Tech + Humanity: How to Build a Successful EU Supply Chain
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Coyote Logistics combines three original research studies to provide insights into the unique challenges of European supply chain professionals. By combining technology and people to operational tasks, EU shippers and carriers can achieve long-term success.
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Tech + Humanity: How to Build a Successful EU Supply Chain
- 1. The Evolution of Technology + Humanity: coyotelogistics.com Building a Successful European Supply Chain with a Balance of People and Tech
- 3. 3 Bigger Challenges C A L L F O R Bigger Questions
- 4. 4 Three Surveys • Third-party market research company • Focused on the challenges and needs of European carriers and shippers • Sample size: roughly 140 total carriers and shippers across EUR countries O C T O B E R 2 0 1 8 : MakerStreet Innovation • Coyote Logistics customer surveys • Focused on what our European carriers and shippers value most • Sample size: roughly 140 total carriers and shippers across EUR countries J U N E 2 0 1 9 : Coyote Logistics • Third-party market research company • Focused on how the industry views technology and human expertise • Sample size: roughly 350 total carriers and shippers across North America J U L Y 2 0 1 9 : Martec Group
- 6. 6 Source: MakerStreet Innovation, October 2018 Less than 10 Between 11-30 Between 31-50 More than 51 Fragmented Market 50% of Shippers Work with Over 30 Road Freight Carriers 32% 19% 24% 24%
- 7. 7 Challenges are Universal Source: MakerStreet Innovation, October 2018 Costs Flexibility Capacity Visibility Speed Complexity Biggest Shipper Challenges
- 8. Source: Coyote’s customer survey, June 2019 What They Care About Shippers Quickly resolves issues when they occur Easy to do business with On time pick-up and delivery Accurate reporting Helps me optimize my shipping spend Customizes their offering to meet my specific needs 74.42% 20.93% 4.65% 72.09% 20.93% 6.98% 72.09% 20.93% 6.98% 53.49% 25.58% 16.28% 48.84% 32.56% 13.95% 44.19% 16.28% 2.33% 4.65% 4.65% 37.21% Very Important Somewhat Important Neutral Not that Important
- 9. 9 Balance for Shippers Source: Coyote’s Martec Research Study, July 2019
- 10. 10 Source: Coyote’s Martec Research Study, July 2019 Shipper Preferences Human vs. Technology vs. Both Q: For each of the following tasks, do you value the work done by people, technology, or both to achieve optimal results Communicating with customers Communicating with 3PL partners Resolving shipment problems Analyzing data for actionable insight Building a long-term strategy Planning routes Identifying operational efficiencies Pricing Optimizing network Booking shipments Load scheduling Monitoring shipments Managing inventory
- 12. 12 Challenges are Universal Source: MakerStreet Innovation, October 2018 Costs Capacity Competitive Pricing Visibility Flexibility Complexity Biggest Carrier Challenges
- 13. Source: Coyote’s carrier survey, June 2019 What They Care About Carriers Ability to negotiate rates Easy to browse available loads Ability to see load prices up front Carrier reps who work with me to effectively resolve issues Independence to pick the loads that I want Eliminates empty kilometers 65.98% 25.77% 8.25% 58.76% 28.87% 11.34% 53.61% 32.99% 12.37% 55.67% 27.84% 14.43% 49.48% 34.02% 15.46% 54.64% 16.49% 1.03% 1.03% 24.74% Very Important Somewhat Important Neutral Not that Important Not a Factor in my Decision 1.03% 1.03% 1.03% 2.06% 2.06%
- 14. 14 Balance for Carriers Source: Coyote’s Martec Research Study, July 2019
- 15. 15 Value of Work Performed for Carriers Human vs. Technology vs. Both Communicating with brokers & 3PLs Communicating with customers Analyzing data into actionable insights Resolving delivery problems Identifying operational efficiencies Building a long-term strategy Load scheduling Obtaining & negotiating prices Optimizing my network Managing driver utilization & safety Booking loads Monitoring trucks & deliveries Planning routes Source: Coyote’s Martec Research Study, July 2019
- 16. How do you go about becoming a Shipper of Choice?
- 17. 17 STEP 1: Identify your optimal tech-to-human balance.
- 18. 18 • Inventory management • Load scheduling & booking • Communicating with customers • Communicating with 3PL partners • Monitoring shipments • Identifying & resolving issues TECHNOLOGY HUMAN BOTH
- 19. 19 STEP 2: Leverage your data.
- 20. 20 Centralize your data with a transportation management system (TMS). Clean your data with the help of experts. Leverage your data to keep score of performance.
