B2B credit management has evolved since 2019. Here’s how to ensure your credit department succeeds. 

The COVID-19 pandemic drastically changed the world, businesses, and their credit departments. It reshaped our economy. In order to meet the changing business landscape, credit managers have adapted quickly to maintain their companies’ financial stability. 

Let’s briefly review the economy before the pandemic started. This will give us a clearer picture of the changes that have happened and the difficulties B2B credit managers now face. We’ll look at how your sales team can become a credit ally and close with tips on how to decision today’s B2B credit with success.

Pre-Pandemic Stability

Before COVID-19, the economy experienced comparatively stable growth. Companies were generally optimistic about their clients’ creditworthiness. The approval process for B2B credit managers was a relatively simple routine. They usually assessed customer creditworthiness based on financial statements, credit reporting, and industry benchmarks. Once a credit limit was approved, customers were generally given net payment terms.

Pandemic-Induced Shifts

The pandemic triggered a series of economic shifts that profoundly affected B2B credit practices. Government stimulus programs, supply chain disruptions, and inflation surges all contributed to a climate of uncertainty and volatility. 

According to the National Association of Credit Management (NACM), total bankruptcy filings increased 18 percent year-over-year (YoY) in 2023. 

As a result of these changes, businesses became more cautious about extending credit and credit managers had to adopt a more rigorous approach to risk assessment. 

6 Key Changes in B2B Credit Management

In-Depth Credit Risk Assessments

Economic changes caused credit managers to become more reliant on data analysis to assess creditworthiness. This includes using financial modeling tools to assess a company’s ability to meet its debt obligations. Credit bureaus and alternative data sources are also leveraged to achieve a comprehensive view a customer’s financial health.

Tighter Credit Terms

As businesses become more risk-averse, they are tightening their credit terms. This can involve shortening payment terms (e.g., from net 60 to net 30), reducing credit limits for existing customers, and issuing lower initial credit lines for new customers. According to a March 2024 report by HighRadius, 52 percent of companies seek extended terms – quite the opposite view. The same report shows that 17 percent of customers blatantly ignore credit terms while another 48 percent intentionally delay payment. This can make building strong customer relationships difficult.

Increased Use of Credit insurance

The rise in economic uncertainty has led to a surge in demand for credit insurance. Credit insurance protects businesses from monetary loss if a customer defaults on their payments. A 2023 survey by AU Group shows that since the third quarter of 2022, the number of business failures in almost every region of the world has risen. In line with that statistic, credit insurers expect growth in their sales over the next six years.

Growing Use of Digital Credit Tools

The pandemic has accelerated the adoption of digital credit tools and automation. Tasks like processing credit applications, credit checks, and collections are now being completed faster and allowing credit teams to focus on exception management.

Collection Challenges

The pandemic caused many businesses to experience cash flow disruptions. It’s made it more difficult for some companies to meet and/or maintain on time payments.

Cash Flow Management

Businesses are focusing on more effective ways to manage their working capital. This can include reworking their collection processes and closely tracking inventory levels.

Opportunity Emerges

All these changes have significantly affected credit managers and their teams. Now, they carry heavier workloads and face increased pressure to mitigate credit related risks. They also need to be able to adapt to rapid changes that may happen in today’s economy. 

While these changes may have increased the burden on credit managers, they’ve also created opportunities for collaboration with sales teams. By working together, credit managers and sales teams can better service their businesses and customers.

5 Ways B2B Credit Managers Can Seek Help from Sales

In today’s risky and fraud-ridden environment, the sales team support in customer onboarding and credit is vital. Credit and sales teams must collaborate to ensure a positive and seamless customer experience. Here are some tips to foster better collaboration:

Educate for an Improved Understanding

Sales teams are crucial in helping gather customer information to assess creditworthiness. Credit managers can help sales teams understand the importance of collecting this information. Sharing its use and how having it can make the approval process faster helps, too. 

Develop a Standardized Form  

A standardized customer information form ensures sales teams collect all the required information. This can help streamline the credit approval process.

Encourage Proactive Customer Updates  

Credit teams must stay updated on customer developments. Encourage the sales team to proactively share any relevant customer updates with the credit department. Discuss what information is “relevant”, so everyone is on the same page.

Have a Joint Review Process  

Joint sales and credit reviews can ensure both teams understand customer creditworthiness. They can help prevent incidents where a customer is given an okay by sales and later is deemed to be a credit risk. At the same time, joint reviews will strengthen the relationship between sales and credit while improving the customer experience.

Foster Open Communication and Trust 

Open communication and trust are essential for effective collaboration between teams. Credit managers should be available to answer sales teams’ questions and provide guidance on any credit-related matters.

Is This the New Normal for B2B Credit Management?

It appears this “new normal” of post-pandemic business is here to stay, and it’s changed credit management for the foreseeable future. Because of this, we must have a more strategic and data-driven approach to B2B credit management. Those credit teams that adapt to these changes and improve collaboration with sales will be well-positioned to thrive in today’s economy. Furthermore, those who stay flexible and committed to delivering exceptional service will aid their company’s success. Will your credit team be the ones to hold revenue back or help drive it forward?

About the Author 

Tracy Mitchell currently holds the position of Director of Accounts Receivable at Trinity Logistics. She has worked at Trinity for nine years, with over five years of those in credit management. She holds a Credit Business Association (CBA) designation. With a deep understanding of the industry’s dynamics, she has firsthand knowledge and provides the company with invaluable insights into the complexities of credit risk assessment, collections, and sales alignment. 

The food and beverage industry is enormous, including subindustries like grocery, restaurants, bars, catering, and more. The industry continues to evolve and adapt despite frequently changing consumer preferences and new, complex challenges. So, what’s currently affecting those in food and beverage? In this blog, we’re going to dive into some of the latest trends in the food and beverage industry.

