Founded in 1996, Hopewell Logistics is part of the Hopewell Group of Companies. Hopewell’s commitment to operational excellence, teamwork, innovation and sustainability has helped the company become one of Canada’s Best Managed Companies.

Today, Hopewell provides third-party logistics services to some of the world’s best-loved brands and operates multiple stand-alone and campus-based distribution operations across Canada.

The firm continues to drive operational excellence and continuous improvement at all of its sites and offers a complete suite of supply chain solutions to help you deliver world-class service to your customers, including:

Dedicated Warehousing & Order Fulfillment

Warehousing and Distribution are at the core of Hopewell’s business. The company operates multiple +500,000 sq ft warehouses across Canada and ships to all major retailers. Their team of experts can custom design or accommodate your existing facility and operations in addition to tailoring solutions to businesses of any size.

eCommerce Fulfillment and Delivery Solutions

Hopewell’s flexible and customizable solutions can help you overcome the challenges of omni-channel fulfillment and meet growing consumer demands with speed and accuracy. Whether you are a large retailer or small to medium enterprise looking to outsource your ecommerce fulfillment, Hopewell’s full-service logistics solutions can aid you a seamless buying experience for your customers.

Transportation Management

When it comes to moving products, Hopewell has a Transportation Solution for you. Its Transportation Management System provides top-shelf infrastructure and is calibrated by experts to support your business needs. Services include order tracking, OS&D, claims management, billing, and compliance management, among many other features.

Continuous Improvement

At Hopewell, exceeding KPIs is a way of life. The team has led and participated in many Continuous Improvement initiatives with its clients, including Six Sigma programs, facility design and re-engineering, data modeling, and workforce management.

Network Evaluation & Design

Whether you are looking to design a site network strategy, multi-temperature zone locations within site, or just figuring out the best place to put the washroom, Hopewell can help!

Value-Added Services

Hopewell offers several value-added services, including:

• Transition and Change Management
• Contract Packaging (Co-Pack) Solutions
• Information Technology Services
• Shunt and Shuttle Services

With a high level of complexity for product assembly and additional requirements beyond the industry standard for white glove service, this company and Hub Group started a business relationship in 2009 that was focused on providing consistent, nationwide white glove service for an affordable price and within a reasonable transit time.

The Solution: Multiple Methods

Hub Group used multiple methods of training materials including videos, conference calls, work instructions, on‐site visits, and other reference guides to prepare the last mile terminal network for a zero‐defect, staged onboarding of the business. With such a successful implementation, the customer continued to increase the percentage of markets that Hub Group serviced for them until Hub Group became their primary last mile carrier, acquiring 95% of their white glove business.

Hub Group has also ensured continuous improvement and service consistency. As new terminals are brought into the network, Hub Group reviews all customer training materials in‐depth with the delivery teams and terminal management. Internal meetings are held to keep open communication flow on opportunities and trends as well as set assignments and progress goals within both companies to enhance the customer experience.

The Results

Throughout the relationship, the furniture manufacturer has set and measured goals that align with their business focus, and Hub Group has continued to develop strategies around service improvements within the areas that Hub Group can impact. In particular, the company surveys all their white glove delivery recipients measuring overall customer satisfaction with the service provided as well as ratings in the following categories:

1. Ease of scheduling.

2. Driver product familiarity, professionalism, and performance.

3. Individual service requirements–assembly completion, removal of stickers, performance of the product wipe down, product manual distribution to the customer, etc.

Over the years of survey scores, Hub Group has averaged 97% overall satisfaction rating, and the individual performance metrics are used on a weekly basis as training opportunities for specific driver teams and to identify service trends for high- and low‐performing terminals.

In addition to the company’s service measurements, Hub Group provides a monthly scorecard to track KPIs. The Defect‐Free Ratio (shipments without a transportation service defect notation) is 97%, and Hub Group OSD for the account is <2%. The average last mile transit time is 3.5 days with an average of .65 days from the order arriving to the Hub Group terminal to the first call placed to the customer for scheduling.

The clear outline of expectations and goals in addition to the commitment from both companies to provide the best possible customer experience has proven to create a long‐term, successful business relationship. Open communication and alignment of delivery strategies with the customer vision will continue to be the cornerstones of the value‐added services Hub Group provides to ensure customer satisfaction.

To learn more:
info@hubgroup.com
800-377-5833
hubgroup.com

Outsourced Fulfillment Services Defined

Outsourced fulfillment, or outsourcing order fulfillment, is a strategic approach where businesses delegate parts of their services to specialized third-party partners. It goes beyond shipping and includes various services to streamline the supply chain.

Fulfillment can be complex, involving inventory management, shipping cost optimization, and creating great customer experiences. That’s where outsourced fulfillment services come in. They provide tailored solutions to these challenges.

Outsourced fulfillment partners with global networks can help your business expand into international markets, handle complex customs rules, and ensure timely deliveries worldwide.

Fulfillment Providers

Third-party logistics are pivotal in managing various aspects of the fulfillment process. They operate dedicated fulfillment centers with state-of-the-art warehousing facilities. 

Understanding the depth and scope of Third-Party Logistics (3PL) Providers and Fulfillment Services is vital when considering outsourcing fulfillment. These components significantly impact an e-commerce business’s efficiency, cost-effectiveness, and ability to meet customer expectations.

Impact on Product Availability

Fulfillment providers play a significant role in product availability. By efficiently managing inventory, they ensure that products are consistently in stock and ready for prompt shipment. 

For instance, a 3PL provider can monitor stock levels and reorder products as needed, preventing stockouts. This ensures that customers can access the products they want when they want them, leading to increased sales and customer satisfaction.

Impact on Delivery Efficiency

Fulfillment providers greatly influence delivery efficiency. With their expertise in logistics, they optimize shipping routes, negotiate favorable rates with carriers, and employ advanced tracking systems. 

For instance, businesses can achieve faster and more cost-effective deliveries by partnering with a fulfillment center strategically located near key markets. This enhances customer experience, reduces shipping costs, and boosts competitiveness.

