CARB And EPA Crack Down On Heavy Truck Air Quality Standards

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CARB Rule Violations

Recent news from the California Air Resources Board (CARB) reports that a number of transportation companies were found in violation of CARB’s Truck and Bus Rules. These violations resulted in hundreds of thousands of dollars in settlements, with funds being directed towards clean air projects in various areas throughout the state. Many of the recent violations include carriers running trucks in California without the required Diesel Particulate Filter (DPF) systems.

You can find a list of all CARB regulations here and all CARB permits, certifications, exemptions and registrations here. You can also learn about CARB’s 2018 rule making activity here to make sure you stay up-to-date on regulations, therefore, avoiding costly penalties.

EPA & CARB Revisit NOx Emissions Standard

Announced on November 13, 2018, the U.S. Environmental Protection Agency (EPA) began an environmental review to reduce nitrogen oxide emissions (NOx) from heavy-duty truck engines.  According to EPA Acting Administrator, Andrew Wheeler, the goal of this project is to modernize and improve the efficiency of heavy-duty truck engines to provide cleaner air for U.S. citizens. The initiative will remove unnecessary steps to certifications and compliance standards, while also focusing on reducing NOx emissions. The current reduction efforts by the EPA seek to lower NOx emissions to 0.2 grams per brake horsepower/hour.

This announcement comes on the heels of CARB’s even stricter initiative to reduce NOx emissions to 0.02 grams per brake horsepower/hour. According to Transport Topics News, EPA officials stated they would like to work with CARB to update overarching U.S. emissions requirements, but have received no communication compliance. In the EPA’s November 13thpress conference, Lewie Pugh, Executive VP of OOIDA, stated that changes must consider cost and reliability of technology for the small business trucker.

The Take-Away

Emission standards in the trucking industry are constantly evolving. The EPA and state level organizations are consistently searching for ways to reduce emissions and improve air quality. It’s important to stay up-to-date on the current developments of these standards to avoid costly violations for your company.

If you have any questions about current standards, don’t hesitate to reach out to us to talk with one of our logistics experts.

BM2 Freight Services, Inc.

Phone: (859) 308-5100

Email: Sales@BM2Freight.com

How Frequent Price Changes Effect Your Supply Chain

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The Ebb & Flow of Consumer Behavior

With the rise of e-commerce giant, Amazon, and the shift of consumer behavior to online retail, it’s no wonder brick-and-mortar stores are having to adjust to the competition. Not to mention, e-commerce entities of all shapes and sizes are putting pressure on brick-and-mortar retail operations. One of the more prominent aspects of Amazon’s e-commerce business model is changing prices frequently. Therefore, brick-and-mortar retailers are forced to also apply price changes more often in order to stay competitive. Furthermore, recent research shows the average time period for regular price changes fell from 6.7 months (from 2008 to 2010) to 3.7 months (from 2014 to 2017).

Retail Prices Subject to Price Changes

While many brick-and-mortar retailers are now changing prices more frequently to achieve uniformity with the e-commerce world, this can possibly expose their proverbial “Achilles Heel.” Shifts in supply chain costs—including gas prices, tariffs, and many other variables—can adversely affect retail prices across the board, not to mention dwindle profit margins.

Supply Chain Costs Affect the End Consumer

Additionally, the brick-and-mortar industry has been pushed into a tough spot when faced with price shocks… the most prevalent of late being the tariff war between the U.S. and China. Retailers are challenged with maintaining profit margins, so they 1) end up passing on costs to the end consumer, or 2) sacrifice profit margins to invest in more “behind-the-scenes” supply chain costs.

One solution to maintaining profit margins—while  keeping the end consumer happy—is to budget according to the ongoing trend of more frequent price changes. Furthermore, this means incorporating a robust contingency percentage into your supply chain budget to account for unexpected price shocks in the chain. Additionally, the contingency plan should include analyzing more volatile variables in your current supply chain, those most affected by commonly shifting cost variables outside your chain. Understanding the year-over-year trends of supply chain variables and costs will prove highly beneficial in planning your future supply chain and, ultimately, the success of your business.

BM2 Freight Services, Inc.