TRENDS IN THE FOOD AND BEVERAGE INDUSTRY

CONTINUED COLD CHAIN GROWTH

SUSTAINABILITY

LABOR SHORTAGES IN FOODSERVICE

CONSUMERS ARE MORE COMPLEX

SUPPLY CHAIN CHALLENGES

ARTIFICIAL INTELLIGENCE & AUTOMATION

GROWING COLD STORAGE DEMAND

CONTINUED COLD CHAIN GROWTH

One of the well-known trends in the food and beverage industry is the continued growth of cold chains. Recently, a Grand View Research study shows that the cold chain market was estimated at USD $330,680 billion in 2023. Furthermore, it’s estimated to grow at a Compound Annual Growth Rate (CAGR) of 14.8 percent from 2024 to 2030.

Recently, there’s been an increased demand for temperature-controlled pharmaceutical logistics (think vaccines and biologics), rising demand for better food quality, including more fresh and frozen foods, and a surging need to reduce food waste. All this is anticipated to drive the market’s growth. 

In light of the pandemic, the risks of COVID-19 have made consumers more interested in healthier, less processed foods that will boost their immune systems. However, less processed foods mean more food products that will need temperature control.

Additionally, the frozen food sector looks to be growing. Besides filling home freezers, frozen foods are growing in restaurants. Restaurants are also providing new menu items for the frozen grocery aisle. In an American Frozen Food Institute report, 72 percent of frozen food consumers said they combine frozen and fresh ingredients in their meals.

Comparatively, shippers are also using more cold chain services to preserve the shelf life of their products, even when temperature-controlled transportation isn’t needed.

SUSTAINABILITY

Growing climate issues are making sustainability a common trend in almost all industries. Consumers are taking notice of the sustainable practices of companies. From ethical sourcing, carbon neutrality, to eco-friendly packaging, consumers want the brands they buy from to be sustainable. Additionally, food waste is a major contributor to greenhouse gas emissions globally, contributing to cold chain issues. This makes sustainability one of the top trends in the food and beverage industry.

Consumers Care About Sustainability

One way consumers can show their support for the environment is by choosing to purchase from sustainable brands. Consumers have shown they’re willing to pay more and be loyal to brands that invest in their sustainability efforts. In a survey by YouGov, more than half of consumers said they would be willing to pay up to 10 percent more on sustainable versions of regular packaged food and drinks. In another consumer survey, 78 percent of respondents agree that sustainability is import, with 63 percent stating they have adopted greener buying habits.

Food Waste Prevention

In fact, an S&P Global Ratings report says food waste contributes to 10 percent of emissions and that $1 trillion of food is wasted each year. Similarly, according to the U.S. Environmental Protection Agency (EPA), between 73 to 152 million metric tons of food get wasted each year in the U.S. The most wasted foods are fruits and vegetables, followed by dairy and eggs, with over half of all waste occurring in households and restaurants. In addition, the food processing sector generates 34 million metric tons of food waste per year. And over the past decade, the total U.S. food waste has increased by 12 percent to 14 percent.

To put it differently, the EPA said halving food waste in the U.S. would save 3.2 trillion gallons of water, 640 million pounds of fertilizer, 262 billion kilowatt-hours of energy, and 92 million metric ton equivalents of carbon dioxide. According to the Agency, reducing the waste of meats, cereals, and fresh fruits and vegetables would have the most significant impact.

Due to this growing issue, governments and businesses have been working hard to improve sustainability efforts. In July 2021, the Zero Food Waste Act was introduced to provide grants to businesses that significantly reduce their food waste. Additionally, in November 2021, the Food Donation Improvement Act was introduced to lower food waste by making it easier for companies to donate food instead of throwing it out.

Cold chain improvements have seen growing importance even outside the food and beverage industry. One example is UPS Healthcare developing a system and opening facilities to move medicines safely. Part of their plan includes using reusable cold chain packaging. In addition, Amazon is working on insulation packaging to reduce material waste and replace 735,000 pounds of plastic film, 3.15 million pounds of cotton fiber, and 15 million pounds of non-recyclable plastic.

LABOR SHORTAGES In Foodservice

Labor shortages are common among other industries, making this another relatable trend in the food and beverage industry. As a result, hiring workers in the U.S. is becoming near impossible. According to a recent market report, labor shortages are a top concern for 23 percent of food and beverage businesses. The most difficult positions to fill look to be those in the restaurant and foodservice sectors. It’s not just the hiring of new workers, but retaining them as well.

Workers are leaving the industry due to a combination of burnout, low wages, and a desire for better work-life balance. Because of this, restaurants and foodservice companies have had to reduce their hours or limit their menu, while consumers have felt it in longer wait times and less personalized service. With good customer experiences being paramount to a company’s success, resolving this issue is critical.

For this reason, advanced technology can help remove some redundant tasks and help supplement amidst labor shortages. For example, those in the bar sector are being introduced to self-pour technology, which uses RFID tracking and allows customers to pour their own beverages. .

CONSUMERS ARE MORE COMPLEX

Over the years, consumers and their choices in food and beverage and their preferred shopping habits, have become more complex. Because of this, there is a greater assortment of products than ever, with more items requiring temperature control as consumers move away from processed foods and look for fresher, healthier items. Consequently, the supply chain for grocery continues to evolve as the message from consumers is clear. They want what they want, when they want it, where they want it, and expect businesses to respond to their demands.

Continued Decline of In-Person Shopping

In speaking to consumer shopping preferences, it looks like online grocery shopping, food delivery, and food subscription boxes are here to stay. Many consumers prefer the option to receive food and beverage products at their door. For instance, in recent a study by Drive Research, the use of grocery delivery services in 2024 have risen 56 percent compared to 2022. Additionally, the use of grocery curbside or pickup in 2024 have risen 100 percent compared to 2022, further showing the decline of in-person shopping for food and beverage items.