Bottom Line Profit

Fulfillment providers directly impact the bottom-line profit of businesses. By streamlining order processing, reducing warehousing expenses, and optimizing shipping, they contribute to cost savings. 

For example, outsourcing fulfillment can lower labor and storage costs, allowing businesses to allocate resources to core activities like marketing and innovation.

In-House vs. Outsourced Fulfillment Providers

When fulfilling customer orders, businesses have two primary options: managing fulfillment in-house or outsourcing it to a third-party provider. Each approach has its advantages and disadvantages.

In-House Fulfillment

In-house fulfillment refers to a business strategy where a company manages its entire order fulfillment process internally, from receiving and storing inventory to packing and shipping orders directly to customers. 

This approach provides complete control over the fulfillment operations. For example, a boutique clothing brand may choose in-house fulfillment to maintain quality control and offer personalized packaging to its customers.

Outsourced Fulfillment

Outsourced fulfillment involves partnering with third-party providers or fulfillment centers to handle various aspects of the order fulfillment processes. This can include warehousing, picking and packing orders, and shipping to customers. 

For instance, an e-commerce retailer may outsource their order fulfillment to a specialized third-party logistics (3PL) provider to reduce costs and access their expertise in efficient shipping and order processing.

Fulfillment Services of Third-Party Logistics (3PL) Providers

Third-Party Logistics (3PL) providers have revolutionized the shipping and supply chain industry through their positive impact and diverse service options. 

These fulfillment centers ensure secure and efficient storage for a wide range of products, including temperature-controlled storage when needed. They streamline logistics operations, offering businesses the flexibility to scale efficiently.

For instance, a 3PL like Amazon Fulfillment Services enables sellers to store their products in Amazon’s warehouses, which are strategically located for quick deliveries. This reduces shipping costs and allows sellers to leverage Amazon’s extensive network.

Local and Remote Warehousing

With local warehousing, businesses store inventory close to their target markets, ensuring faster delivery times. 

For example, an e-commerce company may partner with a 3PL to store products in fulfillment centers strategically located near major cities. 

Remote warehousing, on the other hand, allows businesses to access cost-effective storage solutions for excess inventory or seasonal items. This versatility ensures efficient inventory management and cost control.

Picking

Picking is where items are selected from storage to fulfill customer orders. With outsourced fulfillment, businesses can benefit from efficient picking strategies. 

For instance, a 3PL provider may utilize advanced technology and well-organized warehouse layouts to optimize the picking process. This results in faster order processing and reduced error rates, ultimately enhancing customer satisfaction.

Packing

Packing is the process of preparing products for shipment. Outsourced fulfillment providers excel by ensuring products are adequately protected during transit. 

For example, a 3PL may use custom packaging solutions to minimize the risk of damage during shipping. This attention to detail safeguards products and contributes to a positive customer experience.

Shipping

3PL providers leverage their expertise to negotiate favorable shipping rates and optimize delivery routes. 

For instance, they may partner with carriers to provide cost-effective and reliable shipping options. This ensures timely and cost-efficient order deliveries, enhancing customer satisfaction and reducing fulfillment expenses.

Processing Returns

Processing returns is a critical aspect of outsourced fulfillment. 3PL providers excel in managing returns efficiently, allowing businesses to maintain customer trust. 

For example, a 3PL may have a streamlined returns process, including inspecting returned items, restocking inventory, and processing refunds or exchanges promptly. This ensures that businesses can effectively handle returns without compromising customer satisfaction.

Potential Benefits of Outsourced Fulfillment Companies

In e-commerce, you always strive to streamline operations, reduce expenses, and meet customer demands. Outsourced fulfillment services are a strategy gaining momentum, and for good reason. 

It offers a range of advantages that can propel your e-commerce business to new heights. Let’s explore the benefits of outsourcing.

Cost Savings in Fulfillment Operations

Outsourcing can lead to significant cost savings, helping you:

• Slash Warehouse Costs: Say goodbye to renting and maintaining warehouse space.
• Trim Labor Expenses: Avoid the hassle of hiring and managing an in-house team.
• Optimize Shipping Costs: Benefit from experts who negotiate lower shipping rates and use efficient strategies.

Scalability and Flexibility

E-commerce order volumes can fluctuate, especially during busy seasons. With outsourced fulfillment, you can

• Scale Smoothly: Adjust your operations up or down as needed without changing your infrastructure.
• Handle Seasonal Peaks: Keep up with high order volumes during holidays or special events.

Focus on Core Competencies

Outsourcing fulfillment lets you get back to what you do best, like:

• Innovating: Invest in developing new products to keep customers engaged.
• Marketing Effectively: Spend more time on marketing strategies to grow your brand.

Global Reach and Expertise

Expanding globally can be complex, but outsourced fulfillment providers offer:

• Global Expansion: Use their international presence to reach new markets.
• Navigating International Challenges: Tap into their experience with cross-border shipments and regulations.

Expertise and Technology

Third-party logistics providers (3PLs) are supply chain management experts. They use advanced technology for:

• Efficient Order Processing: Ensuring orders are handled accurately and swiftly.
• Inventory Tracking: This gives you real-time visibility into your inventory.
• Faster Delivery Times: Thanks to their know-how and resources.

Risk Mitigation

Outsourced fulfillment can help manage risks by:

• Reducing Dependency: Diversify your fulfillment network to avoid relying on a single channel.
• Expert Risk Management: Benefit from providers’ risk protocols to protect your operations.

Outsourced fulfillment boosts efficiency, cuts costs, and empowers your business to focus on growth.

Potential Disadvantages of Outsourced Fulfillment Service Companies

While the advantages are compelling, it’s essential for e-commerce businesses to thoroughly understand and weigh the potential disadvantages associated with this approach.

Integration Complexities

Integrating outsourced fulfillment services providers into your existing systems and processes can present challenges:

• Technology Integration: Ensuring seamless integration between your e-commerce platform and the fulfillment provider’s systems can be complex.
• Data Syncing: Maintaining synchronization of inventory and order data between your systems and the fulfillment partners requires robust integration solutions.

