Executive Briefings

To Be Successful, Your Last-Mile Transportation Capability Needs 'Game'

Picture this: It's a late-season baseball game between the Giants and Dodgers. The regular season championship is on the line and, with it, a trip to the playoffs. The Giants have nursed a 1-0 lead since the second inning. Now in the ninth, with just three outs between them and victory, manager Bruce Bochy makes his call to the bullpen. With 40,000 fans screaming encouragement, the skipper hands the ball to ... some kid who just arrived from the single-A San Jose minor league team?

Wait a minute. Where's All Star closer Brian Wilson? There's no way such an outrageous decision could be made in the Major Leagues. And, yet, while we might laugh at the idea of turning to an unknown and untested performer in sports, our industry makes equivalent choices every day.

In fact, this kind of decision is very common in the so-called "last mile" of transportation. As goods move to manufacturing and distribution points around the world, shippers have many resources for the linehaul portion of the movement. The integrator networks, commercial air and shipping lines provide many options for getting from point A to point B at a variety of cost and speed tradeoffs.

But what about when the goods arrive at point B? That's where our industry so often relies on brokered, local providers to recover the freight from the air or seaport and deliver it to the final destination. And just as often, that's the point where visibility, standard operating procedures, damage prevention and other key customer concerns fall apart.

To be sure, not every move requires high levels of quality control. When you're sending a container of teddy bears to some undeveloped places, the customer may not much care about a delayed delivery or a couple of torn boxes. Low cost is the primary concern. (This is shipping's equivalent of a game between the Kansas City Royals and the Pittsburgh Pirates. Who cares, so let the kid pitch!)

For manufacturers of high-tech products, medical devices, telecom equipment, aerospace / defense products and other expensive and sensitive goods, there's no room for error. And, they end up imperiling their supply chains when they compromise that last link in the supply chain. Let's look at some key areas where local, brokered transportation falls short:

Visibility. What you can't see, you can't control. When goods are handed off from an integrator or forwarder to their local agent, they often show as "out for delivery." But what does that really mean when those goods have been out for delivery for three days and counting? A client of ours recently shared its frustration at goods being distributed to Saõ Paulo, Brazil. The client had great, real-time status updates up to the items' arrival at the airport. From that point on, the client had no idea whether its goods were in customs, in a warehouse, on a truck or delivered. A week or two would pass and eventually a proof of delivery would be supplied. What happened in between airport arrival and final delivery was anyone's guess.

Security. With TSA requirements, known-shipper mandates and even theft and highjacking considerations, there's no longer room for sloppiness in a chain of custody. Missing links may mean missing goods. Worse, every gap in accountability is an opportunity for those with bad intentions to affect our shipments.

Compliance. Beyond terrorism and security concerns, government, customs and industry association mandates are increasing at an ever-greater pace. In our own business, we find that the only way to ensure full and consistent adherence to the rules is to have all parties agree and sign off on a complete standard operating process (S.O.P.) document. Such standards rarely get communicated well and enforced with a local, brokered drayage provider.

Quality. If the above hasn't scared you yet, then this should. When goods are high-value, sensitive equipment, the customer gets understandably upset when it arrives on a broken pallet. Or in a box that's been squashed under other freight. Or with a forklift hole in it. Not to mention when it arrives on Thursday instead of the promised Tuesday delivery.

Our customers compete in a brutal, demanding, global marketplace in which all their competitors have very good products. The whole future of a sales relationship often hinges on small, executional details. If you're late and the other guy isn't, good luck with your revenues next quarter.

For all of these reasons, shippers have to start paying as much attention to the last mile of their transportation as they do the linehaul that gets them to that point. They also need to realize that many of these manufacturing supply chain endpoints also serve as first-mile, pickup locations for onward movement. And the same inattention to detail at pickup can result in the same misery for the shipper.

If your products demand visibility, quality, compliance and high security, you should know and certify the first- and last-mile transportation provider in each location where your supply chain goes. Make sure that they're using their own, dedicated personnel and equipment instead of subcontracting services out to a third party. Check the means by which you can maintain visibility of your goods-all the way to the final delivery point. Look for vendors with a global footprint and centralized management, so that you don't end up managing multiple, long-distance relationships. And, make sure that you have complete S.O.P. documents that are signed by the local provider and periodically audited.

In baseball, it's said that the final three outs are the hardest to get. In transportation and logistics, it doesn't have to be that way if the shipper applies consistent standards, right through to the final delivery. Let's work as an industry to fix our "last mile" challenges, and together we can deliver championship results for all the players.

