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trends Tag
HomePosts Tagged "trends"

Tag: trends

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August 23, 2023 By user

U.S. Importers Are Absorbing Higher Shipping Costs This Summer

Container lines have reversed a big drop in freight rates this year, but experts say the price increases may be short-lived

Shipping costs from Asia to the U.S. are going up 61% in the six weeks up to Aug. 15, 2023, according to the article. Although the prices have increased, U.S. importers are still absorbing the increase, with August 2022’s rate still 66% lower than now.

The price hike came after big shipping lines raised their prices following a significant drop in the sector’s spot market, which dropped from nearly $10,000 per box in February 2022 to below $1,300 in late June. In order to avoid these fluctuations, some U.S. companies locked in freight rates.

Shipping costs fell in 2023, a contrast to the high prices that burdened corporate budgets in the previous two years. Major retailers like Home Depot and Target report better supply chain conditions, especially in ocean shipping.

In the industry, spot rates have been up recently, but they’re expected to be short-lived, since U.S. container imports aren’t as high as they were last year, and new containerships are adding extra capacity. There are some carriers trying to charge peak-season surcharges on long-term contracts, but the volume and market conditions may not justify it.

While shipping costs from Asia to the U.S. have gone up recently, American importers are managing to absorb them. Because of the projected oversupply of containerships, many experts believe rates will resume a downward trend soon.

 

more about this in :https://www.wsj.com/business/logistics/u-s-importers-are-absorbing-higher-shipping-costs-this-summer-8f661768

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LOGISTICS
May 9, 2023 By user

Six Digital Supply Chain Trends That Are Happening Now

Six Digital Supply Chain Trends That Are Happening Now

Here are some of the top digital supply chain trends that shippers need to understand and leverage as they continue along the path of transformation.

Focused on increasing productivity, improving organizational resiliency and fostering innovation, supply chain professionals are also being asked to “do more with less” in the midst of economic uncertainty and constant change.

As they also navigate rising costs, inflation, labor pressures, and other challenges, these professionals are using more technologies that help them engage their employees, make better use of their assets and resources, and develop intelligent, responsive logistics operations.

Those technologies come together to create digital supply chains that can be used to leverage new opportunities, tackle current challenges, and plan for the future. “Advancements in technology provide supply chain technology leaders and other executives an opportunity to support new business models, enhance decision making, and improve integration with trading partners,” Gartner reports in Top Trends in Strategic Supply Chain Technology 2023. “This is causing supply chain organizations to fund new initiatives focused on digitizing asset tracking and management, supporting digital supply chain transformation, improving user experience through technology, and reskilling and upskilling their workforces.”

The proof is in the numbers. According to Gartner, 73% of supply chain organizations are currently allocating their supply chain IT budgets to “driving business growth and enhancing performance.” A movement that has been underway for several years now, digital supply chain transformation helps shippers work smarter, faster, and more efficiently amidst the current market uncertainty. It also helps them plan for a future that’s sure to include a blend of opportunities and disruptions.

Here are six digital supply chain trends that shippers should be paying attention to along with some top analyst advice on how.

1

What’s old is new again.

Greg Aimi, VP, team manager of supply chain research at Gartner, remembers the day when Walmart set a January 2005 target for its top 100 suppliers to be placing RFID tags on cases and pallets destined for its stores in the Dallas/Fort Worth metroplex area. The announcement sent a chill down the spine of all suppliers that worked with Walmart, which promised to extend the mandate to all of its suppliers by a certain date.

In the end, the initiative wound up being what Aimi calls “the epitome of the hype cycle.” Fast-forward to 2023, however, and the retailer—which has mostly been using RFID tags for apparel—is now revisiting the idea of using the tags for general merchandise.

The RFID technology itself has advanced since 2005, and more retailers are using automation, robotics, and RFID in their fulfillment centers and stores. If the technology becomes ubiquitous in the retail environment, Aimi says it will increase inventory visibility levels, support the use of more robotics in stores, and migrate into additional use cases.

2

Servitization comes to the forefront. 

