With the transformation of the source chain caused by the coronavirus pandemic, logistics consumers will require their suppliers to be more agile, financially stable, transparent and temporary, and some are seriously outsourcing at least some of these services.
This is the conclusion of the scholars and business leaders who contributed to the State of Logistics 2020 report published in June through the Council of Supply Chain Management Professionals (CSCMP). The report sponsored through Penske Logistics and studies conducted through the consultanus Kearney.
“It’s transparent that logistics plays a leading role in securing resilient source chains,” says Michael Zimmerman, Kearney’s spouse and co-author of the 2020 report. “Logistics professionals will want to be even more agile as they move towards recovery by 2020 and 2021.”
According to Marc Althen, president of Penske Logistics, “With the reopening of U.S. companies, many supply chains have become unbalanced. Supply chain managers want to rely on forged knowledge and recommendations experienced to move forward. This is a vital time to re-evaluate your source chain, from distribution issues to modes of transport. »
Rick Blasgen, president of the CSCMP, agrees. “To say that everything has been replaced is an understatement. Many players in our industry have led adaptation, innovation and control efforts through unprecedented disruptions while creating new business models. The 3 keys to preparing for the future, he says, are the ability to adapt, improvise and overcome.
When the State of Logistics Report was first drawn up more than 3 decades ago, its main objective was to contribute to the political debate on the economic deregulation of road transport by measuring the positive effect of deregulation on logistics prices over the past year. . After several years of proving the favorable effect of price deregulation, the report added more knowledge about other modes and services.
In recent years, the focus has been on providing more information about what it deserves to happen in the industry, while proceeding to analyze last year’s functionality in the sectors. The 2019 report found that corporate logistics prices in the United States overall rose between $0.6% and $1.63 trillion last year, or 7.6% of GDP in 2019. Compared to 7.9% of GDP in 2018, this reflected an improvement in overall productivity.
This turns out to be an old story now. The economic downturn has severely affected the economy to the fullest, adding logistics. Even before COVID-19 arrived, a large number of truck carriers had begun to file for bankruptcy. Some carriers now face higher rates, while others are received for overcapacity.
“To get ahead in difficult times, all parties will want to make smart investments in generation and use those technologies to deepen collaboration,” Kearney researchers said. “Supply chains will want to become more resilient, more able to adapt to, and from demanding long-term situations. Abandoning cost-oriented and single-source procurement purposes can pose new demanding logistics situations, which in turn sees its proven resilience in this crisis.
Most goods in the United States are transported at least at any given time by trucks. Trucks are already slowing down in 2019 after a torrid 2018, the report notes. After two years of limited capacity and emerging rates, the 2019 market balance has shifted to chargers. They regained their purchasing strength and were able to negotiate reduction rates and secure capacity.
At the same time, the fleets recorded a drop in profits and ended up asking for fewer new trucks. Beyond the resumption of a cycle of expansion and recession now exacerbated by COVID-19, primary operators are turning to technological investments that promise to increase efficiency, while others look at progress.
On June 30, a week after the CSCMP report, the federal government lent $700 million under the CARES Act to YRC, the least truck carrier (LTL), in exchange for a 29.6% stake in union employer Teamsters.
The small fleets will have to fight to survive, Kearney researchers say. “Small carriers, i.e. those in the most affected sectors, want to resort to application-based and intermediary-based responses to supply more routes and return to routes.”
The railways continued to increase their profitability despite the decrease in volumes in 2019, which was largely the result of boosting the prices of their carriers in recent years through the adoption of the Precise Hourly Railway System (PSR), and through changing the prices of delays and accessories to a source of profit through the monetization of the inefficiencies created by the railways.
However, the COVID-19 pandemic has reduced volumes by 25% more, and railways face constant peak prices on their networks in their main car business. To generate more revenue, major freight railroads are returning to the intermodal, which they had treated as the proverbial red-haired stepson when they rushed to adopt the SSP.
Given the carbon footprint and load benefits of intermodal technology, carriers need higher rates and reliability. According to the researchers, the railroads have realized this and say they are applying tactics to their intermodal networks.
In the other aspect of the intermodal equation, shipping has noticed that volumes soared in 2018 in anticipation of U.S. fares, however, in 2019 and this year, the industry has controlled new pain resources. Shippers discovered that they had entered in 2019 with an excess of stock that reduced their shipping requirements, and carriers were affected by costly new environmental regulations.
