Logistics Industry 2018 Recap and 2019 Forecast

See statistics on the state of transportation and what to prepare for in 2019.

We took a look at the highlights of 2018 that we think impacted the logistics industry. Reviewing the hot topics in our industry can help us all be better prepared for what is to come in 2019 and get ahead of freight trends.

CAPACITY AND DRIVER SHORTAGE

2018 Recap: The economic growth in 2018 has added to the capacity issues our industry is already facing. Coupled with the driver shortage, capacity issues are on everyone’s mind. However, innovative brokers who have experience are able to navigate this landscape and deliver. According to the Bureau of Economic Analysis, the gross domestic product rate increased at an annual rate of 4.2% in the second quarter of 2018, and at a rate of 2.2% in the first quarter.[1]The driver shortage has caused driver pay and packages to increase in response to the demand. According to the American Trucking Associations’ (ATA) latest Driver Compensation study, the median salary for a truckload driver working a national, irregular route was more than $53,000—a $7,000 increase (15 percent) from ATA’s last survey in 2013. Private fleet drivers saw an 18% pay rise to more than $86,000 from $73,000. [2]
2019 Forecast: The 2019 forecast is for us to see slower growth. According to the nonpartisan Congressional Budget Office (CBO), the 2019 pace of GDP growth will slow to 2.4 percent in as growth in business investment and government purchases slows. The CBO also warns that trade tensions could make a bigger dent on GDP growth than anticipated.[3] For 2019 and beyond, the driver shortage will continue to increase (especially considering that the unemployment rate is at a 49-year low of 3.7%.)

THE ELD COMPLIANCE AND HEADACHES

2018 Recap: The ELD deadline caused some carriers to scramble while others were well prepared. At the end of the day, the improved technology can give us all better visibility and data. However, a survey by Cortex revealed 33% of respondents indicated it is more difficult to retain drivers because of the strict Hours of Service compliance. With the American Trucking Association stating there are 50,000 fewer drivers than available jobs, the ELD ‘solution’ could be fueling the flames of the driver shortage.[4]
2019 Forecast: The next step will be how can we turn this data into business efficiencies. In particular, efficiency on the shippers’ part will be key to allowing drivers to use the majority of their allotted time on the road with the wheels turning.  The more time spent driving will allow more loads to be completed on time and allow carriers to better plan their schedules (leading to less cancellations, delays and headaches for shippers.)  Continuing to increase driver pay will be integral to attracting younger folks to the profession.  While an increased driver pay may lead to a short-term increase in trucking rates, it will combat the extreme pricing fluctuations and uncertainty we are experiencing with the exponential growth of the driver shortage. Much of 2018 was spent dealing with supply and demand issues and could continue to get worse. Westgate will continue to monitor this as well as the hours of service issue in Congress.

TECHNOLOGY TAKES FLIGHT

2018 Recap: Logistics companies are now expected to utilize the latest technology in order to keep customers informed on their load status. While many companies tout that they offer the latest technology, not all of them have the attentive team to monitor the data and get the full use out of it. See our article on The Major Roadblock to Technology.
2019 Forecast: Offering technology will not be a distinguishing factor among brokers. How that technology is utilized and access to a support team will be what separates companies. Aggregating data and translating it into business efficiencies will be the next step. While technology continues to take over a large part of our every day lives, communication continues to be as important as it ever was in the freight industry. There are too many variables beyond anyone’s control (Traffic, weather, mechanical issues, etc) to allow technology to replace the service provider entirely.  Where technology benefits us is by providing additional means to source trucks, communicate with carriers and track shipments to be ahead of issues. In addition, it offers efficiencies in back office procedures that allow customer service folks to concentrate solely on servicing clients to the fullest.
At Westgate, we provide monthly ‘On-Time’ reports to several of our customers to highlight our performance levels.  We also are very flexible and have developed custom reports to meet the particular needs of clients in providing them data that is valuable to them.