Cost of Food and Beverage Products a Large Concern

Additionally, inflation and rising costs for everyday items, including food and beverages, have consumers rethinking how much and what brands they buy. For example, a recent study showed 54 percent of respondents stating they’ve reduced how much, and unfortunately, 20 percent said they were skipping meals to save money on food. Data from another survey found that 43 percent of consumers are cooking dishes with less meat to save on grocery costs. Others are choosing to purchase cheaper cuts of meat.

Private label brands continue to see growth as shoppers look to save money whenever possible. In fact, according to Numerator, private label brands hold almost a quarter of sales in the grocery sector. The Private Label Manufacturers Association shows that private label sales saw 2.5 percent growth compared to a decline of 0.8 percent by national brands in 2024.

Taste and Experience is a Must

Consumers want to feel good about what they eat. They want nutritious options that alight with their dietary preferences or health goals. In a survey but the International Food Information Council, 54 percent of consumers consider the healthfulness of food in their purchasing decision. Yet, even with the health benefits, they still want their products to taste good, as Datassential shared 35 percent of them purchase items that sound both delicious and healthy.

Consumers are interested in trends like unprocessed foods, natural ingredients, anti-inflammatory, and hydration. Alcohol-free and non-alcoholic beverages are also a rapidly growing trend, with 2 in 5 consumers abstaining from drinking alcohol.

Consumers generally want a positive experience with food and beverage products. While it’s fuel for the body, it can also serve as a source of community, entertainment, and more. In one study, 53 percent of consumers see experiences as essential to their personal lives, especially among the younger generations since the pandemic. They’re interested in trying to tastes and spices, products that bring a sense of nostalgia, or food and beverages that tie in with a story, as shown by the recent increase in pop-up restaurants and bars.

supply chain Challenges

Since the pandemic, supply chains have been seen more of the limelight. As shown by rising costs faced by consumers, food and beverage supply chains have been challenged by shortages of raw materials, disruptions like strikes or a bridge collapse, and a growing demand by consumers for transparency and speed.

Consumers are also becoming more interested in knowing where the products they buy come from. According to a study by IBM, nearly 70 percent of consumers want to see a brand’s sourcing practices. They want to know how the products they buy were manufactured. They’re looking for companies who show concern to how their manufacturing affects the planet’s life span and how their product is raised or grown. Consumers want to feel like the products they choose to buy will make a difference.

According to a Mckinsey report, food and beverage supply chains see supply chain disruption roughly once every three years. A 2023 risk report shows that supply chain executives are concerned about disruptions from climate change, environmental factors, and geopolitical conflicts. Another risk report shows that 73 percent of companies experienced higher supply chain losses within that past two years. Because of this, building supply chain resiliency is a huge trend for food and beverage companies.

ARTIFICIAL INTELLIGENCE & AUTOMATION

Artificial intelligence (AI) is a buzzword across all industries, but how could it affect food and beverage? One way is through providing clearer insights into shopper preferences, helping companies better market to them to grow brand loyalty. It can help with supply chain optimization, helping businesses better understand consumer demand and optimize production planning and management, reduce overstocking, and minimize waste. Some companies, like Campbell Soup Co., are using AI to help with product development, tracking data and discovering what its customers want next.

According to WifiTalents, 62 percent of food and beverage executives believe AI will have a significant impact on their industry within the next five years. With the uses for AI in the food and beverage industry being so extensive, it will be interesting to see how companies make use of it.

There’s also a lot to be talked about in AI and automation for the customer experience. Companies are looking into AI-driven customer service opportunities and ways to streamline customer interactions. You see a lot of this in the restaurant industry with the use of table side tablets, interactive menus, and mobile ordering and payment. AI is used in mobile apps to personalize menus and promotions based on customer preferences.

Growing Cold Storage Demand

The demand for refrigerated warehouses is continuing to soar to new heights. A report from Skyquest forecasts the U.S. cold storage market to increase with a compound annual growth rate of 13.5 percent through 2031, expecting to reach a value of $118.8 billion.

Temperature-controlled storage is critical to many sectors, from grocery to pharmaceutical companies. The growing demand for cold storage facilities comes the adoption of automation and technology, the popularity of ecommerce and demand for faster delivery, as well as online grocery platforms. There’s also a thriving demand for convenience foods – those that are usually chilled but ready to eat with little to no preparation.

STAY AHEAD OF TRENDS IN THE FOOD & BEVERAGE INDUSTRY

No matter the trends in the food and beverage industry, having a logistics resource, consultant, or expert is one way to stay ahead. Whatever phrase you want to use but ultimately, have support on your side for any complex situation. This is where a third-party logistics company (3PL), such as Trinity Logistics, can come in. We can help you find creative solutions to your logistics challenges.

Now, you’re likely wondering, “why work with Trinity Logistics?” For one, we’ve been serving cold chains for over 45 years! Whether you have a complex challenge or just need help with one shipment, we have the experience and quality carrier relationships to meet your needs.

You can also count on us to stay knowledgeable on what’s going on in your industry so you can stay updated too. We know that even in times of supply chain disruption, your industry doesn’t stop, so neither do we.

And lastly, what makes Trinity unique from other 3PLs and what our customers praise the most is our exceptional People-Centric service. We’re a company built on a culture of family and servant leadership, and that culture shines through in our service to you. It’s our care, compassion, and communication that you’ll notice and appreciate.

If you’re ready to have Trinity Logistics on your side for logistics support and expertise, no matter the industry trends, then let’s get connected.

Most of us over the age of 25 can remember when the World Wide Web made its debut. We remember the “beep-boop” sound of dial-up and the big chunky computers that were as wide as a television set in the 1990’s. It’s been almost 30 years since the dawn of the Internet. It’s mystifying to look at the impact it still has on our everyday lives. Because of the Internet, e-commerce was born, and the need for flatbed shipping has increased. 

