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Port of Houston box Numbers Stay High in Softening Market

The Port of Houston has enjoyed a 13 per cent year-on-year container growth in October, continuing its positive trend seen throughout 2022.

The port moved a total of 371,994 TEU during the month.

Loaded container TEU reached the highest volume ever, up 21 per cent compared to the same month last year.

Overall, container volume is up 18 per cent year-to-date at Port Houston’s terminals and has surpassed the 3 million mark thus far, with 3,333,924 TEU.

“Although the import demand in the US appears to be softening, we have not seen any slowing in Houston in recent months,” said Roger Guenther, Port Houston Executive Director.

“We are handling record amounts of cargo and remain focused on aggressive infrastructure development to optimise capacity and efficiently handle current and future demand through our port.”

The Port Commission recently voted to introduce a sustained import dwell fee and an optional excessive import dwell fee to cope with record-breaking volumes.

The port had long considered the introduction of a fee as containers keep flowing in at its terminals with no signs of imminent softening in import loads.

“The additional dwell fees are intended to minimise storage of containers on terminal. Boxes need to move through the terminal quickly to maintain a fluid environment and superior level of service for our customers,” Guenther said.

Total tonnage across Port Houston’s facilities was up 18 per cent in October and 25 per cent for the year as compared to last year.

In September, the Port of Houston registered its second-highest month ever for containers following a surge in demand for imported goods.

Total throughput reached 353,525 TEU, a year-on-year increase of 26 per cent

The Uber-ization of US Trucking is only Speeding Up

US trucking is entering a tumultuous period that will likely reshape the $875 billion industry.

Shipping rates that spiked during disruptions caused by the pandemic have plummeted — some are now calling it a “freight recession” — as inventory gluts across the US lowered demand. That has placed the sector at a disadvantage during annual contract negotiations now in full swing, but means retailers and other customers will benefit from lower transportation costs.

There’s also a shakeout among the brokers who match trucking companies with loads that need to be shipped. Silicon Valley entered the fray a few years ago and digitized what had been a transaction done with phone calls and paper. Large and established brokers have also bolstered their technology, leaving the 17,000 smaller firms that haven’t evolved vulnerable.

When Suma started his career in the truck industry a couple of decades ago, his job was to open up packets of paperwork delivered by courier to log the deliveries made by drivers for Knight-Swift Transportation Holdings Inc. Now the company he runs is trying to eliminate all that paper.

Inventory Glut 

Meanwhile, uncertainty reigns. Retailers still have too much inventory, a result of consumers pulling back from apparel and other goods after splurging last year. The US might also be heading into a recession, which would put more pressure on spot market truckload rates that are down 40% from a year ago, according to KeyBanc Capital Markets.

Contracted freight tonnage that’s seasonally adjusted fell 2.3% in October from September, the largest decline since the beginning of the pandemic, according to the American Trucking Associations. Contract freight rose 2.8% in October when compared with a year ago, the lowest gain since April, the trade group said.

The brokerage battlefield is pitting legacy brokers, such as C.H. Robinson Worldwide Inc. and RXO Inc. that are expanding automated systems, against digitally native newcomers, such as Uber Technologies Inc.’s freight unit and Convoy Inc. Large trucking companies, including J.B. Hunt Transport Services Inc. and Werner Enterprises Inc., are adding more competition by building out their own digital brokerages.

The race to become the leading digital platform includes Werner’s $113 million acquisition this month of ReedTMS Logistics, a Tampa, Florida-based freight broker with $372 million in annual revenue. That came after Uber Freight’s purchase of Transplace last year for $2.25 billion.

Most brokers are asset-light, which means they don’t own trucks. Instead, they shepherd freight from origin to destination by playing matchmaker between shippers and truckers. Brokers build capacity in this fragmented industry by signing up as many of the 2 million US freighters as they can. These carriers are mostly small, with half of them being just one-truck operations. Less than 6,000 carriers own more than 100 trucks.

The automation technology removes labor by providing a computer application for truckers to find freight and accept the price for hauling it. There’s still a lot of paperwork used in the industry. But services, including Transflo, are bridging the transition by allowing drivers to scan trip documents at truck-stop kiosks to digitalize the paperwork for fleet operators.

Uber Freight and Convoy have gobbled up market share, but struggled to make a profit. Convoy, which raised $260 million in April led by Baillie Gifford is still investing in its technology and capturing market share, CEO Dan Lewis said in an interview.

Bob Biesterfeld, CEO of C.H. Robinson, has been through several dips in the freight market and is responding by planning to cut costs by $175 million — mostly through personnel reductions — to preserve profit while also boosting spending on automation. C.H. Robinson projects the freight downturn will pressure its operating margins, but expects to come out stronger when the cycle eventually turns positive.

Brewing Battle

RXO, the digital freight broker spun out from XPO Logistics Inc., expects to make money during the downturn and pick up new business, according to CEO Drew Wilkerson. The company brought on Yoav Amiel, a former Uber exec, from XPO to supercharge its automation technology.