Reach out to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

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[1] https://www.bea.gov/news/2018/gross-domestic-product-2nd-quarter-2018-third-estimate-corporate-profits-2nd-quarter-2018
[2] http://www.inboundlogistics.com/cms/article/driver-pay-and-benefits-rise/
[3] https://www.reuters.com/article/us-usa-economy-growth/u-s-economy-seen-strong-in-2018-to-slow-in-2019-cbo-idUSKBN1KY23R
[4] http://www.inboundlogistics.com/cms/article/fleet-operators-get-no-eld-satisfaction/

The Major Roadblock to Technology: The Team Using It!

Technology is only as good as the team behind it!

 

The newest, sleekest logistics technology is rendered useless if the company utilizing it doesn’t have an experienced team managing it. The topic of offering shippers tracking and visibility comes up a lot in conversations as well as in industry publications.

Providing insight into load status through modern technology is definitely important. However, the team behind the technology is what makes it a successful tool. They are able to stay on top of your important delivery and address any delays and issues along the way. The technology isn’t going to do that on its own.

Westgate’s Chairman Tom Fiorini commented “Everyone says shippers want more visibility. What they really want is the freight off their dock on time and no issues during transit.” While Westgate utilizes a sophisticated technology to give their shippers the data and updates they need, they also have the focused support team to monitor it along the way.

 

“We want to take that worry away from our customers,” says President Mark Fiorini. “Westgate gives location updates sent via email, a log in to view detailed freight coordinates, the ability to watch your freight’s real-time movement, and estimated arrival time. But the real value comes from the trustworthy team monitoring all of this.”

 

As shippers find themselves regularly dealing with time-sensitive and short-notice shipments, working with a vendor who has tracking, estimated time of delivery becomes vital. The technology is useless though if the shipper doesn’t have time to use it. Since the shipper is short on time, the broker’s ability to monitor and manage the technology is key to a successful process.

Ultimately, technology can save time and improve processes. But the human touch is what makes it a tangible resource.

 

Reach out to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

 

Westgate High Cost of Poor Service

The High Cost of Poor Service

Do you know if your logistics partner is costing you money? 

Recent statistics indicate that poor service could not only tarnish your company’s reputation, it could potentially cost you future customers as well. New Voice Media recently researched the cost of poor service and found that it costs U.S. businesses a whopping $41 billion annually in lost revenue. Not only will poor service cost you the current customer, research shows that most dissatisfied customers will share their bad experience and many will post a negative review online. Companies need to show consistent, efficient, and friendly service to retain and grow their business. An unreliable logistics provider could damage your reputation and cost you more in the long run by having to fix their mistakes. We outline how to avoid these mistakes and improve your shipping processes.  

Our Guide Includes:

  • Criteria your logistics provider should meet

  • Insight into key areas impacting shipping inefficiencies

  • Best practices for shipping and receiving

 

GET YOUR COPY!

DOWNLOAD THE HIGH COST OF POOR SERVICE TODAY and learn how to stop profits from slipping out the door!

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Westgate Looks to the Future as it Celebrates its 35th Year!

Our passion for delivering exceptional logistics services continues to be at our core and is why we have thrived in this constantly-changing industry.

 

Since Westgate was launched in 1983, the company has grown in size and variety of services. Today, Westgate offers a full range of logistics services including truckload, LTL, specialized services, and more. Founder Tom Fiorini’s son, Mark Fiorini, has since taken over the leadership roll as president of the company and continues the company’s legacy as a premier transportation partner.

 

“Being a family-owned business since 1983 has allowed our customers to develop personal connections with our team. The durability of our company and team assures our customers of the high level of expertise they will receive when they partner with Westgate to handle their transportation needs,” said Tom Fiorini, Chairman of Westgate Global Logistics. Our core values – honesty, integrity and trust – have allowed us to develop close relationships not just with our customers, but with a strong network of carriers as well, who we can depend on to meet our customers’ expectations for service.”