Phone: (859) 308-5100

Email: Sales@BM2Freight.com

Global Supply Chain Updates Following The G20 Summit

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The Trade War

In lieu of the 2018 G20 Summit held in Argentina last weekend, Donald Trump and Chinese President Xi Jingping have begun to reach an agreement on the ongoing tariff war. According to the White House press, one highlight of the agreement is that China has “agreed to start purchasing agricultural product from our farmers immediately.” Tariffs on $200 billion worth of Chinese goods will remain at the current rate of 10% through January 1, 2019.

The United States and China are set to resume negotiations regarding the G20 Summit agreements in coming days. However, if a final agreement is not reached on these matters within 90 days… tariffs will rise to 25% across the board.

In conclusion, the immediate effects of this pending agreement means lower demand from west coast ports. The lower demand implies potentially higher shipping prices, as well as higher carrier capacity from the west coast.

USMCA

Additionally, heads-of-state for the United States, Mexico, and Canada signed a new trade deal at the recent G20 Summit. Upon approval of the respective nation’s legislatures, the United States-Mexico-Canada Agreement (USMCA) is intended to replace the 1994 North American Free Trade Agreement (NAFTA). In a statement to reporters on his return flight from the G20 Summit, Donald Trump says he plans to terminate NAFTA shortly and present choices of the USMCA or pre-NAFTA to Congress.

However, the USMCA is largely similar to NAFTA. The biggest changes—aside from an obvious name change—include higher rules-of-origin requirements for the auto sector and slightly greater U.S. access to the Canadian dairy market.

BM2 Freight Services, Inc.

Phone: (859) 308-5100

Email: Sales@BM2Freight.com

3 Ways To Keep Your Supply Chain Efficient This Winter

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Winter Is Coming

The shipping industry has many changing factors and moving parts, weather being one of the more influential… but you already know that. So, let’s talk about three ways your supply chain might be affected by the colder months ahead. They are:

  • Lanes
  • Spot market
  • Regional capacity

Each of the above supply chain aspects work in tandem with one another. Lanes in northern regions of the U.S. are obviously affected by winter weather, causing traffic accidents and transit delays. Therefore, the spot market rates are expected to increase as capacity for trucks tighten.

Getting Ahead of the Weather

Just like the weather, it’s important to forecast your supply chain during the winter months. By following this mentality, we are now able to identify solutions to increasing capacity in lanes and finding cheaper spot market rates.

The key solution is focusing on lead times and strategically partnering with dedicated carriers before the winter weather hits. Even though another effect of winter weather is tighter lead times, it’s imperative to plan your supply chain as far in advance as possible. Planning ahead ensures your shipments are taken care of in a timely manner.

Quality Over Cost… Mostly

Yes, it is true—to an extent—that you want to partner with carriers based on their quality. However, when you are forced to steer away from regular lanes and partnerships in the winter months, it is important to vet carriers on both quality and cost. Even more importantly is to partner with the right carriers that provide the maximum amount of lead time possible, while spending the least amount of money.

Are you struggling to optimize your lanes, the spot market, and regional capacity? DON’T WORRY! This is a common, yet complicated, issue to solve. That is why we, at BM2 Freight Services, exist. Call and speak with one of our supply chain experts to strategically optimize your supply chain this winter.

BM2 Freight Services, Inc.

Phone: (859) 308-5100

Email: Sales@BM2Freight.com

Supply Chain Forecasting & The Ongoing Tariff Crisis

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Final Discussions Before Impending January Tariff Hike

President Donald Trump and Chinese President Xi Jinping are scheduled to have one last meeting before 2019 at the G20 summit in Argentina to discuss the current tariff crisis.  The content of these talks will be focusing on solutions to U.S. tariffs on $250 billion in Chinese goods and $110 billion in reciprocal import duties China placed on U.S. goods.  According to Michael Angell of freightwaves.com, the lack of consensus amongst the 2 leaders is likely to lead to no deal being struck.  If no deal is struck to solve the crisis, then the January 1 tariff hikes will hit the supply chain full force with more likely to follow.

Supply Chain Forecasting

It’s important to understand the effects of these macro-economic policies on the consumer experience at the end of the supply chain.