Variable Costs

While outsourcing fulfillment can save costs, it’s essential to recognize that costs can fluctuate:

• Fulfillment Fees: Third-party providers often charge fees based on factors like order volume, storage space, and services rendered, leading to monthly cost variations.
• Hidden Costs: Unexpected expenses, such as additional packaging or special handling fees, can impact your overall expenses.

Limited Customization

Outsourced fulfillment providers may offer standardized services, limiting your ability to customize the fulfillment operations.

• Packaging and Branding: Control over product packaging and branding may reduce, potentially affecting your brand’s identity.
• Order Handling: Customized order processing or kitting options may be limited, restricting your flexibility in fulfilling unique customer requests.

Communication Challenges

Efficient communication is crucial in fulfillment operations, and outsourcing can introduce communication hurdles.

• Time Zones: Dealing with fulfillment partners in different time zones can lead to delays in addressing issues or queries.
• Cultural Differences: Variances in work cultures and languages may create communication barriers, impacting operational efficiency.

Risk of Dependence

Relying on a third-party fulfillment partner exposes your business to certain risks:

• Provider Reliability: If your fulfillment partner faces financial instability or operational issues, your business could be adversely affected.
• Data Security: Sharing sensitive customer and order data with an external entity may raise concerns about data security and confidentiality.

Find the Best 3PL Service for Your Business Needs: Trigger Points

Is your e-commerce business experiencing rapid growth, with increasing order volumes month after month? Do you need help to keep up with the demand, leading to delayed shipments and potential customer dissatisfaction?

When your business is growing quickly, outsourcing fulfillment can provide the scalability you need. Third-party logistics partners are equipped to handle spikes in order volume, ensuring timely deliveries and customer satisfaction.

Another factor to consider is your shipping volume. Do you generate enough orders to justify outsourcing fulfillment? Assessing your order volume is crucial in determining whether a 3PL partnership makes financial sense. 

Next, evaluate your goals and specific needs. Are you looking to expand your market reach, streamline operations, or reduce shipping costs? Identifying your key objectives will help you align with a 3PL provider that can meet these goals.

Conduct thorough research to identify the best 3PL companies. Explore reviews, ask for referrals, and scrutinize their track record. A reputable 3PL should have a history of reliability and efficiency. Once you’ve selected a partner, understand what working with a 3PL entails. 

Lastly, set realistic expectations. While a 3PL can significantly enhance your logistics, it’s essential to understand the transition period and any adjustments required.

Key Efficacy of 3PL Service Providers

3PL service providers excel in delivering goods to customers efficiently. They streamline order processing, ensuring products reach their destination on time. These experts also manage inventory effectively, reducing storage costs and preventing stockouts.

Routing orders is another strength of 3PLs. They optimize shipping routes for cost-effective and speedy deliveries. 3PLs negotiate favorable shipping rates, lowering costs for businesses. 

3PL service providers precisely handle returns, efficiently managing the inspection and restocking process.

Trends and the Future of 3PL Service Companies

In recent years, the world of third-party logistics (3PL) has witnessed significant trends driven by the rapid growth of e-commerce. One prominent trend is the integration of advanced technology, including data analytics and real-time tracking systems. These tech-driven solutions offer valuable insights into supply chains, optimizing routes, and improving inventory management.

The future of 3PL services will likely see even more technological advancements. Automation and the Internet of Things (IoT) will play a central role, with automated warehouses, smart inventory management, and autonomous delivery vehicles becoming more prevalent. 

This increased automation promises to reduce costs and enhance the speed and accuracy of order fulfillment. Additionally, as environmental sustainability gains importance, 3PL providers may focus on eco-friendly supply chain strategies, such as optimizing delivery routes to minimize carbon emissions.

Frequently Asked Questions:

Do you have questions about outsourced fulfillment, shipping, warehouse management, or fulfillment services? 

What is outsourced fulfillment?

Outsourced fulfillment is when a business partners with a third-party provider to handle its order processing, storage, and shipping, streamlining operations and reducing costs.

What is outsourcing in shipping?

Outsourcing fulfillment in shipping refers to a company entrusting its shipping needs to a third-party logistics partner, allowing for efficient, cost-effective, and reliable delivery services.

What is outsourcing in warehouse management?

Outsourcing in warehouse management involves delegating the responsibility of managing and operating warehouses to a third-party provider or fulfillment partner, and optimizing inventory control and distribution.

What is a fulfillment service?

A fulfillment service is a third-party company that manages various aspects of order fulfillment, from inventory storage and order processing to packaging and shipping, helping businesses meet customer demands efficiently.

Summary of Outsourcing Order Fulfillment

Outsourced fulfillment empowers your e-commerce business with cost-effective solutions, scalability, and the freedom to focus on your core competencies. It opens the door to global expansion while minimizing risks. 

When considering outsourced fulfillment, carefully assess your business’s growth stage, seasonal demands, expansion plans, cost-saving goals, focus areas, and technological needs. 

With planned and unplanned cargo that ranges from fashion to finished vehicles to delicate flowers and produce, Sea-Air Logistics provides savings in either lead time or cost. Companies can leverage Sea-Air as a primary mode for forecasted volume or cost-effectively meet an unexpected spike in demand.

Each Sea-Air shipment is pre-booked onto an ocean vessel, within dedicated containers that enjoy high priority for equipment and space.

During the sea transport stage, the shipment is assigned air freight space, ensuring it is uplifted without dwell time. Once the vessel reaches its hub destination, shipments are transloaded to an aircraft, typically within 8 to 12 hours.

“Even during COVID, the Sea-Air product maintained an on-time performance level of 95%.”

-Leo Qvarnström
Director, Sea-Air Logistics
and Air Sustainability,
North America
Kuehne+Nagel

Because Kuehne+Nagel works only with premium carriers and requires their adherence to stringent performance requirements, it can confidently forecast transit times. “Even during COVID, the Sea-Air product maintained an on-time performance level of 95%,” says Leo Qvarnström, Director, Sea-Air Logistics and Air Sustainability, North America with Kuehne+Nagel.