 

Though the company has grown in size throughout the years, we still remain smaller than most of our competitors. However, we don’t view this as a disadvantage. Westgate’s small, intimate structure helps us remain flexible. Because of our close-knit group of eight employees, the typical layers of management between the customer and the team are eliminated. We are available directly to provide personalized solutions to our clients’ issues. We treat our customers like family, resulting in close relationships that last for years and years.

 

“Celebrating 35 years of business in a constantly changing industry is an exciting achievement for us,” said Mark Fiorini, President of Westgate Global Logistics. “As we move into the future, my goal is to continue to offer our customers the latest technology, tools and resources while preserving Tom’s legacy of honesty, integrity and trust he built into the foundation of our business.”

 

Westgate’s commitment to growth and providing exceptional solutions for our customers’ transportation needs are what will carry us into many more years of service.

See for yourself why businesses are depending on Westgate to improve their shipping processes and to keep them informed of industry trends. Reach out to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

 

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Take a look at our featured article on page 15 of the Lehigh Valley Business publication.

http://www.lvb.com/article/20180226/SUPPLEMENT/180209878/milestones-2018

 

 

About Us

Westgate has 35 years of consistently delivering expertise in handling specialty loads, maintaining a large network of resources, and exceptional personal service. Reach out to us and allow one of our Certified Transportation Brokers to provide you with a quote.

Take a look at industry perceptions and the realities of a tight capacity market…

We are all facing challenging times due to consecutive quarters of GDP growth which have impacted freight volume growth and pushed capacity to the limits. FTR’s Shippers Conditions Index (SCI)[1] continued to fall in October to a reading of -9.6 which is a pessimistic outlook for shippers. The SCI tracks the changes representing four major conditions in the U.S. full-load freight market: freight demand, freight rates, fleet capacity, and fuel price. What will this mean as we move into 2018?

Survey Results & Facts

The freight volume increase in 2017 has left shippers and logistics providers with differing outlooks for the year ahead. According to a survey by IHS Markit[2], most shippers believe all modes of traffic volume growth will be flat except for truckload in 2018. The majority of logistics providers also expect truckload volumes to increase, but predict LTL will experience a boost as well. The reality is LTL traffic is indeed moving up. It appears truckload demand has been so intense, some is moving over to LTL and filling their capacity as well. FTR reported record-high trailer orders[3] in 2017 in what they predict are fleets ordering thousands of dry vans to deal with exceptionally tight trucking capacity. According to the Cass Freight Index[4], trucking shipments increased 0.2% month-to-month and 6.3% YoY in November 2017, while expenditures increased 0.9% month-to-month and a whopping 14.3% YoY.

When surveyed on what would be the top challenges of 2018, shippers and logistics providers both agree capacity is their number one concern. After that, shippers see rates and costs being the number two challenge while service providers rank ELDs as the next in line for concern. The van, reefer and flatbed rates at the beginning of January were certainly higher than any rates in 2017.  Spot Market Load rates in December 2017 were up 86% from December of 2017. We probably won’t see the true impact of ELDs until after April’s deadline.

What’s a shipper to do?

In this environment, it is more important than ever to partner with a trustworthy logistics service provider who has a track record of looking out for the shipper’s best interest. A logistics provider can offer you expanded resources to help meet your shipping needs. At Westgate, we are continually working to stabilize our resources to maintain capacity and fill our customers’ requests.

On the shipper’s end, lead times, flexible pickup dates /times, and not trying to time the market are keys to finding capacity in this landscape. One thing is certain, our industry is always changing.  This can be a challenging time for shippers, but with the right team, it is not an impossible cycle to ride out.

 

 

About Us

Westgate has 35 years of consistently delivering expertise in handling specialty loads, maintaining a large network of resources, and exceptional personal service. Reach out to us and allow one of our Certified Transportation Brokers to provide you with a quote.

