Sustainability has emerged as a fundamental principle guiding business practices in global commerce’s contemporary and dynamic landscape. At the heart of sustainable operations lies sustainability in supply chains, which seeks to integrate environmental responsibility, social equity, and economic viability into the fabric of organizational processes. Within this framework, circular supply chains have garnered significant attention as a transformative strategy to mitigate environmental impact, foster resource efficiency, and drive long-term sustainability. While often seen as practicing carbon footprint reduction or manufacturing with bio-friendly materials, supply chain sustainability encompasses social responsibility and includes fair labor practices and other regulations protecting workers and communities. These are keystones to all supply chains, including chemical logistics, where safe and sustainable practices are paramount for success.

Why is Supply Chain Sustainability Critical?

The imperative for a sustainable supply chain stems from recognizing traditional linear supply chains’ inherent limitations and detrimental effects. These linear models, characterized by a ‘take-make-dispose’ approach, result in resource depletion, environmental degradation, and social inequalities¹. In contrast, a sustainable supply chain embraces circularity, emphasizing resource conservation principles, waste reduction, and closed-loop systems. Contrary to widespread thought, supply chain stability is not only ethically responsible but also economically encouraged. Sustainable supply chains that reduce waste often reduce costs and surplus through better record keeping, refined sourcing practices, and decreased waste disposal.

Increased Consumer & Investor Demands

There’s been a discernible shift in consumer preferences and investor priorities in recent decades toward sustainable and ethical business practices. Consumers increasingly demand transparency, accountability, and environmental stewardship from the brands they support. Similarly, investors are integrating environmental, social, and governance (ESG) criteria into their investment decisions, recognizing companies’ long-term viability and resilience with sustainable supply chains. As such, organizations that embrace sustainable and circular supply chains can enhance brand reputation, attract investment, and secure long-term competitiveness in the marketplace. For those in chemical logistics, sustainability has become vital to meeting consumer demands and the regulations that continue to mirror the public’s need for environmental and social protections.

Climate Change & Global Disruption

The urgency of addressing climate change and mitigating global disruptions underscores the importance of adopting sustainable supply chain practices, primarily for chemical logistics industries where improper material transportation can create environmental disasters. However, the risk of pollution extends beyond chemicals leaking into the environment—it also includes noise pollution, deforestation, and other facets of supply chains that can negatively impact ecosystems and communities. Minimizing and eliminating potential pollution promotes supply chain sustainability and eliminates waste more than contributing. Circular supply chains offer a holistic approach to reducing greenhouse gas emissions, minimizing resource extraction, and promoting renewable energy adoption. Organizations can enhance supply chain resilience and mitigate risks associated with climate-related events, geopolitical instability, and other global disruptions by localizing production, optimizing transportation networks, and embracing circularity.

What is a Circular Supply Chain?

A circular supply chain aims to maximize resource efficiency and minimize waste generation throughout the product lifecycle. Unlike traditional linear supply chains, which follow a linear trajectory from extraction to disposal, circular supply chains prioritize reuse, refurbishment, recycling, and remanufacturing.² Organizations can unlock value, minimize environmental impact, and foster a more sustainable economy by closing the loop on material flows and adopting innovative business models such as product-as-a-service and resource recovery.

Linear vs. Circular Supply Chains

The distinction between linear and circular supply chains lies in their fundamental approach to resource utilization and waste management. Linear supply chains operate on a ‘take-make-dispose’ model, where resources are extracted, transformed into products, and discarded after use. In contrast, circular supply chains aim to close the loop on material flows, enabling resources to be reused, refurbished, or recycled at the end of their lifecycle. By embracing circularity, organizations can minimize waste generation, optimize resource utilization, and create a more sustainable supply chain ecosystem.

The Role of Circular Supply Chains in Cultivating Supply Chain Sustainability

Circular supply chains play a pivotal role in driving the transition towards more sustainability in supply chains. Organizations can minimize environmental impact, enhance social welfare, and drive long-term economic value by prioritizing resource efficiency, waste reduction, and closed-loop systems. Moreover, circular supply chains enable organizations to meet the evolving expectations of consumers, investors, and regulatory bodies, thereby enhancing brand reputation, attracting investment, and ensuring long-term competitiveness in the marketplace.

Circular Supply Chain Management in Chemical Logistics

Circular supply chain management in the chemical industry is pivotal, given the industry’s substantial environmental footprint and resource-intensive processes ³. Chemical companies play a crucial role in advancing circular supply chain principles, encompassing a spectrum of strategies to optimize material flows, minimize waste generation, and promote resource recovery and recycling. By embracing circularity, chemical companies can enhance their operational efficiency and make significant contributions to environmental sustainability and the transition towards a circular economy.

As chemical companies tend to begin or make up the first links of the supply chain process for countless global products, embracing sustainability in chemical logistics goes a long way in cultivating sustainability in supply chains for thousands of industries worldwide.

Optimizing Material Flows

Central to circular supply chain management in chemical logistics is the optimization of material flows. This involves streamlining processes to minimize resource inputs and maximize the utilization of raw materials. By implementing efficient production techniques and adopting innovative technologies, chemical companies can reduce material wastage and enhance resource efficiency throughout the supply chain. Additionally, optimizing material flows enables companies to minimize energy consumption, lower production costs, and improve overall operational performance

Minimizing Waste Generation

A key objective of circular supply chain management in the chemical industry is to minimize waste generation at every stage of the production process. This entails implementing waste reduction strategies, such as process optimization, product redesign, and waste-to-energy initiatives. Chemical companies can mitigate environmental pollution, conserve natural resources, and reduce their ecological footprint by prioritizing waste minimization. Moreover, minimizing waste generation contributes to cost savings and enhances the overall sustainability of the supply chain.

Promoting Resource Recovery & Recycling

Circular supply chain management emphasizes the importance of resource recovery and recycling. This involves capturing and repurposing materials that would otherwise be discarded as waste. By implementing recycling programs, recovering valuable components from by-products, and exploring alternative uses for waste streams, chemical companies can create closed-loop systems that maximize resource utilization and minimize environmental impact ⁴. Promoting resource recovery and recycling helps companies meet regulatory requirements, fulfill sustainability commitments, and enhance their reputation as responsible corporate citizens.