The Beginning of ECommerce

Over time, ecommerce has taken the baton from traditional brick-and-mortar stores, leaving many big-box store retailers high and dry. Since Amazon Prime’s arrival in 2005, online shopping has exploded in the marketplace. The ease and convenience of it have forced many retailers to develop a strong online presence or risk closing their doors for good.

COVID-19 Creates Rapid Growth

Due to health concerns and social distancing practices, COVID-19 rapidly escalated the use of ecommerce. Total online spending in May 2020 was up 77 percent year-over-year (YOY), according to a report on online spending released in June by Adobe. In that report, Vivek Pandya, Adobe’s Digital Insights Manager, states that it would have typically taken 4-6 years to see the level of growth in online shopping that was seen then. Contactless online ordering helped individuals attempt to limit their exposure to the virus by shopping from home, so it’s easy to see why those reported numbers were so high. 

Since the pandemic, the changes in the ways consumers shop have remained. While in-person shopping has increased compared to then, it still lacks in the amount of foot traffic that was received previously. Consumers continue to like the ease of online shopping, and with fewer in-person shoppers, companies are investing less in their brick-and-mortar locations, which has only made people less likely to want to shop in person. In fact, it’s estimated that 40,000 to 50,000 retail stores will close in the next five years, according to the UBS investment bank.

Ecommerce continues to experience growth, with 22 percent of retail sales being online in 2023, the largest U.S. ecommerce sales percentage to date, according to the U.S. Department of Commerce. As e-commerce growth carries on, it’s created a growing need for companies to expand their inventory and improve their ability to distribute their products. What used to be a problem of “too much” storage space for companies before the pandemic has quickly turned into a necessity in today’s time. 

The Need for Storage Space

As online distributors continue to see growth, their need for storage space has grown as well. Prior to Covid-19, one or two warehouses could keep a medium-sized company running efficiently. Now, more space is needed to keep up with the increasing demand of companies. Having more than one distribution center can be a huge benefit to a company’s ability to stay successful these days.

This all trickles down to the construction industry. As demand grows for new or renovated warehousing, the need for building materials to meet that demand has also increased.

How ECommerce Growth Affects Flatbed Shipping

Flatbed shipping has always been a leading mode of transportation for industrial freight. Lumber, stone, racking, and other building materials travel best on an open trailer due to their odd dimensions and additional weight requirements.

Looking for an extensive guide to keep on hand for your over-dimensional shipping?

Usually, flatbed shipping sees an increase in volume in the summer months. Construction companies take advantage of the warmer weather, which is most suitable for outdoor construction work. During this peak shipping flatbed season, it’s not unusual to see tightened capacity and higher freight rates, but any added demand for warehousing can add to that, making securing a flatbed carrier more difficult.

Strong Relationships Help

Having a relationship with a third-party logistics company (3PL can be a benefit to those who coordinate freight to be delivered to a job site. Typically, job site freight is very hands-on and has a perpetual knack for being time-sensitive. Installation crews are on-site to receive and install the material scheduled to be delivered. Even the slightest delay can cause significant ramifications to the completion of the construction project. Having a strong relationship with a 3PL can help companies mitigate risk, reduce costs, and provide peace of mind to those who are coordinating the freight.

Be Ready for Anything

It appears online shopping is here for the long-haul and whether it’s causing you to expand your warehousing or not a 3PL like Trinity Logistics can help you be prepared for any changes that may come your way. With Trinity, you’ll gain a Team of experts that can help you optimize your supply chain and arrange shipping for various of transportation modes, including flatbed, while offering end-to-end visibility of your shipments. No matter what changes the future brings, you can stay one step ahead when you choose to have Trinity Logistics by your side.

If you haven’t already noticed, cold chain logistics is currently a hot topic. The demand for fresh products and quality supply chain processes are at an all-time high. Recognizing these trends in cold chain and taking action will help you fulfill your customer’s needs. Let’s look at five trends going on in the cold chain industry.

1. An Increased Demand on Quality Products

Big trends in cold chain, specifically the food industry, has been the demand for fresher and higher-quality products. Consumers want their peaches to be juicier and their avocados to be riper. To satisfy the customers’ wants, you need to make sure the carrier that is shipping your product is well versed in cold chain management. They need to know how to avoid changes in the texture and taste of the produce when a shipment fluctuates beyond the required temperature. The focus on quality products means that refrigerated warehouses will need to maintain temperature zones.

Quality products don’t stop at fresh food. With the COVID-19 vaccine being administered, people want to make sure that what they’re getting injected into their bodies is safe. In addition, the amount of biological drugs and gene therapies is growing. Because of this, logistics companies are also widening their capacity for temperature-controlled transportation to meet the demand.

As we’ve stated in our Shipping Pharmaceuticals blog, cold chain logistics play significant role in the pharmaceutical supply chain. Manufacturers of these vaccines and medications need the cold chain to run smoothly to prevent any damage to the expensive drugs. Pharmaceuticals also need to arrive as good as new because medicine that has sat in incorrect temperatures for an extended period can be ineffective or detrimental to a patient’s health.

2. The Global Cold Chain Market is Booming

A recent report by Grand View Research shows that the global cold chain market size is expected to grow 14.8 percent from 2021 to 2028. Many nations have recognized a rising need to avoid food waste and loss of healthcare products due to spoilage. Moreover, the demand for fresher products is on the rise. Nations such as China and India are boosting their global cold chain efforts to meet the demand for their exports. International trade liberalization has also boosted the use of cold chain, globally. Because it is the global cold chain is rising, manufacturers need to become more specialized in their products so they can ship their goods to a wider variety of customers across the globe.