The digital startups that have scooped up customers have done so mostly by offering lower prices, which isn’t a new tactic in the industry, Wilkerson said. In the end, it’s still a relationship business because shippers depend on brokers to deliver their freight on time.

Suma projects Loadsmith will generate $8 million of earnings before interest, taxes, depreciation and amortization this year and plans to fund expansion with its own cash. The company expects sales growth to slow down next year amid the downturn in freight demand. The company also will pursue an acquisition at the end of next year or beginning of 2024 to catch the upswing in the freight cycle.

Top Strategies for Coping with the Capacity Crunch

In spite of the recent improvements concerning shipping container shortages and similar, the capacity crunch is still a real concern. In fact, it is likely to remain one indefinitely. So, coming up with viable solutions to the problems is one of the foremost tasks for any business involved in the shipping and transporting of goods. To contribute, we have prepared a guide on the top strategies for coping with the capacity crunch!

Work on your efficiency

The first way of coping with the capacity crunch is to make it easier for carriers and logistics companies to work with you. Since the capacity crunch makes it necessary for them to be slightly pickier with their partners, choosing someone who helps them do their work quickly and effectively will always be a priority. Meaning they likely won’t choose to work with you if your handover of goods is not optimally organized. Besides, some effort to optimize your distribution center will also help your own business, as well. It is only better to invest time and resources into such a project.

Form long-term cooperative agreements

If you want a guarantee that you’ll be able to ship your goods consistently, the best thing to do is form long-term cooperative agreements. If you know you can rely on your partners for shipping space; you won’t need to worry about a capacity crunch. They will also feel more motivated to provide you with enough space for all your shipping needs. In addition, working more closely together gives you the benefit of knowing your goods are being handled well. And that they will arrive safely at their destination without any damage. Which is not something you can absolutely guarantee when working with new carriers.

Improve your routes

If you rely on your own truck fleet or other transportation methods, one way of coping with the capacity crunch is to optimize your delivery routes. As logistics experts like to point out, working on the improvement of your everyday traveling routes can shave off a lot of time from your schedule. This would, in turn, free up your trucks faster and allow you to make more rounds. It may not be an obvious thing when just paying attention to short-term boosts to your delivery efficiency. However, over weeks and months, it will slowly add up to a significant improvement well worth all the effort to achieve it!

Ship more frequently

Yet another method of coping with the capacity crunch is making more yet smaller shipments. This somewhat synergizes with our previous piece of advice. Of course, there is a serious downside to this, especially if you are doing it yourself. Frequent smaller shipments still use up fuel, which would increase your operating costs. Still, if your goal is to get your goods to the destination as quickly and reliably as possible, this is likely one of your best options. The downside is somewhat minimized, too, if you are working with logistics companies or carriers. The price of their service is, after all, primarily based on the amount of inventory you have them transport. Especially if they are picking up your goods while running their own pre-set routes. In this scenario, you should definitely prioritize making this your preferred mode of operation.

Organize your shipping dates better

If the idea of shipping more frequently does not appeal to you, then there is a decent alternative. Namely, you can simply try to put the dates forward a little. If you ship your goods earlier than the stipulated deadlines, you will have the time required to deal with any delays or issues that pop up. Now, this does cause problems of its own. Namely, it causes potential inventory and warehousing issues. If the goods are delivered too early, the recipient may not have enough space to store them. Or the delivery may overlap with another and cause a delay in unloading the goods. This is why, if you opt for this particular solution, make sure to properly communicate the changes with your partners or customers. This way, they will have an opportunity to fix things on their end, and problems can be largely avoided.

Cooperate with multiple logistics companies

Whether you are doing shipments yourself or have a set partner, another potential solution for capacity crunch is simply working with multiple carriers instead. After all, if a single company cannot properly account for all your needs, then several will. Naturally, this does mean you need to carefully pick and choose whom you want to work with. You would also need to go through the process of fine-tuning your cooperation with them once again. But, if you consider the current state of global logistics, this is not a bad idea at all. If any of your partners run into serious issues, you still have the option to fall back on. As such, working with multiple companies would not only solve your capacity crunch problems but provide you with a sense of security as well.

Invest in your own expansion

The final way of coping with the capacity crunch is to expand your own shipping capacities. Now, this is both the most expensive and most viable solution. Obviously, it requires a considerable short-term investment. And even an increase in your everyday expenses as you work to ensure the maintenance of your trucks. But, consider this: you would have your own solution, which you can have absolute confidence in, and would not be required to deal with agreements, partnerships, or schedule syncing. In other words, you would have complete control over the shipment of your goods. This is by no means a small boon for any company! Especially since you could fine-tune all the deliveries and the expenses associated with them.

Final comment

We hope that the top strategies for coping with the capacity crunch we have prepared will be helpful to you! Of course, whatever solution you settle on, know it will take some time to properly integrate them into your business. So, make long-term plans rather than temporary fixes!