American Chemistry Council’s Sustainability & Circularity Recommendation

The American Chemistry Council (ACC) is at the forefront of promoting sustainability within the chemical industry. Through its Sustainability Priorities initiative, the ACC provides guidance and resources to help chemical companies integrate sustainability into their operations. Of particular relevance is the ACC’s Circularity recommendation, which emphasizes the importance of adopting circular supply chain principles to achieve sustainability goals. By aligning with the ACC’s recommendations, chemical companies can leverage industry best practices, collaborate with stakeholders, and drive meaningful progress towards a more sustainable future.

Benefits of Circular Supply Chains for Chemical Logistics

Adopting circular supply chains offers numerous benefits for chemical logistics, ranging from enhanced resource efficiency to reduced environmental impact. Chemical companies can streamline logistics operations, reduce costs, and enhance supply chain resilience by optimizing material flows, minimizing waste generation, and promoting resource recovery. Moreover, circular supply chains enable chemical companies to meet regulatory requirements, satisfy customer expectations, and drive innovation in the marketplace. The chemical industry can shape a more sustainable future for generations to come through collaboration, innovation, and a commitment to sustainability.

Implementing a Circular Supply Chain in Your Logistics Company

Logistics companies must embrace innovation, collaboration, and transparency across their operations to implement circular supply chain practices. Strategies such as design for circularity, reuse and refurbishment, material recycling, and waste minimization are integral to this endeavor. Furthermore, leveraging technologies, fostering consumer education, and forging partnerships with suppliers is essential to creating a more sustainable supply chain ecosystem.

Green Logistics & Sustainable Supply Chain Management

At CLX Logistics, we’re committed to driving positive change and fostering a more sustainable future by adopting and encouraging circular supply chains for our partners. A sustainable supply chain surpasses standard responsible business practices and requires all participants to consider how their processes and actions can be supported by nature and society. Following international standards such as the GHG Protocol, we deliver a sustainable supply chain that reduces the environmental impact of your transportation operations and increases your business benefits.

Find out how CLX minimizes the effects of logistics on the environment.

Sources

¹ https://www.igi-global.com/dictionary/take-make-dispose-model/87704#google_vignette

² https://www.americanchemistry.com/the-science-behind-sustainability/chemistry-sustainability/circularity

³  https://www.ey.com/en_us/chemicals/can-repurposing-drive-your-purpose-in-a-circular-economy

⁴ https://www.epa.gov/hw/hazardous-waste-recycling

How to Elevate Your Logistics Operations with AI & ML Technology

Global supply chain organizations are embracing digitization to propel their supply chain planning to new heights. This transformation is not just a technological upgrade but a strategic move to foster innovation and support the ambitious growth goals of the organization.

Within the chemical industry, challenges such as regulatory compliance, market volatility, and stringent safety measures require innovative solutions. The need for solutions is where the power of digitization comes into play, addressing these challenges head-on. Whether achieving real-time compliance tracking, navigating market uncertainties through advanced analytics, or reinforcing safety protocols via secure data exchange, the digital revolution within the chemical supply chain emerges as the critical factor in surmounting these difficulties.

What is Supply Chain Planning?

Supply chain planning is the process of efficiently and effectively managing the entire lifecycle of a product or service from its initial design and development through production, distribution, and, ultimately, delivery to the end customer. Supply chain planning aims to ensure that the right products are available at the right place, time, and quantity while minimizing costs and optimizing overall efficiency. Companies that have streamlined their supply chains experience a 15% reduction in supply chain costs, maintain inventory holdings below 50%, and achieve cash-to-cash cycles that are three times faster.[1]

Chemical supply chain planning specifically refers to applying supply chain planning principles and strategies within the context of the chemical industry. The chemical industry is characterized by the production and distribution of various chemical products, including raw materials, intermediates, and finished goods. Managing the supply chain in this industry involves unique challenges and considerations due to the nature of chemical products, regulatory compliance, and safety requirements.

Components of the Supply Chain Planning Process

Planning in supply chain management is of the utmost importance for sustained success. Select components form the backbone of a well-orchestrated supply chain, allowing businesses to respond adeptly to market demands, mitigate risks, and optimize resources for sustained success. These components include:

Demand Forecasting

Accurate prediction of customer demand is the cornerstone of effective supply chain planning. It involves analyzing historical data, information such as market trends and other relevant factors, and the knowledge to anticipate future demand accurately. Data informs transportation capacity and rates. The information identifies the opportunities and inefficiencies in a particular spend market. Knowledge pulls in specific rate structures and data points to determine how to save costs. For the best Demand Forecasting decisions, use transportation-managed analytics such as those outlined below.

Inventory Management

Balancing inventory levels is essential to avoid stockouts or excess stock. Efficient inventory management ensures that the right products are available at the right time, minimizing costs and maximizing customer satisfaction.

Response & Supply Planning

This component focuses on crafting responsive strategies to address unexpected disruptions in the supply chain, ensuring that the production and delivery processes remain agile and adaptable.

Sales & Operations Planning (S&OP)

S&OP involves aligning sales and operational teams to make informed production, inventory, and distribution decisions, optimizing overall business performance.

Demand-Driven Replenishment (DDMRP)

DDMRP is a method that combines planning and execution to synchronize supply chain processes with actual demand, promoting flexibility and reducing lead times.

Supply Chain Monitoring

Monitoring and analyzing key performance indicators (KPIs) is crucial for identifying bottlenecks, optimizing processes, and ensuring continuous improvement in planning and supply chain management processes.

How efficient is your freight management system? Is it operating at peak performance and driving customer satisfaction and business results on all fronts? These can be difficult questions to answer. Consider these six core freight management KPIs as a great starting point:

Supply Chain Digital Transformation

The integration of digital technologies has become a catalyst for profound transformations across various sectors, and the supply chain management industry is no exception. The strategic implementation of advanced technologies has brought about a paradigm shift to enhance efficiency, visibility, and agility in the entire supply chain ecosystem. This transformative journey encompasses a spectrum of innovative tools, including artificial intelligence (AI), the Internet of Things (IoT), blockchain, and data analytics, which collectively revolutionize traditional supply chain models.