3. Stronger Regulations

Another trend in the cold chain has been stricter regulations on shipped products. Both globalization and the recent rise of food and pharma counterfeit incidences have caused production and cold chain rules to be reevaluated. The beginning of these rules started with the Food and Drug Administration’s Food Safety Modernization Act. This act requires anyone in the food supply chain to document every step of the process. Certain products like fruit must be traced all the way back to the point of origin.

Being proactive with these firm rules and regulations has also been a common trend across cold chain logistics. Manufacturers are strengthening their processes in-house to help mitigate any issues with their cold chain. Safety should be a top priority for the manufacturer when shipping through cold chain.

4. Innovative Packaging

Specialized packaging has been a trending topic in the cold chain industry. Whether it be for pharmaceuticals or food and beverages, manufacturers have been more specific on how they want their products packaged.

For pharmaceutical companies, there has been a conflict between packaging and transportation costs. For smaller shipments moving through the supply chain, a company can choose either a 24, 48, or 72-hour packaging that will protect the products from becoming ineffective. The more insulated the packaging is, the higher the cost. Globalization is also a major factor in this dilemma. If the U.S. ships cold chain products like pharmaceuticals overseas, it is imperative that the carrier knows to re-ice the shipment if any delays occur.

Companies that specialize in temperature-controlled packaging are making single-use or reusable packaging for all your cold chain needs. There are new refrigerated shipping systems that don’t require gel coolants, and they weigh much less than typical cold chain packages. These systems use evaporative, reactive cooling technology that responds and adjusts to fluctuating temperatures.

Whether it be significant innovations such as evaporative cooling technology or something as simple as adding handles and straps to your packaging, traditional packaging is starting to become a thing of the past. Companies are trying to gain that competitive advantage of being the most innovative packaging company for your cold chain needs.

5. Outsourcing to a Third-Party Logistics Company

Another demand in the cold chain has been for efficiency and visibility throughout the supply chain. Companies don’t like to be left in the dark when it comes to the transportation of their products. That is why a 3PL provides a wide range of technology services to promote transparency within the supply chain.

Consumers today are becoming more conscientious about their needs. No one wants to settle for spoiled milk or ineffective pharmaceuticals. It is imperative that manufacturers stay up to date on these current trends in the cold chain in order to satisfy their customers. Doing research and staying in the know are both imperative ways for your business to be successful. Being proactive and listening to what customers want is the best way to stay on top in the cold chain industry.

Interested in learning more about Trinity’s experience in cold chain?

Picking up medicine and vitamins from your local store or pharmacy may be a simple task for you. However, shipping pharmaceuticals is a meticulous challenge. Even more so as cold chain logistics often plays a big role in the pharmaceutical supply chain. Let’s dive in and find out what makes shipping pharmaceuticals so complex.

The Basics of Pharmaceuticals

Pharmaceutical companies have made great advances within the past few decades in making medications specialized to certain individuals and rare diseases. These specialized pharma products come in several different types.

One form of pharmaceuticals is biologicals. This includes vaccines, blood, allergens, genes, and tissues. Biologicals have been popular recently due to the demand for a COVID-19 vaccine.

Another form of pharma products are prescribed drugs such as opioids, stimulants, and benzodiazepines. These have a high theft risk and need to be handled with extra security.

Lastly, there are over-the-counter (OTC) medicines like vitamins, minerals, and supplements. All these different types of pharmaceuticals can come in the form of either a liquid, ointment, or a solid.

To learn more about the basics of shipping pharmaceuticals, check out the video below.

Transportation Regulations

The nature of shipping medicine is delicate. Since it can be so complex to ship, regulations are a big thing to keep in mind. Not considering regulations can be detrimental to the flow of your supply chain.

Rules for shipping pharmaceuticals start when manufacturing begins and all through the supply chain. The Food and Drug Administration (FDA) and the Current Good Manufacturing Practices (CGMP) made guidelines for pharmaceuticals to set specific standards for manufacturing, storage, and distribution.

Having standardized vehicle equipment is necessary when shipping this form of freight. If products are being transported by road, each truck must have temperature control and security measures in place. Routine cleaning of the trailer is required in order to prevent cross-contamination of different products.

Another regulation that is crucial in transporting pharmaceuticals is keeping everything on record. Transportation records and training documentation must be stored for all involved parties.

Cold Chain Maintenance

In 2019, cold chain logistics accounted for 26 percent of the pharmaceutical industry. Maintaining cold chain logistics throughout your shipment plays a big part in preserving the quality of most pharmaceuticals. Roughly 70 percent of medicine needs to be climate-controlled. This is why climate-controlled trucks are necessary when shipping pharmaceuticals. Climate-controlled trucks run their cooling unit independently. The refrigeration unit keeps your freight at the proper temperature and provides insulation, so products stay protected from outside elements.

Proper packaging of these products is important. Selecting the appropriate level of temperature-controlled packaging that best fits your shipment will help protect your pharmaceutical products even more. Using insulated containers to prepare your freight for transit can also help protect against exposure to heat, light, and moisture.

Temperature fluctuation as little as two degrees can ruin a pharmaceutical product. Having the vehicle regularly inspected and serviced will help make sure there is no variation in temperature during transport. The key to cold chain logistics is to be proactive so that your freight remains as unscathed as possible.

Risks When Shipping Pharmaceuticals

With valuable freight comes high risks. Without proper temperature control, pharmaceuticals can become ineffective or even deadly. A change as little as two degrees in temperature can ruin a pharma product. Carriers must be diligent with their temperature logs and stay proactive throughout the shipment to prolong the effectiveness of this important freight.

Cargo theft is a big risk when shipping pharmaceuticals. Prescribed drugs like opioids are especially at high risk of theft. Most pharmaceutical warehouses have high security measures, but the majority of theft happens while in transit. This is why it is necessary to find quality carriers that will ensure the safety of your freight.