- 21. 21 STEP 3: Treat carriers like partners.
- 22. 22 Be open and honest about your expectations and their performance. Reward them for their good performance by paying them on time. Be as fair as possible with your scheduling and facility amenities.
- 23. 23 STEP 4: Invest in people
- 24. 24 System integration across business Insight into government regulations Insight into customer issues Where Shippers Want Expert Help Source: Coyote’s Martec Research Study, July 2019
- 25. 25 Outsourcing Becomes Common Practice As You Grow Using or Considering an Outsourced Solution Source: Coyote’s Martec Research Study, July 2019
- 26. 26 STEP 5: Play the long game.
- 27. 27 Apply best practices consistently, no matter the market condition. Understand the evolving challenges and needs of your carriers. Build a long-term supply chain plan that balances new technology and human expertise.
- 28. 28 • Read the full research study to better understand the dynamics and challenges of the European road freight market. • Apply our best practices and tips to help position yourself for success in 2020 and beyond. Visit: coyotelogistics.com
- 29. 29 - Shipper from Logistics 2030: Navigating a Disruptive Decade Report “We’re looking at people, processes, and technology in a holistic approach to transportation. That means taking some calculated risks to be successful.”
Editor's Notes
- Welcome/thank you for coming/teaser of what we will present “I’m going to present exclusive new research on the challenges facing European shippers and carriers in today’s volatile market. I’ll discuss what each audience is feeling, what they truly care about, how technology is impacting their businesses and most importantly – actionable steps that you can take to become a preferred, “Shipper of Choice” for future business success.
- Across all global markets, and regardless of shipper or carrier, we see today’s supply chain challenges stemming largely from 3 common problems: New & Disruptive Technology Increasing Consumer Expectations and the “Amazon effect” Evolving Workplace “To get a feel for the room, let’s do a little audience poll. By a show of hands, who thinks disruptive technology is their #1 challenge? Consumer expectations? Changing workplace? I would argue that increasing consumer expectations are driving the other two – we’ve been forced to adapt how we structure our workforce, how we stay connected, and how we communicate in order to get faster. Regardless, all three of these challenges are constant topics of discussion in most meetings I have with our largest enterprise customers. They frequently ask about: ‘What is Coyote’s technology roadmap?’ ‘What insights can you give me into where the market is headed?’ ’What knowledge can your people share to help my team become more efficient?’”
- Our customers are also starting to ask new questions too, like: ‘How are emerging technologies going to shift the market over the next 5 years?’ ‘How many functions of the supply chain can be automated?’ ‘Where should I invest to prepared my supply chain for transformation?’ ‘How do I make sure carriers want to haul my freight?’ ‘What will give me a competitive advantage over other shippers?’
- Understandably, we all (shippers, carriers and 3PLs) have a lot of questions. In an effort to answer some of them, Coyote has invested in new original research over the past year -- including teaming up with two third-party market research firms. We surveyed hundreds of shippers and carriers across all levels of experience, size, profession and industry. Today, you’ll be the first hear the results of these original studies. And more importantly, we’ll help you understand how to take these insights and apply them to your own supply chain to better position it for future success, no matter the market condition. FOR MORE DETAILS ON SURVEYED: MakerStreet - 115 carriers scattered across all major markets (PL, ES, DE, FR, NL, UK, IT, BG, HU) - 15-25 shippers across primarily western European markets (DE, FR, NL, UK) Coyote 97 carriers across EUR heavily Poland and Romania 37 shippers across EUR heavily UK 6 3PL/4PL across EUR (freight forwarders) Martec 200 decision-makers within shippers across all regions, sizes, titles and verticals 150 decision-makers within carries across all regions, sizes, titles
- “So, let’s start by taking a look into what European shippers are dealing with in today’s modern supply chain.”
- Exacerbating the 3 broader industry challenges – disruptive technologies, increasing consumer expectations and the evolution of the workplace -- is the fact that the European freight road market is so fragmented. According to our MakerStreet survey, over 50% of all shippers are working with over 31 different carriers at any given time. One reason is that shippers need to ensure their loads are covered in order to meet customer demand. But carriers often commit only 50% of their capacity to dedicated lanes, while the rest is left open to stay flexible. Almost half of all the shippers surveyed from MakerStreet Innovation said they’d like to reduce the number of carriers they work with, or keep their number the same. However, in the past 5 to 10 years 32% of the shippers have actually increased their pool of carriers. With so many carriers to juggle, it’s creating more challenges that shippers across Europe need to deal with every day.