Supply chains incorporating AI technologies demonstrate a 67% increase in efficiency compared to conventional supply chains that don’t leverage AI.[2] Hence, it is no surprise that a recent industry survey found that 97% of respondents anticipate AI’s influence on product development and manufacturing.[3] Of these, 85% have already embraced these technologies or are actively in the adoption process. As organizations embrace this digital evolution, they streamline operations and gain a competitive edge by staying ahead of the curve.

Challenges Faced by Chemical Supply Chain

The chemical industry faces unique challenges in its supply chain, including regulatory compliance, volatile market conditions, and the need for stringent safety measures. Digitization offers a comprehensive solution to better manage and optimize for these challenges.

How the Digitization of Supply Chains Solves Issues Faced by Chemical Logistics

This digitization resolves specific challenges and brings about a holistic transformation, optimizing processes, improving compliance, and fortifying safety measures.

• Regulatory Compliance: Digitizing supply chain processes allows for real-time tracking and documentation, ensuring compliance with regulations throughout the supply chain.
• Market Volatility: Advanced analytics and forecasting tools powered by artificial intelligence (AI) and machine learning (ML) help anticipate market changes and proactively adjust supply chain strategies.
• Safety & Security Concerns: Digital solutions enable the implementation of robust safety protocols, traceability, and secure data exchange, mitigating risks and ensuring the integrity of the supply chain.
• Complex Logistics: Digitization provides visibility into the entire supply chain, allowing for better coordination and communication among stakeholders, thereby simplifying complex logistics.

Dive deeper into how Transportation Managed Analytics is building and managing next-generation supply chain’s by finally answering the questions that close the gap between visibility, performance, spend and risk. 

Whitepaper: Rethinking Supply Chain Performance with Transportation Managed Analytics

Planning for a Supply Chain Digital Transformation

Incorporating digital technologies into your supply chain is beneficial if you plan well and leverage them correctly. Embarking on a supply chain digital transformation journey requires careful planning and strategic implementation. Here are the key steps:

1. Create a Plan Based on Business Goals: Developing a comprehensive plan that aligns digitization efforts with overarching business goals is paramount. It involves identifying specific objectives such as cost reduction, improved customer satisfaction, or increased operational efficiency. The plan should also consider the long-term sustainability and adaptability of the digital transformation initiatives.
2. Evaluate Existing Systems: A thorough assessment of current supply chain systems, technologies, and processes is essential. It involves identifying inefficiencies, bottlenecks, and areas where technology can bring about significant improvements. Additionally, it’s necessary to consider the compatibility and interoperability of existing systems with new digital solutions.
3. Gain Stakeholder Buy-In: Engaging key stakeholders early in the planning process is crucial to understanding their concerns and expectations. Clear communication of the benefits of digital transformation to executives, managers, and employees is essential. Establishing a collaborative approach to decision-making ensures support at all levels of the organization.
4. Unify Data for Supply Chain Visibility: Integrating data from various sources, such as suppliers, manufacturers, and distributors, is fundamental to creating a centralized data repository. Your company should implement real-time tracking and monitoring systems to enhance visibility across the supply chain. Increased visibility facilitates data-driven decision-making by ensuring data accuracy and accessibility.
5. Automate Routine Processes: A critical step is to identify repetitive and time-consuming tasks in the supply chain workflow that your company can automate. Implementation of robotic process automation (RPA) or other automation technologies is necessary to streamline operations. The focus should be on reducing manual errors, improving accuracy, and accelerating the pace of routine processes.
6. Take Advantage of AI- & ML-powered Analytics: Implementing artificial intelligence (AI) and machine learning (ML) tools to analyze large datasets and extract actionable insights is pivotal. Leveraging predictive analytics enhances demand forecasting, inventory management, and overall decision-making. Continuous learning from data patterns and adapting to changing conditions optimize supply chain operations.
7. Train Teams on New Technology: Investing in comprehensive training programs to equip employees with the necessary skills to operate and leverage new technologies is essential. Providing ongoing support and resources facilitates a smooth transition to digital tools and systems. Fostering a culture of continuous learning ensures that teams stay updated on the evolving technology landscape and can adapt to future changes.

How well do you know your data? Check out CLX Gravity^TM, a proprietary platform that helps companies understand their supply chain analytics and optimize their supply chain.

Choose CLX to Improve Your Chemical Supply Chain Planning

While the efficacy of AI and ML in addressing the distinctive challenges of chemical logistics is evident, achieving a seamless integration of these technologies for comprehensive efficiency optimization can pose challenges. Optimizing your supply chain management requires a deep understanding of the industry and the relevant technology.

With expertise in AI and ML for addressing unique challenges in chemical logistics, our globally trusted chemical logistics division, CLX Logistics®, specializes in transportation solutions tailored to special regulatory, safety, and security requirements. From strategic design to operational support, our comprehensive supply chain consulting and transportation management services (including intermodal transportation solutions) optimize efficiency and savings. Partner with CLX to stay ahead in the digital transformation, gaining a competitive edge for sustained success in the chemical industry.

Are You in Control of Your Logistics Spend? CLX Gravity™ Can Answer That Question… And More!

CLX Gravity™ is an analytics platform that significantly improves transportation visibility by combining data from multiple systems within your business with data already available through CLX Global TMS™. This application provides a holistic view of your global supply chain while allowing CLX Logistics® to analyze information in a new way.

• Increase the value of your transportation spend faster than ever before
• Reduce IT involvement in your data analysis
• Reduce costs and complexity of combining and managing disparate systems

Connect with us to elevate your chemical supply chain management.