A cross-functional team within Kuehne+Nagel oversees each shipment. “One ‘control tower’ team handles the whole shipment from origin to destination and across modes, providing an integrated, controlled operation that’s also scalable,” says Robin Knopf, Global Head of Sea-Air Logistics with Kuehne+Nagel.

The experts on the Sea-Air team boast decades of experience and speak the language of both modes. “They are magicians,” Knopf says. They leverage their sea and air freight knowledge, using Kuehne+Nagel’s global network and the latest technology to predict movements and track shipments. Because the handling processes are so tightly managed, the damage rate on shipments is close to zero.

“One ‘control tower’ team handles the whole shipment from origin to destination and across modes, providing an integrated, controlled operation that’s also scalable.”

-Robin Knopf
Global Head,
Sea-Air Logistics
Kuehne+Nagel

The Sea-Air product often works in lanes with an imbalance of trade—that is, more cargo typically comes into a hub than exits it. These markets tend to experience less volatility than many other trade lanes, and the shipments capture capacity that would otherwise sit empty on a return flight, Qvarnström says.

Shippers of all sizes and verticals use the Sea-Air product to save time and money, and minimize carbon emissions, when compared to air freight alone.

Some also use the solution as a kind of mobile warehouse, avoiding the cost of warehousing freight while it’s in transit. Kuehne+Nagel’s Sea-Air Logistics also helps companies diversify their supply chain and logistics operations, boosting flexibility and resilience. It works year-round as a true alternative to other transport modes.

“That’s the beauty of the product; it’s something that everyone can take advantage of,” Qvarnström says.

The Challenge

As a high-value shipper which operates largely in the LTL space, Convergint keeps a close eye on key performance indicators such as cost per commodity, on-time-in-full delivery performance per carrier, and claims ratios.

For one such high-value shipment, Convergint needed to move a large quantity of ATMs. These banking machines needed to be secured properly in order to maintain proper functioning upon arrival. To prepare for this, the devices had been equipped with wheels to move more smoothly between trailers and docks in the loading process.

Despite explicit instructions from Echo, the ATMs were accidentally loaded onto faulty pallets by the carrier. As a result, the products could not be secured as required during transit. Upon arrival, the pallets had broken, leaving the high-tech devices damaged and in need of significant repair.

“It was almost a total loss,” said Raj Dharamsi, supply chain manager at Convergint. “The damage was significant, and we were worried our products would not be able to be salvaged.”

The Solution

In 2023, Echo Global Logistics, a leading third-party logistics provider of technology-enabled transportation and supply chain management services, introduced EchoInsure+, a means to add an extra layer of protection to LTL shipments. This shipping solution offers best-in-class coverage as a simple addition to loads booked through Echo and includes claims paid in as fast as 10 days, zero deductible up to $10,000, broader protection with fewer exclusions, and full-value coverage rather than limited carrier liability.

Fortunately, Convergint had included EchoInsure+ on its damaged ATM shipment. Convergint’s client was able to receive reimbursement for 75% of the value of the product, and the parts from the machines were able to be salvaged. The turnaround for filing and resolving the claim was swift, and the time lost and the damage dealt was resolved much more easily than if the shipment had not been insured.

With EchoInsure+, the shipping and claims process is significantly easier, and in the event of lost or damaged goods, the client payout much more accurately retains the value of the product. Now, Convergint ships nearly every load with EchoInsure+, providing peace of mind when transporting their business’s valuable products.

“We were thankful that we had included EchoInsure+ on this particular shipment,” Dharamsi said. “It quickly allowed us to turn a major roadblock into a readily available solution. We’re able to continue to ship our high-value products worry-free with Echo’s help, and we’re grateful for the support of their innovative services and dedicated team.”

Dave Bozeman, CEO, C.H. Robinson

Soon after Dave Bozeman joined C.H. Robinson as CEO in 2023, he launched a company-wide challenge called What’s Impeding Your Speed? “I asked everyone, ‘What is keeping you from doing your job or going faster in your work?’” he says.

Bozeman expected to send about 345 handwritten notes thanking the global 3PL’s employees for their responses. “But I received 3,400 ideas from more than 2,400 employees,” he says. “That told me we have a speak-up culture, full of people who want to win. It was all very rich data.”

Gaining insights from rank-and-file employees is a signature strategy for Bozeman, who has also held executive positions at Harley-Davidson, Caterpillar, Amazon, and Ford Motor. He recently talked with us about his leadership philosophy and recent efforts to foster continuous improvement at CH Robinson, which is one of the world’s largest logistics platform, offering logistics services, a multimodal transportation management system, and insight from supply chain experts.

IL: What was one event early in your career that helped to shape you as a leader?

When I came to Harley-Davidson in 1992 as an entry-level manufacturing engineer, I badly wanted to carry a two-way radio on the job. Only supervisors carried radios, but I wanted it so much, my superintendent finally handed me one. That obliged me not only to do engineering work, but also to spend time on the floor with the people who worked on the flywheel truing line.

I took a pounding from those people, because they saw me as management. But at the end of several weeks, a few of them said, “We like the way you listen to us and respect us.”

This taught me always to get close to the work and respect the people who do it. When the time came to introduce new processes on the floor, people were cooperative. I’ve carried that lesson throughout my career.

IL: What did you learn from serving as vice president of Amazon Transportation Services during the pandemic?

It was a crazy time for ecommerce. We worked long hours and handled surging volumes with reduced capacity, since everyone had to be six feet apart. I learned never to underestimate the power of innovation and people. We had to innovate quickly and remember that it’s okay to fail. I tell my teams now, you fail, get up, learn fast, and keep moving.

When I look back on that time, I wonder how we made it through. But we became stronger, and we made some important discoveries.

IL: You’re a lean practitioner. How have you been implementing lean principles at C.H. Robinson?

You can’t just walk in and say, “Today we’re going to do lean.” You need to make sure everyone speaks the same language. Maybe people don’t know anything about lean, but if I say I want to reduce waste in all the processes within a company—waste of information, waste of movement—people understand that.

That’s the approach I took at the beginning, walking through discussions of continuous improvement and helping people at Robinson adopt that mindset.

