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Case Study: Thurston, Inc.

The Client

“I didn’t realize how easy it could be. Night and day difference,” raved Amanda with Thurston, Inc., a leading hybrid seed brokerage, while speaking of the difference in their freight shipping from one year to the next. And she gives full credit for the change to Ingrid. 

You see, Ingrid is one of our logistics experts, and after she and Amanda met, Ingrid promised Amanda she would never have to worry about what was happening with her freight again. Ingrid has been making good on that promise ever since. 

Opportunity for Improvement

Before Agforce and Ingrid, Amanda was working with multiple sources to move her truckload and LTL freight. The general nature of Thurston’s business means there is sensitivity around blind shipping. So, they need good communication and affirmation for peace of mind. They need to know the shipper and consignee will stay unknown to each other. Their previous resources didn’t give them much reassurance around shipments being picked up, let alone confidence the paperwork would be handled correctly. 

Amanda wears a lot of different hats at Thurston. There is simply not enough time in the day for her to get everything done if she’s constantly checking on the state of their freight. Plus, she knew that if she didn’t receive communication from the 3PLs and carriers she tendered freight to, her customers weren’t receiving any updates either. They couldn’t allow their freight shipping to leave a sour taste in their client’s mouths. 

Solution Design

Ingrid’s goal: Give Amanda the confidence to know her freight is handled. Ingrid and the team laid out a communication plan that prioritized immediate response when Amanda submits a load for pickup, and they reach out with updates so she can know things are on track. Ingrid wanted to ensure Amanda could work on the other things that keep Thurston running, and doesn’t have to worry about follow up with her freight. 

Today’s Processes 

Amanda shared, “It’s been a big weight off my shoulders. Agforce just makes freight easier.” She went on to tell us the amount of time she has to spend dealing with freight has been cut down due to the good service and communication from Ingrid. During their heavy truckload season, they used to wait up to two and a half weeks between loads while their 3PL sourced equipment. Ingrid put processes in place and found carriers that appreciated the regularity of Thurston’s freight with multiple loads in the same lane to secure the best service. Thurston made it through their busy shipping season in record time! 

Amanda knows she’s not alone in her appreciation of Ingrid. Their customers even remark on how great Ingrid is to work with and appreciate the quality drivers she sends to their facilities. 

If your freight shipping could use someone like Ingrid, let’s talk. Wouldn’t you like some time back to focus on the other stuff? Together, we can move your business forward. Give us a call at 877.367.2324 or email us at inquiry@agforcets.com.

Sip, Sip, Hooray! Agforce and Fastbreak Collaborate on Warehouse Expansion

Agforce has doubled down on its longstanding partnership with Fastbreak Consolidators, Inc, the leader in Northern California wine consolidation, to increase warehouse space by 10,000 square feet. This extra space, plus investments in additional drivers and tracking technology, means we can pass our unique experience and understanding along to more customers who need us. 

Fastbreak Warehouse

“This is the first foray into warehouse space for Agforce,” says Andy Tuley, Vice President of Business Development. “It not only signals the growth and evolution of our business, but the lockstep relationship we have with Fastbreak. No other consolidators in the industry have honed in on their expertise like Fastbreak, and they’ve done it intentionally so that makes it easy for us to treat our customers right.”

Distributors across the United States rely on the Fastbreak and Agforce partnership for quick, efficient wine deliveries no matter the situation. “Let’s say your sales rep has a wine vendor coming next week that nobody told you about. Or someone scheduled a wine dinner for next week, and you don’t have the product. You can call us in a panic at 3 p.m. on a Friday, and we’ll make it happen,” says Chris Stranckmeyer, Manager Business Development Wine & Spirits. “We’re not even going to argue. We’re going to get off the phone as quickly as possible so we can send a driver to get the product you need and get it to you on time. We get it, and that’s why we get it done.” 

The Agforce and Fastbreak partnership eliminates partially-filled truckloads, maximizes the use of all capacity and includes access to proprietary technology that provides visibility into all aspects of an order. In short, it’s airtight. 

“Together, Fastbreak and Agforce are able to show customers exactly who is taking care of their product, its status and its estimated delivery time, from our warehouse door to the customer’s door,” says Kathy Edwards, Fastbreak Office Manager.

