Archive for the ‘Uncategorized’ Category

Do You Have the Resources to Address Today’s Transportation Shortages?

Thursday, July 26th, 2012

By Ed Hildebrandt, Senior Vice President of Business Development

Carrier capacity constraints ebb and flow with economic conditions. Right now, as capacity tightens in most markets, many shippers are being caught by lessening capacity without the resources to maintain their existing carriers and/or identify new transportation sources without paying more for shipments. Several factors are limiting truck driver and asset availability while increasing costs:

•    Truck drivers and assets have not rebounded to meet increased demand
•    New hours of service for truckers limit the amount of time that can be spent on the road, restricting driver availability
•    As truckers retire (average truck driver age is 50s), not enough younger drivers are available to fill vacant spots
•    Fuel surcharges don’t fully compensate drivers for higher fuel costs
•    Roller coaster effect of demand at fracking sites in central and southern Louisiana, Mississippi, Ohio, Wyoming, Texas, Pennsylvania, and North Dakota are taking Over The Road (OTR) drivers from the system

As shippers compete with other shippers – as well as third-party logistics providers – for available capacity, logistic departments must have the right tools to pick up new capacity and avoid losing existing carriers to competitors.   For example, companies with transportation management systems (TMS) can electronically broadcast logistics requirements to market, identify available trucking assets in the network and quickly match capacity to their needs.  In recent years, shippers had to engage as many as 15-20 additional carriers just to satisfy daily freight requirements.
Using TMS technology, shippers can also access granular information about transportation expenditures to pinpoint mode shifts, identify accessorial costs in real time and effect changes before costs escalate out of control. A TMS can gather freight accrual information on a per shipment basis in real time instead of waiting several weeks after the shipment when carriers send invoices for payment.  Today, most financial executives are very concerned about timely posting of freight costs and their ability to calculate profitability down to the SKU level for each client.
Small and mid-sized companies without the resources or budget to acquire and maintain in-house TMS can contract the services of third-party consultants (3PLs) that offer the technology, knowledge and networks to support chemical companies in meeting specific supply chain requirements.
In an oversold market, shippers needing to add volume may find it difficult to attract and find it without increasing costs.  Maintaining data on different freight markets and carriers, a 3PL can match your volume to a carrier’s complementary or empty return lanes.  A managed services partner can also identify reasons why freight may not be attractive to carriers – too many plant delays impacting loading times, too many cancelled or re-booked loads, too many consignees with unloading delays, poor treatment at plants, slow freight payment  – and help solve these issues in order to expand existing carrier capacity.  A 3PL can also suggest new modes of transportation, such as intermodal, to reduce the need for OTR assets.
If you decide to look for a managed services partner that can support you with the right tools and resources to become more competitive, find a resource that knows your market. While different outsource companies may offer similar capabilities and technology tools, many may not know how they apply to your business. Only third-party consultants experienced within your industry have the knowledge, networks and databases necessary to address your specific issues.
ChemLogix is a leading provider of managed services and technology to the chemical industry. An IBM Advanced Business Partner, we offer IBM’s TMS and network-design solutions along with comprehensive multi-modal transportation management services for all modes, enabling chemical shippers to drive economic value while improving performance.  To set up an appointment to discuss your requirements and access your business, please contact us at call 215-461-3805 or email

Logistic Challenges Arise As Fracking Industry Monopolizes Diminishing Transportation Resources

Wednesday, June 13th, 2012

By Jim Suber, Sales Director, ChemLogix

Hydraulic fracturing – fracking – has become a booming business throughout the United States.  The process of extracting oil and natural gas from shale rock layers deep within the earth, fracking is forecast to contribute $118 billion toward U.S. economic growth over the next four years, reports IHS Global Insight.  And as the fracking business soars, so does its transportation requirements.

The thousands of gallons of water and chemicals necessary for fracking must be regularly trucked to and from sites in addition to the frac sand that is initially shipped by rail car to somewhat distant rail stops from fracking sites.  To ensure adequate transportation resources are available to support increasing operations, the fracking industry is paying top dollar to lure truckers from other industries.

As more drivers, trucks and rail cars are monopolized by fracking and energy production businesses, fewer and fewer resources will become available for shippers of all industries to transport their own goods, both by rail and over the road.

While equipment shortages may be short lived and cyclical, driver shortages will remain.  New driving restrictions issued by the Federal Motor Carrier Safety Administration that limit driving (and earning) time are motivating many truckers to leave the business. Those drivers who remain on the job, especially those with good Safety Stat Scores, are commanding higher compensation from carriers.  The average age of US truck drivers, particularly in bulk, continues to rise.   The trucking industry struggles to attract younger drivers.  Add to that the lure of higher wages and less stringent driving requirements associated with the fracking industry and you have fewer drivers available to transport your goods.