Also, I like to use a lean practice called gemba, which means “go see.” Just as in my Harley-Davidson days, I like to get close to the work. As a leader, that lets me base decisions on actual data and things I have witnessed.

IL: What’s an example of an improvement Robinson has made by implementing lean principles?

We have approximately 100,000 customers. Some of the largest have IT systems that connect directly to our IT systems, allowing for seamless transactions, for example, when they need a quote.

But many other customers, even quite large ones, communicate with us via unstructured data, which generally means email. Then a human needs to do the research and get back to that customer with a quote.

But if you examine that process through the lean framework, you ask how we can take waste out of that system using technology such as generative AI and large language models.

With some of that technology, we can deal with 500,000 unstructured data points daily. The system retrieves the right information, and in some cases it talks back to the customer in a conversational way. Our bar, which we’re hitting, is to get that quote back to them in less than one minute.

IL: What characteristics make you an effective leader?

I hope the people who work around me will say that I’m authentic. I like to communicate consistently and effectively.

Driving the development of others is my responsibility, and it gives me satisfaction. Solving problems through the use of data is very important. So is driving a high bar to take people where they didn’t think they could go.

IL: What’s the hardest aspect of your job?

It’s not lost on me that when I make decisions and take actions, I’m responsible for more than 15,000 employees. We’re in a freight recession right now. People deserve to have leaders who make them feel confident, assuring them that we have a plan to get them through these trying times.

IL: What books do you like to recommend to others?

I gave the whole organization a book called The Lean Turnaround by Art Byrne. As an easy read that gives insights into what lean is, it provided the Rosetta Stone our organization needed, so we could all talk the same language.

On a personal level, one book I love is The Color of Law: A Forgotten History of How Our Government Segregated America by Richard Rothstein.

IL: When you’re not working, how do you spend your time?

Spending time with family is the big thing. My wife and I have been married for almost 31 years. We met in college, and now we have five children ranging in age from 15 to 30—four are out of college, two work in Florida, one is in law school in Oregon, and one works in Arizona.

Also, I’ve become a big-time foodie. I like to cook, and as I have traveled around the world I’ve come to appreciate the power of food to help people connect.

Disruption and Opportunity

Two closely related concerns make C.H. Robinson’s customers especially anxious these days. “Number one is the unknown and number two is variability,” says Dave Bozeman.

Since the pandemic, shippers have been riding a roller coaster, trying to get their supply chains and inventories back to the right levels while dealing with a freight recession. “Customers are thinking, ‘I certainly don’t want to experience the pain I had when I over-ordered during the pandemic,’” says Bozeman. “There were shipping and logistics issues, and a lot of customers were stuck with inventory.

“And it was tough to move goods around the world,” he adds. “So I think they’re being cautious about how and when they order.”

Global turmoil—including attacks on shipping in the Red Sea and disruptions at the U.S.-Mexico border—compound challenges for shippers. For example, as workers at the Big Three automakers ended their recent labor strike, the tight border made it hard for tier one suppliers in Mexico to speed auto parts back into the pipeline. C.H. Robinson helped with creative solutions, such as shifting some shipments to air freight.

“We thrive in disruption,” Bozeman says.

The Challenge

Aggreko was struggling with gaps in shipment payment data and needed better visibility, accuracy, and supply chain efficiency. “Every time we sent a shipment, we were almost starting from scratch; we were constantly in reactive mode,” explains Chad Thibodeaux, Aggreko NAM Transportation Manager. The company also wanted technology to help manage its complicated transportation network, improve procurement processes, and manage vendors.

“We’re high-maintenance,” quips James Hoogendoorn, Aggreko NAM Logistics Manager. “We needed a provider that wouldn’t be scared off by that. We wanted a logistics partner with the same intensity-driven mindset as ours.”

The Solution

Aggreko found an ideal partner in RedStone, a Kansas-based third-party provider (3PL). “RedStone didn’t run from our challenges,” Hoogendoorn says. In addition to the experienced RedStone management team, Aggreko gained access to the RedStone Latitude technology solution. Latitude provides real-time information for tracking and exception management, sophisticated reporting and analysis, as well as a best-in-class transportation management system (TMS).

Thibodeaux describes their partnership with RedStone as a major success: “We now have a tailored solution that captures data for every shipment and provides full visibility to crucial information such as length of haul, type of truck, dollar-per-mile cost, etc.”

RedStone helped Aggreko re-align procurement strategies by conducting a sweeping analysis to find opportunities for cost and performance improvements throughout their vendor network. Today, Aggreko and RedStone work together to continually analyze procurement effectiveness, identify ongoing opportunities, and find new vendors.

Nailing down accurate freight rates got easier as well, thanks to the custom freight calculator RedStone created for Aggreko. “We’ve always struggled with pricing freight accurately because we operate in many different markets using many different vendors,” Thibodeaux notes. The Aggreko team now uses this custom calculator as a quick, easy way to provide freight quotes.

RedStone also streamlined freight-payment processes by taking on accounts payable duties. Instead of paying hundreds of vendors, Aggreko makes one payment to RedStone, which manages individual payments.

With closely aligned philosophies, Aggreko and RedStone have developed a strategic partnership that supports the Aggreko mission. “When facing crisis events, our customers count on us to engineer solutions that allow them to continue being productive,” explains Hoogendoorn. “Ultimately, RedStone did exactly the same for us.”

To learn more:
solutions@redstonelogistics.com
888-733-5030
redstonelogistics.com

WHO: OpenRoad | WHAT: Celebrating Its 20th Anniversary and Entering a New Era

OpenRoad’s story begins in the small, Pacific Northwest farming community of Dallas, Oregon. Mark Weisensee was first introduced to logistics by a friend in the industry, and although he had built a successful career in construction, he sensed an opportunity. Fueled by a passion for entrepreneurship, Mark and his wife Liz gathered their entire $6,000 savings and recruited two industry friends to create a small truckload brokerage.

Over the next 20 years, OpenRoad transformed. Many talented professionals joined the team, and they quickly expanded to include LTL and Intermodal. In 2018, OpenRoad initiated a team-based operational model that would enable the company to grow at scale. Specialized carrier reps, sales reps, and operations reps began working together to service customers, augmenting the strong foundation of cradle-to-grave freight brokers and agents on OpenRoad’s team.