As a result of COVID-19, additional monetary tensions are likely to continue in the future. “Ship and container imbalances and capacity uncertainty have raised market costs in cash and suspended negotiations on general contract rates, as the image of the call remains hidden,” the researchers explain.
U.S. ports began 2020 taking advantage of the merit of expanding shipping volumes and efficiency, however, the pandemic temporarily surprised them by facing declining volumes, congestion and thousands of boxes trapped in the terminals.
Last year, warehouse rents continued and vacuum rates remained close to historic lows. E-commerce continued to drive growth, especially for smaller urban warehouses with larger appliances operating closer to customers, the report notes.
Inventory garage prices rose to 6.6% in 2019 as the garage capacity remained low, which in fact has been the case for many years, the speed of the structure has also been higher. “The warehouses delivered the largest square footage ever made in a singles neighborhood, and the market swallowed them temporarily,” Kearney researchers report.
By 2020, researchers hope that the disruption of customers’ chains of origin resulting from the coronavirus pandemic will lead to a further increase in demand for garages, i.e. temperature-controlled warehouses, as more customers order food online. But it’s probably not the only engine.
Researchers estimate that a 5% build-up in security stocks will require approximately 750 million square feet of additional business area as corporations use their old simplified stock strategies, such as immediate and just-in-time response.
“The rise in stock levels should spur industrial activity, given the expectation that the warehouse construction pipeline will remain full and warehouse availability will remain tight,” they predict.
These trends require greater attention to effective control of personal warehouses and corporations that offer third-party logistics warehouses (3PL), which help consumers manage other home chain desires by offering road transportation, cargo brokerage, cargo transit, packaging and curtain handling, as well as another SpecialtyArray
Generation is also being deployed to increase the power of warehouses and distribution centers. “E-commerce in the event of a pandemic leads to an expected increase in the adoption of warehouse automation responses at additional prices and operational complexity,” the researchers explain.
Sales of autonomous cell robots are expected to double to $27 billion by 2025, they said. This and other generation responses put the industry in a smart position for strong recovery.
The pandemic tested 3PL service providers without warning, facing sudden shutdowns and overloads, depending on the industries they serve, and this has a lasting effect. Most heavy production industries, the automotive industry, and vital segments of critical chemicals stopped when factories closed when the call evaporated.
“3PL and supplier chains serving hotel and dining venues have stopped more frequently,” the report says. “On the other hand, high-tech products, such as microprocessors, have continued to travel around the world, and are still needed to obtain inputs for computers, servers, and military products.” In addition, demand for packaged and grocery products for customers has increased, and others accumulate and then shop while fulfilling home orders.
The report notes that several 3PL have been able to redistribute part of their body of workers and assets from discontinued and decelered industries to those with outbreaks. “Most of the loaders we talked to indicated that their 3PLs had a ‘we’re in the same boat’ attitude as depending on the force majeure clauses,” the researchers reveal.
However, the report’s authors warn that 3PLs will have to continue to invest in generation and improve their experience. “Some carriers have told us that technological advances (warehouse control systems, transport control systems, monitoring and traceability) facilitate the internalization of decision-making.”
They add: “Senders who have committed to buying 3PL skill and innovation have indicated that they see incremental innovations in creativity, such as the 3PL campus style where senders are served from the same set of facilities, or the accumulation of 3PL at the end. Miles of networking and increased transfer capacity that can help loaders cope with sudden increases in strength.”
The effects of the COVID-19 crisis have opened the eyes of consumers and suppliers to the price of generation in the management of the source chain, the researchers note. “Even suppliers who in the past have hesitated to invest in tracking the location of electronic shipments or signatures, claiming that these virtual technologies were not necessary, are now adopting them as table issues.”
With emerging labor prices and COVID-19-induced recession, carriers and 3PLs are turning to automation and robotics to make logistics more efficient, not only through complex and unpredictable product flows, but also through assistance to a larger workforce. Fresh.
While Kearney researchers estimate that serious expansion and implementation of autonomous truck transport is still 15 years from now, they point out that legions of cell robots are already running alongside humans in many warehouses and distribution centers.
The logistics industry had presented very clever basic concepts before the pandemic devastated the economy, and those will help it weather the existing storm, the researchers say. “While almost no one has noticed the upcoming COVID-19 crisis, the state of the industry in 2019 suggests it could happen quickly.”