Another obstacle is that medicine is becoming more specialized. More personalized medicine is being made for individuals with specific and rare diseases. These pharmaceuticals ship at low volume but high value. With specialized pharmaceuticals comes specialized temperatures. It is important to communicate with your carrier what your unique freight needs are in order to deliver safely.

Choose a 3PL with Experience in Cold Chain

Regardless of the type of drug or the shape it takes, all pharmaceuticals need to be handled with great care. This is where a third-party logistics company (3PL) can come in handy.

Shipping pharmaceuticals is a job that requires delicacy and expertise. Choosing a 3PL that has an extensive background in cold chain logistics is the way to go. As a Burris Logistics company, we can offer you cold chain support from production to delivery, or anywhere in between. You can feel at ease knowing your pharmaceuticals will be in good hands.

Want to learn more about our experience in cold chain?

The economic and operational effects of COVID-19 on the trucking industry have been challenging and devastating. Many have warned the true storm for the trucking sector has yet to arrive, and the effects witnessed to date have been warning signs of what’s yet to come.

Not all operations have been equally affected, but tough times are on the horizon for some trucking companies. The early impacts of the pandemic were at ports, as containers shipped in from China were affected there first.

As lockdowns happened and with events canceled, companies that specialize in moving concert and trade show exhibit items were affected the most. Some fleets dedicated to hauling equipment for events have noted that economic hardship. Others in similar sectors have reported equal occurrences.

THE HARDEST-HIT SECTORS

The food industry has been especially hit hard. Many restaurants and bars have had to close, except for takeout outlets that have stayed afloat. This has left food-service trucks with dwindling sources of income. The International Foodservice Distributors Association predicts the industry will lose $24 billion during the last three months of 2020as the pandemic closes eateries, hotels, and schools.

Another group affected are those who service the automotive industry. Many manufacturers have enacted temporary shutdowns, which affects fleets in more than just their shipments. This limits their supply of new parts for trucks when they need repairs.

Those servicing some of the retail sectors may also struggle. Malls and retail stores are closing at an astounding rate worldwide, slashing demand for the transportation of various goods. While online shopping and delivery could offset the losses faced by trucking companies to a degree, it will take a while for the playing field to level.

THE SECTORS BENEFITING FROM THE PANDEMIC

Of course, fleets who haul sanitizer, toilet paper, groceries, and home office supplies are staying exceptionally busy. Some fleets are even adding more freight to their rosters to keep their trucks running, while others are expanding their operations to keep up with demand.

DAT Solutions has noted that urgent retail orders continue to drive up spot rates for reefer and van equipment. The company says nervous shoppers buy as much as they can for every trip, and retailers are relying more on spot market providers to restock shelves rapidly when other truckers face delays.

Now that a significant part of the world’s population is home, families are also cooking more often. This means that freight demand for grocery and food-related truckers will continue to soar, creating a new market trend many can capitalize on if they’re quick on the uptake.

As retail takes a downward turn, an increasing number of people are shopping online and relying on curbside pickups. Amazon has reportedly been so busy that it’s hired another 100,000 staff members to keep up, while Walmart has enlisted the help of another 150,000 employees.

PREPARING FOR THE UPCOMING RECESSION

While many experts are hailing these changes as a ‘new normal’, it’s important to remember that a recession is looming. If countries put in place secondary lockdowns as the second wave of COVID-19 hits, freight won’t be flowing at the same time. The trucking industry will eventually recover if this proves to be the case, but the time frame for this recovery will depend on how long the virus takes to peak, and how long the recession will last. 

WHAT TRUCKING COMPANIES CAN DO

What can fleets do to counteract the potential effects of a second wave? That will depend on the sectors they operate in. Trucking industry professionals have warned some companies may struggle to keep their drivers busy while others will be rushed off their feet in the face of an upswing in demand.

Those in the grocery and refrigerated goods sectors aren’t likely to feel the pinch, even once the recession has arrived. Those in the general freight space may have fewer tons, fewer route miles, and fewer loads to haul. It’s realistic to expect that some carriers will not survive.

In the meantime, trucking companies should work to keep their drivers busy in any way they can. They should remain financially prudent and cut costs where necessary without compromising on safety or service quality. On the other end of the pandemic, there will be many companies that will need to restock their supply chains and they’ll need partners to help them achieve this. 

If you’re a trucking company owner or associated professional, get out there, network, talk to your customers and determine what their needs will be once the outbreak has died down. Even if business is not booming right now, you need to find a way to keep drivers in the short term so that your company does not emerge with under-used equipment and a lack of drivers.

Keep your business alive and kicking and be prepared for a decline in business and revenues. We are sitting on the precipice of some major changes in both the world’s economy and the trucking sector. It will be possible to survive, but only with the right approach and strategic partnerships.

Guest Author: Lori Dodson

Does the COVID-19 vaccine have your cold chain logistics worried? If not, you should be taking it into consideration. 

Everyone’s over the pandemic. We’re ready to be back attending public events, traveling to popular destinations, have our kids in school full time, and more. So much of 2020 has had to cancel or make the move to virtual and it’s not the same. Additionally, here at Trinity, the health and wellbeing of our Team Members, Authorized Agents, Carriers, and Customers is our number one priority.

Pfizer, Moderna, and others have quickly turned around vaccine solutions, making the light at the end of the tunnel seem in reach. With everyone looking to gain some sense of normal back into their lives, it means all hands will be on deck for the upcoming vaccine distribution. That means other cold chain commodities, will fall lower in priority. How will this affect your cold chain logistics?

THE IMPORTANT ROLE OF COLD CHAIN LOGISTICS FOR A COVID-19 VACCINE

Vaccines are fragile. Most have to store at specific colder temperatures to protect them from deterioration. If left out too long or exposed to fluctuating temperatures, vaccines can lose their effectiveness. According to the World Health Organization, one in four vaccines loses its integrity during transit. Due to their fragility and the extensive attention to detail that the logistics sector has to maintain, roughly 80 percent of a vaccine’s cost comes from its storage and transport. 