[1] The State of Supply Chain Management – Statistics and Trends

[2] AI set to transform supply chain management – Industry roundup: 13 April

[3] 2023 State of Manufacturing Report

Procurement management stands at the crossroads of technological innovation and strategic decision-making. As organizations strive to enhance operational efficiency, mitigate risks, and capitalize on emerging opportunities, the role of Artificial Intelligence (AI) and Machine Learning (ML) in procurement has become increasingly prominent.

Navigating Procurement Management Challenges with AI and ML

Procurement leaders face a myriad of challenges in today’s fast-paced and difficult-to-predict business environment. From optimizing operational efficiency to maximizing cost savings, organizations must navigate a complex landscape of competing priorities and evolving market dynamics. At the heart of these challenges lies the need for advanced tools and technologies to drive innovation, enhance decision-making, and unlock hidden value within procurement processes.

Let’s explore the role of AI and ML in addressing these challenges, providing a comprehensive overview of their applications, benefits, and potential pitfalls. From streamlining sourcing and supplier management to optimizing contract negotiations and spend analysis, AI and ML offer various capabilities that can revolutionize procurement management operations and drive sustainable value creation.

The Sourcing and Procurement Landscape

The sourcing and procurement landscape has significantly transformed in recent years, driven by technological advancements and changing consumer expectations. Organizations are increasingly leveraging AI and ML to streamline procurement processes, enhance visibility into supply chain operations, and mitigate risks associated with global sourcing and geopolitical uncertainties.

A recent survey highlights the evolving priorities of procurement leaders, emphasizing the importance of digital transformation in driving operational excellence and strategic alignment. With supply chain disruptions rising and inflationary pressures mounting, organizations are turning to AI and ML to optimize resource allocation, enhance supplier relationships, and capitalize on emerging market trends.

The Rise of AI and ML in Procurement

The growth of AI and ML has ushered in a new era of procurement management, where data-driven insights and predictive analytics are driving strategic decision-making. Organizations leverage AI-powered tools to automate routine tasks, extract actionable insights from large datasets, and optimize real-time procurement strategies.

From demand forecasting and inventory optimization to supplier performance analysis and contract management, AI and ML offer a wide range of applications that can revolutionize procurement operations. By harnessing the power of advanced analytics and predictive modeling, organizations can identify cost-saving opportunities, mitigate supply chain risks, choose the best mode of transportation, and enhance overall efficiency and agility.

What is AI in Procurement: Definitions and Applications

Procurement AI encompasses a broad spectrum of technologies and applications to automate tasks, optimize decision-making processes, and extract actionable insights from complex datasets. From machine learning algorithms to natural language processing (NLP) and robotic process automation (RPA), AI-powered solutions offer many capabilities that can transform procurement operations.

What AI in Procurement is NOT

Contrary to misconceptions, AI in procurement is not a one-size-fits-all solution but rather a toolkit of technologies and methodologies that can be tailored to meet organizations’ specific needs and objectives. By understanding the nuances of each AI technology and its potential applications in procurement, organizations can unlock new opportunities for innovation, efficiency, and growth.

Leveraging Different Forms of AI in Procurement

Various forms of AI, including ML, NLP, and RPA, play distinct roles in procurement optimization. ML algorithms enable predictive analysis and decision-making, while NLP algorithms enhance communication and data analysis capabilities. RPA, on the other hand, automates repetitive tasks and streamlines manual processes, freeing up valuable time and resources for strategic initiatives.

By leveraging the complementary capabilities of these AI technologies, organizations can optimize procurement management operations, enhance decision-making, and drive sustainable value creation. From automating invoice processing and contract management to identifying cost-saving opportunities and mitigating supply chain risks, AI-powered solutions offer many benefits that can revolutionize procurement management.

Generating Value in Sourcing and AI Procurement

Generative AI presents a significant opportunity for organizations to optimize source-to-pay processes. By automating document creation, compliance monitoring, and supplier evaluation, Generative AI streamlines procurement workflows, enhances accuracy and ensures regulatory compliance. Leveraging advanced analytics and predictive modeling, organizations can mitigate risks, identify cost-saving opportunities, and drive operational excellence.

In addition to its role in document creation, compliance monitoring, and supplier evaluation, Generative AI enhances decision-making through advanced analytics. By analyzing vast datasets, Generative AI identifies patterns, trends, and anomalies, providing valuable insights for strategic procurement planning. Organizations can leverage these insights to optimize inventory management, accurately forecast demand, and negotiate favorable terms with suppliers.

Furthermore, Generative AI enables organizations to adapt swiftly to changing market conditions, mitigate supply chain risks, and seize growth opportunities. Embracing AI-driven innovation empowers procurement professionals to stay ahead of the curve, driving continuous improvement and sustainable success.

As organizations embrace AI-driven transformation, fostering a culture of innovation and collaboration is essential. Organizations can achieve operational excellence, drive sustainable growth, and capitalize on emerging opportunities in an increasingly competitive marketplace by empowering procurement professionals with AI-powered tools and insights.

Choose CLX to Maximize the Impact of AI in Procurement

CLX Logistics, LLC, a global 3PL provider, offers comprehensive transportation management systems, managed services, and supply chain consulting. With a focus on creating sustainable economic value for clients, CLX combines industry expertise with cutting-edge technology solutions to deliver personalized, high-touch logistics solutions.

With offices in North America and Europe, we solve our clients’ most vital logistics challenges by combining our team’s expansive industry expertise and best-of-breed technology solutions with a personalized, high-touch approach. Since our founding more than twenty years ago, we have focused on one thing: creating true, sustainable economic value for our clients. With hundreds of clients worldwide, we deliver on this mission daily with fully integrated transportation management packages and single-service solutions.

Our logistics experts become true partners with our clients and their organizations, strategizing and building customized plans that increase performance and reduce costs. With the in-house capabilities to tackle today’s logistics challenges—from capacity crunch to supply chain visibility and everything in between—we thrive on solving the challenges that other 3PLs tend to avoid.

Partnering with CLX enables organizations to harness the full potential of AI and machine learning in procurement optimization. From enhancing operational efficiency to maximizing cost savings, CLX empowers clients to navigate procurement challenges effectively and confidently to achieve strategic objectives.

