers.
There’s also a bottom-line benefit to working with a 3PL.

For instance, some traffic managers can spend three hours every day trying to find the right carrier for every shipment. By working with a 3PL, those three hours can be deployed elsewhere. It means consistently getting the best shipping prices while lowering the time spent finding them, which brings down overhead costs.

Not every 3PL is the same. Full-service 3PLs offer deeper services to manage all of a company’s LTL shipping. Find a company that can be partner and consultant. Working off of price alone will not help companies achieve the savings they’re looking for.

Insights Logistics is brought to you by Amware

Reduce your parcel shipping expenses through software

Parcel delivery is more than shipping packages on time. There are elements of auditing and contract negotiation that when applied diligently can recover hidden savings.

“Say you ship a package through one of the major carriers using next day air so it arrives at 10 a.m. If it gets there at 10:01 a.m., it’s late, which is not uncommon, and you could be due a refund. However, if no one at the company is auditing shipments, there’s no way to know a refund is due. Companies that make hundreds of thousands of shipments are leaving a lot of unclaimed money out there,” says George W. Reyes, executive vice president at AMWARE Companies.

Companies can also find savings through contract engineering, which is a process of comparing rates to identify discounts that can be applied to pricing agreements.

Fortunately, in both cases, that work can be done through time-saving software. Unfortunately, most companies don’t realize that such software exists.

Smart Business spoke with Reyes about how parcel auditing and contract engineering software can be deployed to save money on shipping.

What challenges come with parcel audits?
Companies often skip parcel audits because the manual process is time-consuming and laborious. Carriers send shipping invoices weekly, each of which can be hundreds of pages.

Most companies don’t have parcel auditing software in house. Instead, someone in the accounting department spends a considerable amount of time thumbing through shipping invoices to find any incorrect charges. And there’s a lot to look at.

Among the issues to review are shipping times, which should be checked against the guaranteed delivery times to see if a refund is due for late delivery. Also, the major carriers assume a package’s weight through its dimensions. There are enough instances of incorrect weight assumptions that companies that don’t catch the error will overpay for a shipment.

Why scrutinize pricing agreements?
Pricing agreements for parcel shipping are designed to be confusing. To untangle the language, companies use contract engineering, which is another method of ensuring parcel shipping costs are kept as low as possible. Many companies are unaware of what can be negotiated in an agreement.

Much like parcel auditing, contract engineering is done through software, instantly comparing levels of service with thousands of other shippers to find appropriate discounts and improve pricing agreements with carriers.

How is parcel auditing and contract engineering software implemented?
Adopting the auditing software is easy. Not much about companies’ shipping processes change — they will still get invoices from their carriers and still pay them directly. Companies just set up an online account and the software automatically does the rest.

Contract engineering is a little more involved. It uses data captured though the auditing software to analyze better pricing agreements. The process typically takes one month, largely because the new agreement needs to be negotiated with and changed by the carrier.

What does the software cost?
Typically there are no costs. Whatever savings are found through an audit  — companies typically save 5 to 6 percent on shipping — is split evenly between the software provider and the company. That means the software doesn’t have to be a budgeted line item because it’s paid for exclusively through found money. That money was already spent on shipping, and now some of it is coming back just by uncovering errors.

It’s the same with contract engineering — it’s paid for entirely through found money. If a discount can be found on shipping, part of that savings comes back to the company, offsetting its shipping costs, while the other part pays for the software.

Don’t be taken advantage of by the only two major parcel carriers in the market. Find a partner that has the technology and software to ease the pain of auditing and negotiating parcel agreements.

Insights Logistics is brought to you by Amware

How to cost-effectively navigate the tightening logistics market

The logistics industry is being affected by two divergent trends: a driver shortage and growth in the U.S. economy. The confluence of factors has greatly reduced capacity, leaving shippers with the uncomfortable choice to either take an expensive option or to have their materials sit.

“Shippers of all types are feeling the effects of these trends in increased freight rates,” says Matthew Fink, vice president of transportation at AMWARE Companies. “However, there are tactics that can save companies from absorbing the additional freight expenses or having to pass them along to their customers.”

Smart Business spoke with Fink about strategies to cost-effectively navigate today’s shipping challenges.

What is a shipper of choice?
Shipper of choice is a term that delineates companies that build quality relationships with their logistics suppliers. It can make a company’s freight more likely to be hauled quicker and at reasonable pricing, something that’s important as logistics capacity tightens.