Author Bio

Jacob Fabre is a logistics expert associated with Movers Not Shakers and has over two decades of experience in the field. He draws on this knowledge to produce quality texts and articles on various subjects related to his field of work.

SC Ports Remains Fluid while Handling record Volumes in October

SC Ports reported 9% container growth year-over-year as 256,879 twenty-foot equivalent units (TEUs) moved through Wando Welch Terminal, North Charleston Terminal and Hugh K. Leatherman Terminal in October. When accounting for boxes of any size, SC Ports handled 142,276 pier containers last month.

Imports remain strong, with 121,305 loaded import TEUs coming through the Port of Charleston last month, up nearly 13% from last October. This sustained growth is driven by strong consumer demand and a growing Southeast population.

SC Ports recently handled three 1,200-foot ships simultaneously at Wando Welch Terminal — a first for the 40-year-old container terminal that has been enhanced with big ship capabilities and more cargo capacity.

SC Ports also handled 14,365 rail moves at Inland Ports Greer and Dillon, 17,996 vehicles at Columbus Street Terminal and 24,406 cruise passengers at Union Pier Terminal last month.

About South Carolina Ports Authority
South Carolina Ports Authority, established by the state’s General Assembly in 1942, owns and operates public seaport and intermodal facilities in Charleston, Dillon, Georgetown and Greer. As an economic development engine for the state, Port operations facilitate 225,000 statewide jobs and generate nearly $63.4 billion in annual economic activity. SC Ports is soon to be home to the deepest harbor on the U.S. East Coast at 52 feet. SC Ports is an industry leader in delivering speed-to-market, seamless processes and flexibility to ensure reliable operations, big ship handling, efficient market reach and environmental responsibility. Please visit www.scspa.com to learn more about SC Ports.

Fleet Advantage Helps Corporate Truck Fleets Certify GHG Output For New SEC Climate Disclosure Proposal

Fleet Advantage, a leading innovator in truck fleet business analytics, equipment financing, and life cycle cost management (LCCM), announced their program helps corporate truck fleets certify their greenhouse gas emissions (GHG) output, recently mandated under a proposed rule issued by the Securities and Exchange Commission (SEC). Fleet Advantage is the only finance lessor that has been certifying such measures for a decade with a focus on tractor trailer fleets that operate high annual mileages (MPY).

On March 21, the SEC issued a proposed rule designed to enhance and standardize climate-related disclosures divulged by public companies. Under the proposal, a registrant is required to adhere to greenhouse gas (GHG) emissions disclosures within qualitative governance disclosures within their annual reports (e.g., Form 10-K). Comments on the proposed rule are due 30 days after its publication in the Federal Register or May 20, 2022.

Pioneering Focus on ESG and Documented Certification for SEC Filings

With more than 12 years of experience reporting to America’s Top 50 corporate truck fleets to achieve emissions sustainability, the company developed innovative technologies analyzing billions of miles of data from more than 50,000 vehicles in its network and providing accurate, ongoing emissions audits combined with its Fleet Modernization and Finance Program. 

John Flynn founded Fleet Advantage in 2008 with the goal of developing solutions to significantly reduce emissions using a sustainable Fleet Modernization Program. The company has introduced breakthroughs including emissions scorecards, early truck EXchangeIT® program, and financial flexibility to acquire use of clean-diesel engines more frequently as the emission technology advances. This program has helped fleets meet GHG-1and -2 Federal mandates to reduce CO2, while saving millions of dollars year-over-year with improved MPG and reduced fuel consumption.

Fleet Advantage customers operate fleets with lower cost per mile, a reduced carbon footprint and improved safety and driver morale by maintaining their fleet’s average life at about 2-3 years. This helps compliment ESG strategies for its customers in their goal to report to regulators and critical stakeholders. The company’s data analytics have proven that switching from an 8-year truck life cycle to a 4-5-year life cycle nets an average fleet reduction of 2.5 million gallons and 25,000 metric tons of CO2. According to the IEA, global energy-related carbon dioxide emissions continued to rise by 6% in 2021, their highest ever level.

Currently, five of America’s top ten corporate fleets trust Fleet Advantage as their truck finance partner. To learn more or receive an emissions scorecard and fleet modernization study, call 954-615-4400 or visit https://www.fleetadvantage.com/contact

GLOBAL MANUFACTURERS THAT ROLL PLANET PRESERVATION INTO THEIR BUSINESS PLANS

With the global population expected to reach 9.6 billion by 2050, the United Nations estimates that the equivalent of almost three planets would be required to provide the natural resources needed to sustain that many modern lifestyles.

While consumption and production are critical to the global economy, current volumes and unsustainable practices are placing a massive strain on the environment and its resources, leading to some already catastrophic impacts.

For instance, Deloitte reports that between 2000 and 2020, CO2 emissions released by global fossil fuel combustion and industrial processes rose by roughly 35%, to 34.07 billion metric tons. Given the need to address climate change and meet net-zero targets, this trend must be reversed.