Robots as a Service (RaaS), Software as a Service (SaaS) and Retail as a Service (Raas) are all gaining in popularity as more companies obtain their equipment and software on a service basis versus buying it outright. A lower upfront investment means companies of all sizes can get a ticket to the digital supply chain game. It also puts less stress on internal IT departments because the vendors themselves usually maintain and upgrade the hardware or software that they’re selling as a service.

Vamshi Rachakonda, VP and sales/GTM lead for U.S. manufacturing, auto and life sciences at Capgemini, sees this trend continuing as more companies hone their individual digital supply chain strategies. “We’re definitely seeing increased demand for services, both from shippers and from their customers,” he says. “This is likely to continue for at least the next few years.”

3

The digital supply chain isn’t a nice-to-have; it’s a must-have. 

Any company that’s still using spreadsheets to track shipments, walkie-talkies to manage yard activity, and clipboards to track inventory is slowly making itself obsolete. That’s because the digital supply chain is no longer a luxury; it’s a necessity. “Companies are making progress in this area because they really don’t have a choice,” says Rachakonda.

Among the key drivers is logistics’ transition from being a “back-end” function to one that can substantially affect revenues (both positively and negatively). In response, Rachakonda says smart manufacturers are leveraging the latest technologies—IoT, big data, AI, blockchain, etc.—to their advantage. “This is an area where manufacturers are making progress, but there’s still more work to be done,” he adds.

4

Vendors are stepping up their games. 

Never ones to sit on the sidelines while their customers struggle with increasing supply chain complexity, hardware and software makers are stepping up to the plate and helping shippers tackle the rigors of global supply chain and logistics management.

Many of them are adding digital enhancements based on customer input and feedback, says Aimi, and others are starting up entirely new companies based on specific needs. He points to organizations like project44, FourKites and MacroPoint as some of the newer entrants born out of shippers’ need for improved transportation visibility and tracking.

“That whole market of companies came about on a serious level just within the last five years or so,” says Aimi. Their platforms incorporate handheld and in-cab computers, IoT sensors, and real-time location systems (RTLS) versus satellite. Rather than using EDI to transfer messages out to the drivers (and vice versa), everyone knows where the truck is at any given time. “That’s all being handled by ubiquitous, federated networks that are cloud-based,” he adds.

5

People play an important role in the digital supply chain.

As they struggle with a persistent labor shortage, shippers recognize the importance of finding and keeping good talent—and even as they continue to invest in automation. According to Gartner, 95% of supply chain professionals are considering cyberphysical automation solutions and 59% say that “ongoing labor availability issues” are their primary reason for doing so. Asked which factors motivate their organizations to invest in supply chain technology, 17% of survey respondents cited the need to address labor constraints or shortages.

As operational labor management and its supporting technologies continue to evolve, Gartner says those solutions will be largely focused on improving workforce retention and deployment—and all while maintaining and/or improving productivity.

These are important wins in a labor environment where Deloitte expects U.S. manufacturers to have 2.1 million unfilled jobs by 2030, and where the Bureau of Labor Statistics is projecting that logistics employment will grow by 7% annually through 2026.

6

All eyes are on sustainability. 

Logistics, fulfillment, and transportation operations are all being called upon to institute environmentally-friendly processes and procedures, and for good reason. According to the EPA, the transportation sector is one of the largest contributors to U.S. greenhouse gas (GHG) emissions and accounted for 27% of all U.S. GHGs in 2020.

As consumers, business partners, governments, and regulators strengthen their push for more sustainability, shippers are placing similar expectations on their own suppliers. “Two years or three years ago, suppliers weren’t really being measured on sustainability the way they are now, and the way they will be going forward,” says Rachakonda, who recently worked with the head of sourcing for one of world’s largest aerospace manufacturers. That professional’s biggest concern was how to effectively measure suppliers based on their sustainability impacts.

This is just one example of the critical nature of sustainability in today’s manufacturing and distribution environments, where software vendors are being asked to meet similar expectations. For example, Rachakonda says software vendors develop solutions with help of partners/suppliers, all of which should also have their own sustainability programs in place.

