Articles by: Anthony
Dialing in business growth solutions in Northeast Ohio rarely involves a single factor, but the strength of a company’s Cleveland supply chain strategies can’t be overlooked.
Simply put, the supply chain is the flow of goods and services both within and among companies, domestically and internationally. It usually begins with raw materials and manufacturing, then onto production, processing and packaging and then transport and distribution – though your firm may only deal directly with one or two aspects. What is often not so simple – especially when that chain crosses state and international borders – is the logistics.
Ensuring goods get from Point A to Point B intact and on time is the foundation of our entire business model. Logistics management is a $1 trillion dollar industry in the U.S. – and it’s still growing, thanks to e-commerce and advancing technology.
Ohio University analysis shows that in just in the last decade, supply chain management employment has spiked by more than 50 percent – and that’s because business leaders increasingly recognize the upper hand it affords. The Cleveland and Columbus regions are especially active hubs, thanks to their central physical location, population and industry density and access to various transportation modes.
Cleveland trucking companies expressed alarm about the plight of several truck drivers in recent months arrested on serious felony drug trafficking charges – for hauling federally-approved industrial hemp across state lines. Along with its oil extract, cannabidiol (CBD), hemp was declared legal by Congress with the passage of the 2018 U.S. Farm Bill.
To be clear, hemp and CBD are not the same substance as marijuana, which contains the psychoactive ingredient THC. Both hemp and marijuana are parts of the same cannabis plant, but neither hemp nor its CBD derivative contains more than trace amounts of THC (0.3 percent maximum by law).
Hemp is a versatile plant used for thousands of years as a food and fiber source. It was widely grown in the U.S. prior to WWII, until the government chose to strictly regulate it alongside marijuana. Hemp-derived CBD is purported to have a number of health benefits for a range of conditions, ranging from depression to rheumatoid arthritis to epilepsy.
The problem for trucking companies in Cleveland and throughout Northeast Ohio is that this change in federal statute did not automatically alter any state laws. States have been tackling it one-by-one, and some still have the old laws in place. That means truck drivers hauling hemp and CBD material through these states will remain at risk.
Here in Ohio, lawmakers passed a CBD/hemp bill, SB 57, about a week ago – more than six months after the 2018 Farm Bill went into effect. The measure aligns state and federal law.
Whether on a highway, an ocean freight or a customer’s doorstep, one key advantage of working with a Cleveland 3PL (third-party logistics company) is reducing the risk of liability – on several fronts.
How? A dependable Cleveland 3PL streamlines supply chains by reducing bottlenecks, constantly updating intermodal deliveries and preparing for exigencies with solid contingency plans. In taking on these responsibilities, our insurance assumes coverage for some of the risks our clients would otherwise have to burden alone.
That said, shippers/manufacturers are urged to carefully review their own liability insurance plans with a qualified agent to ensure their coverage is sufficient, but not excessive. Cargo insurance (land, marine, general) is not required of shippers, but it’s something for which many opt.
Although we can’t advise you on insurance, here’s what we can say:
At On Time Delivery and Warehouse, our committed Cleveland 3PL team strives daily to always provide the very best logistics services to our clients while also keeping our rates AND terms-of-service, fair, unambiguous and transparent.
Liftgate delivery service is an economical means for LTL (less-than-truckload) shippers to onload, offload or transload heavy or bulky items while limiting the risk of damage to those goods and injury to workers.
As a longtime 3PL which also provides warehousing and trucking services, we’re committed to getting our clients’ shipments to their destination on time. But it’s going to be of little consolation to them or their customers if it doesn’t arrive intact. Liftgate delivery service helps ensure that.
It’s a fairly common add-on when you work with mid-to-large trucking/delivery services, but not everyone understands why it’s so important – and why contracting with a 3PL trucking company that knows how to properly spec all the weight requirements is imperative.
Manufacturers, retailers and other businesses seeking to team up with a top Cleveland trucking logistics firm are probably mindful of recent “trucking industry recession” rumblings. Before on-boarding a new trucking 3PL, it’s reasonable to want assurance the transportation team chosen will having staying power.
Leaders at long-time Cleveland trucking logistics firm On-Time Delivery & Warehouse urge potential clients to bear in mind: The trucking industry has always operated in cycles of dizzying heights and sharp declines. That’s because our network of transportation logistics partners is not only national but global, and we serve a broad range of industries, leaving us more exposed than most to the fickle market fluctuations across industries and continents.
But we’ve remained strong in business all this time because of what we do best: Planning and preparing. We may actually earn more than other industries when times are good, but that allows us to prepare for fluctuations.