Thankfully, many manufacturers are now recognizing the strong business case behind pursuing more sustainable practices. Indeed, operating in a sustainable manner can improve energy efficiency, reduce waste, lower costs, increase operational efficiency, enhance brand reputation, boost recruitment and staff retention practices, provide competitive advantages, futureproof for regulatory constraints and opportunities, and unlock access to government grants and funding.

Of course, sustainability is not a case of one-size-fits-all. Every manufacturer is different, and each will have to make sustainable changes that match unique criteria. Yet this diversity is resulting in an abundance of commendable innovations.

What follows are some leading global manufacturing companies that are taking proactive and progressive approaches toward sustainability.

CANADIAN PACIFIC

Canadian Pacific (CP) is one firm leading the sustainability charge in the rail arena, having introduced a hydrogen locomotive program back in December 2020.

Many railway operators globally use diesel-powered locomotives at present, representing the industry’s most significant source of greenhouse gas emissions.

Recognizing this, CP has introduced a host of sustainability initiatives that have been successful in improving its fuel efficiency by more than 40% in the past three decades. Should the hydrogen program prove to be successful, it will help the firm take a further leap toward sustainable practices and serve to revolutionize energy consumption for the industry as a whole.

CP is in the process of retrofitting a line-haul locomotive with hydrogen fuel cells and battery technology to power the locomotive’s electric traction motors. The company will then conduct rail service trials and qualification testing to evaluate the technology’s readiness for real world use.

To accelerate the program, the company also recently received a CA$15 million (US$12.1 million) grant from Emissions Reduction Alberta to increase the number of hydrogen locomotive conversions from one to three, as well as developing more hydrogen production and fueling facilities at CP’s rail yards in Calgary and Edmonton.

The former will comprise an electrolysis plant that will produce hydrogen from water, this process powered by solar panels at CP’s headquarters campus to keep emissions at zero. The latter, meanwhile, will see a small-scale steam methane reformation system being used to generate hydrogen while tapping into Alberta’s abundant natural gas resources.

RIO TINTO, POSCO, METSO OUTOTEC

Over in the mining and metals sector, organizations are also tapping into the potential of hydrogen to unlock similarly transformative solutions.

Rio Tinto, the world’s third largest mining company, has partnered with POSCO, the largest steel producer in South Korea, for the exploration and development of technologies capable of contributing to a low-carbon emission steel value-chain.

Both firms have outlined ambitions to reach carbon neutrality by 2050, the integration of Rio Tinto’s iron ore processing technology and POSCO’s steelmaking technology set to be pivotal in helping them to each reach such their intended sustainability targets.

In addition, Finnish metals specialist Metso Outotec is equally championing sustainability in the sector thanks to its unique Circored process, this involving the use of hydrogen to decarbonize the production of steel.

The flexible Circored process produces highly metalized direct reduced iron or hot briquetted iron which is then in turn used directly as a feed material in electric arc furnaces for carbon-free steelmaking.

Not only does this not require any fossil fuels, but it also helps Metso Outotec to minimize its costs by eliminating the need for energy-intensive pelletizing.

PACCAR, DAIMLER TRUCKS NORTH AMERICA, VOLVO GROUP

Back in the transportation sector, automotive manufacturers PACCAR, Daimler Trucks North America and Volvo Group recently sealed $127 million of $199 million in U.S. federal funding made available for the development of advanced battery-electric and fuel cell electric truck projects.

According to the International Energy Agency, transport accounts for approximately one fifth of all CO2 emissions, with 74.5% of this contribution stemming from passenger vehicles (45.1%) and road freight vehicles (29.4%).

Known as SuperTruck 3, the federal funding initiative is a five-year dollar-for-dollar investment matching program designed to accelerate the development of pollution reducing electrified medium- and heavy-duty trucks and freight system concepts that will either achieve zero emissions or improve energy efficiency.

PACCAR secured $33 million of the funds to develop 18 class 8 battery-electric and fuel-cell trucks, as well as a megawatt charging station.

Daimler Trucks North America has received $26 million to develop two class 8 fuel cell trucks that have a 600-mile range and 25,000-hour durability–providing similar operational output compared with a diesel vehicle.

And Volvo Group North America will use $18 million in SuperTruck 3 funding to manufacture a 400-mile class 8 battery-electric tractor trailer that will focus on optimizing performance in relation to aerodynamics, tires, braking, automation and route planning. Further, the firm will also develop a megawatt charging station.

This is not the only commitment the manufacturers have made towards sustainable automotive solutions. Equally, Daimler and Volvo previously signed a joint venture to develop fuel cell vehicles during the current decade that would be sold under both brands.

THE MARISURF CONSORTIUM

Pharmaceutical and chemical manufacturing might seem like a sector less ripe for sustainability initiatives. However, the MARISURF Consortium is demonstrating that this is equally an area where much progress can be made.

The Consortium, backed by several companies and funded by a grant of 4.8 million euros (or about US$5.4 million) from the European Union’s Horizon Europe research and innovation program, aims to develop alternatives for petrochemicals in pharma products using marine microorganisms.