What’s next?

As Rachakonda makes predictions about the future the digital supply chain, he sees more autonomous vehicles, delivery drones, and fully-automated warehouses coming into view. These technologies are all being developed, piloted, and deployed at various stages of the logistics process, but he expects the pace of adoption to accelerate over the next few years.

“We’re definitely seeing more companies interested in how to use drones for deliveries, automate their warehouses, and use more autonomous vehicles in their fulfillment centers,” says Rachakonda, who points to consumer packaged goods (CPG) and food and beverage as two sectors that have been leading the pack in this area.

“This is something we’re seeing more companies think about and spend dollars on,” Rachakonda adds. “One thing we all learned from the pandemic is that there are situations where you may not have a workforce in the warehouse. That event made more companies take everything from drones to autonomous vehicles to AI a lot more seriously in manufacturing and distribution. This isn’t just a theory anymore; it’s a reality.” 

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LOGISTICS
April 25, 2023 By user

Supply Chains Have Changed Forever

A robot moves products manufactured by Nestlé at a distribution warehouse operated by GXO Logistics near Derby, England. Photo: Chris Ratcliffe/Bloomberg News

Supply Chains Have Changed Forever

Nearshoring. Automation. Supplier diversification. Sustainability. Here’s how companies are reshaping their supply chains.

When a measure of strains on global supply chains fell earlier this year to levels last seen before the Covid-19 pandemic, it signaled to some that the product shortages, port bottlenecks and shipping disruptions of the past three years were over and that a new era of stability was on the horizon.

But industry experts say a “return to normal,” as the Federal Reserve Bank of New York described its Global Supply Chain Pressure Index in February, hardly means that companies are going back to conventional, some would say complacent, supply chains.

Instead, say academics and consultants, the experiences during the pandemic, along with changes in geopolitics, are leading to broader, potentially long-lasting changes in how companies manage the flow of goods, from the sourcing of raw materials to manufacturing and distribution.

The changes are playing out at factories in India, auto-assembly plants in northern Mexico, ports from the U.S. Southeast to East Africa and mineral mines in Canada and Sweden. The sites are where companies are implementing disciplines such as resilience, regionalization and supplier diversification that came to the forefront as they coped with the severe disruptions that began in early 2020.

The turmoil that began with the declaration of the Covid-19 pandemic first hit companies with sudden shortages of consumer staples as households locked down, was followed by factory shutdowns that interrupted the flow of goods and then hit transportation networks as an abrupt snapback in demand led to overstuffed ships and enormous backups at ports.

By April 2020, the New York Fed’s supply-chain stress index had shot up to double the level it reached during the recovery from the 2009 financial crisis. It finally fell back early this year to levels more typical of a measure going back 25 years.

“Some stresses have been taken off, there are fewer supply shortages, and things are a lot less hectic, but we certainly are not back to normal,” said Patrick Van den Bossche, a partner and global analytics practice leader at consulting firm Kearney. “There is a subdued level of urgency but a lot of things have changed.” 

Diversifying supply sourcing

The changes on the surface include less reliance on Asia, particularly China, and the use of more automation technology to keep assembly lines and warehouse operations running.

Apple Inc. is shifting some smartphone production from China to India, toy maker Mattel Inc. is among companies expanding operations in Mexico, and even a Chinese manufacturer, Hisense Co., is looking to make appliances in Mexico for the U.S. market.

But there are more enduring changes, experts say, that will more broadly affect how companies get their raw materials and parts, where they produce goods and how they ship finished products to consumers. Taken together, the changes mark the biggest shift in how supply chains are managed since China’s entry into the World Trade Organization in 2001 ushered in a new era of globalization.

Experts say postpandemic supply chains are being built with a focus on regionalization, with production closer to where companies expect to sell their goods. Companies are also moving to spread their base of suppliers around the world, moving away from single-sourcing, and they are adding automation to everything from warehousing operations to procurement decisions.

The shifts add up to a widespread effort to make supply chains more resistant to disruption.