In 2019, OpenRoad expanded further, establishing a Global Forwarding division and completing their comprehensive suite of services. Their added capabilities in air, ocean, and in-house customs brokerage enabled OpenRoad to serve any customer, anywhere in the world.

As the company grew, OpenRoad prioritized investments in cutting-edge technology, partnering with industry-leading tech providers to upgrade their platforms including everything from their TMS to their human capital management system. With financial responsibility a top priority, the company has remained committed to avoiding external funding to support the business. Coupled with their laser focus on pursuing opportunities that drive results, OpenRoad stands in its strongest financial position today.

Mark and Liz’s commitment to “get better every day” has fueled OpenRoad’s growth. With their people their first concern, they prioritized initiatives that supported their employees and the award-winning culture OpenRoad is becoming well known for.

And while the substance of the company has remained unchanged, the last 20 years have produced a nearly unrecognizable OpenRoad from the humble company that started in 2004. To reflect their remarkable growth and expanded services worldwide, the company recently unveiled its refreshed logo and new name—OpenRoad Global. Their modernized look communicates their service scope, confidence, and proficiency, while also honoring their rich history of service, entrepreneurship, and grit.

As OpenRoad faces the next 20 years, the company is prepared to meet the market with renewed energy. Their solid infrastructure will underpin their ability to serve any customer, with the new name and look accurately reflecting the heart of their mission—to empower global business through personal and modern logistics services. OpenRoad’s core values of helping others succeed, working with a sense of urgency, and following through on all commitments are the immovable pillars that will carry the company forward. And most importantly, OpenRoad will continue to evolve to meet the needs of their people and customers, in pursuit of their overarching vision: To inspire excellence through our passion for continuous improvement and unwavering care for people.

The Role Of A Warehouse

A warehouse is a storage facility that efficiently stores and protects goods until they are needed for distribution or sale. It plays a crucial role in the supply chain by managing inventory, fulfilling orders, and facilitating distribution. 

The Role Of Inventory

Inventory, encompassing all goods and materials held by a business for sale or production, plays a pivotal role in maintaining the seamless operation of supply chains across retail, trade, and manufacturing sectors. 

Supply Chain: Warehouse And Inventory Management Solutions

Integrating warehouse and inventory management solutions in supply chain optimization is pivotal to maintaining regulatory compliance and ensuring efficient resource allocation. 

Addressing labor within these systems requires a strategic approach to workforce quality management, balancing the need for skilled personnel against the potential benefits of automation.

Addressing Labor

The labor shortage remains a major concern in the supply chain industry. To address this, companies are turning to automation, inventory, and warehouse management software, and other technologies to streamline processes and reduce manpower requirements. 

Just-In-Case Inventory

Just-in-case inventory allows companies to hold extra stock to meet unexpected demand or supply disruptions. Pros include minimizing stockouts and customer dissatisfaction. Cons include increased storage costs, potential obsolescence, and tying up capital. It’s a balancing act between risk mitigation and cost efficiency.

Implementing Inventory Management With 3PL Solutions

Implementing inventory management through Third-Party Logistics (3PL) solutions can significantly streamline the supply chain process for businesses. 3PL providers specialize in logistics operations, offering expertise and resources many companies may need to have in-house. 

Advantages:

• Expertise in Logistics: 3PLs bring specialized knowledge and experience managing complex logistics operations.
• Scalability and Flexibility: They offer scalable services that can be adjusted based on business needs and market demands.
• Geographical Advantages: 3PLs often have strategically located facilities, enabling quicker and more cost-effective distribution.
• Reduced Overhead Costs: Outsourcing logistics can significantly reduce the need for investment in warehouses, transportation, and staff.
• Technology and Infrastructure: 3PLs usually have advanced technology systems for inventory management, offering better visibility and control.

Disadvantages:

• Limited Control: Relying on a third party can lead to less direct control over warehousing and distribution operations.
• Dependency Risks: High reliance on a 3PL provider can be risky if the provider faces operational challenges or discontinues certain services.
• Potential for Misaligned Priorities: The goals and priorities of the 3PL may sometimes align differently with those of the business.
• Communication Challenges: Effective communication and coordination between the company and the 3PL provider are crucial but can sometimes be challenging.
• Cost Considerations: While 3PLs can offer cost savings, the pricing structures can be complex, and there may be hidden costs.

Inventory Software Applications

Inventory management software applications have revolutionized inventory management, making it more efficient. Here are the pros and cons of how software has shaped inventory management:

Pros:

• Enhanced Accuracy: Reduces human error in inventory counts and records.
• Real-Time Tracking: Offers immediate inventory tracking updates on stock levels and movements.
• Efficient Order Management: Automates order processing and fulfillment.
• Data Analytics and Reporting: Provides valuable insights for strategic planning.

Cons:

• Complexity: Can be challenging to set up and integrate with existing systems.
• Cost: Initial investment and ongoing maintenance can be expensive.
• Training and Adaptation: Requires staff training and adaptation to new processes.
• Dependence on Technology: Reliance on software means any technical issues can disrupt operations.

Relevance of Analytics

Analyzing data through forecasting in inventory management aids in anticipating demand, ensuring optimal stock levels, and minimizing waste. Here are the pros and cons of utilizing analytics:

Pros:

• Predictive Planning: Anticipates demand trends, enabling better stock preparation.
• Reduced Stockouts and Overstocking: Balances inventory levels, reducing costs.
• Efficiency in Operations: Streamlines procurement and storage processes.

Cons:

• Data Quality Dependence: Accuracy relies on high-quality data inputs.
• Complexity in Analysis: Requires expertise to interpret and apply insights.
• Potential for Inaccurate Predictions: Market volatility can lead to forecasting errors.

Inventory Spot-Checks

Inventory spot-checks are crucial for accurate data and effective inventory management. These checks validate warehouse inventory management system records against the actual stock. Spot-checks use radio frequency identification to improve transparency and alignment of raw materials and inventory, increasing warehouse efficiency.

