August 28, 2019

Managing Cargo in the Age of Less-Than-Truckload

Written by Garret Weigel | Connected Facility

The less-than-truckload (LTL) industry has been experiencing very strong growth, driven in part by the manufacturing sector in addition to robust retail and e-commerce sectors. They need LTL carriers to transport smaller shipments for last-mile and middle-mile logistics to distribution centers. Last year, some experts touted economic conditions in the transportation marketplace as producing the strongest LTL market of the past decade.

 

At the bedrock of this demand is the rising global domestic consumption. This is somewhat explained by the growth of a worldwide middle-class population that seems to have the spending power to drive such demand. In response, the growing manufacturing sector in the United States and elsewhere is helping to raise the overall movement of LTL shipments.

 

This increase in LTL shipments has put a spotlight on warehouse management. Because of increased demand and product volume, warehouse managers are under pressure to better organize and control everything within the warehouse to make sure it moves optimally.

 

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Responsibility and Accountability

The warehouse manager must focus on a long list of responsibilities: they must accurately and optimally organize their warehouse; secure and maintain appropriate equipment to move material rapidly and safely without damaging any cargo; follow a robust process for managing any new shipments that come into their facility; pick, pack, and ship orders efficiently and keep up with the supply of orders coming in and going out; and continually improve their warehouse performance. They must make sure that their own performance competes with their peers.

 

There are many different parties who might manage a warehouse. Independent warehouse operators and private distributors manage their own warehouse spaces. In addition, third-party logistics providers (3PLs) also warehouse goods and broker warehouse space for their shipping customers.

 

Because 3PLs manage a variety of shipments in cargo from a wide array of customers, they have an advantage in working with many suppliers and are often able to consolidate shipments to gain economies of scale. They can allocate shipments in an optimal way to capitalize on available warehouse capacity. However, a shipper or warehouse manager may not have this luxury. This gives them some negotiation leverage with warehouse operators and LTL carriers to attain the best warehouse space and freight rates for their customers.

 

8-Ideas-For-Warehouse-Organization

Ways to efficiently organize a warehouse for business. Source: https://emergeapp.net/warehouse/warehouse-organization-ideas/

 

The Burdens of Cargo Management in the Age of LTL

Whether the LTL shipments are handled by a private distributor, warehouse operator, or a third-party logistics provider, these leaders must manage numerous burdens efficiently to stay competitive. Managing compliance is a key concern: customs requirements, customs coding, completion of required documentation that must accompany product shipments, and other compliance issues. In addition, state, local and federal officials impose interstate regulations regarding safety and hazardous materials that create additional record-keeping requirements.

 

If the burden of compliance isn’t enough, they also have to manage the risk of cargo loss due to spoilage in climate conditions that can reduce shelf life or lead to cargo needing to be discarded. This means managing temperature and environmental conditions while monitoring the overall integrity and condition of the cargo itself.

 

Aside from the environmental conditions, warehouse managers, private distributors, and third-party logistics providers must be sensitive to the risk of loss due to pilferage. Many organized crime rings operate in and around warehouses, terminals, and other concentrations of cargo and shipments. Such crime rings are very apt in confiscating cargo and shipping it quickly to other destinations that are often outside the country.

 

Additional loss risks include compromised packaging, exposure to weather, and damage during loading and unloading. For a warehouse manager or third-party logistics provider, it is important to invest in technology that helps safeguard against such loss and enables them to track, monitor, and control shipments to reduce the overall risk of loss from various sources.

 

Audit requirements are yet another burden. Audits are conducted by external sources such as federal and state authorities as well as internal auditors. Managers must keep and maintain accurate and discernible records that are available at any time to those required to see such documentation. In order to pass audit or inspections of any type, systems and tools can help produce accurate and detailed records.

 

Why-You-Should-Regularly-Audit-and-Assess-Your-Warehouse-928x1024

Reasons why you should continue an audit process. Source: https://emergeapp.net/warehouse/audit-and-assess-your-warehouse/

 

Embrace Technology

To stay competitive in today's rapidly changing supply chain environment, warehouse managers and third-party logistics providers must invest in digital technology. Available in the cloud or installed on-premise, it helps manage the extended supply chain. It affords efficiency and provides the visibility and control required to manage the many burdens described. A failure to embrace or invest in technology puts a supply chain company at a competitive risk. If they overlook this, they are likely to be overcome by a competitor who gets on board.

 

In recent years, warehouse managers, independent distributors, and third-party logistics providers are all benefiting from the uptick in the volume of LTL cargo. Along with this welcomed new business are a set of new responsibilities. These responsibilities as described can be managed, but a vendor can’t do it alone. Supply chain companies need the tools, solutions, and technology now available to become more efficient, competitive, and sustainable.

 

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