“They have been moving away from a model built on scale, where everything is engineered to get the best financial impact from the greatest economies of scale, to a model where there is plenty of redundancy in the network,” said Mr. Van den Bossche.

“The move away from China, to rewire supply chains to where you have multiple local supply chains, is really just starting. Companies are still trying to figure out how this works,” he said.

Risks vs. rewards

Rick Gabrielson, a consultant and former senior transportation executive at Target Corp. and Lowe’s Cos., said many companies are looking hard at their sourcing strategies, including whether they have a heavy concentration of goods or components coming from one country or a single supplier.

Spreading out suppliers almost certainly adds costs, but Mr. Gabrielson said companies have to balance those costs against the potential for future disruptions.

“You have to ask yourself, which do you want? Are we going to minimize risk for shareholders and customers or are we going to minimize costs? This is the conversation that is taking place, but the change doesn’t happen overnight,” he said. 

Heidi Landry, chief procurement officer for MedTech at Johnson & Johnson, told the University of Pittsburgh’s Supply Chain Management Symposium in March that the healthcare-products company is trying to better gauge risks in its global network of suppliers in the wake of pandemic disruptions. The program, she said, is aimed at “maintaining a continuous supply base and managing risk to enable global access to lifesaving medicine and equipment.”

New regulatory disclosures

Expanding environmental rules and the drive by companies to cut their carbon footprint is making that effort to diversify sourcing more complicated.

In the U.S., the Securities and Exchange Commission is advancing plans to require that companies disclose not only their own carbon emissions but those of their suppliers, and their suppliers’ suppliers—what is known as Scope 3 emissions.

“Sustainability adds complexity and it adds costs,” said Mr. Gabrielson. 

The biggest casualty in supply-chain strategies during the pandemic may have been the just-in-time principle that has preached lean inventories to cut costs and improve efficiency in supply chains. 

After lengthy product shortages and factory outages from Vietnam to the U.S. Midwest because of parts shortages, businesses from Nissan Motor Co. to PepsiCo Inc. have said the focus on hyper-efficient supply chains may be waning as more companies recognize the value in buffer stock.

Mr. Gabrielson said companies will adapt over time, taking on more safety stock while managing risk in other ways such as adding multiple suppliers. “You will not see the pendulum pull all the way back” to a just-in-time focus, he said.

Greater regionalization of production will also help minimize risks of shortages because the supply lines aren’t as long, he said.

‘The most important lesson’

Yossi Sheffi, director of the Massachusetts Institute of Technology’s Center for Transportation and Logistics, said the accelerated adoption of technology during the pandemic, as companies rushed to make and ship goods more quickly, will have a lasting impact on supply chains.

But the bigger impact will come, he said, as companies assess how they responded to the pandemic strains and adapted. Prof. Sheffi points to the consumer-goods companies that quickly reconfigured supply chains by trimming product lines, resetting sourcing and using other tools to rebound from early shortages.

“They learned a lot of things that they didn’t think were possible. This means companies can do more than they thought was possible,” he said. “They have learned how to be nimble, and that may be the most important lesson.”

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LOGISTICS
April 18, 2023 By user

Reshaping the Future of Logistics: An Outlook on Warehousing Automation Trends

Despite an expected slowing pace of automation in 2023, the forecast is for stronger growth through 2027. According to Interact Analysis’ Warehouse Automation – 2022 report, between 2024 and 2027, the market is forecast to grow at a 19% CAGR, driven by improving macro-economic conditions, as well as steady growth in e-commerce. 

Reported by The Industrialist, the warehouse automation market is expected to reach $41 billion by 2027, according to LogisticsIQ’s latest 2022 market report. As the sector looks to evolve and keep up with rising consumer demand, significant investments are needed in transformative warehouse robotics.  

Changing Consumer Dynamics – More at Home, More Online 

The logistics industry needs to shift gears in order to keep up with changing consumer demands. Consumers are spending more time at home, and have included ordering online as part of their everyday shopping routines. For e-commerce merchants, this shift in consumer behavior meant that warehousing facilities have had to adapt to control a sharp spike in online orders moving through the warehouse. 