- Let’s dive deeper into some of the challenges uniquely felt by European shippers. According to our MakerStreet Innovations study, respondents overwhelming pointed to cost-saving pressures as the #1 challenge facing their supply chain. That is not surprising and is also a challenge echoed globally, with “keeping transportation costs down” cited as a top 3 challenge for North American shippers by our Martec study. Because of industry dynamics and demand volatility, remaining flexible is also a big challenge felt by most EU shippers. And because of that market fragmentation we talked about, managing consistent capacity, visibility to that capacity and service are all issues that stem from the complexity of moving goods in today’s supply chain.
- As a result of these challenges, shippers need to work with carriers and providers to help simplify their supply chain and bring more order to the chaos. According to a survey of Coyote’s own shippers, here are the main things they care about when looking to work with a provider: A partner who can quickly resolve issues Who is easy to do business with Provides consistent service in terms of on-time pick-up and delivery Accurate reporting Able to help optimize their shipping spend And the ability to customize an offering unique to the shipper’s specific needs All of this requires a partner with the mix of digital support for visibility and reporting, along with human expertise to resolve issues and creatively address the challenges of today’s supply chain. Whatever your supply chain needs may be, Coyote has the people and tech to help. We offer: Tracking to help ensure top-notch service and accurate reporting Consultation through a dedicated service rep who can help you strike the right balance between tech and people and plan for long-term growth Desktop and mobile apps to make booking freight easier than ever
- So what is that ideal balance between digitalization / automation in the supply chain and human expertise? According to the Martec survey we conducted, shippers said the ideal ratio is roughly 60% technology automation and 40% human handling across supply chain tasks. Results varied slightly by the size of the company and by job titles, but overall it was clear that shippers were leaning slightly more heavily towards technology.
- So do we eliminate people from our department or work with providers who provide only digital freight solutions? No. This 60:40 ideal balance can only be achieved by identifying where humans are irreplaceable and where technology helps to better empower the people you work with. But what does that look like in practice? For each of the following tasks or activities, we asked shippers to check where they value the work being done: by people (humans) to achieve the most optimal results; by technology to achieve the most optimal results; both are required for the most optimal results. What we found is that humans are best focused on supply chain tasks that include: communications, problem solving and analyzing. This makes sense – let humans do what they do best. And where is technology most valued? For tasks that are more operational and repetitive in focus: managing inventory, booking shipments, scheduling loads and monitoring shipments. But across the board, there were no tasks that didn’t require both humans and technology working together to achieve greater efficiency.
- Now that we’ve talked about what shippers face every day in terms of challenges and what they value, from both providers and technology, let’s quickly touch on carriers. Because as we mentioned, the EU market is increasingly diverse and fragmented. So understanding what carriers care about and are challenged by can help you to better work with the carriers that move your freight.
- While some of the challenges felt by carriers are very similar to shippers, including managing costs and staying flexible, there are some differences. Due to changes in regulatory climate, it is becoming increasingly difficult to source drivers from “cheaper” countries, which therein is negatively impacting capacity levels and driving up costs. 81% of carriers in the MakerStreet study mentioned that their average costs increased over the last year, largely due to both increasing gas prices and driver-related costs. Remaining competitive from a pricing standpoint is also increasingly difficult, especially when transportation costs are increasing, but customer expectations remain the same. Also, as shippers push for greater visibility, carriers struggle with monitoring trucks across markets and collecting that data for meaningful insights.
- So, while shippers look to providers who are quick to resolve issues, easy to do business with and provide on-time service, what do carriers look for? Unlike the consultative help that shippers are looking for, Coyote’s surveyed carriers are looking for more empowerment to take their business into their own hands. This includes: The ability to negotiate rates – because again, with costs rising it’s hard for them to remain competitive from a pricing standpoint Easy to browse available loads Ability to see load pricing Carrier reps who work with them to effectively resolve issues The independence to pick the loads they want And the ability to eliminate more empty kilometers – because every kilometer driven without freight is money left off the table Coyote provides services to alleviate all of these top carrier concerns. 3PL assistance can help carriers develop an omnichannel strategy through the assistance of a dedicated service rep who knows their carrier’s business in and out. Plus, like shippers, carriers benefit from digital access to Coyote’s loads through our desktop and mobile apps. These tech tools provide anytime access and efficient telematics connectivity to make running business smoother, which opens up time for further transportation optimization and long-term planning. So with more independence in mind, carriers must favor technology more than human expertise, right?