AI and ML are reshaping procurement management, offering unprecedented efficiency, insights, and strategic advantages. By embracing these technologies and partnering with industry-leading experts like CLX, organizations can unlock new opportunities, drive sustainable value creation, and thrive in an increasingly complex and competitive business environment.

Contact a CLX expert today to learn how our services can revolutionize your procurement management operations.

As the freight industry gears up for another year, the whirlwind of uncertainty continues to influence the logistics landscape. 2023 left an indelible mark, characterized by many challenges and some stabilization within certain industry segments. When looking ahead to the future, it’s crucial to reflect on the past year, identify emerging trends, and strengthen strategies for benchmarking and procurement. Join us as our experts delve deeper into the intricacies of the current freight benchmarking industry and uncover how artificial intelligence (AI), machine learning (ML), and real-time data analytics are shaping decision-making and operations in logistics and benchmarking in 2024.

US Freight Market Updates in 2023 and Beyond

2023 painted a picture of uncertainty, particularly in the US truckload dry van market. This segment grappled with significant rate losses, leaving even long-standing carriers in uncharted waters. While profitability remained elusive, improvements were seen in emerging and long-standing carriers as the year progressed. On the flip side, the truck bulk and LTL markets adopted a more specialized approach. The focus shifted towards salary and personnel-based internal strategies, allowing them to stabilize in comparison.

However, the linchpin of these challenges was the manufacturing sector. As it fluctuated in response to factors like inflation, the entire freight industry felt the ripples. An inflation surge or a manufacturing boom held the potential to reshape the trajectory of the industry. The question then becomes, how can we predict these unexpected twists and turns to stabilize budgets without impacting operations? One promising solution on the horizon lies in AI and ML-improved forecasting pattern recognition. This innovative approach translates data into actionable insights that help to unveil hidden patterns that would otherwise remain unnoticed. When such technology comes to fruition, as expected in the approaching years, this would be a milestone step in anticipating the industry’s ebbs and flows.

Essential Freight Benchmarking KPIs to Monitor

Key Performance Indicators (KPIs) are the North Star by which we navigate the freight industry. Among these, the delta to market stands tall. It allows us to gauge how freight, fuel, or other rates fare compared to market rates. Sometimes, a slightly higher rate might be justified if it guarantees better performance. It’s all about paying for performance, a metric that is integral to maintaining profitability in the ever-changing freight landscape.

Another critical KPI is assessing the mix of carriers. Within the transportation realm, carriers come in two classifications—asset and non-asset-based. The mix of these carriers can significantly impact your rates in comparison to the market. Understanding this mix is crucial in making informed decisions.

Fuel expenditure as a percentage of the total spend is another vital KPI. Often, it’s a factor that can be negotiated with the shipper. By knowing where you stand on this line, you can make more informed decisions regarding your fuel strategy to optimize both budget and performance.

In a landscape as dynamic as freight benchmarking, control is paramount. If you’re not in control, the industry controls you. The ability to assert influence and maintain control is essential for any player in the chemical freight industry and every sector.

Finding Freight Industry Stability in 2024

The transition into 2024 marks a pivotal moment as the industry leans toward predictive analytics. Predicted trends emphasize streamlined route identification, punctual deliveries, and optimal cost management. The spotlight falls on the anticipated role of AI and ML in addressing these industry needs. Adapting to the ever-evolving logistics landscape and integrating real-time data analytics stand out as pillars in optimizing freight benchmarking practices in the near future—and leveraging better technology is the key to optimizing logistics operations across the board.

Addressing Pain Points and CLX Logistics’ Unique Approach

Understanding the pain points and challenges shippers face is a crucial aspect of our approach at CLX Logistics. Among the most prevalent challenges is the pressure from the finance team. They demand results, and rightly so. The potential for double-digit savings often beckons, and it’s vital to demonstrate these savings post-implementation.

Our industry-leading solution as recognized by Gartner®—CLX LaneLogix™, has been instrumental in addressing these challenges and ensuring a strong ROI for our customers. It’s not just a tool but a strategic partner in improving procurement and benchmarking. Our analysts meticulously examine the procurement model versus execution, helping you answer critical questions that cut costs. Are you choosing carriers that offer the most competitive rates? Are you effectively controlling non-contracted lanes and associated costs? These are the very questions that weigh heavily in the minds of those planning their budgets for 2024, and we can provide answers.

Real-World Results

A noteworthy success story stems from a client’s journey that commenced with a benchmark analysis of US bulk truck rates.

The outcome? Significant cost savings and a subsequent exploration of comprehensive procurement strategies. The collaboration post-implementation has since expanded, now encompassing the client’s European division. This expansion focuses on optimizing supply chain efficiency and cost savings, showcasing the versatile optimization potential of CLX products like CLX LaneLogix™ and CLX Gravity™.

Closing Out the Year Strong

In the freight industry, change is the only constant. 2024 beckons with a myriad of challenges and opportunities, and it’s imperative to understand the forces driving this ever-evolving landscape. With AI, ML, and real-time data analytics at the revolutionary forefront, the industry is poised for a transformation. The potential to predict and anticipate market shifts, optimize benchmarking strategies, ensure complete supply chain visibility, and embrace innovation is key to thriving in these dynamic times.

At the heart of CLX Logistics lies a dedicated client-centric approach. Addressing client needs and focusing on solving key questions are instrumental in setting the tone for 2024. Understanding opportunities, forecasting spend, and meeting logistics directors’ expectations are pivotal in ensuring a smooth transition into the new year. The emphasis remains on streamlining budgets with benchmarking and procurement expertise. In a landscape that remains ever unpredictable, trust in CLX Logistics to navigate the uncertainty. We’re committed to redefining benchmarking and procurement strategies, empowering our partners with cutting-edge solutions, and reshaping the future of logistics.

To further explore how CLX Logistics supports clients with innovative products like CLX LaneLogix™, contact a CLX representative today and see how we can assist your business.