Usually vaccines transport in temperature ranges of two to eight degrees Celsius. Currently, nine COVID-19 vaccines are in their Phase 3 trials, with two, Pfizer and Moderna, being very close to distribution. Because of the quick turnaround the world is seeking, these vaccines are containing higher protein bases which need ultracold temperatures, as low as minus 80 degree Celsius. Those receiving vaccines will need to get two doses, each about three to four weeks apart. Over time, vaccines will be developedrequiring more typical refrigeration temperatures and single doses. Regardless, cold chain logistics will continue to play a vital role in the distribution of a COVID-19 vaccine and for now, the specifications will be strict. 

ALL COLD CHAIN HANDS ON DECK

Currently, Pfizer expects to produce and distribute up to 50 million doses of their vaccine in 2020 and 1.3 billion in 2021; Moderna expects 20 million in 2020 and anywhere from 500 million to one billion in 2021. Not to mention the other vaccines that will make their way as well. It is estimated that to immunize 7.8 billion people worldwide, 10 billion doses of a coronavirus vaccine will be needed.

The FMCSA recently announced their most recent extension of the Hours-of-Service waiver to February 28^th and included carriers transporting COVID-19 vaccines. This effort is expected to be the biggest challenge the logistics sector has ever faced. Currently, logistics experts are struggling to plan ahead because of the lack of very specific information that they need to know about, such as the packaging, amount of dry ice needed to maintain temperatures, warehousing, equipment needed, and more. 

Shipping temperature-sensitive items? Check out our Temperature Shipping Guide.

AREAS TO WATCH

Through Operation Warp Speed, Moderna and other upcoming vaccines will deliver to the Mckesson distribution center in Irving, Texas, and then arranged deliveries to hospitals, nursing homes, and other determined points. Moderna will manufacture its vaccine in New Hampshire, Pennsylvania, and Indiana. 

Pfizer, however, has chosen to not distribute through Operation Warp Speed. They manufacture their vaccine in Michigan and plan to ship with transportation providers such as UPS and FedEx to locations around the country. They’ve chosen to directly ship to gain greater control and real-time insights into the status of their frozen vials. 

HOW IT AFFECTS CAPACITY

Obviously, reefer capacity is going to be needed for vaccine distribution. But, it’s already tight. If you’re in the cold chain, shipping temperature-controlled items, prepare to continue paying premiums for this service.

Recently, reefer rejection rates have been at almost 50 percent. That means almost one out of every two reefer shipments are being turned down by carriers. When the rejection rates are higher, the tighter capacity is, and the higher cost for you to get your cold freight moved. Reefer rates are already 20 percent higher year-over-year due to increased consumer demand while spending more time at home. 

WHAT THIS MEANS FOR YOU

If you ship temperature-controlled goods, the upcoming vaccine distribution efforts should be a concern for your business and logistics, especially if you regularly ship through less-than-truckload (LTL). Many top tier transportation companies such as UPS, FedEx, and DHL are ready to help Operation Warp Speed in the vaccine distribution. Everyone knows the vaccine distribution is the highest priority, but transportation providers also know they will be well compensated for their service of transporting it. This means other cold chain commodities will be pushed further down in priority. This will only continue on as more COVID vaccines become available to be distributed and until risk of COVID is greatly reduced. In the form of some ultracold transportation logistics, winter is coming and the demand for reefers will continue to rise. 

SHIPPING COLD CHAIN? WHAT YOU CAN DO TO PREPARE

Communicate.

Get ready now. Start talking to your relationships and providers to make sure you will have trucks to move your freight. Talk to your customers. Let them know now that things may slow down or get behind with the upcoming and expected vaccine distribution efforts.

Things may be getting tougher for you, but I think we all know this is good. We’re one step closer to returning to some sense of normalcy. Hold on, because the light at the end of the tunnel is there. It’s now in reach. We’re just in for a few more bumps in the road, but we’ll make it. 

Looking for an expert in cold chain logistics? 

Author: Christine Morris

Onshoring, nearshoring, reshoring – these are terms that we keep hearing in growing popularity lately. Even before Covid-19, many companies have considered onshoring their operations due to concerns about quality and supply chain disruptions. Political tensions and rising tariffs also triggered the growing considerations. 

When Covid-19 hit, it led to sky-high air and ocean freight rates. Any companies with operations in China saw their productions come to a halt. Offshoring your operations has never been riskier. You never know what could happen in another region and how that could affect your operations if offshored. So, the question is, should you be onshoring your operations?

A BRIEF LOOK BACK

Before the 1980’s manufacturing had a large presence in the United States. Technology improved communication and global transportation, so companies saw the opportunity to save on costs by offshoring their operations outside the United States. Offshoring grew and became the norm, until recently. Onshoring has become popular again due to politics, rising labor costs, and increased demand for higher quality products.

WHAT DOES IT ALL MEAN?

Onshoring, nearshoring, or reshoring; it all refers to the overall practice of moving manufacturing operations from foreign soil back to the United States. It may also refer to the practice of outsourcing to domestic contract manufacturers rather than overseas. Nearshoring can also refer to the moving manufacturing to outside the United States, but not across ocean waters. An example of nearshoring would be having operations moved to Mexico.

Offshoring involves outsourcing manufacturing assets far outside of the primary country of operations. American companies have traditionally offshored manufacturing to Asian or Southeast Asian regions. Offshoring has been used in situations where production, materials, and labor costs outweigh travel complexities and shipping costs. 

ONSHORING VS OFFSHORING WHEN IT COMES TO..