It comprises a selection of esteemed academic institutions, end-users and industrial companies, including manufacturers such as Bio Base Europe Pilot Plant VZW, EcTechSystens Srl, Nanoimmunotech and Marlow Foods Ltd.

The goal is to produce marine microorganism-based products for personal care, food and pharmaceutical formulations, with promising progress having been made in the five years since the research project first launched. Given that the consumer industry accounts for more than 70% of demand for all petrochemicals, this is significant.

Indeed, common petrochemical use cases include drug production, soaps, plastics, fertilizers, pesticides, paints, and build materials such as flooring and insulation. However, it is hoped that marine organisms will become a viable, natural replacement, owing to the consortium’s research.

EN+ GROUP

While En+ Group is renowned as the world’s largest producer of low-carbon aluminum, it is also an active player in green energy solutions through several environmentally conscious initiatives.

Many of these are driven by the firm’s New Energy program, focused on expanding clean energy generation and access. This seeks to modernize En+’s power plants through the implementation of new technologies capable of achieving greater hydropower energy efficiency and a reduced environmental impact, without increasing the water volumes passing through its hydropower turbines.

Further, the program aims to reduce En+’s environmental impact in other ways–namely through curbing the emissions of its coal-fired power plants. Initially launched in 2007 in tandem with the company’s plans to conduct the large-scale overhaul and replacement of core equipment at its largest hydropower plants based in Siberia, the project will continue to run until 2046.

Through New Energy, it has also become the first Russian firm and just one of 28 companies globally to achieve a UN recognized Energy Compact–an initiative launched by UN Energy to acknowledge voluntary commitments by countries, businesses, and cities in supporting the Sustainable Development Goals by accelerating the transition to clean energy and improving energy access.

TRAFIGURA GROUP AND NYRSTAR

In Australia, global metals manufacturer Nyrstar and physical commodity trading company Trafigura Group have committed to a joint investment that will see the construction of a commercial scale green hydrogen manufacturing facility in Port Pirie, in partnership with the State Government of South Australia.

Currently the project is in the midst of an AUD$5 million (US$3.65 million) front end engineering design study that is expected to be concluded come the end of 2022, with construction then set to commence in 2023.

In total, the project will cost an estimated AUD$750 million (US$534 million), set to be rolled out in phases. Initially it will produce 20 tons of green hydrogen per day for export in the form of green ammonia, with plans to ramp up to 100 tons per day at full capacity, powered by a 440MW electrolyzer.

The manufacturing facility will become a key backbone of green hydrogen for Port Pirie and the surrounding region, providing significant benefit to local businesses while propelling the decarbonization of transport and industry.

The oxygen created in the hydrogen production process will also be utilized by the Nyrstar Port Pirie smelter. As part of the agreement, Trafigura will source 100% renewable energy to deliver the electricity needed to run the project’s electrolyzer, which will also contribute to decarbonizing the existing smelter’s power supply.

DEMATIC AND ASPIRE FOOD GROUP

Intelligent automation specialist Dematic and Aspire Food Group have partnered on a unique venture, constructing a flagship, state-of-the-art facility that will be used for the purpose of enhancing the production and manufacture of food-grade insect protein.

Anticipated for completion in Q1 2022, the facility will be the world’s first fully automated food-grade insect protein manufacturing site, powered by Dematic’s innovative technology.

Its Unit-Load Automated Storage/Retrieval Systems will be implemented through the 11-story building and use 96,000 totes to breed crickets, ready to be processed for either human or pet consumption.

Industrial IoT sensors, and artificial intelligence will also be deployed to unlock key data and insights that will be used to help optimize the conditions for cricket maturation, breeding and incubation. The project will also mark the inaugural use of such technologies in the enhancement of indoor vertical agriculture with living organisms.

In total, it is estimated that the totes will be able to produce up to 20,000 tons of cricket protein and waste for fertilizer and soil supplements annually.

HONDA AND KUEHNE+NAGEL

In China, logistics specialist Kuehne+Nagel and Honda have worked together to cut 16,000 tons of CO2 out of the supply chain of the automotive manufacturer through an ambitious road-to-rail project, reducing the regional division’s carbon emissions by as much as 70%.

Developed through KN Sincero–a joint venture between Kuehne+Nagel and Chinese logistics specialist Sincero–the initiative has seen Honda China move significant portions of its domestic long-haul trucking operations to train lines.

Tapping into regional hubs to optimize the performance of its supply chain, the manufacturer has unlocked several benefits. It has drastically reduced supply chain efficiencies and dramatically enhanced productive reliability, the project also delivering a range of value-added services spanning sorting, scanning, repackaging, GPS track and trace, and recyclable container management.

As a key partner, the project aligns with Kuehne+Nagel’s Net Zero Carbon initiative that was launched in 2019, geared toward not only lowering its own footprint but equally those of other organizations. Indeed, the firm resultantly achieved carbon neutrality globally in 2020, further turning attentions to supporting its partners thereafter through initiatives such as these.