Fastbreak Warehouse

“We pass the baton back and forth so quickly that our customers don’t even notice it happening,” says Tuley. “All they notice is that we can meet their needs – no matter how crazy, last-minute or specific, in a way no other 3PL can.”

Both companies are committed to customer service, customer retention, growth and laser-focus on what we do best. As the wine consolidation industry grows and shifts, Fastbreak remains the leader, even amid other companies’ mergers and acquisitions. And it appreciates Agforce’s contribution to its growth, viewing us as an extension of its company that it can trust to treat customers in the same way it would. 

“Fastbreak has been committed to its core values for more than 30 years. While others change, try to diversify, or get bought out, we continue to stay true to ourselves and what we do. We’ve found a true partner in Agforce – they support and complement our firm foundation,” says Edwards.

We’re so confident in our continued growth that increasing our warehouse capacity by 25% was a no-brainer.

“In 2018, Fastbreak and Agforce consolidated more than 3.5 million cases of wine, a number that will only increase this year and into the future,” says Brett Eckinger, Director of Sales at Agforce. “We are thrilled at the additional volume our new warehouse space will allow us, and the additional value we will be able to offer our customers based on this investment. We are proud to celebrate our continued growth as a Fastbreak partner.” 

A toast to Fastbreak, Agforce and our customers!

Want in on the amazing agility Agforce and Fastbreak provide? Give us a call at 877.367.2324 or email us at inquiry@agforcets.com.

Predicting 2019 Trucking Spot Rates

Our experts weigh in on what you can expect for the rest of the year.

Last month, FreightWaves, the first organization to develop a futures market based on U.S. trucking spot rates, took four models forecasting trucking spot rates for the rest of the year, and compared them against each other to predict pricing for the second half of 2019. 

Based on historical and future data provided by various freight indexes, FreightWaves provided a comprehensive analysis of all the factors affecting spot rates. 

The analysis is so comprehensive, in fact, that it may be a little dense for those of you who don’t necessarily follow the futures market but just want to know how much you’re going to pay to get your product from Point A to Point B. 

Our experts wanted to analyze the analysis (that’s right) and give you an overview of which conclusions we think are the most important, what we believe the market is likely to do over the next six months (and why) and add our own insights into trucking rates in 2019. First, here are our takeaways of what we considered most important to note from the FreightWaves article:

  • “Positive movement depends on…even more capacity to leave the market as well as new truck orders to stay depressed for the remainder of 2019.”
  • “The market looks flat into the third quarter with a seasonal bounce again at year’s end.” (Tom Mallon, FreightWaves Vice President of Financial & Freight Futures Markets)
  • “Expect to see the supply side supportive of rates, especially with the recent sharp decline in new truck orders.” (Ravi Shanker, Morgan Stanley Analyst)
  • “June contracts are priced at $1.59 per mile, implying a significant bump up from [May] spot rates at $1.41/mile. That’s consistent with the traditional volume and price run-up seen most years in May and June.”
  • “At this point, the market expects a return to the relatively normal price conditions preceding the capacity-constrained environment of 2017-8.”

Since the piece was published, we haven’t seen any indication that these conclusions are off-base. “We saw a holiday at the end of May followed by DOT week. DOT week was not reported to be as big of an event this year as in years past, but it still had an impact on capacity. Spot rates then went up in June, which is normal,” says Justin Hathaway, Carrier Manager. 

But is “normal” actually…normal? Not recently. We think it’s most important to note is that while 2019 looks pretty steady, it’s coming on the heels of a 2018 that was decidedly unsteady. There’s pressure on spot rates to hold strong as the shipping industry as a whole normalizes after very strong rate growth (6.7% annually) in 2018 and a quick tumble downward at the beginning of 2019. 

Because the market couldn’t support the growth of 2018 and diesel fuel supplies tightened due to production cuts, spot rates bottomed out at the beginning of this year, as did the price of diesel. These factors, among others, have led to an extremely volatile recent history.