Chemical companies face various logistic challenges in managing their supply chains efficiently and sustainably, especially during economic uncertainty and volatility. As a manufacturer in any industry, your core priority is manufacturing safe solid and liquid chemicals like performance chemicals, peroxide, and so forth—not specializing in transportation.

To tackle these obstacles and ensure smooth operations, many companies are turning to modal outsourcing, a strategic approach that leverages the expertise and networks of third-party logistics providers (3PLs) or fourth-party logistics providers (4PLs). Utilizing a logistics provider’s network beyond just what the local traffic manager offers opens a more extensive web of expertise and capabilities that alleviates shipper inefficiencies, sustainability concerns, and compliance adherence.

CLX Logistics is a global 4PL that with advanced expertise in multi-modal transportation for the chemical industry, and our experts are demystifying the concept of modal outsourcing and its advantages for chemical companies, particularly in terms of streamlining operations, enhancing supply chain visibility, and promoting environmental sustainability.

Modal Outsourcing in the Chemical Freight Industry

Modal outsourcing is a strategic logistics approach involving delegating transportation operations to specialized providers with expertise in various shipping modes, including road and rail service. Within the umbrella of modal transportation lies intermodal transportation, which combines different modes for efficiency. Chemical manufacturers, particularly those operating domestically or within the same continent, frequently opt for road and rail transportation due to their inherent flexibility in handling volatile materials and safety and sustainability advantages. This allows shippers to tailor logistics strategies to the specific needs of the chemical industry.

Logistics Challenges Facing Chemical Companies

Navigating the complex landscape of freight transportation presents considerable challenges for chemical companies. The many shipping options and intricate regulations governing various chemicals and modes necessitate specialized expertise. Handling volatile or environmentally sensitive substances further complicates the equation, demanding meticulous planning and adherence to stringent safety protocols. In this intricate scenario, entrusting logistics to a proficient provider like CLX presents an advantageous strategy. By doing so, chemical companies gain access to an expansive network of experts well-versed in regulatory compliance and sustainability best practices.

Partnering with a logistics service provider extends beyond ensuring regulation adherence—it encompasses optimizing transport operations to ensure the utmost efficiency and safety. In effect, the collaboration with a logistics provider translates into an enhanced return on investment (ROI) and a streamlined logistical journey, allowing chemical companies to focus on their core competencies while leaving the intricate nuances of transportation in the capable hands of experts.

Cost-Saving Opportunities with Modal Outsourcing

Modal outsourcing provides several cost-saving opportunities for chemical companies that can regain investments and improve gross profits. Providers leverage extensive carrier networks to secure better rates and discounts, capitalizing on proven procurement processes and strategic technological solutions.

Companies can reduce capital expenditure through outsourcing chemical transportation by avoiding the need for private fleets and leased assets, especially during economic downturns when third-party solutions can alleviate multiple strains. Additionally, transportation providers bring expertise in network optimization, identifying route efficiencies and load consolidation opportunities for multi-plant operations.

Data-driven decisions based on customer information enhance cost management and carbon emission reduction, while administrative efficiency and resource deployment further contribute to savings. Collaboration with 3PLs or 4PLs also enhances risk mitigation, minimizing downtime due to non-compliance and breakdowns, further reducing costs, and improving operations.

Streamlining Operations and Enhancing Chemical Supply Chain Visibility

Modal outsourcing offers chemical companies better supply chain visibility by integrating real-time tracking systems and advanced technologies. Working with a 4PL like CLX enables centralized management of all transportation modes, streamlining operations and providing customers with near-real-time visibility of their shipments and advanced security. This enhanced visibility improves customer service and acts as a defense in case of customer issues or delays.

Modal Outsourcing vs. Intermodal Transportation

Although distinct, modal outsourcing and intermodal transportation can work harmoniously to enhance shipping efficiency. Intermodal transportation, particularly advantageous for extended journeys exceeding 750-1000 miles, is a remarkable avenue for achieving cost-effectiveness and reducing carbon emissions. Intermodal transportation from CLX Logistics leverages our BulkTainer® intermodal transportation services comprised for liquid chemical transportation that expedites shipments through the use of intermodal-exclusive railways and truckload shipments of a single container that increases security and reduces carbon emissions through improved capacity management and route optimization.

By thoughtfully combining the strengths of both modal outsourcing and intermodal transportation, chemical companies can craft a comprehensive shipping strategy that maximizes operational optimization and minimizes risk, late deliveries, and environmental impacts.

Mitigating Risks and Ensuring Compliance

Modal outsourcing helps chemical companies mitigate risks related to contracting, regulatory compliance, security, and documentation. Certified and knowledgeable logistics teams ensure compliance with industry regulations, handle necessary record-keeping, and manage cargo, auto, and general liability insurance requirements. Through modern advancements like a Transportation Management System (TMS), documentation is digitized and housed in a single platform to centralize vital contracting, insurance, delivery, and regulatory information to streamline compliance while enhancing internal visibility.

Considerations for Modal Outsourcing

When evaluating the prospects of modal outsourcing, chemical companies should embark on a thorough assessment process that aligns with their overarching objectives and accommodates potential shifts in their logistical operations. Collaborating with dependable logistics providers and harnessing the capabilities of advanced technology to refine supply chain management emerge as pivotal measures for extracting the full spectrum of benefits from modal outsourcing.

While some customers perceive logistics as an integral competency, specific gaps such as analytics and procurement expertise might exist. Although customers may express interest in outsourcing, their organizational structure may not seamlessly integrate with logistics transformations, particularly when not all departments are attuned to changes at the plant level. Essential questions arise: Can customers institute the requisite changes to succeed, or might they falter?

These disparities can lead to mutual frustration and misalignment between partners, jeopardizing the partnership’s success. Ensuring all parties’ strategic objectives, capabilities, and commitments are aligned is vital to fostering productive and enduring collaboration.

Working with a qualified 4PL or 3PL that provides transparency and puts client interest at the forefront of operations is paramount when considering modal outsourcing and implementing these transformative changes.