They argue that the immediate deployment of professional skills and the immediate steps taken to locate artistic responses through logistics professionals exposed in the early stages of the pandemic bode well for the industry’s long-term.
“The logistics officers rolled up their arms instead of hiding their contracts. People in the industry, in fact, from all over the world, come together to deal with this dramatic collapse and rebuild. Logistics players see the benefits of collaboration, which now motivates them to move more with ambitious new solutions.
The researchers sum up their point of view: “In general, winners will emerge from this crisis with more informed digital logistics operations, especially in the spaces of transparency creation and interfaces, while cutting off the need for physical work between modes and nodes.”
David Sparkman is the founding editor of ACWI Advance of American Chain of Warehouses Inc., and a member of MH-L’s editorial advisory board.
CSCMP / A.T. Kearney
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The FBI’s cybersecurity warning for trucks includes mitigation tips.
The FBI warned interstate truckers that electronic logging devices (ELDs) that must be installed on their trucks to record compliance with hours-of-service regulations make them vulnerable to hackers who can use them to access the company’s monetary data.
The office’s opinion emphasizes that the ELD’s mandate involves cybersecurity needs for brands or device vendors, and that there is no legal responsibility of the government to validate or verify through a third party prior to the ELD self-certification process.
“Industrial and educational studies on a variety of self-certified ELDs revealed that the pattern of devices did little or nothing to stick to the most productive cybersecurity practices and was vulnerable to compromise,” the FBI notes. “Researchers have shown that malicious activities can remotely compromise ELDs and send commands to vehicle parts to make the vehicle behave unwantedly.”
Perhaps the scariest facet of this risk is the possibility of bad actors accessing a company’s monetary data, the DLE as a channel, the workplace said. Although there have not yet been reports of cyberattacks via ELD, they have already occurred with other devices.
Several years ago, he discovered that china-made portable barcode readers used in U.S. warehouses inflamed company computer formulas with a computer virus that patiently sought a backdoor to the formula to eventually enter accounting formulas and pass on knowledge to the Chinese military. Observers.
“ELDs for more complex telematics purposes and a connection for purposes such as tracking or sending shipments can allow a cyber actor who has an unsecured ELD to move sideways through the company’s broader commercial network,” the FBI said.
“Cybercriminals interested in stealing knowledge, such as non-public information, business and monetary records, location history and vehicle tracking, or other knowledge of ownership, such as visitor and cargo lists, may use LED vulnerabilities for corporate networks of road transport companies. Knowledge bases”.
With this type of access, financially motivated cybercriminals would also be located to install malware such as ransomware, preventing the ELD, vehicle or connected telematics, such as sending or tracking shipments, from operating until the ransom is paid through the fleet owner.
Although ELDs are only intended to allow engine data logging, in practice, some self-certified ELDs can be used to send commands to the truck engine through its connection to the Electronic Module (ECM).
As a result, commands transmitted to the vehicle’s network via an ELD can only for purposes such as vehicle controls and console screen accuracy, according to the FBI.
Potential signs of this come with increased functionality or maintenance issues for non-reproducible equipment, increased traffic on the vehicle’s internal network, or network logs for the ELD indicating unplanned incoming remote connections.
“Limited symptoms and symptoms of caution for this type of activity increase the importance of deciding on a safe device with configurations that restrict overall traffic operations,” the workplace said.
The FBI says that possible signs of this kind of malicious activity come with traffic or record sharing on the network. This suggests that this can only be detected by building a network baseline and tracking a large amount of traffic and the network, as well as restricting user and device access privileges for workers to what is required for their work.
Unfortunately, this specific type of vulnerability has been known since before the needs were drafted, but little has been done in this regard, with the exception of the published recommendations on most productive practices. Before the Federal Transportation Safety Administration (FMCSA) began implementing an ELD mandate for advertising cars in December 2017, some truckers unsuccessfully asked Congress for two years to deal with this risk and address other possible technical deficiencies.
In September 2017, a coalition of 31 organizations led through the Association of Independent Owner-Operator Drivers (OOIDA) also reported that there were “significant genuine and technological concerns” that had been addressed through the FMCSA.
In Canada, federally demanding CED is now being introduced gradually, with a deadline for truckers to install the devices through June 12, 2021.