Supply Chain – Your TMS Isn’t Enough: Why You Need a FAP Solution

You’ve heard of a Transportation Management System (TMS). You probably have one. You’ve heard of Freight Audit and Payment (FAP). You may have a FAP solution or think your TMS is adequate as a freight auditor. However, a TMS and an FAP solution are each essential components in a tech stack of supply chain management tools.

No single piece of technology is ever going to seamlessly manage all aspects of a global logistics operation with countless variables and complexities. But together, your TMS, focused on shipment execution, and your FAP solution, focused on post-execution activity, can work harmoniously to create a mature and successful logistics operation.

Freight Audit and Payment Software Systems

To optimize your global financial supply chain process, a freight audit and payment software system is crucial. Finding new efficiencies, ensuring compliance, and enabling cost reductions across your global transportation spend are just some of the valuable products of a holistic freight audit and payment system. However, achieving end-to-end visibility into your global transportation spend demands a sophisticated partnership with your freight audit and payment provider.

Read on to learn more about freight audit and payment and how your FAP system can work alongside your TMS.

History of Freight Audit and Payment

Prior to 1980, the transportation industry was strictly regulated, so payment terms were cohesive across the board, and freight invoices had to be paid in a matter of days. When the industry was deregulated in 1980, logistics services changed, and shippers and carriers could negotiate the terms of their freight bills. This made the freight payment process more complex, and as technology has advanced over the past few decades, the need for a comprehensive freight audit has increased.

Technology for Freight Audit and Payment

When a more robust freight audit is performed, the amount of data gathered regarding a company’s transportation spend is significant. A powerful freight audit and payment provider can then analyze that data to provide a wide range of business intelligence, including carbon emissions, carrier performance, and other important KPIs.

Transportation Management Systems

What is a Transportation Management System?

A transportation management system, or TMS, is a software solution that enables companies to better plan and optimize their global supply chain and logistics operations through multiple modes and regions.

The core functions of a TMS are:

  • Shipment execution
  • Load tendering to carrier/logistics service provider via electronic interfaces
  • Load optimization – i.e., consolidation of LTL to full truckload and selection of proper carrier and service
  • Software-focused – not sold as a managed service
  • Basic freight audit – electronic verification that contract pricing is correct

The Evolution of Transportation Management Systems

Transportation Management Systems have evolved over the last 20 years. In the early days of TMS, there weren’t many integrations available, and manual data entry was common. The advancements in the early 2000s allowed TMS providers to serve not only shippers but brokers and third-party logistics providers (3PLs) through the same applications. When cloud-based solutions became the norm, it became affordable and widespread.

Today, basic freight audit is part of many transportation management systems, though the data captured does not provide a holistic view of an enterprise’s total transportation spend across their global transportation network.

The Goal of FAP & TMS Systems

It is not possible to control or optimize what you can’t see. You can plan your supply chain and bring carriers on board, but without the data to benchmark performance and monitor compliance, you are unable to see opportunities for improvement or spot the nuances that can affect spend.

Your TMS is focused on getting goods out the door as efficiently as possible, as it should. In best-in-class operations, it’s up to the data capture and analysis capabilities of a freight audit and payment system to provide the intelligence – what was actually executed by the carrier, how much it cost, and to spotlight any problems or opportunities for improvement along the way.

While your TMS will assist in managing operations efficiently, the integration, usually via EDI connection, of an industry-leading freight audit and payment solution empowers end-to-end visibility to your entire supply chain, matching what was shipped (over multiple modes, channels, geographic regions, and carriers) to what has been invoiced, while identifying any outstanding charges or anomalies.

Automate the Capture and Standardization of Key Data

The key data captured by your freight audit and payment solution isn’t worth much if it isn’t standardized – ingested, cleansed, normalized, and connected from disparate systems – to provide you with centralized intelligence on your transportation spend.

No TMS on the market can perform these tasks end-to-end, making it imperative to have a freight audit and payment solution that plugs into your TMS and automates the capture of that data.

Benefits of Freight Data Capture by FAP

The benefits of performing regular freight audits often pay for themselves. A structured freight auditing and payments system provides ample opportunities to uncover problems that may have otherwise gone unnoticed.

Uncover Unnecessary Costs

Investing in a freight audit process that validates your freight data can uncover excess charges and allow you to assess what your actual costs should be. For example, a freight audit can detect unnecessary detention and demurrage charges, which are fees for storage and delays in the return of a container. Further, by cross-referencing all of the fees included on your invoices, a freight audit can alert a company’s accounts payable team to unexpected accessorial charges, such as reweighing, and better optimize your supply chain to protect against these charges in the future. The sooner you adopt a structured FAP system, the sooner you cut extra costs and improve your return on investment (ROI).