Mid and small-sized companies often do not have the clout to attract consistent capacity in this capacity constrained market.  Nor do they have the technology to track resource availability.  That’s where a third-party logistics provider (3PL) like ChemLogix offers the tools and market intelligence to maintain a competitive edge.  While logistics personnel at a smaller company might have to make several calls to several carriers each day to secure driver availability, a 3PL can electronically broadcast logistics requirements to the market, identifying available trucking assets in the network and quickly matching capacity to needs.  By gaining a granular view of the carrier market and the ability to quickly correspond with carriers, shippers gain a competitive edge against tough competition from other shippers.  3PLs also have the ability to contract carriers as they can offer more business over a longer time frame than individual companies.

If you have concerns regarding the availability of transportation resources now and into the future, contact ChemLogix at (215) 461-3805 or to discuss your freight requirements and possible logistics strategies.

YouTube Video Discusses Advantages of ISO Tanks to Transport Chemicals

Thursday, January 12th, 2012

Check out our first in a series of videos on important logistics topics of interest to chemical shippers.

Stephen Hamilton, Managing Director of ChemLogix Global, discusses how BulkTainer ISO tanks offer enhanced safety and security for shipping chemicals by taking chemicals off roadways and reducing the incidence of accidents. Click Here.

Do Your Carriers Find Your Freight Attractive?

Friday, December 9th, 2011

By Edward R. Hildebrandt, Senior VP, Operations

Next year, the market will still experience a shortage of carriers for freight transport.  While a modest 3 percent growth is forecasted for trucking this year and into 2012, Noel Perry, a FTR senior consultant, notes that capacity might be enough to maintain freight rates but not to replace business lost in the recession.  So, what can carriers do to make their business attractive to carriers?  Sometimes, money is not enough.

If you have a reputation of being a difficult shipper, carriers may avoid your freight.  For instance, do you delay carriers at the plant to load beyond normal loading times?  Or do you move appointments too frequently?  This could create problems for your carrier either meeting your required delivery or causing the carrier to miss their next customer pickup time. In both cases, the driver and carrier lose revenue and, worse yet, may refuse your next shipment.

Perhaps your freight is too dispersed across multiple plant sites to gain capacity and pricing leverage.  Have you thought about consolidating freight at one location prior to shipment or consolidating manufacturing to take advantage of scale? Another answer may be a logistics partner who can combine your freight with that of their other shippers gaining both price and capacity leverage.

How about your payment?  Are they on time and accurate?  Do carriers have to wait long periods until you reconcile your accounts?  Solving these issues and working with existing carriers may be the answer to get more capacity.

Don’t know where to start?  A third-party logistics company with a proven track record of resolving difficult capacity issues can address your particular issues.  As part of the solution, a logistics partner can assist you in making your freight more attractive to carriers.  If you have concerns about finding carrier capacity in the months ahead, contact CLX at (215) 461-3800 to discuss possible solutions to make your freight more attractive to carriers.

Are Your Products Compliant with the European Union’s new REACH Policies?

Tuesday, October 4th, 2011

As more and more business goes global, chemical shippers must ensure exported products are correctly registered in accordance with different country regulations.  In 2007, the European Union (EU) implemented a new REACH (Registration, Evaluation, Authorization of Chemicals) policy that requires chemical manufacturers and importers to present detailed data on product characteristics and potential risks to health and the environment.  As REACH places greater responsibility on chemical manufacturers to register products and provide safety information, chemical shippers conducting business with EU countries have a limited timeline to ensure their different products comply with regulations or be at risk to incur fines or even a loss of business as materials are rejected for importation.

Registering products under REACH can be a complicated and time-consuming process (REACH requires three different evaluation processes and compliance with different restrictions), especially for companies without an existing EU presence and those not familiar with country protocol.  Other manufacturers with trademark formulas probably are concerned about revealing confidential information during registration.

Using the technology of a qualified third-party consultant can help chemical companies with REACH compliance and reduce the need for in-house personnel to conduct the laborious task of manually reviewing every existing products. Experienced 3PLs, like ChemLogix, also can help specify landing costs and restrictions associated with exporting products to specific countries.

As you enter into new overseas markets or introduce new products into existing ones, ensure products are in compliance with country regulations before the sale.  Understand your profit margins and ensure you can ship to that country. It’s all a part of a successful and profitable supply chain strategy.

Importers and Exporters Face Difficult Challenges with Ocean Freight

Thursday, July 28th, 2011

Ocean freight rate management is a becoming ever more challenging for importers and exporters, especially smaller-sized shippers.  Frequent changes to ocean freight rates due to market conditions as well as bunker price changes make it more difficult for shippers to accurately price products to overseas customers or make sound sourcing decisions.