“After the downhill slide of the last six months, both carriers and brokers are positioning themselves to maintain their current volumes while getting aggressive to secure new business,” says John Kuhlmann, Director of Agribusiness. “From a pricing perspective, we have seen rates bottom out in several markets, but given the current business landscape, there will be pockets where they may climb back up with seasonality, etc.”

Overall, though, “we speculate that Q3 will be flat, but the market will support modest price increases through the end of the year,” Kuhlmann says. “We are not expecting any major market shake-ups before the holiday shipping season starts.”

“My gut tells me spot quote prices will continue to rise in certain regions, but won’t approach where the market was in the first half of 2018,” says Joe McDonald, Business Development. “Ultimately, I see pricing being flat to higher in areas than early 2019, and more in line with pre-2017-2018’s higher pricing.”

According to the Wells Fargo 2Q 2019 North American Truck Transportation Sector Update, these current levels of volume and pricing suggest that the U.S. economy is still growing, just not at the rate it was, and that it may have reached its short-term expansion limit. Of course, nobody can predict the future with complete accuracy. So what are the factors most likely to influence the moderate pricing increases we anticipate for the rest of 2019 and into 2020?

  • Economy and trade policy: “Moving to 2020, I believe that load volumes largely depend on the health of the US economy (and confidence in the US economy),” says McDonald. “Trade policy is definitely a deterrent to higher load volumes, so I’d expect load volumes to remain flat.”
  • Tariff rates: “Pending tariff rates for USMCA, we should see rates uptick slightly as we move into Q3 and Q4 if seasonal volumes remain consistent,” Kuhlmann says. “If volumes shift up drastically, we can expect intense volatility from both pricing and capacity.”
  • Driver availability: According to American Trucking Association estimates, the trucking sector had a driver shortage of 50,000 at the end of 2017. It predicts a longer-term driver shortage of 175,000 by 2026. New driver availability remains an issue and area of significant concern.

Truck capacity and demand: “As always, two major variables are truck capacity and demand/volume,” says Hathaway.

Here at Agforce, we don’t claim to be able to influence trucking spot rates or the futures market. We do, however, guarantee complete honesty and transparency into how and why we set our prices. Our customers are our partners and our friends, and that’s something we owe to them. We will continue watching the market so we have the best, most up-to-date information possible to pass along to you.

Questions? Reach out! Call us at 877.367.2324 or email us at inquiry@agforcets.com. Our experts would love to provide the answers.

We’re One of KC’s Top 10 Small Businesses

Every year, the Greater Kansas City Chamber of Commerce sponsors the Small Business Celebration, a series of events that support and celebrate the Kansas City small business community. The Celebration then results in a highly competitive selection of Top 10 Small Businesses.

In 2019, Agforce Transport Services was one of the Top 10!

Agforce Top 10

“I am so proud that Agforce was honored with the Kansas City Chamber of Commerce 10 Top Small Businesses of 2019 inclusion,” said Marie Burger, Agforce Business Development associate. “This recognition helps to validate our young company as we continue to grow both in the Kansas City area and the country.”

The Chamber’s Top 10 Small Businesses were narrowed down from a pool of more than 2,00 applicants, and included Charlie Hustle Clothing Co., IBC Inc., KC Bier Co., Lever1, Odimo, RFP360, Ripple Glass, TREKK Design Group and VeriShip, in addition to Agforce.

“We were honored to be included with such a successful and dynamic group of companies,” said Michael Preisinger, Managing Director.

“Being included with such fantastic company in the Top 10 was extremely exciting and rewarding for everyone at Agforce,” said Andy Tuley, Vice President, Business Development. “It has inspired us even more in our direction of Agforce and committed us to double down in our involvement in the Kansas City community.”

Since we were founded in 2015, we’ve differentiated ourselves from the rest of the transportation and logistics market by offering a customer experience that’s above and beyond what they have come to expect. And since 2015, we’ve known that our people are the reason we’re able to do that.

“It is a true blessing to work with a team that does an outstanding job. To have our team recognized for being exceptional is encouraging and appreciated,” said Karla O’Malley, Carrier Compliance Manager. “This recognition lets the rest of Kansas City know we are here, ready to serve with logistic challenges, help with compliance issues, or become a job seeker’s new home.”