Therefore, the impending tariffs are expected to increase the medical supply chain’s cost by roughly $160 million in 2019.  While this may not mean an immediate increase in co-pays, costs for local pharmacy goods are expected to rise as a result.

Additionally, Williams-Sonoma recently announced they are planning to move several of their goods out of China to avoid the tariffs.  CEO Laura Alber stated that their company benefits from having a muli-country supply chain that offers sourcing flexibility to account for procurement risks.

In conclusion, recent inflation of prices throughout the supply chain is creating a growing need for innovative solutions and outsourced supply chain consulting.  Now more than ever, talking with experts who understand your specific industry supply chain needs is crucial in combatting the inflating prices of the global supply chain.

BM2 Freight Services, Inc.

Phone: (859) 308-5100

Email: Sales@BM2Freight.com

UPS Strike To Drastically Increase Spot Market Prices

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UPS vs. Teamsters

UPS and the Teamsters UPS Freight National Bargaining Committee (TNUPSFNC) recently concluded a series of labor contract meetings on October 25, 2018, resulting in a ratified master agreement between the two parties. According to an update from UPS.com, the offer seeks to reward UPS employees with higher wages and better benefits to compensate for their contributions to the success of the company. Union members are scheduled to vote on the proposed agreement between November 7th and the 11th of this year.

Following the meetings, TNUPSFNC stated that they believe UPS Freight’s offer should be ratified. Should the joint vote result in a “no,” UPS is preparing for the worst… a strike, already pre-approved by the committee. However, if the vote ends in favor of the ratified master agreement, service will resume as normal on November 12, 2018.

Possible “Domino” Effect

UPS Freight is halting pickups ahead of time to account for the impending strike. UPS stated that they can only ensure the delivery of ground (LTL) shipments through November 8, 2018. A strike could mean a large spike in spot market prices, ahead of already increased prices for the approaching holiday season. If this strike goes into effect, it will be the first strike for UPS employees since 1997.

Maintaining Cost Efficiency

The significant increase forecasted in spot market prices means higher-than-expected costs for your supply chain as the 2018 holiday season ramps up, which raises an important question:

How can you maintain holiday supply chain cost efficiency?

The answer… stay away from the spot market as much as you can during the holidays. Furthermore, a key trick to avoid high spot market prices in 2018 is to strategically partner with a third-party logistics provider with an already established network of dedicated carriers at their disposal. Joining forces with the right third-party logistics provider over the 2018 holiday season should also improve the overall bottom line of your supply chain costs.

BM2 Freight Services, Inc.
Phone: (859) 308-5100
Email: Sales@BM2Freight.com

Trade War With China Affects U.S. Supply Chain

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Due to new tariffs implemented earlier this year, a majority of U.S. businesses are feeling repercussions of the current trade war with China, according to a report from AsiaInspection. The report further deduces that most U.S. businesses are aiming for more cost-effective solutions—rather than completely restructuring their supply chains—to account for the recent change.

What are some cost effective solutions to combat the new supply chain tariffs?

One solution to maintain your company’s profit margins and minimize new costs is to raise prices on goods. However, this could trigger a domino effect across the entire business model, potentially driving consumers away. Furthermore, more than half of U.S. businesses report being affected by the tariffs, which means consumers can most likely expect an increase in the cost of goods.

Another solution to combatting the new tariffs is sourcing products from alternative suppliers in different countries, especially Vietnam. Vietnam is a particularly attractive prospect, as it is located along one of the world’s main supply routes and harbors one of the world’s fastest growing economies. Last year, the United States imported roughly $46 billion from Vietnam, and that number is expected to rise to over $51 billion by the end of 2018.

In an interview with reuters.com, the CEO of Ingersoll-Rand, Michael Lamach, stated that the unpredictable nature of whether the trade conflict with China will be resolved may result in affected companies becoming reluctant to restructure their supply chains. Only time will tell.