Optimizing Warehouse Capacity 

The warehousing sector was especially challenged to innovate fast enough in order to support higher levels of throughput. A frictionless flow of parcels is critical to ensure parcel carriers don’t experience a lag in order deliveries. Warehouses and fulfilment centers are held accountable for this. Logistics solutions therefore need to be made more flexible, so that warehousing companies can efficiently scale up to accommodate the transformations happening across the industry.  

Pressures Faced by Warehouse Floor Workers 

E-commerce growth, with its heightened demands, is leading to a turbulent situation for warehouses having to keep up with order throughput and output. In turn, this pressure is causing warehouse employees to experience a decline in their mental and physical health. This is a strong argument for why automated solutions need to be prioritized, to improve the welfare of existing warehouse employees. 

A 2022 research project, by YouGov, found that nearly one out of every four survey respondents working in warehousing and transportation said their work had a negative effect on their mental health. Of the group, 19% said their employer was resistant to helping employees with work-life balance. To aid healthier working conditions, robotic systems can increase productivity and warehouse capacity. Employees benefit from this, as time-consuming, repetitive and strenuous task are taken out of their hands. 

Unique Challenges: Opening the Door for New Business Models in 2023 

Local-to-Local 

As the logistics industry is adapting to accommodate the online shopping behaviors of modern-day consumers, the typical blueprint for warehouses need an update. Warehousing facilities are now becoming decentralized, meaning smaller warehouses across multiple locations are popping up, with a grid connecting them to the main warehouse. This model decreases congestion, and assists in keeping a steady flow of parcels moving between different parties in the supply chain. Local-to-local reduces the distance between product pickup points and delivery locations, in turn reducing expenses like transportation costs, and cutting back on greenhouse emissions. 

The implication of decentralized warehousing is that traditional methods for packing, handling and shipping parcels have to adapt. When constructing new fulfilment centers, the architecture of “smart warehouses” has to be given special attention. Smart technology can greatly improve parcel storage and shipping activities. 

Space Optimization 

The question of how to store and handle larger items persists. Fulfilment centers are often located in a place that presents limited opportunities for expansion. Making use of every square meter currently available in the existing warehouse is therefore a priority. Here, automation plays a key role in supporting warehouse capacity and optimizing performance. 

Automation is also becoming more advanced in its capabilities. For example, advanced smart technologies are making it possible for robotic systems to be more intuitive, with some automated solutions being able to sort and stack items without wasting valuable space, all while optimizing throughput capacity. With this intuitive approach, robotic pick-and-place systems can help address some common issues with space optimization for warehouses, as these systems are able to fill a tote or container to the optimal capacity. 

More Comfort, Less Labor 

Certain sectors within logistics are feeling first-hand the effects of the labor crisis, not least the warehousing sector, with fewer employees interested in conducting physically demanding tasks, such as pick-and-place activities. Warehouse automation is now offering more personalized in-service offerings, as well as being tailored to solve the unique needs of the warehousing facility’s existing employees. 

The logistics industry has access to technology that can foster a frictionless experience across multiple stages of the supply chain. The challenge is overcoming a tendency to be passive in optimally embracing automation. The future of the smart warehouse is dependent on implementing value-added solutions today, so that supply chains can keep up with customer demand and alleviate pressures for existing employees tomorrow. Local-to-local grid planning and the implementation of smart warehouses will become more prevalent as warehouse infrastructure gets optimized for better performance. 

Heico Sandee is founder and CTO of Smart Robotics

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LOGISTICS
March 28, 2023 By user

Retailers Reaping Big Savings on Ocean Transport Costs

Retailers Reaping Big Savings on Ocean Transport Costs

Ocean container transport prices and negotiations at the moment. The shipping prices have fallen towards pre-pandemic levels, and companies are delaying signing annual contracts to negotiate even further discounted rates, resulting in significant savings for retailers on ocean container transport. As a result of a steep drop in cargo that began in the fall of 2022 and has continued into 2023, ocean carriers are having a difficult time filling their ships. Due to a decline in shipping demand, retailers have overstocked, and spot market rates have fallen by more than 90% from pandemic-era highs.