No, we didn’t win the elusive “Mr. K Award” (named after Ewing M. Kauffman and awarded to the top small business), but that doesn’t put a damper on the pride we feel at this nomination.

“When Agforce started less than four years ago, this recognition is not something we would have even considered to be honored with, especially in this short of a time,” said Preisinger. “We believe this is a testament to all of the employees’ hard work and perseverance.”

We send our most heartfelt congratulations to the Mr. K Award winner, TREKK Design Group, and the rest of the Top 10. We know how we excited we are for the growth Agforce has planned, and we can’t wait to see the rest of you grow, too. Together, we’re shaping Kansas City into a diverse, dynamic, forward-focused community.

Cheers to the future!

Want to be part of an enthusiastic, talented team? Check out careers at Agforce Transport Services.

Case Study: Major Brands

The Client

Major Brands is a leading Missouri distributor of premium spirits, wine, beer, and non-alcoholic beverages, and the largest distributor that remains Missouri-owned and operated.

With offices in St. Louis, Kansas City, Springfield, Columbia and Cape Girardeau, Major Brands employs more than 600 people and serves more than 9,000 retail customers throughout the state.

Opportunity for Improvement

We were moving Major Brands inbound freight through a system of multi-pickup truckloads. Their shipments consisted of a variation of wine, spirits and beer shipping from ports, distilleries and manufacturers across the U.S. But, it wasn’t perfect.   

The multi-pick solution started to create a hassle with missed pickups and late deliveries on Major Brands’ purchase orders. “We had planned ship dates and our sales people worked off of delivery targets. With the fluid market for spirits, slipups started to impact our pricing, bottom line and overall customer experience,” shared Erin Evans, Inventory and Transportation Manager.

They needed to consider different options for their freight in order to operate with more efficiency and dependable timelines.

Solution Design

Our team members Michelle and Chris were on it. The short-term goal was a solution we could implement to solve the inconsistency of Major Brands freight shipping. Long term, we wanted to create a relationship that would provide value to Major Brands.

To do so, Chris, Michelle and the rest of our team worked together to design a tailored plan. We developed a plan with a mixture of LTL and multi-pick loads that focused primarily on the per case cost to the customer. Not only did this provide a lower transportation cost to the customer, it also allowed us to work within the confines and time restraints of Major Brands wide array of vendors. The result is a cost effective, time sensitive and economical approach to moving orders of all sizes.

Today’s Processes

Fast forward to the present and Major Brands doesn’t give their freight a second thought. They put their deliverables in our hands. That’s the part they like best. They just know things are going to happen as planned — the way a true partnership should work.

The new processes have allowed Major Brands to evolve and we have been in lockstep with them the entire way. They now work with less quantity and more brands. It’s all possible because we listened and leaned in. Technology is great, but we gave them so much more: personal attention and the freedom to concentrate on their business.

Today, they generate a purchase order, indicate Agforce for routing and copy us on the email. From there, it is just handled. The vendor reaches out when the freight is ready for pickup and Major Brands doesn’t have to think about it again.

“It is truly amazing. Agforce has removed the burden of our freight shipping unknowns. We can confidently make purchasing projections, a key in the retention of our business, and know things will deliver the way they are supposed to,” stated Erin. “And if there is a hiccup, Michelle and Chris are on it. They are always looking out for our best interests. The partnership is invaluable to us.”

If your freight shipping could use a personal touch, let’s talk. As an extension of your business, your objectives are ours too. Together, we can customize the right plan for you. Give us a call at 877.367.2324 or email us at inquiry@agforcets.com.

Diversification: Optimize Your Supply Chain

Diversification [dih-vur-suh-fi-key-shuh] noun: the act or practice of manufacturing a variety of products, investing in a variety of securities, selling a variety of merchandise, etc., so that a failure in or an economic slump affecting one of them will not be disastrous.

The economic slump referred to in the definition of diversification translates to supply chain as tight capacity. If you are only using an asset-based freight service high demand means, inevitably, you are going to face a disruption to your supply chain, impacting your company’s profitability.

When you diversify your freight providers by adding the right 3PL to your mix, you are getting access to capacity in any lane at any time, making your supply chain agile and adaptable. The result will be increased performance and better cost control throughout your supply chain.