Modal Transportation Environmental and Sustainability Benefits

Modal transportation, encompassing both modal outsourcing and intermodal solutions, holds a substantial promise for advancing environmental sustainability within the chemical freight industry. The incorporation of intermodal transportation, a core facet of modal outsourcing, emerges as a remarkable driver of environmentally conscious practices. By seamlessly integrating rail transport and effective load consolidation into the shipping equation, particularly for long-haul distances that don’t require sea crossing, chemical companies can decisively curb their greenhouse gas emissions, aligning with global and industry efforts to mitigate environmental damage.

This sustainable approach is underpinned by a comprehensive strategy that encompasses improved planning, route optimization, and the adept utilization of the most suitable and cost-effective transportation mode for each shipment. Through leveraging rail and over-the-road (OTR) trucking modes, intermodal transportation presents a compelling proposition that extends beyond emissions reduction. By capitalizing on rail’s inherent efficiency, intermodal solutions minimize fuel consumption, thereby curbing the carbon footprint of chemical freight transportation while reducing energy costs.

As a whole, modal outsourcing bolsters the sustainability journey by integrating cutting-edge technologies and logistical expertise. Advanced tracking systems, data analytics, and real-time visibility mechanisms enable intricate monitoring of shipments, ensuring minimal waste and optimal resource allocation and mode selection. The orchestration of these elements cultivates an ecosystem that harmonizes environmental preservation with operational efficiency.

In embracing modal and intermodal practices, chemical companies underscore their commitment to environmental responsibility and lay the foundation for a more resilient and sustainable industry. The dual benefits of emissions reduction and enhanced logistical effectiveness reinforce the notion that modal transportation is not just a pragmatic choice but a conscientious step towards greener operations.

The Future of Outsourcing Chemical Freight

The future of modal outsourcing and intermodal transportation in the chemical freight industry looks promising. With growing pressure to reduce carbon emissions, modal and intermodal transport will likely continue to gain popularity for long-distance chemical shipments. Integrating advanced technologies will enhance efficiency, security, visibility, and coordination—enabling chemical companies to achieve higher levels of sustainability and optimization.

Embrace the Future of Chemical Transportation with CLX Logistics

In the dynamic landscape of chemical logistics, modal outsourcing and intermodal transportation emerge as transformative forces. As you navigate the intricate realm of supply chain management, consider the capabilities, expertise, and innovation CLX Logistics offers. By partnering with CLX, you open the door to a library of industry-leading technology, an extensive collection of cost-saving strategies, regulatory compliance mastery, and a commitment to sustainability that resonates with operational efficiency and environmental responsibility.

To learn more about how CLX Logistics can revolutionize your chemical freight transportation, explore our comprehensive solutions today—contact our experts, and let’s shape the future together.

In the complex world of chemical shipping and logistics, understanding the intricate dynamics of the National Motor Freight Classification (NMFC) and associated factors can significantly influence overall transportation spend for less-than-truckload (LTL) carriers and shippers. The NMFC is a set of standards developed, maintained, and published by the National Motor Freight Traffic Association (NMFTA).

LTL carriers and shippers reference these standards to classify commodities in terms of the level of resources required to transport products via LTL. How and why the NMFTA classifies the commodity of a given product is critical for shippers to understand, as this directly affects LTL freight pricing and influences the shipper’s overall transportation spend.

To help build your understanding and navigate these waters, here are four critical factors to understand when working to improve LTL chemical shipment rates.

1. NMFC Codes and Freight Class

Each item shipped via LTL is assigned an NMFC code determined by its commodity. In addition, each NMFC code has corresponding freight classes that directly impact the shipment cost. One of 18 different LTL freight classes, ranging from 50-500, is determined by four main freight characteristics:

1. Density
2. Handling
3. Stowability
4. Liability

The resulting freight class is essentially a score of the overall transportability of the freight, where the higher the freight class, the more expensive the product will be to ship via the LTL network.

2. The Role of Density

Cargo density is a primary factor in determining the LTL freight classification. Like most chemicals, the same product can be shipped in various forms and packaging configurations. The same chemical product can have different freight classes depending on the density of the articles that make up the shipping unit. The higher the density, the lower the freight class and shipment rate.

3. Packaging and Handling

Along with density, the dimensions of the packaged freight are a significant factor in determining the freight class. Take, for example, a rigid plastic sheet where one NMFC code has multiple possible freight classes dependent not only on the density but also the greatest dimension of the packaged unit. Additionally, if the unit requires extra labor or special equipment due to its size or shape, this can play a part in determining the freight class and, consequently, the rate.

4. Bill of Lading Accuracy & Completeness

Inaccurate or incomplete information on the bill of lading provided to carriers can result in an incorrect NMFC code assignment and may contribute to higher transportation spend. Bills of lading without product descriptions will force the carrier to estimate the product’s freight class. Carriers typically err on the higher side regarding freight class and rate, leading to billing errors, claims, manual work, and delays to payment, all of which only consume time and effort with no added value.

Optimizing NMFC Classification with Chemical Logistics Expertise

The NMFC system developed by the NMFTA plays an important role in determining the transportation costs of moving cargo via the LTL mode in the United States. It’s the shipper’s responsibility to determine the correct classification of their products. Properly assessing and assigning NMFC codes and LTL freight classes can also be challenging. Shippers who don’t fully understand or manage this process run the risk of overpaying for LTL freight. This risk can be minimized by maximizing the density of the shipping unit, minimizing special handling needs, and providing complete and accurate information on the bill of lading to the carriers.

The procurement experts at CLX Logistics can assist you with evaluating products shipped via LTL to identify the correct NMFC codes and freight classes and guide communications with carriers to reduce billing errors and ensure shippers pay accurate rates. Contact us today to talk with a specialist.

Lisa Carr is the Procurement Manager at CLX Logistics, responsible for over-the-road transportation procurement services for CLX. Year-to-date, CLX Procurement Services has purchased nearly $1 Billion in transportation freight services both internally for CLX Operations and also for CLX customers.

Sarah Napolitan is a Carrier Program Manager for CLX Logistics. With nearly 10 years of experience buying freight, Sarah is an expert in US less-than-truckload freight procurement for chemical shippers.

