The art of high-security, high-service, high-compliance shipping shouldn’t be high-maintenance.
An interview with Todd Simms, VP, Industry Strategy, Manufacturing
How much do you envy the companies that can load pallets of dry goods onto the lowest-cost trailer, close the door, and that’s the last they’ll really ever think of that shipment? You know – the canned, shelf-stable or otherwise inert shipments that couldn’t be more different than what you focus on in your day-to-day?
Envy might be a strong word, but the fact is you have a difficult task compared to your industry peers if you deal with high-security, high-service and/or high-compliance shipments. From high tech to chemicals, paint, medical devices and more, the real challenge truly begins when that trailer door closes. The need to stay connected to hundreds of thousands of dollars of goods destined for your most important customers is paramount.
Odds are, if you ship these types of products, supply chain visibility has been on your radar for a very long time. In fact, I would wager you are already using multiple visibility tools. My challenge to you is to critically evaluate if they’re truly helping you achieve your business’ objectives and enabling your supply chain to make better decisions, or if they’re just giving you field information. Whether you ship paint, microprocessors, petrochemicals, or medicine, connecting your teams to your freight should also come with the added benefit of control and peace of mind.
I decided to sit down with Todd Simms, a leading supply chain expert, to understand how companies might be underutilizing their visibility tools when tackling their three biggest challenges.
Todd Simms: Absolutely not; in fact, a lot of companies employ variable routing within their operations to thwart any efforts to intercept it. However, what is rigid is the need to have the right data at the right time, and the processes required to ensure security.
Tyler Nickel: That makes sense, but at the same time, it seems to introduce a new challenge to the mix – how do you maintain that constant connection to your freight in transit if it doesn’t follow the same routing every day?
Todd Simms: Well, in reality, the challenge isn’t the routing per se; trucks all have telematics devices that will transmit that information to a shipper. The real challenge comes when a company needs to diversify its carrier and data network, the standard EDI and API connections grow and the data feeds become irregular. This is when an intermediary, like a real-time visibility provider, can help wrangle those data connections and serve up a predictable, consistent visibility experience for the shipper so that, whether it’s a small mom-and-pop carrier or a multinational, billion-dollar carrier, they can still have the same visibility.
Tyler Nickel: So let’s say the unthinkable happened, and someone’s freight was intercepted. How do visibility tools help with that?
Todd Simms: This happens a lot more than you would think, especially with consumer electronics like televisions or goods like controlled substances. The sooner you detect that a shipment could have been compromised, the more likely you are to recover it.
Tyler Nickel: Early detection is key, right, but if you’re handling thousands of shipments in a day, how can you catch it early enough to do something about it if you’re not looking at the routing of each shipment?
Todd Simms: Newer visibility tools, like FourKites, allow shippers to receive notifications if a shipment leaves its designated course. In fact, most freight thefts occur within 200 miles of the origin facility, so having systematic processes in place to continually monitor your shipments, and alert you to any irregularities, can help you avoid any major security issues.
Todd Simms: On the surface level, it sounds like an oxymoron – by definition, higher-service shipments will result in a higher linehaul cost. But the reason why so many companies default to the fastest shipping option is the tradeoff cost is much, much higher.
Tyler Nickel: You’re talking about OTIF requirements, right?
Todd Simms: Exactly. If you’re shipping paint to a retailer, a medical device manufacturer on a surgery schedule, or a production plant at risk of a shutdown, then defaulting to the faster shipping cost can be pennies compared to the cost of a miss.
Tyler Nickel: But sometimes those expedites can still miss, right? They’re still subject to the real-world pressures of weather, traffic, and the unknown. What’s available to help manage expectations?
Todd Simms: Right, and that’s where the ability to continually calculate ETAs comes in handy. For example, FourKites’ Dynamic ETA uses real-world data on traffic and weather to give a shipper and/or receiver earlier insights into the actual ETA. This can open up new options, say, for an automotive shipper who might decide to air freight a door handle for their production needs. On top of that, it helps you provide a higher level of customer service. Rather than them needing to call you the day after a shipment was expected to deliver, you can reach out well in advance with solutions in hand, which helps demonstrate your commitment to their success.