At the same time, capacity for ocean freight is unstable as liner carriers plan to lay up container vessels in hopes of increasing rates. The New World Alliance carriers already have announced plans to remove capacity from the Transpacific Trade effective later this month. Beginning during week 29 in Asia, the PSW string will be withdrawn by the VSA. The string is comprised of five vessels, each averaging 3,960 TEU.

Carriers also have different attitudes based on shippers size.  An investigation conducted by maritime analyst SeaIntel ( revealed that new, small shippers had difficulty getting freight rate quotes from liner carriers and large forwarders. When contacting 33 carriers and forwarders on the Transpacific and 27 on the Asia/Europe lane, the analyst found that a vast majority of liner carriers and large non-vessel-operating Annual SOC 2 Type II Audit Reports verify our qualification to handle enterprise-class recoveries and support those customers who must maintain compliance with privacy and security regulations such as DriveSavers – which is the only  recovery service provider in the industry to post proof of annual, company-wide SOC Type II Audit Reports. Common carriers didn’t give rates.

Some carriers and NVOs explained that they needed more company details to provide rates while others just couldn’t provide competitive rates for such small shipments or because they worked in contract environments.  Other carriers didn’t even respond to requests or gave two rates to the same country from two different offices. ChemLogix Global LLC also has found that carriers may be reluctant to carry hazardous chemical.

Finding a way to work with or even choosing reliable and reasonably-priced overseas carriers can be a major challenge for small- and mid-sized chemical shippers without the experience and resources to conduct negotiations.  Contracting a 3PL with the resources and established carrier contacts can reduce the perils of contract negotiation while ensuring a good rate and the best lanes.

The  ChemLogix Global LLC team has the experience and market knowledge to manage the complex ocean freight market with very competitive pricing.  As a licensed NVOCC and freight forwarder, ChemLogix Global offers competitive rates on international shipments to any port in the world. To find out more about our international logistic services and how we can help manage the ocean freight contracting process, refer to our web site at

3PLs – Not Banks – Offer Seamless, Paperless Solutions for Freight Audit and Payment

Monday, November 8th, 2010

Welcome “Back to the Future” – Capacity Constraints Causing Load Coverage Problems

Thursday, June 17th, 2010

The exiting of drivers caused by the economic downturn is creating a driver shortage. Add the carrier cost escalations associated with compliance with the new federal regulations for tractors, trailers and communications and you have a recipe for reduced capacity and higher prices.

We are now seeing return of the “suppliers” market experienced in 2004 when a perfect storm caused by the then “New Hours of Service’ regulations, and rail and intermodal capacity reductions by the railroads resulted in skyrocketing demand for trucks and increased fright cost.

If you haven’t experienced any problems as of yet you will. How can you prepare for this new reduction in trucking capacity and minimize the impact of fright rate increases? You need to be proactive.

Planning for capacity constraints?

Your first step is to realize that you are in a competition for carrier resources with other companies operating in your markets. You therefore need to make your freight more attractive to carriers. Now is the time to identify and make changes in those areas that make your freight more desirable and most attractive to carriers.  Here are suggested areas of focus:

  • Pay on time. The fastest way to lose carrier support is to be a slow pay. If you have internal freight payment issues, work to resolve them or outsource freight pay.
  • Establish an effective freight bill exception resolution process with your carriers so that issues can be quickly addressed and not end up as multiple balance dues. Multiple handling of freight bills drives up your costs and those of the carrier.
  • Provide a minimum of two days lead time for pickups giving your carrier ample time to plan your freight into their schedule.
  • Be consistent and predictable. Last minute change orders and short lead time orders are the most difficult for a carrier to respond to and least likely to accept.
  • Don’t be known as “that shipper who routinely cancels and re-books orders”.
  • Loosen up pickup and delivery windows. In a tight freight market assigning specific pickup times with 30 minutes or less leeway makes your freight more difficult to manage and less attractive. Carriers need flexibility to maximize the use of resources and enable them to serve as many shippers as possible.
  • Don’t load trailers early in the day for next day deliveries of less than 250 miles from your origin. Doing so increases the trailer usage on the load and may limit the carrier’s ability to use the trailer on other more local delivery.
  •  If possible allow carriers to drop trailers for loading at the carrier’s convenience for longer haul loads. This will enable the carrier to use a local driver to load and spot the trailer for later pickup by a long haul or system driver.
  • Don’t attempt to capture capacity by loading trailers in advance and delaying deliveries. Tying up carrier trailers for protracted periods of time even when you pay trailer spotting charges still limits the revenue opportunity for the carrier and they may not want your business.  