Summary

Keep your options open. When you partner with a 3PL, they can help you find capacity that an asset-based provider may not have access to. Service is their product. With that mindset, they can help you build the perfect mix of capacity and cost control to optimize your supply chain.

Agforce can help you maximize efficiency and avoid disruption to your business. Together, we can deliver the right mix for a nimble, agile and profitable supply chain. Give us a call at 877.367.2324 or email us at inquiry@agforcets.com.

Freight Claims: What You Need to Know

Safe. And on time. That’s how your freight should deliver. But we all know damage can happen and we need to know how to handle it. Let’s talk about the things you can do to help ensure your freight arrives safe, as well as the need-to-know information if indeed you find yourself staring at a freight claim.

Prepare for the Pickup

When a carrier signs your bill of lading (BOL) at pickup, they are confirming the freight loaded on their truck in good condition and matches the BOL details. The BOL is a binding, legal document that is never more critical than during a freight claim. Take the time to make sure it’s accurate up front and avoid some painful lessons-learned if you do have to file a freight damage claim later. Here are a few other things to think about during pickup:

  • Stacking: Load your heavier freight on bottom while your more fragile cargo is safely on top.
  • Protection: Block and brace your freight to lower risk of movement during transit.
  • Distribution: You will want even weight across your pallets, and a weight distribution board is needed between every third layer of freight.
  • Uniformity: Stack pallets in a consistent manner and keep a lookout for product overhang.
  • Photograph: Snap a quick pic just in case you would need to prove the condition of the freight at time of pickup.

Be Detailed at Delivery

This is important: Do not let the driver leave until you have inspected the freight. On the exterior, you’ll be looking for things like fork punctures or crushed packaging. Don’t stop there though, go ahead and open it up. If you do find damage, take pictures and note “DAMAGE” on the delivery receipt. Then both you and the driver will need to sign that document.

Once Damage is Found

The freight can be refused if there is damage. However, this may not be in your best interest. It could hold up the payment of a freight claim if neither the consignee nor the shipper are in possession of the freight and it is left with the carrier. If both the shipper and consignee refuse the freight, the carrier can claim ownership of the property. It is typically best to note all of the damage and accept the shipment.

The Claims Process

If a claim must be filed, despite all your efforts and planning, there are some documents you will need to gather and rules you must abide by. First thing you need to remember: Don’t put it off. The claim must be filed within nine months of the date on the BOL. Here are a few checklist items to help you prepare:

  • File the claim with written communication — the claim date must be traceable
  • Clearly identify and define the product damaged
  • Specify the dollar amount of the claim based on its commercial invoice and explain how you reached the number — you may include storage fees or other expenses
  • Keep a copy of the BOL to provide with the claim
  • Gather and send any supporting documents, those may include things like the following
    • Commercial invoice
    • Photographs
    • Temperature reports
    • Loading diagrams
    • Weight receipts
    • Witness statements

Once the claim is filed, you’ll be asked to prove three things:

  1. The carrier received the freight in good condition.
  2. The consignee received the freight short of original contents, there was damage, or it delivered unreasonably late.
  3. The dollar amount of your claim is valid.

The carrier has the burden to establish two items:

  1. To no extent were they negligent.
  2. The damage was due to a recognized carrier defense.
    • Act of God
    • Act of the public enemy
    • Act of the shipper
    • Act of the public authority
    • The inherent nature or vice of the goods themselves

Only when the carrier fails to meet their burden are you entitled to recover the loss. Remember, it is based on actual loss, if an item can be repaired or a part replaced, that may influence the compensation amount. Involve your insurance company, they may be able to assist you in further recuperation of loss.

Summary

Freight claims can be a large pain, and if you do not know the subtle nuances that go into the process, they are nothing short of overwhelming. Be diligent in your shipment preparation, thorough with your paperwork and mindful of inspection at delivery. Hopefully your freight always arrives safe and on time. However, if an accident does happen, you will be prepared to face it head on.

Don’t forget to lean on your freight service. Agforce can help you understand the claim process and serve as a go-between with the freight carrier. Together, we can better navigate the freight industry. Give us a call at 877.367.2324 or email us at inquiry@agforcets.com.