Source: D.W. Morgan Co.

Picture this: It's a late-season baseball game between the Giants and Dodgers. The regular season championship is on the line and, with it, a trip to the playoffs. The Giants have nursed a 1-0 lead since the second inning. Now in the ninth, with just three outs between them and victory, manager Bruce Bochy makes his call to the bullpen. With 40,000 fans screaming encouragement, the skipper hands the ball to ... some kid who just arrived from the single-A San Jose minor league team?

Wait a minute. Where's All Star closer Brian Wilson? There's no way such an outrageous decision could be made in the Major Leagues. And, yet, while we might laugh at the idea of turning to an unknown and untested performer in sports, our industry makes equivalent choices every day.

In fact, this kind of decision is very common in the so-called "last mile" of transportation. As goods move to manufacturing and distribution points around the world, shippers have many resources for the linehaul portion of the movement. The integrator networks, commercial air and shipping lines provide many options for getting from point A to point B at a variety of cost and speed tradeoffs.

But what about when the goods arrive at point B? That's where our industry so often relies on brokered, local providers to recover the freight from the air or seaport and deliver it to the final destination. And just as often, that's the point where visibility, standard operating procedures, damage prevention and other key customer concerns fall apart.

To be sure, not every move requires high levels of quality control. When you're sending a container of teddy bears to some undeveloped places, the customer may not much care about a delayed delivery or a couple of torn boxes. Low cost is the primary concern. (This is shipping's equivalent of a game between the Kansas City Royals and the Pittsburgh Pirates. Who cares, so let the kid pitch!)

For manufacturers of high-tech products, medical devices, telecom equipment, aerospace / defense products and other expensive and sensitive goods, there's no room for error. And, they end up imperiling their supply chains when they compromise that last link in the supply chain. Let's look at some key areas where local, brokered transportation falls short:

Visibility. What you can't see, you can't control. When goods are handed off from an integrator or forwarder to their local agent, they often show as "out for delivery." But what does that really mean when those goods have been out for delivery for three days and counting? A client of ours recently shared its frustration at goods being distributed to Saõ Paulo, Brazil. The client had great, real-time status updates up to the items' arrival at the airport. From that point on, the client had no idea whether its goods were in customs, in a warehouse, on a truck or delivered. A week or two would pass and eventually a proof of delivery would be supplied. What happened in between airport arrival and final delivery was anyone's guess.

Security. With TSA requirements, known-shipper mandates and even theft and highjacking considerations, there's no longer room for sloppiness in a chain of custody. Missing links may mean missing goods. Worse, every gap in accountability is an opportunity for those with bad intentions to affect our shipments.

Compliance. Beyond terrorism and security concerns, government, customs and industry association mandates are increasing at an ever-greater pace. In our own business, we find that the only way to ensure full and consistent adherence to the rules is to have all parties agree and sign off on a complete standard operating process (S.O.P.) document. Such standards rarely get communicated well and enforced with a local, brokered drayage provider.

Quality. If the above hasn't scared you yet, then this should. When goods are high-value, sensitive equipment, the customer gets understandably upset when it arrives on a broken pallet. Or in a box that's been squashed under other freight. Or with a forklift hole in it. Not to mention when it arrives on Thursday instead of the promised Tuesday delivery.

Our customers compete in a brutal, demanding, global marketplace in which all their competitors have very good products. The whole future of a sales relationship often hinges on small, executional details. If you're late and the other guy isn't, good luck with your revenues next quarter.

For all of these reasons, shippers have to start paying as much attention to the last mile of their transportation as they do the linehaul that gets them to that point. They also need to realize that many of these manufacturing supply chain endpoints also serve as first-mile, pickup locations for onward movement. And the same inattention to detail at pickup can result in the same misery for the shipper.

If your products demand visibility, quality, compliance and high security, you should know and certify the first- and last-mile transportation provider in each location where your supply chain goes. Make sure that they're using their own, dedicated personnel and equipment instead of subcontracting services out to a third party. Check the means by which you can maintain visibility of your goods-all the way to the final delivery point. Look for vendors with a global footprint and centralized management, so that you don't end up managing multiple, long-distance relationships. And, make sure that you have complete S.O.P. documents that are signed by the local provider and periodically audited.

In baseball, it's said that the final three outs are the hardest to get. In transportation and logistics, it doesn't have to be that way if the shipper applies consistent standards, right through to the final delivery. Let's work as an industry to fix our "last mile" challenges, and together we can deliver championship results for all the players.

Source: D.W. Morgan Co.