Carrier Networks & their Importance in Global Supply Chains

Author: Angad Singh Abrol
Senior Product Manager, FarEye

Carrier networks form the backbone of any visibility network or solution in supply chains across the globe. In very simple terms, a carrier is an organization or a truck/container/vessel/asset that is contracted to carry a shipper's product from one location to another. This can be done over multiple modes like On-The-Road (OTR), Rail, Ocean, Air. Global supply chains usually involve multi-modal transportation and following are some major challenges which make global supply chains complex:

  1. Different carriers being used for different modes of transportation, leading to change in “chain of responsibility” multiple times
  2. Lack of multi-modal visibility of these carrier networks results in silo-ed views and increased costs for shippers as well as logistics service providers
  3. Lack of predictability leading to poor optimization across end to end supply chain
  4. Supply Chain disruptions like COVID, Brexit, Suez Canal blockage, etc. leading to capacity losses for multiple carriers upstream and downstream in the supply chains

Imagine any supply chain of a particular shipper or a logistics service provider. It can have multiple legs of transportation; first-mile, mid-mile/long-hauls or the last mile, as shown in the pic below. Depending on the design of transportation and supply chain, chain of responsibility, etc. different carriers may take responsibility for transportation for different miles/legs of transportation. E.g.: In the diagram below, we see different types of carriers and modes being used in different legs of the supply chain.




Each carrier in the picture depicted above is important in this journey of material/stock from farm to fork, from transporting raw material in the inbound leg to processing and shipping manufactured goods to a warehouse or DC and finally the packaged product in the hands of consumers. While the inbound or first mile transportation seem to be happening through three different modes (Ocean Vessel, On-The-Road Truck and Air), mid mile in the above figure seems to be getting executed through trucks on the road and last mile through a combination of vans and last mile bike riders. Hence, it is very important to understand the different types of carriers and integrate all these carriers in one common platform to ensure that visibility and predictability of stock/inventory/material gets established, end to end.

Different types of carriers

On-The-Road: Trucks (FTL/LTL)

These carriers operate on the road only and they might be asset or non-asset based. E.g.: US Express, UPS freight, YRC are some asset based FTL/LTL carriers while XPO Logistics, TQL, WorldWide Express are non-asset based carriers. Within these carriers, there might be carriers who only specialize in FTL, full-truck loads or LTL, less-that-truckloads. These carriers use telematics/electronic logging devices (ELDs) like Geotab, Samsara, etc. to keep track of live locations, driver’s logging hours, etc. and Dispatch systems like McLeod, CXT, etc. to keep a track of shipments data associated with each asset.

Rail 

It is a cost-effective way to move goods across relatively far distances on ground. It is considered to be an irreversible mode of transport as a shipment cannot be stopped or turned around until it reaches the destination. It is very common to use this mode of transport for industrial and bulk shipments. Usually Rail is never the only mode of transport and is mostly used in conjunction with FTLs (Trucks) which are responsible for initial and final legs of the transportation from and to rail terminals. There are different types of carriers in Rail mode, e.g.: Class 1 Rail carriers in the US include CSX transportation, BNSF Railway, Canadian National Railway, etc. There are many carriers/3PL players who also offer rail as a mode of transport. E.g.: JB Hunt, XPO Logistics, Coyote, etc.

Ocean

This has been one of the slowest but one of the largest modes used for transportation for volumes. Material is transported in containers (20-40 foot) and steamships, either in full containers as FCL or partial containers as LCL. The average duration of any ocean trip for global supply chains may fall in the range of 20-30 days. Some of the carriers in ocean space include: DHL, DB Schenker, Maersk, Cosco, etc. Ocean vessels can be tracked using the data from containers and via AIS satellite feeds. 

Air 

Air freight uses commercial/cargo airlines as carriers to move goods from one place to another. It is usually the costliest mode among all other modes, as well as the fastest. Usually this mode is used for transporting high value, urgent, high priority goods to be delivered. There are restrictions to transport hazmat (hazardous material) or temperature sensitive materials. In the US, shippers shipping via Air need to be registered mandatorily with Transportation Security Administration (TSA) as a “Known Shipper”. Some of the top carriers in Air mode of travel include: DHL Supply Chain, Kuehne+Nagel, DB Schenker, UPS Supply Chain Solutions, etc.

CEP Carriers 

Courier, Express and Parcel players are players which primarily operate in courier/parcels space. They offer domestic as well as cross border courier/parcel delivery services. E.g.: USPS, Royal Mail, Purolator, DPD, Hermes, Canada Post, etc. Most of these carriers provide status/milestone based visibility. E.g.: Order Picked Up, In-Transit, Delivered, etc. While some of these carriers might have one common technology operating for their global operations, many still have different methods of communication and status for different geographies.

Last Mile 

These are driver/riders who execute deliveries in the last mile, to consumers' households. There might be an overlap in services of last mile carriers and CEP carriers since CEP carriers also operate usually in the last mile and are responsible for deliveries in the hands of consumers. But apart from couriers/parcels, there are many different types of deliveries that are executed by last mile delivery riders, e.g.: Food delivery, 2-man delivery, white-glove deliveries, etc. With COVID-19 taking a toll on consumer’s physical shopping experience, we all have shifted to the touchless deliveries through at-home delivery model due to which there’s a great demand for last mile delivery providers across the globe. From groceries to mobile phones, from heavy electronics to parcel delivery, last mile riders network execute all these deliveries. Some prominent last mile delivery service providers include the likes of Postmates, Doordash, UberEats, Drizzly, Skipcart, LSO, etc.

A true multi-modal global visibility platform should have integrations with all different modes and carriers operating across all these different modes of transportation. Delivering visibility and predictability to global supply chains is one of the core missions of FarEye and hence FarEye has multiple initiatives to ensure that it is constantly growing its carrier base across all types of modes and carriers, across the globe. One of the differentiators for FarEye’s solutions for shippers and logistics service providers is the ability to empower carrier networks which might not have technology stacks integrated in their operations, assets OR are low-technology carriers, with a low-technology toolkit for carriers. This toolkit not only helps the carriers in establishing visibility, but also optimize their operations using intelligent technology of FarEye for optimal routing, digitizing their entire operations and dispatching too. This capability has been one of the main reasons why FarEye has been able to deliver 95%+ visibility compliance in some APAC geographies where ELD/Telematics mandate and infrastructure for tracking assets does not exist at scale. Know more about innovations and new models which FarEye practices to bring high visibility and near 100% visibility compliance into your diverse carrier networks.


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