 


 

[1] https://ftrintel.com/news/latest-sci/index.php

[2] https://www.joc.com/sites/default/files/u45421/Whitepapers/JOC-Inland2017_Whitepaper-00983-v4.pdf

[3] https://ftrintel.com/news/ftr-reports-preliminary-december-trailer-orders-at-record-levels-reaching-47000-units

[4] https://www.cassinfo.com/Transportation-Expense-Management/Supply-Chain-Analysis/Cass-Freight-Index.aspx

Improving Shipping Efficiencies

Nowadays being an efficient shipper has received a ton of buzz, simply because of how much of a difference it can make in the costs of running a business.

But did you know, even with all the new mandates, price compression, and industry changes, you could still help manage your shipping expenses by paying attention to overlooked ways to improving shipping efficiencies? Some freight budgets are being revised around the New Year, because it turns out many businesses are seeing losses of 8-10% due to inefficient shipping practices.

Three of the major areas impacting shipping inefficiencies are:

  • ELD Enforcement
    Understanding the ELD implementation can be critical to improving efficiencies in your business. We know that as we move past the April 1st deadline for ELD implementation, the already tight capacity landscape will be affected even more as some carriers will drop out of service. Being proactive with our network of carriers by confirming available hours of service and ELD compliance helps us to be prepared in meeting our customer’s desired timelines and in making sure all parties involved are on the same page.
  • Small Changes
    Benefiting from small changes such as proper packaging and maximizing the pallet placement in trucks can have a positive effect on your freight savings and can also limit damage claims. Using standard size pallets (when the product allows) that are in sound condition and properly securing the items to the skid can minimize the number or trucks, and avoid potential damage and/or mishandling. Both the pallet preparation phase and the truck loading phase, can present cost-saving opportunities.
  • Inefficient Processes
    Direct impacts from inefficiencies in your processes are going to be felt with higher rate increases in 2018. For example, labor intensive requests on the pickup or delivery end are going to result in even higher rates as these additional services are going to be factored into the quotes. Also, with the additional hours of service constraints resulting from the ELD mandate, prompt loading and unloading procedures will be as important as ever in limiting freight costs and securing capacity.

 

Don’t get left behind in 2018. Get control of your shipping costs now, and inform yourself on how to take the most advantage to help yourself and your business. Have a happy and healthy New Year!

You can also check out our article on Best Practices for Shipping and Receiving

 

About Us

Westgate has 35 years of consistently delivering expertise in handling specialty loads, maintaining a large network of resources, and exceptional personal service. Reach out to us and allow one of our Certified Transportation Brokers to provide you with a quote.

 

 

Navigating A High-Capacity Market

An outlook on shipping in 2018

With the ELD mandate around the corner, the perking economy, the continued driver shortage, we are expecting an increase in carrier rates as we move forward and into 2018. In fact, over the past two months we’ve seeing a spike that we hoped was only temporary. However, spot rates continue to exceed contract prices over the last few months in all three modes (dry van, reefer, flatbed) due to strong demand and rising fuel prices, according to DAT. With online load boards reporting record-high load postings, shippers will continue to depend on brokers in this high-demand market to find capacity. And don’t forget about rising fuel rates. The average $2.91 per gallon of diesel last week was $.49 higher than a year ago, which drives up carriers’ costs.

ELD Update

Moving into 2018, those trucks that still haven’t installed an ELD will be put out of service on April 1, 2018. It is estimated that close to 1 million trucks still haven’t completed the Dec 18th required deadline. Some industry experts estimate the mandate could push out 3-5% of our industry’s capacity. While the majority of carriers are implementing an ELD (although begrudgingly) some veteran owner-operators could decide to retire early while others could move over to larger carriers so they don’t have to bother with it. Gone are the days of any wiggle room in a driver’s hours and shipments could be delayed when a carrier is out of hours and has to break. Carriers will have to be compensated for loading dock delays and will expect a premium for next-day service. We will definitely feel a difference in how we do business moving forward.