Most of the components of a good shipper of choice program are fairly inexpensive to implement, and in some cases are free — paying invoices early or consistently on time, treating drivers well. What remains can be difficult, but follow best-in-class sourcing and procurement activities.

For years, trucking has been treated like a commodity, and shippers did not develop durable relationships with their transportation suppliers. Transportation companies have to be treated like any other material supplier. Preferential treatment regarding capacity, commitments and payment terms, however, requires a partnership.

What are dedicated solutions in logistics?
Dedicated solutions can vary in depth, scope and formality. At a basic level, there can be a noncontracted commitment to scheduled movements where a carrier dedicates a specific amount of capacity to a customer.

More formal arrangements can include service-level agreements, performance incentives and the sharing of risk for damaged or late materials.

The misperception is that only big companies can install an effective, dedicated program, or that dedicated programs are inflexible and more expensive than a traditional network design. Rather, when proper care is used in scoping the needs and determining the value of a dedicated program, companies can realize value without having enormous volumes or signing an unfair agreement.

What should companies look for in a request for quotation from logistics companies?
Extreme care should be used when crafting a request for quotation (RFQ). Too many constraints will dissuade carriers from participating, and too loose of a program won’t ensure supplier accountability.

The keys to a great sourcing event are to ensure the data returned is comparable and doesn’t require reassembly to make an apples-to-apples comparison. That could affect the integrity of the data and assumptions can be made that result in future billings not matching expectations.

While consistency is helpful, companies should allow suppliers to present alternative and creative solutions. Ask respondents to adhere to the RFQ template, but give them room to put their expertise on display.

How can companies leverage their logistics provider to drive value in their supply chain?
The right logistics partner will be able to leverage all aspects of its network to optimize and provide efficient and flexible solutions. Ideally, your logistics partner will be able to provide a balanced solution as both an asset-based provider and leveraging a robust 3PL network.

The work companies put into their logistics network can be shared with their customers. That transparency and collaboration from order to cash will enable all stakeholders to reap the benefits of network optimization.

Supply chains are maturing at an incredibly rapid pace. The proper resources and business plans have to be installed to stay in front of the competition. Embrace the value in the supply chain, leverage the expertise of partners and work in a collaborative fashion with customers and suppliers.

Shippers are not at the mercy of the market. There are levers they can pull to optimize and protect their business.

Insights Logistics is brought to you by Amware

How your products are delivered is a reflection upon you

Third-party logistics (3PL) companies have to deliver freight to their customers on time and undamaged. Finding a logistics company that is capable of consistently executing and safely warehousing products requires due diligence.

Warehousing is critical because customers are judging the companies from which they purchase goods based on the condition and timely delivery of those goods. Damages or delays reflect poorly on the manufacturer.

“A product manufacturer’s customers have no idea a third-party is involved with the storage and shipping of their order,” said George W. Reyes, executive vice president of AMWARE Companies.

Smart Business spoke with Reyes about how to find a 3PL that will uphold a company’s reputation for quality and attention to detail.

What troubles do companies tend to have with warehousing and logistics?
Product manufacturers, for example, rely on third-party warehousing and logistics partners to get the right product, the right lot number, and the right quantity — with the right labeling — to their customers on time.

It’s a very fast-paced business that requires a high degree of organization and accuracy to execute correctly and consistently. If the third-party provider makes mistakes, it reflects poorly on the customer because it’s their name on the product being shipped.

When executed correctly, 3PLs add value to the supply chain by labeling and prepping the products to be shipped. Regardless of those extras, it all needs to be done just-in-time and without error.

More and more, companies forego having their own asset-based warehouses because they’d rather invest that money in improved or additional manufacturing space. That’s why it has become increasingly popular to outsource warehousing and logistics to a third party. Outsourcing places the responsibility of product distribution to the third party, saving companies the huge costs associated with running a warehouse.

What should businesses consider as they look for outside warehousing help?
The condition of the warehouse (structure) is often overlooked by companies conducting due diligence to find the best 3PL provider. Businesses seeking to partner with a 3PL should look for a company that has a well-constructed, modern building.

The geographical location of the warehouse is another often overlooked component. Companies looking for a warehouse would be well-served to partner with one in a favorable geography to its client base. Cleveland is a fantastic market because products sent from the city can reach 70 percent of the U.S. population in one day or less.