In an era of increasing global awareness and growing demands for responsible business practices, sustainability is critical to every industry. This practice is spotlighted and increasingly required and necessary in logistics and chemical supply chain management, prompting chemical shippers to rethink traditional operations. Supply chain sustainability is more than a buzzword and rather a powerful approach linking ethical, economic, and environmental considerations in a strategic symphony.

This holistic focus extends beyond regulatory compliance to address every aspect of a business’s operations, from sourcing materials and managing resources to logistics and delivery, all while considering the environmental footprint and societal impacts. By embracing sustainability, chemical shippers can improve their reputation, enhance efficiency, reduce costs, and drive innovation, all contributing to long-term resilience and success.

We’ll explore six key strategies to improve your supply chain sustainability, turning it into a powerful engine of value, resilience, and competitive advantage.

What Makes a Supply Chain Sustainable?

Supply chain sustainability is a multifaceted concept requiring an intricate balance between environmental stewardship, social responsibility, and economic efficiency.

• Environmental Consciousness: Environmental consciousness involves implementing strategies to minimize the environmental impact of the supply chain. Actions could include reducing carbon footprints, implementing waste reduction measures, pursuing energy-efficient operations, and promoting a circular economy that prioritizes recycling and repurposing.

• Social Responsibility: Social responsibility covers a wide range of ethical considerations in the supply chain. From fair labor practices to ensuring safety standards, companies need to consider the welfare of all stakeholders. Ethical sourcing, diversity and inclusion, community engagement, and transparent corporate governance are critical to social responsibility in a sustainable supply chain.

• Economic Viability: While environmental and social factors are crucial, the economic viability of a supply chain cannot be overlooked. Supply chains should be profitable and add value to the organization through cost-effective operations, efficient resource utilization, and resilience to market changes and disruptions.

How to Make Your Supply Chain More Sustainable

Achieving supply chain sustainability is not a single-action task but a multifaceted process that requires considering various factors. It’s about fostering a culture of continuous improvement, encouraging innovation, and adopting a long-term perspective. Now that we’ve established the building blocks of a sustainable supply chain, let’s delve into six tangible strategies that can help your organization enhance its sustainability efforts:

1.    Optimize Your Transportation Methods

Bolster your green credentials by streamlining transportation processes. Utilize efficient routing strategies, consolidate shipments, and embrace greener modes of transportation such as rail or sea freight. An intermodal approach leveraging rail transport for longer distances and trucks for short distances can be incredibly impactful.

2.     Partner with Sustainable Suppliers

Create a sustainable ecosystem by collaborating with suppliers that share your environmental ethos. Source raw materials from companies committed to sustainable practices, such as using renewable energy sources or minimizing waste.

3.     Track Sustainability Performance with Precise Metrics

To ensure your sustainability efforts deliver results, establish key performance indicators (KPIs) that track and evaluate your performance and modify practices when necessary. Monitor metrics such as carbon emissions, energy consumption, waste generation, and water usage.

4.     Cultivate a Sustainability-first Culture

Let sustainability permeate every layer of your organization. Raise awareness, provide training, and embed sustainability practices into your company culture to foster environmentally responsible behaviors. One tactic could involve shifting from smaller, frequent deliveries to larger, less frequent shipments to reduce the total number of trips and subsequent energy consumption.

5.     Commit to Waste Reduction and Recycling

Drive down your environmental impact by implementing waste reduction strategies, such as adopting lean manufacturing principles, optimizing processes, and establishing robust recycling programs. Consider minimizing packaging materials, reducing product defects, and promoting product reuse or remanufacturing. Implementing programs to reuse IBCs (Intermediate Bulk Containers) or drums minimizes the need for new containers and dramatically reduces costs and overall waste.

6.     Embrace Renewable Energy and Energy Efficiency

Lower your carbon footprint by enhancing energy efficiency, optimizing equipment, implementing energy-saving technologies, and developing sustainable energy management practices. Strategies could include retrofitting warehouses with energy-efficient systems and implementing digital inventory management to maximize storage.

Benefits of a More Sustainable Supply Chain

Embarking on a journey towards a more sustainable supply chain is more than just an environmental commitment; it’s a smart business move that brings a wealth of benefits, including:

• Cost Savings: Sustainable practices often lead to the reduction of waste and optimization of resources. By streamlining processes, businesses can realize cost savings in energy consumption, transportation, and packaging materials.
• Potential for Improved Revenue Growth: By tapping into the growing market of environmentally-conscious consumers, businesses can unlock new opportunities. A sustainable supply chain can attract customers willing to pay a premium for sustainable products, potentially increasing sales, market share, and revenue growth.
• Improved Brand Image and Consumer Satisfaction: A commitment to sustainability enhances a company’s reputation. It aligns with the growing consumer demand for ethically produced goods, leading to greater customer trust, loyalty, and overall satisfaction, giving your brand a competitive edge.
• Risk Mitigation and Regulatory Compliance: A sustainable supply chain can better withstand disruptions by diversifying suppliers and reducing dependency on vulnerable regions. Moreover, adhering to environmental and social regulations ensures legal compliance and protects the company’s reputation.
• Environmental Conservation and Social Responsibility: Sustainability in the supply chain contributes to environmental conservation and aligns with the broader goal of social responsibility. This way, businesses can reduce their carbon footprint, preserve natural resources, contribute to social development, and uphold ethical standards.
• Enhanced Stakeholder Relations: Investors, shareholders, and employees increasingly value organizations that prioritize sustainability. Integrating sustainable practices into your supply chain can boost stakeholder engagement and promote a positive organizational culture.

How CLX Can Help Build a Sustainable Supply Chain

Creating a sustainable chemical supply chain is a smart strategic move that yields significant business benefits. With a comprehensive suite of services and deep supply chain expertise, CLX Logistics is uniquely positioned to assist you in this transformation. Through strategic green supply chain design, tactical optimization, operational support, diagnostics, training, technology, and more, we can help you reduce your environmental footprint while unlocking significant business advantages.

Reach out to our team and start your journey toward a more sustainable and efficient chemical supply chain.