This Week in Logistics News (January 19-23, 2015)

By Adrian Gonzalez

Who knew that air in a football (or lack thereof) could generate so much hot air, not only from sports commentators, but from all the major news organizations too. Deflategate has consumed the airwaves, headlines, and social media conversations all week, especially here in Boston. And the news just keeps getting worse for the Patriots. The NFL is now reportedly investigating whether the Patriots played Sunday’s game against the Colts with a properly inflated Vince Wilfork.

I’m so deflated.

In other news…

As I’ve said in the past, I believe many companies will find opportunities for supply chain innovation at the intersection of Software, B2B Connectivity, and Social Networking. Of the three, B2B Connectivity is the least sexy, but commerce wouldn’t be possible without it, at least not efficiently. And innovation exists within the realm of B2B Connectivity, as evidenced by this week’s announcement by Elemica. The company was awarded Patent No. 8,904,528 for a “Method and Apparatus for Translation of Business Messages” for its next generation QuickLink Network. According to the press release, “[The patent] relates to how messages are translated from one format to another using ‘universal business concepts,’ significantly reducing the time and simplifying the process of on-boarding supply chain trading partners.”

Here’s a quote from John Blyzinskyj, Elemica’s CEO:

“Elemica’s QuickLink Network platform, in a very straightforward way, integrates the extended supply chain using technologies that allow for easy on-boarding of thousands of trading partners without requiring them to change the way they fundamentally do business. Our patented approach to integration means that companies can seamlessly and efficiently conduct business with others on the network without having to make costly investments in time and technology. This exciting patent not only adds to Elemica’s growing IP portfolio, but protects our one-of-a-kind technology for message translation.”

Companies have historically overlooked B2B Connectivity when evaluating supply chain software solutions, such as transportation management systems. Many are now starting to recognize that connecting with carriers and other trading partners (via EDI, FTP, AS2, web portals, and other means) is not only a labor-intensive and time-consuming part of the implementation process, it is also a continuous process, with ongoing costs and IT resource requirements. I’ve stated my opinion many times before: I believe companies, especially manufacturers and retailers, should get out of the B2B Connectivity business. It’s not their core competency, and as history has proven, they’re not doing a good job at it either. Instead, companies should view B2B Connectivity as a utility and outsource it to a Supply Chain Operating Network, where data quality management is central to their business model and value proposition.

Moving on to other technology news, Kewill announced that it has been “proactively upgrading their customs software solutions to ensure their customers are able to file, monitor and report on all customs filings and communications with the use of this new single online ACE [Automated Commercial Environment] portal that will connect CBP, trade representatives and government agencies.” As noted in the press release, companies are required to use ACE for all electronic import and export manifest filings for all modes by May 1, 2015 and use ACE for all electronic cargo release and related entry summary filings by Nov. 1, 2015.

There’s been plenty of notice regarding these ACE mandatory use dates and requirements, so if you’re involved with global trade and aren’t prepared yet, you better come up with a good excuse (but I doubt Customs will buy it) or act now to upgrade your systems.

On the 3PL front, Ryder announced that it was awarded SAFETY Act Certification from the U.S. Department of Homeland Security (DHS) for its global supply chain security program. Here are some details from the press release:

The SAFETY (Support Anti-terrorism by Fostering Effective Technologies) Act provides important liability protections for providers of products and services with anti-terrorism benefits. The SAFETY Act award is not only a validation of Ryder’s effective anti-terrorism security practices, but it also affords liability protections from third-party claims arising from an act of terrorism to Ryder customers who employ the company’s certified supply chain services.

Ryder received the Certification for the physical, technical and procedural security measures the company has put in place to ensure the secure shipment of goods transported across international borders into the United States. This includes conducting supply chain risk assessments; policies and procedures for selecting and monitoring business partners; a detailed record-keeping and shipment monitoring program; vetting new hires and training Ryder personnel on global supply chain security threats; and a comprehensive auditing program. The Certification also recognized Ryder’s risk assessment processes; cargo security methods; physical security systems; on-board technologies; and suspicious activity targeting program.

Supply chain management is all about risk management, and this is a great example of how third-party logistics providers (3PLs) need to redefine themselves. Yes, 3PLs provide customers with multiple logistics services like transportation management and warehousing, but that definition is stale and limiting. 3PLs are also in the risk management business, helping customers to minimize or eliminate supply chain risks, and more importantly, helping them recover from supply chain disruptions faster and with less impact. The sooner 3PLs start positioning themselves as risk management experts and providers of related services, the sooner they’ll get the attention of CEOs and CFOs.

And with that, have a happy weekend!

Song of the Week: “Simple Machine” by Guster