Technology also plays a significant role in warehousing. For instance, does the warehouse use RF scanners for lot control, accountability and accuracy? There should be a sophisticated inventory management system that can handle the type of inventory needed for the product being warehoused.

Some manufacturers need a logistics provider that can accommodate a first-in-first-out process. That system needs to be fail-safe when it comes to picking the correct lot number and date of manufacturing. Sending the wrong batch can create a host of costly problems the manufacturer will be forced to reconcile.

Two other aspects to consider are quality control and inbound/outbound processes. Ask about inventory accuracy rate — some companies maintain rates as high as 99 percent. Also consider the hours of operation. Some warehouses keep standard business hours while other companies adjust to their customers’ hours of service.

How does price factor into the decision?
Price alone should not drive the decision to work with one logistics provider over another. It’s critical to conduct a background check on the warehouse provider. Companies looking to partner with a 3PL or warehouse should make sure they have quality facilities and experienced and knowledgeable staff capable of handling the distribution of specific products.

It can be surprising to some companies when they compare potential providers against their current provider and find out how little they were getting for what they were paying. Find a good partner that has your and your clients’ needs in mind, because if it’s a one-way street, the relationship is doomed.

Insights Logistics is brought to you by Amware

Low price doesn’t mean greatest savings with LTL shipping

When it comes to less-than-truckload shipping (LTL), companies are looking for the right carrier with the best transit times, rates and services.

“It’s a challenge to find the best carrier because there are so many running the same routes,” says Brad Mullins, COO at AMWARE Companies.

When searching for an LTL shipping provider — of which there are many — companies tend to spend a lot of time online visiting carriers’ websites, typing in the same information over and over to get their rates and transit times.

“Shippers that have 100 orders a day are often getting three to five quotes per shipment. The time it takes to do that becomes a challenge,” he says.

Given the consolidation that’s happened in many companies’ traffic departments, finding a third-party logistics provider (3PL) that can not only find competitive rates, but offer other time-savings services, can bring real bottom-line value.

Smart Business spoke with Mullins about how the right 3PL can make shopping for the best LTL carrier easier.

What challenges do companies typically face when it comes to finding an LTL carrier?
Not every shipment is built the same. There are myriad product types under many National Motor Freight Classification designations, all of which are factors when negotiating shipping costs with carriers. And only when carriers have been contacted and specific rates have been negotiated can rates be compared against all others to find the best price and transit time for a particular shipment.

Because the traffic departments of a lot of companies have been consolidated, there’s no longer multiple personnel available to deal individually with all the aspects of the department — loading trucks, finding and comparing shipping rates, scheduling production, etc. It’s often the case that one person is loading trucks and negotiating rates with carriers. This is why 3PLs have become such a key partner in recent years.

How can 3PL companies help with LTL shipping?
Having a shipping partner that has the experience needed to compare shipping costs among LTL carriers is important, and it’s a service that can be found in some 3PL companies. These companies can gather the information and find the best quotes for each LTL shipment, eliminating the time burden while quickly finding the best prices. They’re a partner and a consultant that has the technology combined with an understanding of shipping characteristics to narrow down the choice of carriers.

Some 3PL companies have a full team of dispatchers who can help move freight. They will find the best LTL carrier for the job, schedule the pickup and complete all of the paperwork that goes along with the delivery and deal with any discrepancies to ensure the price quoted is the price charged. They’ll even handle the billing.

Not all 3PLs have a team. Some just have software tied to their websites that traffic department personnel can use to manually search rates.

Companies can also find 3PLs that are able to integrate their shipping software with a company’s existing Enterprise Resource Planning systems. That enables the provider to populate shipping characteristics the moment an order is received, and begins the routing process.

What benefits can companies realize by partnering with a 3PL to handle their LTL shipping?
Partnering with a full-service 3PL company offers relief to a company’s traffic manager, enabling them to get back the time needed to make sure the right product gets on the right trucks rather than managing carriers. There’s also a bottom-line benefit to working with a 3PL.

For instance, some traffic managers can spend three hours every day trying to find the right carrier for every shipment. By working with a 3PL, those three hours can be deployed elsewhere. It means consistently getting the best shipping prices while lowering the time spent finding them, which brings down overhead costs.

Not every 3PL is the same. Full-service 3PLs offer deeper services to manage all of a company’s LTL shipping. Find a company that can be partner and consultant. Working off of price alone will not help companies achieve the savings they’re looking for.