Tyler Nickel: That’s fantastic. But I’m curious, on the flip side, is there a way for companies to reduce the amount of expedites they use?
Todd Simms: Absolutely, and it all comes down to that advanced warning. Some shippers could ship expedited less frequently, but they’re paying for that peace of mind. In fact, one of the newer solutions we offer, FourKites X, takes that network data and gives the shipper at the point of label creation the probability to achieve the transit quoted to help them balance economics with service.
Tyler Nickel: So, by having access to more data, data science engines can generate predictions well ahead of time to advise a shipper on the appropriate service level?
Todd Simms: Exactly, which can chip away at their freight spend over time.
Todd Simms: Absolutely. Meeting the standards of your stakeholders – whether chain-of-custody, temperature, or hazmat, is an incredibly challenging task. But it doesn’t mean that it needs to be difficult to maintain.
Tyler Nickel: So just because there’s a greater level of scrutiny and requirements, it doesn’t really need to be devoid of any support or automation?
Todd Simms: Exactly. In fact, the companies I’ve seen excel the most with compliance are those who can really push their visibility tools to do the thinking and monitoring for them. It doesn’t allow for much to fall through the cracks. And on top of that, dissemination of data to all levels of an organization – finance, customer service, sales – allows for better governance and compliance since they’re all working off of a single source of truth.
Tyler Nickel: Similar to the Security conversation we had.
Todd Simms: Yes, but even deeper than simply dots on the map, leading visibility platforms are data-hungry and want to serve up as much information as possible to create context and actioning insights.
Tyler Nickel: Like temperature – if you’re a temperature-sensitive customer like a paint company who can’t have their freight freeze or a pharmaceutical company that ships refrigerated, I’m sure having all of that information aggregated in your tracking platform is helpful.
Todd Simms: And like before, with thousands of shipments out there, you need to be able to have the system think for you and alert you of any problems.
Tyler Nickel: I feel like that’s a pretty common feature today, but the added bonus with a platform like FourKites is that we connect all of the carriers and standardize it into one platform.
Todd Simms: Even that isn’t as differentiating as you’d think. What I think is a huge opportunity for temperature-sensitive shipments is in the yard. When a trailer arrives, it typically leaves the visibility of the shipper and the custody of the trailer is handed off to the site. A yard management system, like Dynamic Yard, can take that handoff and alert a spotter if a reefer is running out of fuel or if the temperature is deviating too much.
Tyler Nickel: The yard is definitely not thought of enough – it’s basically a warehouse-worth of inventory sitting in a parking lot, but without the right tools you really can’t do much with it. Huge opportunity.
Todd Simms: Completely agree, and I think a lot of companies are leaving a ton of money on the table by treating their yard as a dumping ground.
Tyler Nickel: But shifting gears, since compliance isn’t always just about temperature management, it can also be about hazmat and custody compliance, right?
Todd Simms: Definitely. In fact, that’s where companies can get in a lot of trouble. If you’re a pharmaceutical company shipping controlled substances that have a lot of value, you need to be extremely vigilant about record keeping. If a trailer shows up with seals broken or product missing, being able to track milestones and key handoffs can help you pinpoint where something occurred and remedy it. It also goes back to routing compliance – early detection and record keeping are very important.
The truth, as we’ve come to understand, is that while high-maintenance shipments like hazmat, technology, petrochemical, and pharmaceuticals come with a litany of additional concerns, it doesn’t mean that it needs to be high-touch.
The need for security, service and compliance offers a ton of additional considerations, but when executed correctly, it can result in competitive advantages. If you can use a visibility platform to do the heavy lifting, your supply chain can take an intelligent approach to more flexibility, more savings and more safety.