Agforce Vice President Andy Tuley’s 2019 Intermodal Outlook

Precision in an Imprecise Market

2018 was a big year for precision railroading, and that’s an understatement. Some might go so far to say it was a “make or break” year, and I would have to agree – as long as those people also agreed that by December 31, 2018, we could conclude precision railroading probably checked all the boxes on the “make” side of the equation. Of course, that growth did not necessarily come easy for any of us.

According to the Association of American Railroads, intermodal volume rose 5.5 percent in 2018 alone. At Agforce, we experienced that growth firsthand with our partners. By the end of the year, it had become clear that precision railroading is well positioned to go mainstream in 2019, but not without a few growing pains. Thanks in large part to a confluence of factors that included precision railroading and tight trucking capacity, CSX, for example, struggled with delays and the resultant frustrated shippers on the precision railroading side.

Thankfully, CSX adjusted to the “new normal” quickly, modifying and improving service to accommodate pared-down service routes and closed ramp facilities. The use of the word “quickly,” by the way, is highly relative. It did not take CSX long by railroad standards to make some high-impact, significant changes, but to our customers, it felt like an eternity. We were relieved in October 2018, when we started seeing glimmers of the positive angles of precision railroading strategy emerge not just for CSX, but for our intermodal partners as well.

Accept it: Precision Railroading is Here to Stay

The shifts and evolutions that came in 2018 created an intense need for not just data, but the best data and the best analytics to go with it. Agforce brought both last year and is prepared to do so again in the coming year.

Precision railroading can be difficult to deal with on the client side when a railroad first engages in this format. Done right, the strategy dramatically increases efficiency and optimizes use of assets across the board at a railroad, but the implementation period can be rough. CSX picked a rough time to implement precision railroading, in the middle of a tight truck market, since companies were already looking for options to get product off their docks and onto the road or, instead, the rails.

When engaged in successful precision railroading, a railroad like CSX may “shed” operations (including ramps and associated operations) while expanding profits all the while. This can complicate things for shippers to no small degree.

“CSX has more pricing power [now]…particularly in intermodal truck-rail business,” wrote WSJ business editor Paul Page this past October. Precision railroading provides more pricing power for the rails but also causes massive operational changes which makes having a solid strategic partner that much more imperative. The ensuing volatility certainly had a huge impact on our industry in 2018, but we expect things to calm down in the coming year.

What does this mean for Agforce customers? As precision railroading grows in popularity (and it will with results like CSX is posting), it will be imperative that every company have a highly optimized intermodal strategy. Whether you have had the same basic process for years and are in need of a “revamp” or you have only recently begun working with or considering intermodal shipping, rely on Agforce to help you develop and optimize the intermodal strategy right for you.

Rising Rates Likely to Slow in 2019

Fortunately for the entire industry, 2019 will probably not be quite as volatile as its predecessor. At Agforce, we do not expect the same volume of rate increases that we saw in 2018, which were caused by the coupling of a very tight truck market and the emergence of precision railroading as a dominant trend in railroading. Intermodal growth in 2018 was definitely fueled by tight capacity in the truck market, but now it is certainly here to stay.

The trucking industry appears to be taking a pause of its own as 2019 begins, another positive indicator for you that rates on this side could settle in the coming months. After a huge surge in fleet expansions, orders for heavy-duty trucks in North America were 43 percent lower in December 2018 than they were a year prior and down 24 percent month-over-month, ACT Research reported in early January.

However, ACT vice president Steve Tam observed, order volumes are not so low that the hot freight market could be heading for a downturn. “Freight demand is still growing. Freight demands are still increasing; it’s just that they are growing at a lower rate,” he told WSJ. This certainly correlates to our own outlook, with the caveat that this applies mainly to lanes that still “fit” railroads’ new operations. Be alert: precision railroading can create logistical issues if a railroad’s new ramp pairings do not fit with the network customers are used to. Agforce is dedicated to helping partners identify the best fits between providers and customers and also between rail and trucking providers as this evolution continues.

