“When it comes to the logistics industry, DB Schenker has been around some time. Every month I’ll be providing my insight into what’s going on and what you need to know. I’ve been part of this industry for over 20 years, and my passion is all about the teams I work for and with.
Bookmark this page and come back often.
Manage the systems. Lead the people.”
Bill Heaney, CCO of DB Schenker, USA
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Week 2
If You’re a Logistics Professional: Pass This to Your Finance Team
Dear Colleague in the Finance Team… I’m getting some insight about the latest logistics changes, and this is written specifically for financial experts – thought you might be interested…
All too often we are writing about logistics for logistics professionals, but occasionally, we need help from within the shipper’s organization to overcome logistics challenges.
Over the last two years, a series of shocks — including factory closures, skyrocketing shipping costs, shortages of material and labor, and the war in Ukraine — has created extreme variability for businesses in practically every industry.
This means that your logistics team are probably making some changes. If you import or export internationally, that will be even more complex.
What does it all mean for finance? These changes provide an opportunity and a challenge for finance teams and their members, whether they’re working at public accounting firms or within companies.
For example, complex new trade arrangements will raise new tax and money transfer questions. Many times, companies will think their problem is a logistics problem or a shipping problem, but the problem is more complex:
– Are credit terms updated – and how do we deal with that?
– Is there currency volatility that needs to be managed?
– How do you move the money for that transaction? And how long will that take?
– What does that mean for customs?
– How do they account for the goods on their books?
Finance needs to be involved early and often in changes to the supply chain. Amid increasing complexity finance also needs to understand the legal, tax, and global trade angles of the supply chain.
It’s not just about the books. It’s about how do your books match what’s really happening out there in the business, to properly reflect those activities. Each company’s supply chain will raise unique issues, such as questions of force majeure in a particular contract. The goal for finance is to create partnerships with experts in other fields — including indirect tax and customs and duties — to examine all sides of a scenario before making decisions.
While we support your logistics professionals, we are also here to support you and your financial questions.
Risk Comes In Many Forms – Wise Up To Cybersecurity
In recent years we’ve seen a trend towards attacks targeting the software supply chain rather than being directly against the goods being transported. Attacks can include poisoning the software components, stealing secrets to compromise an account, or modifying code repositories to allow for exploits.
Why have these attacks become such a concern? And how can you guard against them?
Products such as DB SCHENKERsmartbox can physically provide increased security and information transparency for your cargo. But what about data?
As we increasingly digitize the supply chain and become more reliant on the data that we have at our fingertips… and reliant on that data to make decisions, so does the risk increase from bad actors.
Cyber-attacks were the fifth top rated risk in 2020 and became the new norm across public and private sectors. This risky industry continues to grow in 2022 as IoT cyber-attacks alone are expected to double by 2025.
Cybercrime, which includes everything from theft or embezzlement to data hacking and destruction, is up 600% as a result of the COVID-19 pandemic. Nearly every industry has had to embrace new solutions and it forced companies to adapt, quickly.
We wrote about Three Things Every Shipper Should Know About Cybersecurity not too long ago. Since COVID-19 we’ve increased our vigilance and security measures. But, just like your interactions with your bank on a personal level, there is a part for everyone to play.
At the most basic level:
- Ensure you are setting up and using complex passwords when logging into your business and logistics systems.
- Don’t share login details, and
- Be aware of suspicious email that may be a phishing attack designed to trick you into revealing sensitive information
Together we can work on protecting your cargo physically and the data that drives it.
Week 1
Senate Debates Bill to Help Build Domestic Technology Supply Chains Amid Shrinking Economy
The U.S. Senate debated the America COMPETES Act on Thursday, a bill to help build domestic technology supply chains. A quick summary…
Two trends were key drivers of the U.S. economy’s decline last quarter:
- Imports soared nearly 20 percent as Americans spent heavily on foreign-made goods, while exports fell almost 6 percent as growth slowed overseas — a widening of the trade deficit that subtracted 3.2 percentage points from GDP.
- Businesses had built inventories aggressively ahead of last year’s holiday shopping season, when they feared pandemic-related supply shortages, so they restocked more slowly at the start of 2022, denting GDP by 0.8 percentage points.
Although imports surged in the first quarter, COVID lockdowns in China are likely to perpetuate supply shortages this year. Ford and General Motors said this week that they still can’t get all the computer chips they need, costing them sales and forcing temporary plant closures.
As logistics professionals, it’s ever more important to look at our processes. Are we running forecasts often enough, so that we can put in place plans for our supply chains, whether they are international or domestic?
As Ferris Bueller said, “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.”
The supply chain is moving fast – make sure you keep up.
Why Having a Leading 3PL as Your Logistics Partner is Ever More Important
3PLs have evolved from being a mere service provider to an enabler that makes sure that customers get their goods delivered. And logistics professionals realize that a good relationship with their 3PL is key to a good experience for their customers. A recent Gartner survey found that 63% of logistics leaders believe that logistics outsourcing has had a positive impact on their organization’s competitive positioning.
Here are three factors to consider when finding or reviewing your 3PL relationship.
Knowledge and Experience
Not all 3PL’s are made the same. Some have been around longer than others. Some have weathered more than one economic recession and worked in multiple regions where war and pandemics have changed the supply chain. Find a 3PL that has seen it before so you can benefit from their experience.
Tech and Innovation
A key driver of ongoing supply chain resilience in the logistics space is investment in technology. While it’s great to have a 3PL that has experience, how are they investing in, and implementing the latest technology? When it comes to your supply chain, can your 3PL give you the planning, flexibility, transparency, and communication platforms that makes your life easier and exceeds your customer’s expectations?
Buying Power
You’ve found 3PL that has the knowledge, experience, and technological innovation. Do they also have the market size (domestically and internationally) to negotiate the best rates for you, across all modes of transport? Breadth across land, ocean and air is vital, as the supply chain changes, and what might seem like a very logical solution today, may need to be changed in the future.
And, to add one more consideration, does your 3PL have the best people, that you can have the best relationship with? Connect directly with me if we can help you, and come back often to find out the latest thought leadership.