- Well yes, but no more so than shippers. Like shippers, carriers effectively have the same 60:40 tech-to-human ratio when it comes to where they value tasks performed across their business. But how does that split play out at the task level?
- Also very similarly to shippers, humans are valued more for tasks involving communications, data analysis and resolving issues. Meanwhile, technology is valued most for operational tasks like planning routes, scheduling loads, monitoring trucks, and booking loads. As with shippers though, there is still overwhelming value put on empowering people with technology to help them become even more efficient.
- All of these insights are well and good, but what do they mean for you? In today’s increasingly fragmented and competitive world, you need to appeal to the diverse pool of carriers out there and lock in as much dedicated capacity with the ones that align most with your goals and service requirements. This means applying best practices to help you stand out as a preferred shipper, or what we call a “Shipper of Choice.” The more you can apply these principles to your supply chain, the more attractive you’ll be to work with and the more likely you’ll be to reduce some of those common challenges like: Being able to source consistent, reliable capacity Remain flexible Reduce complexity And increase your visibility and speed for overall cost efficiency Okay, so where do you start on your road to becoming a Shipper of Choice?
- No two supply chains are alike, and neither are technology-driven solutions. That’s why you need to investigate where you can increase efficiency, make accurate predictions, or integrate various systems with the people who are powering the technology. Identify chokepoints that complicate operational processes. Once you find the challenge, it’s easier to work backwards to find a solution. Look to make technology investments to improve operational tasks. Implement technology from the top down that increases automation and opens up time for you to focus on what’s next for your supply chain.”
- The right answer is going to vary based on everyone’s unique business and strategy, but a good place to start is prioritize your top challenges. What are you struggling with most? Will a tech, human, or both solution prove the most beneficial? Here are a few topics that other shippers identified as the top areas to focus on. We covered these earlier, but to reiterate. If you do not have a robust tech solution for inventory management, that’s likely a good place to start. If you do not have trained specialists dedicated to maintaining relationships with customers and providers, bring those people in. If you do not have a solid combination of the two working on our shipment monitoring and solving problems when they crop up, you’re probably overly reliant on either tech or people.
- There is more data available today than ever before. Companies big and small recognize data is power, but the sheer volume of information can be overwhelming. However, successful shippers are making it a priority to invest heavily in collecting, analyzing and storing proprietary data.
- 72% of all MakerStreet participants (shipper and carrier) said they see the benefit of a single digital tool that connects all relevant data. That’s because without a decent TMS, you are stuck in a world of spreadsheets and emails. It is difficult to share information across relevant parties and challenging to collect data in any meaningful way. With one centralized system (or an outsourced Managed TMS solution), it is possible to get a snapshot of your performance at a supply chain level, or drill down into specific lanes or facilities to mitigate pain points and amplify best practices. Once you have a TMS (or the support of a Managed TMS team), now it is time to put it use. While data in and of itself is useless, gathering it is a good start. Keep in mind, it is very difficult to get “clean” shipment data and inherent volatility in your own network will make comparisons difficult. However, it is worth the effort and expense. A good third-party logistics provider can help you through this process. Once you get a good base of historical information, you can start transforming It from megabytes on a server to concrete changes in supply chain execution. Last and most importantly, leverage your data into actionable insights. You can do a lot with a robust TMS, but here are some of the highlights: Identify underperforming facilities, chokepoints in your network, appointment scheduling best practices, opportunities for modal conversions and warehouse relocations Create rational procurement strategies that account for external market conditions, more accurate budget forecasts, more accurate shipping forecasts and a system for holding everyone accountable Keep score of your carriers and providers, such as: primary and backup tender acceptance %, on-time pick-up and delivery %, scheduling and equipment requirements, accessorials, etc. Generate simple, yet effective scorecards to make it easier to evaluate your performance and the performance of your carriers/providers.
- With the help of your TMS data, you can start to understand which of the 30+ carriers you may be working with are the most efficient and consistent. Then you can start to focus on those and you do that by developing your relationship by treating them like true partners.