Increasing Supply Chain Value & The Correlation To CSA Safety Measurement Changes

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In light of impending changes to the federal Compliance, Safety, Accountability (CSA) program, insurance companies are searching for better ways to identify unsafe motor carriers. Duke Tomei, Executive VP and Transportation Practice leader at USI Insurance Services, noted that there’s industry-wide doubt about the correlation of current CSA scores to accidents.

shipping, supply chain, CSA

A combination of the current CSA scoring system and the dramatic increase in severity of claims is causing shipping prices as a whole to increase. Five years ago, what would have been a $200,000 claim is now up to $500,000 according to Chris Mikolay, VP of National Accounts and Truck Alternative Risk at the National Interstate Insurance Company. The new changes being looked at by the CSA means insurers can audit a carrier’s safety protocol more closely to gather whether it cares about safety and is acting in accordance. Carriers are responding by employing insurance deductibles and alternative risk management strategies based on the risks their companies are willing to take.

What does this mean for your supply chain?

Shippers can expect increases in shipping costs associated with higher risk industries and products specifically. This is due to carriers choosing those higher insurance deductibles and risk management strategies to combat the impending federal CSA changes.

However, the CSA Safety Measurement System changes will result in more accurate carrier safety ratings in the near future. This means that even though carrier prices are going up, so is the quality of service. The increase in price and quality of service means an increase in the value of your supply chain.

Although carriers in the near future will be vetted more closely by insurance companies—resulting in an even tighter carrier market—higher quality carriers will be more easily accessible to your company’s supply chain needs.

BM2 Freight Services, Inc.

Phone: (859) 308-5100

Email: Sales@BM2Freight.com

3 Reasons Why You Should Consider Partnering with A 3pl

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Is partnering with a third-party logistics broker the right move for your company’s needs?

Have your company’s shipping needs outgrown what you can handle on your own? Are you in search of more efficient ways to ship your product, while maintaining customer satisfaction? Have you even considered hiring your own in-house logistics team, but are not sure of the cost?

Man in blue polo talks on a black chorded phone

If you find yourself asking these questions, then keep reading.

Here’s 3 Reasons Why You Should Consider Partnering with A 3pl

NEW PERSPECTIVE PROVIDES INNOVATIVE LOGISTICS SOLUTIONS

According to the 2019 Annual Third-Party Logistics Study, 73% of 3PL users stated that partnering with a broker helped provide new and innovative ways to improve logistics effectiveness. Furthermore, 89% of shippers were in accord that third-party logistics usage had translated into improving customer services. At BM2 Freight, we provide the ultimate customized approach to your logistics needs, to ensure your supply chain is fully optimized.

OUTSIDE PARTY IS ADAPTABLE TO YOUR DEMAND

As with running any business, you are liable to run into periods of high product demand. Partnering with a third-party logistics provider will help adapt to those periods so your supply chain remains efficient. With BM2 Freight on your side, you can rest-assured that seasons of demand will be easily managed. Our large database of dedicated carriers is ready to pick-up your loads at a moment’s notice.

BROKERS CAN SAVE YOU THE OVERHEAD

If you find yourself debating solutions to your supply chain, like hiring an in-house shipping team or partnering up with a third-party logistics provider, then let’s walk through a cost-benefit analysis.

  • Hiring an in-house team

    → Costs begin to soar when factoring in employee salaries, purchasing a customized Transportation Management System (TMS), management and oversight of the processes, initial adjustments that sacrifice supply chain efficiency, and time-consuming carrier relations management. Benefits do include daily face-to-face interaction with your logistics team.

  • Hiring a third–party logistics provider

    → Costs include nominal fees for each load you move. Benefits include a stress-free solution to your supply chain, saving the expense of hiring an in-house team (which means you only pay for what you want to ship), price-optimization on every load so you get the best rates available, cargo insurance, and having your outsourced dedicated team just a phone-call or email away.

It is clear that the benefits of partnering with a third-party logistics provider far outweigh the costs. With that being said, hiring a 3PL may not be the best decision right now for your company. Forecast the periods of critical mass and consider the context of your company’s current supply chain.

If you find that your company could potentially benefit from a third-party logistics partnership, give us a call or email us. Our dedicated, highly communicative supply chain specialists are prepared and eager to learn about your company’s needs.

Request a quote from BM2 Freight Services, Inc.

 

BM2 Freight
(800) 319‑1115
sales@bm2freight.com
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50 E Rivercenter Blvd. Ste. 525
Covington, KY 41011