It is Time to Take a “Deep Dive” of Your Own

At Agforce, we have shifted historical business to rail in many cases due to pricing or capacity constraints. This service shift and the ability to meet demand has made rail a better fit for our customers in certain cases, and those instances are increasing in number as more railroads nail down precision railroading and the positive results it can bring.

It is imperative your logistics partner is doing constant, analytical due diligence for you. This is what Agforce does for its customers.

The good news is we don’t expect the spot market to stay up where it is right now. In fact, we’re predicting it will come down while contractual rates rise a modest 3-5 percent in lanes that continue to fit the railroads networks. Agforce continues to carefully and consistently monitor service provider, freight volumes, ramp pairings and schedules to help you optimize your shipping strategies. Untiring attention to detail in this will play a key role in your company’s successful shipping, regardless of mode or combination of transport methods, in 2019.

 

Together, we can leverage 2019 to your advantage. Let’s partner and create solutions for your business. Give us a call at 877.367.2324 or email us at inquiry@agforcets.com.

 

Andy Tuley is the Vice President of Business Development at Agforce Transport Services. Tuley’s long history of work in the logistics and supply chain industry coupled with skills in freight, sales forecasting and P&L management uniquely qualify him to provide Agforce customers with the strategic industry analysis they need each quarter and in the event of industry disruption.

 

Cargo Theft: Is Your Freight at Risk?

A suspected crew of cargo thieves followed a truck from a local warehouse. The truck didn’t go far, parking just a couple of miles away. Detective Gerardo A. Pachuca of Los Angeles County Sheriff’s Department’s Cargo Criminal Apprehension Team (Cargo CATs) had the crew under surveillance. He reached out to the driver to let him know the thieves were tracking him — that shipment remained safe. The following week on the same route, and same parking lot, the trailer was left unattended. The thieves had their window. They took the entire trailer.

In the same article by Transport Topics, Pachuca warned about the sophistication level of cargo thieves. They are organized often working as a crew, where they stake out specific goods and their corresponding warehouses. Here’s what you should know.

Food and Beverage Freight is at the Highest Risk of Theft

The joint 2018 Semi-Annual Global Cargo Theft Intelligence and Advisory Report published by the TT Club, leading provider of insurance and related risk management services for the logistics industry, and BSI Supply Chain Services, leading global provider of supply chain intelligence, auditing services, audit and risk management compliance solutions and advisory services, revealed large growth in cargo theft and crime, reporting 24 percent of global cargo theft resulted from violent truck hijackings, with 27 percent of those incidents targeting food and beverage.

North American Cargo Theft Statistics

North America Cargo Theft
Credit: 2018 Semi-Annual Global Cargo Theft Intelligence and Advisory Report

  • 38 percent of thefts are by hijacking with theft of vehicle 25 percent
  • 82 percent of theft occurs in the truck modality compared to less than 7 percent by rail
  • Food and beverage are 34 percent of the stolen commodities, consumer products 18 percent
  • 66 percent of theft happens while cargo is in-transit and 11 percent while in warehouse
  • Mexico is top North American country for theft at 69 percent of all incidents, U.S. 22 percent

Cargo Theft Sophistication is Evolving

Scott Cornell leads Travelers Insurance transportation business and helped create its cargo theft investigation unit more than a decade ago. In this recent article, he talked through strategic cargo theft, which employs deceit and results in carriers and shippers unknowingly handing over their loads.

These thieves may pose as a carrier or broker, finding their target commodities and companies by matching them with the location of available cargo on public load boards. To steal the identity of legitimate carriers or brokers and bid on these loads, they may have posted fictitious loads where they can capture legitimate credentials during the bid process.

Friday afternoons, when companies are most pressured to get freight off the dock, may present the highest risk of falling victim to this strategy. The thieves hope the stress of getting the freight moving may lead to less scrutiny of credentials at pickup.

From double-brokering scams to all-out deception, shippers need to be cautious and aware. Cornell provided practices for shippers to help protect against strategic cargo theft including, “Work only with legitimate and licensed brokers that have strong controls in place for vetting carriers, ensuring their legitimacy and protecting cargo security.”

Are there additional safety procedures you should consider for your freight? Give us a call at 877.367.2324 or email us at inquiry@agforcets.com. We can talk about your current processes and identify risk. Let’s prevent cargo theft, together.