- With the ability to keep score, make sure you’re being clear about your expectations. Create an onboarding process and ensure every carrier goes through it before they move their first load. Tell them your KPIs, set reasonable performance expectations that both parties can agree upon and outline consequences for under (or over) performance. Then share scorecards and performance with them quarterly. Do not try to undercut carriers with complex demands and long-drawn out payment processes – they may save your company money in the short-term, but can come back to haunt you in the long-term. Carriers are often small businesses so strive to pay them fast (within 30 days) and pay them accurately, including fuel surcharge and all accessorials. Remember: carriers are challenged by rising costs and the need to stay competitive from a pricing standpoint – so help them out by paying them quickly and not requiring unnecessary documents or contracts. Also,, be fair to them when it comes to both appointment scheduling and the facility amenities you provide to them. Work with your suppliers to ensure carriers can easily schedule appointments, provide ample lead team (more than 48 hours if possible), be as flexible as possible and be understanding – transit times on the road can be inconsistent. Also, keep in mind that being a driver means long hours and tight deadlines. So be sure to provide easy access to things like: bathrooms, overnight parking, vending machines and WiFi. Lastly, being a true partner means being polite! A simple “thank you” can go a long way. 23% of Coyote’s 5-star facility ratings were because the staff at receiving facilities were friendly, polite and professional.
- You can buy the best TMS on the market and work with the most reliable carriers, but if you do not have quality, well-trained individuals executing, your supply chain is vulnerable to inefficiency.
- Investing in the right people is crucial in conjunction with investing in the technology solutions you need. We asked shippers what their expert wish lists was. Where did they want expert help? Integration of technology across the organization Visibility to regulatory changes Better insight to customer issues Invest in the right talent in-house to help bring your technology tools and data to life. Is operations and logistics a core function of your business? If so, bringing in more control—and the commensurate talent– in house might make sense. If you feel out of depth and need to focus your efforts on growth, outsourcing some-or all- of your supply chain operations may make more sense.
- Outsourcing is becoming more common by the day. For industry leaders, it’s giving them a competitive edge in the increasingly complex logistics landscape. Team up with the pros who can help you automate your supply chain and supplement the skills of your team to move forward faster. Companies tend to outsource more of their transportation management tasks as they scale up. As supply chains become more complex, it get tougher for companies to scale their supply chain personnel and sophistication to meet it. Outsourcing allows their people to focus less on those operational tasks and more on those relationship and process tasks. So, if you’re looking to grow, this may be your immediate next step. At least for certain functions of your supply chain.
- Over the past decade there has been an extraordinary amount of change within the industry: integration of new technology, changing regulations, increased consumer expectations, same-day deliveries, emerging markets and volatile fuel prices – to name just a few. However, at its core, the European road freight market is governed by the basic laws of supply and demand – the pendulum swinging from a “shipper market” (with plentiful capacity and favorable rates) to a “carrier market” (with an abundance of freight at increased rates), and back again. Because of this continual rebalancing act, along with the incredibly fragmented European market, shippers need to optimize their operations for long-term success, prioritizing consistency over reactionary strategy shifts. At times this means sacrificing short-term gains in exchange for the greater good of a sustainable supply chain.
- So what does that mean to play the long game? It means applying some of things we talked about – like treating carriers as core business partners and investing in people & training – on a consistent basis. And sticking with it. It’s not always easy. It takes strategy, vision, commitment, planning, resources and organizational buy-in at every level, but it’s worth it. It also means fully understanding who your carriers really are. We talked about some of the major challenges facing carriers today, but it’s important to note as well that carriers are looking for shippers to build a strong relationship with. In fact, over 80% of MakerStreet surveyed carriers said they agree or strongly agree that they’re looking for clients to build long-term relationships with (compared to the just over 50% that said the same). This means that carriers put even more of an emphasis on long-term relationships and are willing to provide higher levels of services to help achieve that. Last, but not least, you need to start thinking and planning long-term. According to our MakerStreet research, only 37% of shippers are considering changing their operational model – and of those that are, they haven’t done so yet because of conflicting priorities. As we talked about earlier, a long-term focus requires an optimal balance of both technology and human expertise for effective supply chain strategy and management. Coyote applies this same philosophy to our business. We believe that it’s a combination of both – our proprietary technology that connects shippers and carriers, as well as our trained experts. If you apply the same approach to your supply chain, it will be easier to stop thinking day-to-day and week-to-week and focus more quarter-to-quarter or even year-to-year. Remember: knowledge, consistency and commitment are truly what separate average shippers from Shippers of Choice.
- Coyote wants to help YOU achieve that Shipper of Choice status. With that in mind, we invite all of you to read our full study, which includes more in-depth details from our three research studies. Also, read our Resources for more tips and best practices for navigating the market today and tomorrow.
- Remember, it won’t be easy to start making meaningful change. It will require a commitment from you and your organization to make big decisions when it comes to investing in operational changes, technology and people to achieve long-term, future success. Thank you for joining me today. My name is Joel Gard, and I look forward to speaking with you more soon about taking a Shipper of Choice approach.