Our customers and partners stick with us because they know day-in-and-day-out, we plan extensively in ways that allow us to streamline, reduce waste, lower costs and get goods where they need to be – intact and on-time.
We’re going to take the same care in preparation for our own sustainability – because we want to be around to serve this community and beyond for many more years to come.
Bottlenecks – on urban roads and interstate thoroughfares – have been on the radar of our Cleveland trucking firm for some time.
Transportation bottlenecks in the supply chain could include:
- Congestion on a freeway in an intercity trucking freeway;
- A traffic light that’s poorly-timed on an urban trucking corridor;
- Routine crashes at an intersection that’s improperly-designed or outdated.
Everyone knows the pain of a traffic jam, but for the U.S. trucking industry, per a report last year from the American Transportation Research Institute, trucking industry time losses due to clogged highways collectively added up to 1.2 billion hours annually. According to the agency’s release, this is equivalent to more than 425,000 truck drivers sitting in idle mode – for a full 12 months. Total cost of this traffic congestion to the trucking industry (which ultimately affects shippers and consumers too) is nearly $75 billion.
Worst Trucking Bottlenecks in U.S. Supply Chain
Our Cleveland trucking company stays constantly apprised of traffic flow and congestion on major and minor routes, maintaining contingencies for alternative routes to help save time – and ultimately money. For example, if every UPS vehicle every day experienced a 5-minute delay, this would total $115 million in additional costs a year.
A insatiable demand for online purchasing (commonly called e-commerce) has altered the landscape of many industries, with direct impact to Cleveland trucking. Businesses have always relied on effective supply chain strategy to satisfy customer demand, reduce delivery times and keep down costs. However, the reason e-commerce is a game-changer is because buyers are increasingly unwilling to trade cost OR speed. Many operations leaders are learning that developing and managing their own Cleveland trucking supply chain solutions is no longer cost-effective. This is especially true with increasing trucking bottlenecks.
Although third-party logistics Cleveland trucking companies face the same challenges, the difference is about having network contingencies already in place. A dedicated 3PL has the existing capacity and adaptability on numerous fronts to help clients keep pace. That includes LTL (less-than-truckload) arrangements that allow retailers and business-to-business firms to get goods expediently to their destination, even if there isn’t enough product to ship a full truckload (FTL).
As a longtime Northeast Ohio trucking and logistics firm with solid connections at major ports in New York, New Jersey, Georgia, Virginia, Florida, Texas and California, we offer Cleveland trucking P.O.D. (proof of delivery) and invoicing so your team can measure delivery times and dependability, key values of a 3PL trucking partnership.
That kind of transparency is important to our operations too. It allows us the ability to quickly identify where WE can be better and make swift adjustments if necessary. On Time Delivery & Warehouse’s in-depth analyses of service quality is ongoing.
Our third-party logistics supply chain partners in Cleveland are adept at helping clients navigate all challenges impacting the timely flow of goods to their final destination. Sometimes, the issue is a faraway natural disaster or social unrest. Other times, it’s homegrown regulation or infrastructure challenges.
Right now, there’s swelling concern over recent promises by President Donald Trump to shutdown the U.S.-Mexican border if neither Congress nor the Mexican government takes what he deems decisive action to stem the tide of illicit drugs and illegal immigration into the U.S. Ohio 3PL partners at On Time Delivery & Warehousing are watching the situation closely, and have begun mapping supply chain contingency plans.
The likelihood of an actual border shutdown isn’t clear. While some of the president’s allies in Washington D.C. have stated a total border closure would be “catastrophic” to U.S. supply chains, the president isn’t exactly known for always toeing the party line. He’s said that secure borders take priority over trade. He has floated a potential compromise: A border closure solely permitting the back-and-forth flow of commercial trucks. Whether that would be enough to blunt the biggest supply chain impacts isn’t certain.
Meanwhile, trucks at the Mexican border have reported long delays this month, after U.S. Customs and Border Protection officers were abruptly reassigned from import regulation to immigration processing, according to Bloomberg.
For us, this is not about choosing political sides. Our role as an Ohio 3PL partner is to be prepared for all scenarios with the goal of minimizing the product and financial losses for our clients – and that’s what we intend to do.
Trucks and truck drivers are integral to U.S. supply chains, moving 70 percent of the nation’s daily freight-by-weight and generating $700 billion in annual revenue, according to the American Trucking Associations. So mounting discontent by truckers nationally over a range of issues isn’t something our Ohio trucking logistics team – or any one else with a supply chain relying on truckers – can afford to ignore. The biggest problems, truckers say, are beefed-up regulation, lack of adequate training and proposed gas tax hikes – all of which put their safety and financial security at risk.