Manage And Assess Stock Levels Routinely

Routine stock level assessments are crucial for maintaining inventory accuracy and efficiency. Implementing third-party logistics solutions allows for seamless oversight of storage systems across multiple locations. 

How 3PL Improves Inventory Efficiency And Overhead

By utilizing third-party logistics (3PL) providers, small businesses can improve cash flow by enhancing inventory efficiency and reducing overhead costs by outsourcing warehousing and distribution services. This strategic partnership allows for a simpler and broader approach to managing production supply and shipping costs.

Implementing Warehouse Management With 3PL Solutions

Warehouse management systems can be improved by implementing 3PL solutions. These solutions help optimize product placement, reduce handling times, and improve overall logistics. They also ensure compliance with regulations and enhance inventory management efficiency.

Fulfillment Strategies And Filling Methods

Third-party logistics (3PL) companies effectively address inventory and warehouse issues through strategic fulfillment strategies and filling methods. By leveraging their expertise and resources, 3PLs optimize tracking inventory levels, streamline picking and packing processes, and implement efficient storage solutions. 

Product Placement Strategy

A 3PL provider’s product placement strategy enhances warehouse management by optimizing the layout for efficient inventory accessibility and workflow. This approach ensures compliance with regulatory standards, maximizes space utilization, and facilitates systematic stock control.

Utilize Cross-Docking

Third-party logistics (3PL) companies employ cross-docking to manage inventory and warehouse issues efficiently. By eliminating the need for storing inventory, products can be directly transferred from incoming shipments to outgoing orders. 

It reduces storage costs and improves order fulfillment. 3PLs expertly utilize this strategy for maximum efficiency and customer satisfaction.

How 3PL Improves Warehouse Logistics

Leveraging an advanced warehouse management system, 3PL providers significantly enhance logistics operations by optimizing inventory flow and storage solutions. They meticulously orchestrate the intricate compliance requirements, ensuring a cohesive alignment with regulatory mandates.

3PL Best Strategies To Improve Warehouse And Inventory Management

3PL logistics can greatly enhance warehouse and inventory management by improving processes, optimizing inventory control systems, and ensuring compliance with regulations. However, challenges may arise when integrating 3PL solutions with existing warehouse systems and ensuring alignment with specific business needs and industry standards.

Same-Day Order Fulfillment

Third-party logistics providers greatly enhance same-day order fulfillment by leveraging their expertise and resources. They possess extensive networks, advanced technology, and efficient processes that enable them to handle order processing, warehousing, and transportation seamlessly. 

Minimizing Inventory Shrink

Third-party logistics providers reduce inventory shrinkage by offering advanced inventory management systems, accurate demand forecasting, and real-time tracking technology. These solutions improve inventory control, minimize stockouts and overstocking, enhance security measures, and streamline supply chain management, reducing inventory shrinkage.

Optimized Order Fulfillment

Third-party logistics (3PL) improves order fulfillment by optimizing the entire process. With their expertise and resources, 3PL providers streamline inventory management, reduce shipping times, and enhance delivery accuracy. 

Benefits Of Optimizing Warehouse And Inventory Management

Robust logistical frameworks and meticulous stock control are imperative for maintaining regulatory compliance and ensuring operational excellence. Mastery of this optimization yields:

• Enhanced inventory accuracy
• Streamlined supply chain processes
• Reduced overhead costs
• Improved customer satisfaction
• Strategic use of 3PL partnerships
• Compliance with industry standards

FAQs

Here are the frequently asked questions about Warehouse and Inventory:

What is the difference between warehouse and inventory?

A warehouse stores goods, while inventory refers to items in stock. Warehouses ensure safety and compliance, while inventory management tracks and controls stock levels.

Is warehouse and inventory management the same?

Warehouse management and store inventory management are related but different. Effective warehouse management involves storing and moving goods efficiently, while inventory management focuses on tracking and maintaining optimal safety stock. 

What does inventory mean in a warehouse?

Inventory in a warehouse is the comprehensive list of goods, components, and raw materials stored for use or sale. Managing inventory forecasting is crucial for compliance, efficiency, and profitability.

What is the difference between storage and inventory?

Storage is the physical space for holding goods, while inventory is the stored items. The specific storage location must comply with regulations, while inventory management ensures accurate tracking of the supply chain and improving warehouse operations.

THE CUSTOMER:

Musco Family Olive Co. is the country’s largest producer of black ripe olives. After more than eight decades in business, the third-generation, family-owned California company now works with more than 450 farmers and runs the first food-processing plant in the world to achieve a Level 2 Safe Quality Food ethical sourcing certification.

THE PROVIDER:

Founded in 1982, AFS Logistics, based in Shreveport, Louisiana, provides differentiated logistics services to more than 1,800 customers and employs more than 380 employees across seven locations.

Musco, which boasts eight decades of history, is the largest producer of black ripe olives in the United States. The company works with more than 450 California farmers, providing olives that are transported to four warehouses in the United States and then distributed to retailers across the country.

Musco’s olive-processing plant in California is a near-zero-waste facility and the first food-processing plant in the world to achieve a Level 2 Safe Quality Food ethical sourcing certification.

Despite its robust operations, Musco is still a relatively small, third-generation, family-run company. It doesn’t have extra resources it can easily allocate to areas outside its functional expertise—namely, olives.

Working within those constraints, Lin set several supply chain and logistics objectives: reduce manual processes, enhance the freight audit process, and boost the company’s ability to identify location and arrival times of in-transit freight so it could more proactively address customer questions and continue to provide quality service. Achieving these goals would also help Musco scale its operations and offset increasing logistics costs.

Lin kickstarted a partnership with AFS Logistics, with whom he’d worked at a previous company. Based in Shreveport, Louisiana, AFS provides logistics services, including freight audit and payment, as well as parcel, less-than-truckload, and transportation management services to more than 1,800 clients.

Revamping the Carrier Dynamic

The two companies first collaborated on a domestic managed transportation program, says Andy Dyer, president, transportation management for AFS.

At the time, Musco was working with a number of incumbent carriers. While Lin didn’t want to drop them, he wanted to make sure they were meeting Musco’s business needs, had solid safety records, and were reliable and cost-effective.