Insights Logistics is brought to you by Amware

How your products are delivered is a reflection upon you

Third-party logistics (3PL) companies have to deliver freight to their customers on time and undamaged. Finding a logistics company that is capable of consistently executing and safely warehousing products requires due diligence.

Warehousing is critical because customers are judging the companies from which they purchase goods based on the condition and timely delivery of those goods. Damages or delays reflect poorly on the manufacturer.

“A product manufacturer’s customers have no idea a third-party is involved with the storage and shipping of their order,” said George W. Reyes, executive vice president of AMWARE Companies.

Smart Business spoke with Reyes about how to find a 3PL that will uphold a company’s reputation for quality and attention to detail.

What troubles do companies tend to have with warehousing and logistics?
Product manufacturers, for example, rely on third-party warehousing and logistics partners to get the right product, the right lot number, and the right quantity — with the right labeling — to their customers on time.

It’s a very fast-paced business that requires a high degree of organization and accuracy to execute correctly and consistently. If the third-party provider makes mistakes, it reflects poorly on the customer because it’s their name on the product being shipped.

When executed correctly, 3PLs add value to the supply chain by labeling and prepping the products to be shipped. Regardless of those extras, it all needs to be done just-in-time and without error.

More and more, companies forego having their own asset-based warehouses because they’d rather invest that money in improved or additional manufacturing space. That’s why it has become increasingly popular to outsource warehousing and logistics to a third party. Outsourcing places the responsibility of product distribution to the third party, saving companies the huge costs associated with running a warehouse.

What should businesses consider as they look for outside warehousing help?
The condition of the warehouse (structure) is often overlooked by companies conducting due diligence to find the best 3PL provider. Businesses seeking to partner with a 3PL should look for a company that has a well-constructed, modern building.

The geographical location of the warehouse is another often overlooked component. Companies looking for a warehouse would be well-served to partner with one in a favorable geography to its client base. Cleveland is a fantastic market because products sent from the city can reach 70 percent of the U.S. population in one day or less.

Technology also plays a significant role in warehousing. For instance, does the warehouse use RF scanners for lot control, accountability and accuracy? There should be a sophisticated inventory management system that can handle the type of inventory needed for the product being warehoused.

Some manufacturers need a logistics provider that can accommodate a first-in-first-out process. That system needs to be fail-safe when it comes to picking the correct lot number and date of manufacturing. Sending the wrong batch can create a host of costly problems the manufacturer will be forced to reconcile.

Two other aspects to consider are quality control and inbound/outbound processes. Ask about inventory accuracy rate — some companies maintain rates as high as 99 percent. Also consider the hours of operation. Some warehouses keep standard business hours while other companies adjust to their customers’ hours of service.

How does price factor into the decision?
Price alone should not drive the decision to work with one logistics provider over another. It’s critical to conduct a background check on the warehouse provider.

Companies looking to partner with a 3PL or warehouse should make sure they have quality facilities and experienced and knowledgeable staff capable of handling the distribution of specific products.

It can be surprising to some companies when they compare potential providers against their current provider and find out how little they were getting for what they were paying. Find a good partner that has your and your clients’ needs in mind, because if it’s a one-way street, the relationship is doomed.

Insights Logistics is brought to you by Amware

Ready or not, here it comes

The global logistics industry has had a full year to adjust to industry-changing Importer Security Filing (ISF, or 10+2) regulations before they become fully enforced by U.S. Customs and Border Protection (CBP) on Jan. 26, 2010.

Aimed at preventing acts of terrorism, the 10+2 ruling requires ocean cargo information to be transmitted to Customs at least 24 hours before being loaded onto a vessel in the foreign port.

“Because noncompliance in the form of data errors and late transmissions can result in severe financial penalties between $5,000 and $10,000 per shipment, timely receipt of information and documentation from overseas suppliers, shippers and cargo agents has never been more critical for the global supply chain community,” says Paul Codere, corporate Customs brokerage manager for AIT Worldwide Logistics, Inc.

Smart Business spoke with Codere about how the industry has adjusted to the ISF phase-in period and his advice for Customs brokers and importers once CBP begins full enforcement of the ruling.

Why did Customs give the industry a trial period with the ISF regulations?

Customs afforded the entire industry a yearlong delayed compliance period to acclimate to the new mandates. The intent behind this initiative was for the international trade community to take the full 12 months to work together in educating themselves on complying and cooperating with 10+2. Importers have been warned of infractions rather than being fined so that, ultimately, it will only mean business as usual when full enforcement begins.