..YOUR CUSTOMERS

Poor customer service can have a huge impact to your company’s success. More than 50% of consumers said they would never do business with a company after just one negative experience. When choosing to onshore your processes, it gives you the benefit of serving and supporting your customers from “home”, which reduces your risk of your customers receiving poor service elsewhere. 

Customers nowadays like to support products made in their own country. They feel that it further benefits the local economy and they feel more confident in a products quality when its been made in the same country. Depending on your customer base, this could give you a huge advantage over your competitors. 

Due to the recent Amazon Effect, customers now expect their products delivered to them in days. Shorter travel times can make that expectation easier to meet. If suppliers are farther away, delivery times can sometimes be uncertain and take longer. Customers also want full transparency on their freight’s travel, and onshoring can make that more successful on your end. 

..YOUR SUPPLY CHAIN

Onshoring can offer you better supply chain management. It allows shorter lead times because companies can operate all within the same time zone (or at least closer to each other than if offshoring). Not to mention other processes that can take time, such as design and approval. All parties in the supply chain can have closer relationships because they won’t have to deal with the challenges of long distances and varying time zones. Nor do you have to worry about the risk of facing language or cultural barriers among locations. Onshoring is becoming very popular for those organizations that need a lot of communication to be successful.

..YOUR COSTS

With rising labor and shipping costs, many find savings are no longer there when it comes to offshoring. Time is money and offshoring can add weeks to delivery times. Shorter distances with onshoring mean reduced (and less complicated) transportation costs. This also means less fuel used, giving you the benefit of being greener (and customers like that). 

As time goes on, overseas economies are further developing, taxing is changing, labor, wages, and shipping costs are all on the rise; all making it less profitable to handle business offshore. Tariffs have risen in recent years, with some commodities up to a 25 percent charge. By choosing to even nearshore your operations rather than offshore, you can avoid those increased costs. 

There’s also the possibility of defected goods arriving to consider when offshoring. Recalled products have been a rising concern. The defect rates of shipments from other countries can be so high at times that entire batches must be inspected upon arrival. The time and expense to do this and rework or scrap products, can wipe out the savings offshoring promised and even exceed your original budget.

THINGS TO ASK WHEN CONSIDERING ONSHORING

Tariffs, customs, duties

• How many fees will you incur in transporting your finished goods to distributors? Could these fees be avoided if goods are produced elsewhere?

Transportation costs

• Transportation can sometimes be your largest expense. You can reduce costs by shortening travel distances or choosing to work with a logistics company, like Trinity Logistics.

Lead times

• How long will it take to get the finished product in hand? Lead times vary depending on how far away production takes place. Make sure to consider design and approval time. This is one part of the process where differences can slow down your production.

Political environments

• What is the political climate like in the region where your goods are produced? No country is immune to civil unrest. What is the political climate like between your primary company’s country and where the products are made? Consider any chance of future supply chain disruption, and those tariffs. 

BEFORE YOU DECIDE..

Before you make your decision on whether to onshore or offshore, make sure to consider all factors. Onshoring may seem like the answer right now, but will it still in the future? If transportation costs and delivery disruptions are your main concern in business, consider looking into outsourcing your logistics with third party-logistics (3PL), like Trinity. Choosing to work with a 3PL can offer you some of the same benefits as onshoring, but with less work on your part. 

The COVID-19 pandemic is currently turning the world upside down. With the changes caused by it, the logistics industry has been evolving with it. Many brokerages have been struggling to keep up with the changing freight patterns. However, this week it was announced that Trinity Logistics ranked three spots higher in the Transport Topics Top Brokerage Firms listing, from #18 to #15. Trinity has continued to grow despite any industry disruptions last year and will continue to move forward amidst this pandemic.

Technology

Trinity has invested in technology over the years to maintain the resources needed by customers, carriers, and Team Members. Due to this forward-thinking, all Team Members were prepared to transition to a remote work environment before shelter in place orders were issued by the governments. The entire company was remote within days and without skipping a beat. This focus on technology preparedness ensured that the service level never faltered. Trinity’s goal is to keep our Team Members safe while continuing to serve the needs of our customers and carriers.

It is because of the Technology Team that Trinity has also been able to continue to grow our technology services and offerings during this time. This week, Trinity launched the new Book Now option as one of a handful of brokers given early access to partner with DAT in this new venture! This feature will continue to enhance our ability to handle increased freight needs and strengthen the tools Team Members and Authorized Agents have to grow.

Financial Stability

Trinity Logistics has a long history as a financially stable company. From being able to pay Authorized Agent commissions weekly upon delivery, extending credit to all sized companies, and offering quick payment options for carriers. Trinity’s solid foundation of 40 years in business has prepared our company to continue these practices even in times of crisis. During this time, it has been reassuring for our carrier network that Trinity has been able to keep up their quick payments. Our Authorized Agents are a huge asset. The foundation that we have established allowing Trinity to continue to pay commissions to this team without change has been a great way to serve these small businesses.

Legacy

In 2019, Trinity Logistics celebrated their 40^th Anniversary and in 2020, are celebrating the 30^th Anniversary of the Authorized Agent Division. Now a Burris Logistics company, Trinity Logistics has a long history of thriving in both growing and challenging markets. The continued success and growth of Trinity doesn’t depend on the challenging times, but on the Guiding Values that every Team Member and Authorized Agent live every day: Integrity, Legacy, Determination, Teamwork, Continuous Improvement, Excellence, Leaders, and Fun! These values were instilled in the company 40 years ago by the founders Ed and Deanna Banning, and continue to drive the company forward today.

The one foundation and most valuable asset that continues to drive Trinity Logistics forward are the Team Members. Trinity’s Team Members and Authorized Agents live the Guiding Values every day and put the needs of others first. Developing customized solutions, delivering excellent service, and constantly striving to be their best is what will drive Trinity Logistics through any challenging time.

AUTHOR: Jennifer Hoffman