Through carrier reviews, Musco and AFS were able to confirm that the incumbent carriers would continue to provide optimal service.

In addition, AFS provided Musco with access to a range of additional carriers from across the country. As a result, Musco doubled its carrier mix.

ENSURING STRONG RELATIONSHIPS

The AFS team also guided Musco on the benefits of building relationships with carriers. Strong relationships help ensure Musco can maintain its partners not just in good times, but also when the business encounters challenges. “We stay loyal to our carriers as long as they’re within reason, while also introducing other carriers. Having that access has been huge,” Lin says.

As they accumulate data on carriers’ service levels, the partners also engage in network analysis. For instance, Musco and AFS work together to assess if it makes sense to adjust forward stocking locations, given changes in demand or customer demographics.

Musco previously lacked a coordinated process for tendering shipments. This occasionally led to double- or triple-brokering loads. And, some brokers would re-broker freight to asset-based carriers, prompting concerns about maintaining integrity in the chain of custody.

AFS now coordinates Musco’s annual freight bids. AFS only considers asset-based providers for the carrier network, reducing the likelihood of shipments being brokered multiple times. To ensure Musco can leverage cost-effective shipment options, AFS receives outbound freight shipment notices via electronic transmission. AFS can then access competitive rates from a national pool of vetted carriers.

Once a shipment is booked, the transaction automatically loads into Musco’s ERP system, streamlining the billing process and enabling shipment tracking. This reduces the amount of time previously spent on tasks like manually coordinating and managing shipments.

The managed transportation service from AFS also helps Musco adjust to market changes by providing information that helps to optimize the transportation mode for each shipment.

Branching out With Track and Trace, visibility

Before working with AFS, Musco’s lack of an effective track-and-trace system limited its visibility to shipments. Now, by using the AFS transportation management system (TMS), Musco has access to visibility on shipment location, as well as costs and carrier operating performance. This data enables Musco to address issues as they arise, so it can continue to maintain quality service.

This data also aids in reducing customer chargebacks, which Dyer says is a key capability for Musco. Retailers, and particularly grocers, can impose significant penalties when a supplier makes a mistake. Working with AFS, Musco is able to receive data from carriers on arrival and wait times that it previously could not access. With this data, Musco can challenge claims that, for instance, deliveries arrived after the scheduled delivery time.

In addition, because Musco hadn’t been rigorously auditing its less-than-truckload, truckload, or intermodal freight, management couldn’t ensure billing accuracy. And with limited visibility into freight costs and load status data, it was difficult to dispute claims on issues like on-time in-full, as well as customer deduction claims. As a result, Musco was at risk of overpaying accessorial charges.

Getting Serious About Audits

Musco Family Olive Co.’s processing plant in California is a near-zero-waste facility and the world’s first food-processing plant to achieve a Level 2 Safe Quality Food ethical sourcing certification.

To help Musco exert more control over fees and surcharges, AFS implemented an invoice audit process across all transportation modes. By providing a comprehensive review of every bill, Musco can recover many overcharges and minimize the risk of overpaying. Without this information and process, fighting fines and fees often becomes time consuming and cumbersome, Lin says.

The invoice audit process also consolidates Musco’s weekly bills into one invoice, providing timely insight into transportation costs.

Musco also worked with AFS to streamline its order fulfillment process. Now, Musco sends order details to AFS via an SQL (structured query language) download, which then feeds into the AFS TMS. AFS also provides a gateway to exchange files and messages with other external trading partners, such as carriers.

Now, when orders drop, Musco no longer needs to manually disseminate information across the company and enter it into the system, Lin says.

Over time, the relationship between Musco and AFS has expanded to include imported containers as well. On these international shipments, AFS acts as Musco’s advocate in the market.

Musco’s network of warehouses also underwent analysis as part of the new partnership with AFS. By reviewing the network’s costs and services, Musco determined it could consolidate some facilities, reducing overall inventory levels. The two companies continue to periodically tweak the network.

“Quarterly business reviews are a great opportunity to flesh out other opportunities from a service or from a cost standpoint,” Lin says. This also enables Musco to redeploy employees who’d previously been dedicated toward freight, he adds.

Enjoying Process-Driven Results

By implementing more efficient processes and technology, Musco lowered its total transportation spending by more than 10% in the first year of its partnership with AFS. It also identified additional opportunities for cost reduction, leading to another $50,000 in savings, also during the first year. Subsequent reviews have led to warehouse network optimization opportunities that Musco is currently pursuing, Lin adds.

Leveraging technology for gains

Musco also was able to double its carrier mix. And through the partnership, Musco has leveraged technology that helps it adopt a process-driven approach.

Becoming more aggressive about pursuing different shipping options is the next big frontier for Musco, Lin says. This could mean reducing the number of containers or even taking trucks off the road by shifting from a less-than-truckload to a multi-stop approach.

“We’re peeling back the onion and asking, ‘What exactly are we doing? And is there a different way versus just being efficient with what we’re doing?’” Lin explains.

Whatever strategies Musco decides to pursue, Lin says AFS is key to achieving their goals. “The AFS operations team is in constant communication with us when things are good, and they’re in front of it when there are hiccups,” he says. “We get talented people who know what they’re doing and can drive value in our decision making.”

Case Study: Growing the Grove

The Challenge

Introducing greater rigor and automation to Musco’s logistics and supply chain processes, with a goal of maintaining quality service and offsetting rising transportation costs.

The Solution

Musco partnered with AFS Logistics, leveraging the 3PL’s managed transportation service and implementing both its freight bill audit and payment and order fulfillment solutions. AFS also introduced greater structure to carrier relationships and regularly assesses the company’s logistics network.

The Results

Among other benefits, Musco lowered its transportation expense by more than 10% in the first year of the partnership, while identifying opportunities to gain an additional $50,000 in cost reduction, also during the first year of the partnership. It doubled its carrier mix and restructured roles and responsibilities to improve the value contributed by employees.

Next Steps

Evaluate different means of shipping to further cut costs and boost efficiencies.