However, because ELD’s mandate in the U.S. implies any cybersecurity criteria or quality assurance for ELD vendors, no third-party validation or testing is required, and device vendors can self-certify their ELDs.
Canada has stated that after its ELD mandate takes effect, U.S. truckers can only enter Canada if their LTLs have also been qualified through a third party. The new devices will also comply with the electronic recording device technique developed through the Canadian Council of MotorIzed Transportation Administrators (CCATM).
Due to the lack of third-party certification in the United States, the FBI warns that corporations that decide an ELD to use on their networks will have to conduct due diligence themselves to mitigate their cyber threat and prospective prices in the event of a PC incident.
ELDs must be connected to a vehicle’s ECM to track the date, time, location information, engine hours, vehicle miles, user identity data, vehicle identity data, and carrier identity data. ELDs must also allow wireless connection.
ELDs bridge the critical parts of the vehicle and the wireless transmission of knowledge, so that the parts of the vehicle itself are available remotely via Wi-Fi or Bluetooth. Maximum non-unusual ELD implementations use built-in cellular modules, but sharing a satellite, Bluetooth, or wired connection to smartphones and cell phone-enabled tablets are also options, the FBI notes.
Before implementing an ELD, the FBI recommends that truck owners contact the EDL manufacturer or carrier and ask about their cybersecurity. “When touching carriers, look for fast and detailed data on the security of the entire ELD solution,” he recommends. “Because ELDs may come with a combination of integrated systems, communication link, user interface, and back-end cloud, the operator will be asked for the main points that deal with cybersecurity for all purposes and components.”
In May, FMCSA published a set of intelligent cybersecurity practices for ELD responses entitled “Best Cybersecurity Practices for the Integration/Modernization of Alternative Electronic And Telematics Systems” [FMCSA-RRT-19-013]. It provides recommendations on considerations that truck owners should consider when getting new devices and explains what visitor acceptance test providers can expect.
The FMCSA recommendations cite a 2018 report through the National Motorized Cargo Traffic Association (NMFTA), which was updated before this year. The document includes a note for cybersecurity considerations, classifying them as low, medium, or high reviews.
NMFTA recommends avoiding responses that do not meet the main criticality needs, however, responses that do not meet the average criticality needs can still be acquired with justification through the supplier, and low-critical needs can still be even without justification through the supplier.
The report, “NMFTA Cybersecurity Requirements for Telematics Systems,” cites these examples of what to look for:
Is communication between the engine and the ELD applied? A requirement of maximum criticality, and the report recommends that any ELD purchased must meet this requirement.
Were the progression of the device followed technical criteria or more productive practices? A requirement of average criticality and responses that do not meet this requirement would possibly still be appropriate to acquire with a supplier’s justification.
Does the component have the confidentiality and integrity of communications? This applies to all components of an ELD solution.
Has component penetration been tested? This also applies to the component or in all likelihood to the formula as a whole. However, asking for the component clarifies the responses of suppliers, NMFTA says.
Does the device have a secure boot? This applies to any device that may be in the hands of an attacker. In some ELD solutions, this will apply to all devices connected to the vehicle, such as a modem and smartphone, as indicated in the report.
Does the device come with debug mode enabled? This would be similar for all devices, which would possibly be one, two, or 3 devices for the solution, as indicated in the report. Unsafe devices, even if not specifically targeted through cybercriminals, would likely delight in stability or functionality disorders resulting from opportunistic interference or infections.
“An active technique for verifying ELD characteristics prior to implementation is a small time-up investment that mitigates the threat of costly or disruptive PC incidents in the long run,” the FBI explains to truckers.
The FBI encourages reports of suspicious or criminal activity at the local offices of the FBI or FBI Cyber Watch (CyWatch) 24 hours a day, 7 days a week. Box office contacts can be found at the address www.fbi.gov/contact-us/box. You can contact CyWatch by phone at 855-292-3937 or by email to [email protected].
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As of our services, you agree to obtain magazines, electronic newsletters and other communications about Endeavour Business Media’s related offers, its brands, affiliates and/or third parties in accordance with Endeavour’s privacy policy. Contact us by [email protected] or by mail to Endeavor Business Media, LLC, 331 54th Avenue N., Nashville, TN 37209.
You may opt out of receiving our communications at any time by sending an email to [email protected].