Many of these complaints have merit. However, the tactics being proposed by some fed-up truckers via social media is deeply concerning. A national trucker protest planned for this month vows to “shut down the nation’s highways.”
The likelihood of this actually happening is unclear, but partnering with a dedicated third-party Ohio trucking logistics company ensures you have eyes/ears on the ground – and won’t be blindsided. Safety will always be our top goal. So too is minimizing our clients’ direct impact if/when transportation industry and labor disputes arise.
Ohio Truckers Protest Regulation, Safety Concerns
Ballooning e-commerce in nearly every industry has rendered Cleveland warehouse space in short supply. Faced with increasing consumer demands and fewer options, more Northeast Ohio businesses are opting to outsource Cleveland warehousing and distribution operations rather than keep them in-house.
Companies with seasonal, fluctuating or uncertain profit margins or those planning on a substantial expansion or contraction generally conclude it makes little sense to keep these resource-heavy duties in-house when those who outsource Cleveland warehousing to a third-party logistics firm are gleaning more benefits with less cost/hassle. Those who manage their own warehousing will be dealing with increasingly stiff competition from those who outsource. In addition to fewer choices and soaring e-commerce, there are sky-high transportation expenses, evolving technology and expanding federal regulations.
Ohio’s Warehousing Market Primed for Growth
Ohio is within one day’s drive of half the U.S. population, making it an attractive site not just for many national/international buyers, but by manufacturers but distributors and workers. Some businesses prefer greater control of day-to-day warehousing and are reticent to invite a “middleman” into the mix. But when you outsource Cleveland warehousing and order fulfillment to a first-rate third-party logistics firm, you can devote more valuable resources on things like product development and innovation, sales, marketing and customer service.
If you need more proof of the benefits of third-party warehousing, take a look at Penn State researchers’ data in 21st Annual Logistics Study in 2017 revealing the number of Fortune 500 companies using third-party logistics doubled from 46 percent to 90 percent in 15 years. Small businesses too can carve out a significant advantage when they outsource Cleveland warehousing, particularly when sales are inconsistent throughout the year.
How to Know It’s Time to Outsource Cleveland Warehousing
Even the best products won’t move if they’re routinely delivered late, damaged or not at all. A client may forgive you once, maybe even twice, but you aren’t likely to get another crack at it beyond that – and your competitors will be ready to seize that opportunity.
In deciding whether to outsource Cleveland warehousing, Northeast Ohio businesses should analyze the totality of their resources and capacity. Sometimes even if it can be handled in-house doesn’t mean it should be. Warehousing and distribution is a constant and at times delicate balancing act that involves more than merely securing space. You need qualified managers to oversee it and reliable workers to keep goods moving smoothly. As distribution centers multiply in Northeast Ohio, skilled warehousing workers are becoming just as tough to find as space. It won’t save you money in the long-run if you have to cut corners on quality, service or safety when times are lean.
High-quality logistics facilities cropping up all over the place in big markets like Atlanta, Dallas and Chicago. But even secondary markets like Cleveland, Nashville and Louisville are growing at a rapid clip too. 3PL services reportedly account for 61 of the 100 largest warehousing and industrial space deals in 2018, according to commercial real estate brokerage CBRE. Industry insiders don’t expect a slowdown.
Companies that want to keep operational costs in check may consider scrapping warehousing altogether, particularly considering the speed of modern shipping methods (goods aren’t going to remain on warehouse shelves for long, if at all). However, warehousing is still a hugely important link in the business supply chain.
When you outsource Cleveland warehousing functions, you have a better shot of bolstering profit margins because you’re more likely to be able to take advantage of:
- A centralized location(s);
- Better service with experienced warehousing and transportation workers;
- Value-added delivery;
- Flexibility for scaled or seasonal growth.
If you are considering changing up your Cleveland warehousing strategy, On Time Delivery & Warehousing, Inc. can help you map a plan that makes the most sense for your unique business model – and help you make adjustments as necessary.
If you have questions about outsourcing Cleveland warehousing and distribution 3PL partnerships, contact On Time Delivery & Warehouse by calling (440) 826-4630 or sending us an email.
On-Demand Warehouse Space Gains Traction in Tight Real-Estate Market, Dec. 23, 2018, By Jennifer Smith, The Wall Street Journal
Midwest Facing A Skilled-Worker Shortage As Warehousing Boom Continues, July 18, 2018, By Jess Mador, All Things Considered, NPR
Ecommerce, 3PLs Account for 61% of Major Warehouse Deals in 2018, Feb. 25, 2019, By Mike O’Brien, MultiChannelMerchant.com
More Blog Entries:
Public Warehouse v. 3PL Service Providers: What’s the Difference? Feb. 25, 2019, Cleveland Warehousing 3PL Blog