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What is Driving More Shippers to Embrace Managed Logistics?

Jason Lockard, Senior VP of Managed Logistics at BlueGrace Logistics, appeared on FreightWaves Now to talk about why shippers are turning to Managed Logistics to cut costs and obtain resilience.

What’s in this article:

  • What does Managed Logistics have to offer?

  • Why are shippers turning to Managed Logistics?

  • How is Managed Logistics relevant to less stressed supply chains?

I had the chance to chat with the supply chain experts on FreightWaves Now recently, to talk about how Managed Logistics can help shippers navigate today’s rocky shores in their supply chain. Here’s a run-down of what we covered in the interview.

The Last Few Years Have Changed the Way We See Logistics

Increased consumer demand, shortages, and shipping delays in raw materials, imports, and domestic products alike have led to sustained supply chain challenges the likes of which we’ve never really seen before. Labor shortages and increased demand mean that companies are trying to move more product with fewer workers.

Now, shippers realize they’ll have to step outside of their comfort zone to find new ways to cut costs

With tremendous stress on supply chains, companies were forced to focus on getting inventory where it needed to be, by whatever means necessary, and at whatever the cost. As the strain dragged on, companies began to look for ways to cope with this new normal and all the curveballs to come. Now, shippers realize they’ll have to step outside of their comfort zone to find new ways to cut costs. Managed Logistics is one of the unique solutions many companies are turning to.

What is Managed Logistics?

Managed Logistics services provide logistics operations with a strategic partner to help them manage their supply chain processes, costs, data, and shipping operations. BlueGrace Managed Logistics® services are end-to-end, from procurement to continuous improvement projects.

It’s not a one-size-fits-all solution. Every shipper faces a unique set of challenges depending on their operations, their location, and the types of products they deal with. In part, Managed Logistics is made up of tech solutions that help in collecting data and making strategic decisions, but it’s not the whole story. The third-party expertise that comes along with Managed Logistics serves up about half of the benefits it offers.

Managed Logistics Helps Cut Costs in Unconventional Ways

It’s easy to get caught up in trying to cut transportation costs since they account for such a large percentage of shippers’ logistics spend. The last couple of years have kind of thrown the simplistic solution, don’t pay as much for shipping, out the window. So, what now?

Managed Logistics looks both upstream and downstream to seek out optimizations instead of focusing on finding savings strictly within the carrier rate.

Every piece of the supply chain is linked, so touching on as many of them as possible can lead to less-than-conventional solutions and cost-cutting measures. Managed Logistics looks both upstream and downstream to seek out optimizations instead of focusing on finding savings strictly within the carrier rate.

Automation of processes and load planning and optimization software are just some of the ways BlueGrace Managed Logistics approaches cutting costs for customers.

What Shippers Can Expect When They Turn to Managed Logistics

Managed Logistics is, as solutions go, quick to implement and get up and running. The faster customers can get Managed Logistics running, the faster they’re able to see a return, and that ROI comes into play pretty quick.

We have to be aligned on measurable objectives, timing and resources from both partners to achieve success.

In the past, we spent several weeks on-site learning about operations and genuinely understanding each shippers’ pain points so we could make an action plan. With the pandemic, the usual on-site time is more difficult to come by. Travel restrictions and key staff members working from home have meant we have to change our strategy. Now, much of the implementation process is done virtually but the same concepts apply. We have to be aligned on measurable objectives, timing and resources from both partners to achieve success.

Many BlueGrace Managed Logistics® shippers are already implementing solutions like new WMS or ERP systems to enable  them to manage costs and the ebbs and flows of the Supply Chain. This oftentimes means shippers’ IT staff is spread thin, so BlueGrace helps many of its customers find 3rd party IT help to assist through multiple implementations.

What’s Next for Shippers in 2022?

If the past couple of years have taught us anything, it’s to expect the unexpected. The ability to pivot and make room in the budget to account for changes in the Supply chain and the world around us can make all the difference.  Supply chains are constantly evolving, and having a seasoned Managed Logistics partner to monitor and proactively challenge adaptations can allow shippers to maintain focus on their product quality and profitability.