Thread by @AdamNeumannsCoS

Some basic supply chain knowledge so your hot supply chain takes are based not cringe.

A thred 👇

most truckers are independent contractors or work for a sub 100 employee fleet. There’s very little consolidation in the space

Carrier - entity that moves stuff (boats, planes, trains, barges, vans, etc)
Shipper - pays carriers to move stuff
Brokers - intermediaries who match supply and demand
Contract - an agreement between shipper and broker or carrier that usually guarantees volume
Spot - not contract

Mode- LTL, TL, ocean, air, rail, courier, etc
Driver - a trucker
Load - what carriers move
TL - truckload
LTL - less than truckload
Drayage - last mile via truck from other mode 2 final destination
Last/first mile - final/beginning leg to destination
Mid mile - between first/last

Lot lizard - companions who go from truck to truck and live at truck stops

The freight industry is highly cyclical in a pattern thats kinda unrelated to market cycles. Sometimes (like now) there’s an under supply of drivers and rates are high other times theres an over supply. Shipper/carrier behavior vacillates wildly depending on how hot the market is

Shippers are responsible for picking up containers from ports and returning them, they hire drayage drivers to do this. Because of the “shortage” they’re hoarding them

ELD - most trucks are required to have an electronic logging device on board to ensure drivers stay below their hours of service and they also let shippers track their loads via GPS

Hours of service - drivers cannot exceed 14 hours of service without an 8 hour break in between

Personal conveyance - when a driver is operating for “personal” reasons and not hauling something

Terminal - place where trucks are loaded with containers, usually from boat

Intermodal - facility for moving things from one mode to another’s

Facility - usually where loads start or end their journey

Detention - facilities are usually run with 1950s technology so they stuffer from the doctors office problem - you show up early and they’re always running behind, after 2 hours carriers get paid to wait

Demurrage - ship/trailer etc takes too long to be unloaded, carrier gets paid

Ports - are a shitshow because of unionized workers striking, changes in trade patterns, container supply problems, ships that are too big for most ports, ships that are too big to unload quick, and a lack of modern technology to coordinate operations, and a lot of other reasons

“make to stock” suppy chains - customers order things, customer service sends Orders to inventory planning/distribution centers (DC) to fulfill orders. DCs/inventory planner send orders other DCs, 3rd party mfg, or production facility to replenish inventory

Production facilities send orders to suppliers for raw material.

Some orders are planned in an ERP module for planning and are sent to the order management system (OMS) others are created/received there, once created orders eventually go to a TMS (transportation mgmt system)

In the TMS they’re planned and tendered (offered to carriers based on the requirements of the order and cost), carrier will accept or reject the tender

Orders also go to the warehouse mgmt system (WMS) where they’re planned to be ready for pickup or drop off when the truck comes

Make to order means the whole supply chain is based on executing on customer orders rather than producing in expectation of demand.

Forwarders - intermediary who handles freight, often for ocean or air

Depending on how freight is planned, load may go to multiple carriers who make up different legs of the journey, often there are intermediaries mixed in like forwarders - the goal is reduce cost and/maximize speed

When the truck shows up to pickup it’s load, it may have an appointment, or maybe it just queues up. When it gets into the facilities lot/yard, it may back up to a loading dock and wait, or just drop the trailer and leave or pickup another one

When the driver gets there, documents like bills of lading are exchanged with facility, same thing when they get to destination. There’s tons of documentation.

Carriers/shippers march the asset (truck) to a load in their TMS so it can be tracked via ELD.

I’m out of tweets for this thred. I’ve probably covered 5% of what actually happpens

Tracking ELDs - fragmented market, samsara, keep truckin, hundreds of ELD providers, and tens of thousands of carriers/fleets with no standardization for how shippers get tracking data from carriers. Software platforms like p44 do the heavy lifting of integrating with all of them

The issues with supply chain RN are not just shortages of supply or containers - there’s also a big uptick and demand. Shippers are at the mercy of carriers right now, but at some point that will change (probably january)

You may be thinking, wait where do suppliers get raw material from? Can any of these steps be skipped? How do they decide which facility to draw inventory from or send it to?

You may be thinking this doesn’t actually seem like a chain, it seems like a network, you’d be right.

Live - driver backs up to dock and waits for trailer to be loaded/unloaded

Drop - driver leaves trailer in a lot/picks it up from one

Some warehouses have appointment systems like calendly for a warehouse. Most don’t

Others have yard management systems to manage the flow of trucks in and out of a facility - most don’t. The ones that do physically slap RFID tags on trucks to track their location in the yard

One of you kids should think about using cameras for yards instead of RFID.

Most documentation is physical, other than basically just Amazon facilities. Driver has to go into an office at the facility and check in and sign stuff.

Other notes: even within companies supply chains are kind of like a country is rich in natural resources and lacking in democracy. They’re ruled by warlord warehouse managers who make all technology decisions, plan capacity, and have way more control than they should in 2021

Other notes: supply chain metaverse when

I’m just a dude who likes drinking with freight brokers though, if you want actual insight check out

@rrpre ‘s substack and @JPHampstead at @FreightWaves

Just to reiterate first point