First, importers had to decide whether or not they were going to complete their ISF compliance individually or with the security filing assistance of agents like Customs brokers, who have the internal processes, resources and capabilities necessary to file the sensitive data requirements.

Working together to streamline their security filing procedures, brokers, agents and importers have been held responsible for organizing data, implementing a software solution to facilitate the process, and transmitting timely and accurate 10+2 filings to U.S. Customs.

Collectively, the implementation of 10+2 has been quite a challenge for the industry. Customs has advised mitigating factors for when they begin enforcing bond guidelines and deadlines, and I am quite confident that the steep financial penalties will absolutely drive 10+2 compliance.

Customs has stated that without fines, the industry might not take ISF seriously.

Supply chain responsibility

By its very definition, a supply chain is a system of organizations, people, technology, activities, information and resources involved in the flow of global shipments from supplier to customer.

In many aspects, the supply chain is the engine that drives our economy — it is a vital service, fundamental to nearly every sector of the marketplace.

Therefore, it isn’t difficult to comprehend why many corporations within the supply chain community have a growing interest in developing a social obligation to the local and national communities they serve.

“Logistics activities that demonstrate a deep-rooted commitment to the community are highly effective corporate initiatives that enhance relationships among employees, customers, vendors, partners and carriers,” says Vaughn Moore, vice president of sales and marketing for AIT Worldwide Logistics, Inc. “The practice of corporate philanthropy has become an important factor in sustaining a successful and responsible logistics business.”

Smart Business spoke with Moore about how the logistics industry has become guided by a collective social conscience.

How has community involvement been embraced by the supply chain community in recent years?

The logical and most obvious form for logistics providers to give back has involved providing the resources, warehouses, transportation solutions and other assets necessary to implement disaster relief operations that, at their core, are all about supply chains. The industry has been a leader at the forefront of using what it has and does every day in order to distribute goods and materials where they are needed most.

Two events in recent years have served as a wakeup call for the industry — Hurricane Katrina and 9/11. In the wake of those dire circumstances and horrific tragedies, transportation providers were called on to coordinate relief operations to civil society.

In addition to providing aid, they were also challenged to move beyond the tangible business aspect of transporting goods. As you might imagine, these two historical events prompted the industry to rally together, recognize the power of humanity and embrace the altruistic side of the supply chain.

Logistics businesses were inspired to find additional ways to connect with local and global communities in order to contribute to the greater good.

Chill out

One day it might be coordinating the delivery of food products to trade shows at convention centers around the world. The next day it could be making sure a single truffle arrives looking perfect for an early morning TV show in New York, while a Fortune 50 customer rolls out a new product line at supermarkets across the country. No matter the size of the shipment or the distance it travels, when it comes to moving perishable commodities, timing is everything.

“The cold chain needs to be precisely timed and maintained from the point of pickup to the point of delivery, as any slight deviation in the process could cause serious losses in product, business and customer satisfaction,” says Steve Taylor, perishable station manager for AIT Worldwide Logistics, Inc.

Smart Business spoke with Taylor about how the regulatory demands of temperature-controlled product distribution have evolved in recent years.

What are some key trends within current industry practices?

The demand for expediting perishable shipments has declined in the past several years as shippers and food manufacturers have trended toward moving their goods using slower modes of transport and deferred delivery services.

Less than truckload (LTL) schedules can pose serious problems in terms of meeting stringent delivery deadlines. To serve and adapt to these evolving customer demands, logistics providers have developed business models that allow perishables to be shipped over longer periods without compromising product integrity.

Customers are also becoming more proactive in taking measures to monitor the condition of their cargo as it is being transported. For example, the use of temperature recording devices has become more prevalent. These monitors are activated, placed into one of the cases and reviewed upon delivery to see if the product experienced any temperature variances while in transit.

What risks are involved with perishables not transported properly, and what can be done to mitigate them?

The first and most obvious risk is product spoilage. The losses result not only in adverse financial impacts, they can also contribute to waste, contamination and illness.

Temperature abuse can also drastically diminish a product’s shelf life, quality and value. Logistics providers should possess extensive knowledge on the type and amount of refrigerant and packaging material required to safely transport each temperature-controlled product, as they degrade at different rates.

For example, ice cream should be continuously maintained at a temperature of minus 20 degrees Fahrenheit. Similarly, food that is labeled as frozen must be maintained at a product temperature of minus 10 degrees Fahrenheit.