Reveal Missing or Incomplete Data

Establishing a solid FAP process as part of your supply chain tech stack uncovers potentially missing or incomplete data by providing end-to-end visibility into operations. For example, if you’re missing information about routing rules or approval parameters, catching that early and filling in the missing pieces can save time, money, and even contracts while improving your relationships with your carriers. With complete and accurate freight data, the visibility into your global transportation spend provides you with invaluable business intelligence, allowing your enterprise to take operations to the next level.

Increase Efficiency

The freight audit and payment process uncovers operational inefficiencies in your supply chain operation. For example, when you replace manual FAP processes with a tech-based solution, you can increase efficiency across multiple departments and your supply chain. More efficiency in the freight payment process allows your finance department to focus on larger issues. More efficiency in your supply chain means lower transportation costs and even lower carbon emissions due to route optimization. As they say, time is money. Allowing team members to focus on core service issues is a better use of their time and, subsequently, better for your bottom line.

Future Proof Against Invoice Errors

Freight billing errors are inevitable – some estimates say up to 25% of freight invoices have errors – but uncovering them allows your company to address the issues and rectify them before larger problems emerge. If your internal FAP solution is properly auditing all invoices, you can quickly calculate shipping costs, see and pay freight bills on time, and streamline payment services. The key to preventing future invoice errors is to catch them early and determine the root cause. Then, you’ll have the chance to optimize logistics operations and make corrections for the future.

Author’s Bio

Chris Cassidy is the chief revenue officer for Trax Technologies, the global leader in Transportation Spend Management (TSM) solutions. Trax elevates traditional Freight Audit and Payment (FAP) with a combination of industry leading cloud-based technology solutions and expert services to help enterprises with the world’s more complex supply chains better manage and control their global transportation costs and drive enterprise-wide efficiency and value.

SC Ports Drives Economic Growth in the Upstate

SC Ports’ teammates, elected leaders and community partners gathered today to celebrate the completed rail expansion at Inland Port Greer. They also touted the next phase of expansion that will double cargo capacity at the rail-served inland port.

Launching the state’s first inland port

Inland Port Greer opened in 2013 with BMW Manufacturing Co. as the launch customer. The inland terminal quickly surpassed initial design capacity estimates.

In fiscal year 2022, Inland Port Greer handled more than 150,000 rail lifts — meaning 150,000 containers were moved on or off Norfolk Southern trains.

Inland Port Greer extends the Port of Charleston’s reach 212 miles inland with Norfolk Southern’s daily, overnight rail service, enabling imports and exports to quickly flow between Charleston and the Upstate.

This has proved crucial for just-in-time manufacturing operations and retailers’ supply chains. The bustling logistics hub now moves cargo for numerous companies, including BMW, Michelin, Adidas, Eastman, First Solar, TTI Floorcare and Visual Comfort & Co.

Inland Port Greer operates 24/7 and runs similarly to a container terminal, with operators moving containers on and off trains instead of ships.

SC Ports’ two rail-served inland ports also generate environmental benefits for South Carolina. The S.C. Energy Office estimated that use of both Inland Ports Greer and Dillon in 2021 minimized carbon emissions by roughly 11,500 tons and saved an estimated 970,000 gallons of diesel fuel, compared to using only trucks to move an equivalent amount of cargo.

Expanding Inland Port Greer

The consistent growth of port customers spurred the expansion of Inland Port Greer, while global supply chain challenges reinforced the need for more capacity.

The first phase of expansion involved building an additional rail processing track and two rail storage tracks within the terminal. The addition of 8,000 feet of new rail will meet cargo demands through 2040.

The next phase of expansion involves expanding the container yard by 15 acres to the east and the west to handle 50% more cargo.

The expansion also involves doubling the size of the existing chassis yard capacity and building new facilities for heavy lift maintenance and terminal operations. The full project is slated for completion in winter 2024.

The more than $30 million expansion is funded by both SC Ports’ revenues and a portion of a $25 million BUILD (Better Utilizing Investments to Leverage Development) grant. The grant was awarded to the S.C. Department of Transportation for its Upstate Express Corridor Program.

Building key port infrastructure

With the support of the SC Legislature, SC Ports is also building the Navy Base Intermodal Facility in North Charleston. This rail-served cargo yard will move more cargo to and from Inland Ports Greer and Dillon, efficiently transporting goods throughout the state.

The Navy Base Intermodal Facility will be served by Norfolk Southern, CSX and Palmetto Railways when it opens in July 2025. The modern cargo yard will sit one mile from Leatherman Terminal to ensure speed-to-market for port-dependent businesses throughout the Southeast.

UK Rail Union Rejects Offer, Christmas Strikes Still Planned

Britain’s National Union of Rail, Maritime and Transport Workers has rejected an offer from the Rail Delivery Group aimed at ending a strike action planned before Christmas.

The offer proposed a pay-rise of 4% in 2022 and 2023, but the union claims it is conditional on many changes to working conditions, including job losses, reducing train staff on-board and the closure of all ticket offices.

This offer is the first in months, according to the RMT, and comes after the Department for Transport gave the Rail Delivery Group, which negotiates on behalf of rail operating companies, a mandate to make a proposal. This comes as pressure is piling on train companies with a strike action planned for 8 days in December and January as well as an overtime ban from Dec. 18 to Jan. 2 threatening mass rail disruptions.