These are important topics and we want to make sure our customers are aware of these potential challenges. We’ve been navigating our ever-changing industry since 1983 and will continue to monitor the industry trends so that we can best serve you. At Westgate, we view challenges as opportunities to continually grow and refine our service.

 

>> CONTACT US for all your logistics needs. 

Best Practices Shipping and Receiving

Don’t allow profits to slip out the back door!

Use this review to insure your receiving and shipping practices conform to industry best practices.

Best Receiving Practices:

Ensure receiving personnel are trained in the proper receiving procedures.

Check seals on trailer doors before opening.

Inspect shipments upon delivery.

Only the person receiving and inspecting the freight should sign the delivery receipt.

Write proper exception notations on delivery receipts.

Report concealed damage or shortages within 15 days of receipt.

Retain all packaging until a claim is resolved.

Notify carriers of claims and request and inspection.

Read and critique a carrier’s inspection report before signing.

Best Shipping Practices:

Always request a copy of the carrier’s tariff before shipping.

Know what a carrier’s liability limits are before shipping.

Use only new packing material, use of used cartons or packing may limit your ability to receive full value for any loss or damage.

When necessary, verify the identity of the driver before loading his truck.

Properly complete the bill of lading using correct classification descriptions.

Clearly mark any special delivery requirements on the bill of lading.

Make sure the driver clearly signs the bill of lading noting the total number of “outside” pieces received.

Never permit a driver to sign “shippers load and count (SLC)” unless he is signing for a sealed load.

Make sure all trailer loads are sealed by your personnel./

Record seal numbers on the bill of lading before it is signed.

Promptly respond to a carrier’s On Hand notices.

When shipping hazardous materials make sure the individual preparing and offering the shipment to the carrier is properly trained and certified to handle hazmat shipments.

By combining technology and expertise with steadfast alliances, Westgate Global is able to simplify your company’s logistics challenges.

Ask about our consulting services and unique Hazmat training program.

Understand, Capture and Control Freight Costs

Domestic Terms of Sale

Over the years, true understanding of domestic purchasing terms of sale and their implications have become blurred.  Issues generally do not arise until there is a problem and then the parties to the transaction attempt to sort out their individual responsibilities.  Taking time to understand the terms, will help you select the correct one for your transaction.
Since transportation costs are the second or third highest expense that a manufacturing company has beyond the cost of labor and raw materials, it makes sense to know how they are allocated.  Even if you permit your vendor to pay the freight charges, you need to know the amount they paid.  Be sure to identify freight costs separate from cost of goods.

Negotiating the most appropriate terms of sale will allow you to add value to your purchase.  Choosing Westgate as your transportation service provider gives you the opportunity to select the best price / service value.

 

 

  • F.O.B. Origin———————–>
    Freight Collect
Buyer pays freight charges
Buyer bears freight charges
Buyer owns goods in transit
Buyer files claims – if any
  • F.O.B. Origin———————–>
    Freight Prepaid
Seller pays freight charges
Seller bears freight charges
Buyer owns goods in transit
Buyer files claims – if any
  • F.O.B. Origin———————–>
    Freight Prepaid and charged back
Seller pays freight charges
Buyer bears freight charges
Buyer owns goods in transit
Buyer files claims –  if any
  • F.O.B. Destination—————>
    Freight Collect
Buyer pays freight charges
Buyer bears freight charges
Seller owns goods in transit
Seller files claims – if any
  • F.O.B. Destination—————>
    Freight Prepaid
Seller pays freight charges
Seller bears freight charges
Seller owns goods in transit
Seller files claims – if any
  • F.O.B. Destination—————>
    Freight Collect and Allowed
Buyer pays freight charges
Seller bears freight charges
Seller owns goods in transit
Seller files claims – if any