Prepare for an RFP in 4 Steps

As a large-scale shipper, you use a request for proposal (RFP) to put freight out for bid, typically on an annual basis, correct? You are smart. This process helps keep your current freight providers on their game and gives you the opportunity to evaluate the capability of newcomers. Here are four steps that will have you well-prepared for your RFP process:

1. Get Organized

Details. And lots of them. That is the basis of a good RFP. The homework you need to do is not only for the sake of line items in the RFP but also for the alignment of your internal team. You need to work together to define the ideal outcome of the process. Once you are in lockstep regarding what a successful RFP looks like, there will be numerous facts to gather and decisions to make. You should get a jump start on these:

  • Know your annual freight spend and volume
    • When you can, break your spend out by mode. This will help pinpoint your savings potential and give you data to measure against.
  • Profile your freight in detail
    • The particulars will help freight providers create tailored solutions for you. Document your freight’s handling requirements, load time, standard weights, pickup and delivery times. Providers will also want to know if you have driver-friendly facilities and how quickly you pay. It is also beneficial to document the efficiency of your check-in and check-out process.
  • Outline the full objectives of your RFP in your clear and concise bid package
    • This is where you define your expectations for the RFP. What do you hope to achieve? Freight services want to provide the information you are looking for. This will help both your organization and those invited to bid to act with intention throughout the process.  
  • Set the number of bid rounds
    • The number of rounds in the RFP process helps those bidding understand your communication cadence and informs their own strategy in regard to winning your business.

Pro tip! Gather visuals of the products you ship. Part of your job is to make your freight attractive to the service provider. They need to want to move your freight.

2. Determine the Participants

Your carrier strategy likely includes a mix of carriers and third-party logistics companies (3PLs) — small, large, national, regional. The tender percentage awarded to each is deliberate and likely based on the requirements of your freight. Bring this same thought process as you determine the invite list of your RFP. You want a good mix to help you thrive in a changing logistics landscape. Balance this group based on fit with your supply chain operations.

The RFP process is the perfect opportunity to evaluate your incumbent shipping services against potential new providers — how they compare on rates as well as overall fit in your strategy. Remember, these partners can make a large impact on how customers view your reliability. So, once you have your carrier mix determined, go ahead and prepare your list of hard-hitting questions:

  • How does our freight fit into your network?
  • Where will we rank among your clients in freight spend?
  • Are we aligned on KPIs?
  • Have you done X before?
    • Whatever your freight requires, make sure they have handled that situation in the past.

3. Establish a Benchmark

To determine your RFPs success, you have to know if it helped you hit your established goals. So, you need a baseline for comparison. There are a few ways you can accomplish this:

  • Gather historical data from your company
  • Reach out to industry trade associations that may share their knowledge
  • Work with an outside consultant

As you are compiling this data, be on the lookout for opportunities to optimize your transportation program. Maybe your RFP should consider modal conversion or the opportunities for lane aggregation.  

After a set time, once your new RFP is in place, look at the numbers in comparison to your baseline. Are they trending in the manner you had hoped? Preparing for measurement and analysis is a plan for success.

4. Outline RFP Administration

You will need to create a system of checks and balances for the RFP process to help secure the best outcome for your business. Define the communication pattern so you have a game plan to reach out to the participants after each round. We also advise an open line of communication with carriers and providers throughout the course of the RFP.

Pro tip! Do not provide target rates in your initial RFP. It could adversely impact the results and cause you to overlook providers that are a great fit with your operations.

After the RFP Process

You prepared and administered your RFP. Now what? Once your freight has been awarded, there is still more to do to get the trucks rolling. Onboarding calls are very important to make sure you are on the same page with each provider regarding service levels and volume commitments. You put a significant amount of your time and energy into the RFP, work to make sure it was worth the investment.

3PLs are a vital part of success in most supply chains. Your carrier strategy likely endorses a mix of 3PLs and asset-based carriers. We provide the value of strategy and solution that only a 3PL can. If our networks compliment one another, we will be a trusted resource to help your company succeed in hitting the goals of your RFP and beyond.

Submit your RFP to inquiry@agforcets.com.