“We have rejected this offer as it does not meet any of our criteria for securing a settlement on long term job security, a decent pay rise and protecting working conditions,” RMT general secretary Mick Lynch said. “The RDG and DfT who sets their mandate, both knew this offer would not be acceptable to RMT members.”

RMT general secretary Mick Lynch called for an “urgent” meeting with the Rail Delivery Group tomorrow to negotiate further. Network Rail also made an offer on pay and working practices which the RMT is reviewing.

Transport Secretary Mark Harper called the deal’s rejection “incredibly disappointing and unfair to the public, passengers and the rail workforce who want a deal.”

“Our railways need to modernize,” Harper said in a statement. “There’s no place for outdated working practices that rely on voluntary overtime to run a reliable 7-day service.”

The Uber-ization of US Trucking is only Speeding Up

US trucking is entering a tumultuous period that will likely reshape the $875 billion industry.

Shipping rates that spiked during disruptions caused by the pandemic have plummeted — some are now calling it a “freight recession” — as inventory gluts across the US lowered demand. That has placed the sector at a disadvantage during annual contract negotiations now in full swing, but means retailers and other customers will benefit from lower transportation costs.

There’s also a shakeout among the brokers who match trucking companies with loads that need to be shipped. Silicon Valley entered the fray a few years ago and digitized what had been a transaction done with phone calls and paper. Large and established brokers have also bolstered their technology, leaving the 17,000 smaller firms that haven’t evolved vulnerable.

When Suma started his career in the truck industry a couple of decades ago, his job was to open up packets of paperwork delivered by courier to log the deliveries made by drivers for Knight-Swift Transportation Holdings Inc. Now the company he runs is trying to eliminate all that paper.

Inventory Glut 

Meanwhile, uncertainty reigns. Retailers still have too much inventory, a result of consumers pulling back from apparel and other goods after splurging last year. The US might also be heading into a recession, which would put more pressure on spot market truckload rates that are down 40% from a year ago, according to KeyBanc Capital Markets.

Contracted freight tonnage that’s seasonally adjusted fell 2.3% in October from September, the largest decline since the beginning of the pandemic, according to the American Trucking Associations. Contract freight rose 2.8% in October when compared with a year ago, the lowest gain since April, the trade group said.

The brokerage battlefield is pitting legacy brokers, such as C.H. Robinson Worldwide Inc. and RXO Inc. that are expanding automated systems, against digitally native newcomers, such as Uber Technologies Inc.’s freight unit and Convoy Inc. Large trucking companies, including J.B. Hunt Transport Services Inc. and Werner Enterprises Inc., are adding more competition by building out their own digital brokerages.

The race to become the leading digital platform includes Werner’s $113 million acquisition this month of ReedTMS Logistics, a Tampa, Florida-based freight broker with $372 million in annual revenue. That came after Uber Freight’s purchase of Transplace last year for $2.25 billion.

Most brokers are asset-light, which means they don’t own trucks. Instead, they shepherd freight from origin to destination by playing matchmaker between shippers and truckers. Brokers build capacity in this fragmented industry by signing up as many of the 2 million US freighters as they can. These carriers are mostly small, with half of them being just one-truck operations. Less than 6,000 carriers own more than 100 trucks.

The automation technology removes labor by providing a computer application for truckers to find freight and accept the price for hauling it. There’s still a lot of paperwork used in the industry. But services, including Transflo, are bridging the transition by allowing drivers to scan trip documents at truck-stop kiosks to digitalize the paperwork for fleet operators.

Uber Freight and Convoy have gobbled up market share, but struggled to make a profit. Convoy, which raised $260 million in April led by Baillie Gifford is still investing in its technology and capturing market share, CEO Dan Lewis said in an interview.

Bob Biesterfeld, CEO of C.H. Robinson, has been through several dips in the freight market and is responding by planning to cut costs by $175 million — mostly through personnel reductions — to preserve profit while also boosting spending on automation. C.H. Robinson projects the freight downturn will pressure its operating margins, but expects to come out stronger when the cycle eventually turns positive.

Brewing Battle

RXO, the digital freight broker spun out from XPO Logistics Inc., expects to make money during the downturn and pick up new business, according to CEO Drew Wilkerson. The company brought on Yoav Amiel, a former Uber exec, from XPO to supercharge its automation technology.

The digital startups that have scooped up customers have done so mostly by offering lower prices, which isn’t a new tactic in the industry, Wilkerson said. In the end, it’s still a relationship business because shippers depend on brokers to deliver their freight on time.

Suma projects Loadsmith will generate $8 million of earnings before interest, taxes, depreciation and amortization this year and plans to fund expansion with its own cash. The company expects sales growth to slow down next year amid the downturn in freight demand. The company also will pursue an acquisition at the end of next year or beginning of 2024 to catch the upswing in the freight cycle.