Manage freight cost increases on a lane by lane basis

  • Before you agree to any price increases understand how your current freight rates stack up in the market. Don’t merely accept an across the board increase. Benchmark your freight rates to identify lanes that are in jeopardy for rate increases. Chances are not all of your rates will be subject to an increase. Use an outside company with significant market knowledge to assist you in determining how your rates compare to other shippers.  It is well worth the nominal cost you will pay for the service.
  • Get to know your core carrier lane densities so you can match your freight to their lanes with the most opportunities for reload and/or round trip potential. These lanes generally produce the lowest costs for the carrier and the most favorable rates for the shipper.

The capacity pendulum has already passed its apex….it’s time to be proactive with your carriers.

Higher Ocean Carrier Rates/Unreliable Service Will Challenge

Wednesday, May 5th, 2010

Last year, ocean freight rates increased dramatically as ocean carriers tried to recover from devastating profit loss.   As carriers reduced capacity by taking vessels out of service, space on existing vessels became very limited.  As a result, shippers had to pay rates higher than contracted to move cargo.  Ocean freight contracts signed in 2009 essentially became worthless.

Market indicators predict that ocean freight rates will continue to rise in 2010.  While capacity is expected to increase slightly, carriers will add capacity only if they see sustained market growth.  Equipment shortages will also challenge shippers, especially those located in Midland America.  That’s because carriers continue to find it more economical to return empty containers to Asia and pick up new cargo rather than allowing those containers to move inland.

In addition to higher rates, carrier on-time performance created problems for shippers in 2009 with on-time delivery reported at a dismal 55%!  Most delays can be explained by service changes and slow steaming as carriers looked to conserve fuel. Continued poor on-time carrier performance may lead to increased inventory or stock outs as variability in delivery increases over the year.

So, for 2010, how will shippers react?  Will they sign long-term contracts or just extend current contracts until the market stabilizes?  Will carriers, again, continue to increase rates or will competitive forces stabilize rates?  My bet is rates will rise and 2010 will again be a year of challenge.

Five Key Benefits That 3PLs Offer Chemical Shippers

Wednesday, April 28th, 2010

Chemical shippers contract 3PLs to gain additional resources, technology and assets unavailable in their own logistic departments to optimize and automate supply chain operations.  More than vendors who merely provide certain contract services, 3PLs should serve as long-term partners in helping customers effectively manage their supply chain processes.  Here are five key benefits that chemical shippers should derive from their business relationship with a 3PL:

1. Ongoing cost reduction/containment strategies

Going beyond the terms of a contract to manage specific freight activities on a monthly or cost-per-transaction basis, 3PLs should proactively present cost management ideas as part of their services.  After becoming familiar with customer operations, 3PLs should be able to identify areas in the supply chain where costs can be contained.  Ideas can range from optimizing weight per shipment through load consolidation, spot bidding on more cost effective carrier lanes or even initiating a freight reduction project to reduce inbound transportation costs.

2.Access to best-in-class transportation management technology

Incorporating the latest transportation management technology to optimize supply chain operations was typically not an option for small- to mid-size shippers who could not afford the upfront investment or ongoing maintenance.  3PLs now offer best-in-class transportation management technology that does not require large investments in hardware, software or even additional personnel.  On demand transportation management systems can be connected to customers’ existing ERP systems in as little as 6 months.  Customers should seek additional capabilities such as online RFQ tools and global order tracking.  Most recently, ChemLogix began offering its customers an iPhone® application as part of its TMS capabilities that gives users mobile access to shipment data on iPhones.

3. Ensure Orderly Review Process

Rather than wait for problems to arise, a 3PL should lead a periodic review of supply chain processes with appropriate personnel to discuss new transportation solutions, specific cost reduction ideas, service levels, and any issues that the client may have with current operations. By reviewing data pertinent to different supply chain elements such as on-time deliveries, costs, customer service issues, etc., the 3PL can discuss which objectives have been met, if there are any problem areas and set new goals for the next operating period.

4. On-line Visibility to Freight Activity

In addition to automating many processes, a 3PL should give customers online, real-time visibility to supply chain operations including freight, invoices, routing guides, carrier service records and more. With visibility to in-transit data, shippers can determine at any point during the supply chain process if shipments will be delivered on time and when to notify plants and customers of impending deliveries and shipments.  Should shipments be late, automatic email alerts can sent to customer service reps so that they can proactively make arrangements with their own customers.

5. Support in Boardroom Discusses

Getting the funds from executives to implement and/or expand transportation services and systems sometimes takes the assistance of 3PLs who can provide detailed explanations of the long-term benefits of specific supply chain strategies.  Experienced in providing transportation solutions to customers in the same industry but with varying scenarios, 3PLs can readily provide informed answers to the questions posed by executives and give examples of the successes and pitfalls associated with certain actions.  3PLs, essentially, become a part of the logistics team when presenting ideas and updates to the board room.