The article written by  Paul Berger  from WSJ on this matter:

Retailers are gaining huge savings on ocean container transport as once sky-high shipping prices tumble toward prepandemic levels and companies delay signing annual contracts so they can bargain rates down even further. 

The average price for Asia-to-U.S. container trade has “fallen as dramatically as we’ve ever seen it fall,” said Jon Cargill, senior vice president and chief financial officer of Hobby Lobby Stores Inc.

Importers and container lines typically conclude agreements for the fall shipping season, when retailers stock up on consumer goods, by mid-April for contracts that take effect May 1. Companies say they are negotiating in a far different environment from last year, when retailers looking to replenish depleted inventories rushed to sign deals and paid record amounts to secure scarce space on container ships.

“In 2022, it was beg, borrowing or stealing to get a meeting with an ocean freight liner,” said Michael Shaughnessy, senior vice president of operations and supply chain at Christmas tree seller Balsam Brands Inc. “Everyone wanted to talk to us this year.”

Mr. Shaughnessy said Balsam Brands expects to sign contracts in the coming weeks at a discount of about 75% compared with last year’s prices and roughly in line with 2019 rates.   

Ocean carriers are struggling to fill space on ships after a steep drop-off in cargo that began in the fall and that has continued into 2023. Retailers ended up overstocked in the second half of last year as consumer spending shifted, and many are still coping with excess inventories. 

Spot market rates have crashed more than 90% from pandemic-era highs as shipping demand has declined. The average spot rate to ship a container from Asia to the U.S. West Coast as of Thursday was $1,289, according to Norway-based transportation data specialist Xeneta, about $668 lower than the contract price.

For a midsize importer bringing in thousands of boxes a year, the wide gap can translate into millions of dollars in annual savings.

Kaitlyn Glancy, head of North America for digital-focused freight forwarder Flexport Inc., said companies that value reliability of cargo flow and consistency in pricing are willing to commit a portion of their imports to rates fixed to contracts. But Ms. Glancy said many of Flexport’s customers are still sitting on inventory that cost $20,000 a box to import last year and are willing to play the spot market to boost profits.

“What we’re hearing more and more is the customer is saying, ‘Look, cost is still king for us,’” Ms. Glancy said. 

Some shippers say they aren’t clamoring to sign a contract because they have no fear of securing space on ships in the coming months.

Ocean carriers are starting to take delivery of container vessels ordered during the pandemic when demand for cargo space surged 20%. Yet demand for space on ships today is low.

U.S. container imports in February were down 25% compared with 2022 and 0.3% lower than February 2019, according to Descartes Datamyne, a data analysis group owned by supply-chain software company Descartes Systems Group Inc. 

Xeneta Chief Executive Patrik Berglund said some shippers are drawing out talks to the last possible minute, or going beyond traditional deadlines, as spot rates continue to fall and drag down contract rates.

Mr. Berglund said many carriers opened negotiations with customers by seeking about $4,000 to ship a container on routes linking the Far East to the U.S. West Coast. The average contract rate to ship a box on those routes as of Thursday was $1,957, according to Xeneta, 71% lower than the same time last year. 

“And it’s still sliding downwards,” Mr. Berglund said.

 

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LOGISTICS
March 21, 2023 By user

GPT4.0 Game Changer

OpenAI developed GPT-4.0, a multimodal model that accepts images as well as text inputs and outputs text. In addition to its human-level performance on various academic and professional benchmarks, GPT-4.0 boasts a multimodal nature that allows businesses to feed it a wide range of data. Companies can use the model to summarize PDFs, aggregate and contextualize chart data, analyze and critique contracts, or identify visual irregularities in physical infrastructure.

As OpenAI’s most advanced system, GPT-4.0 can solve difficult issues with greater accuracy. Its broader general knowledge and problem-solving abilities enable it to produce safer and more useful responses.

In comparison to previous versions of GPT, GPT-4.0 has several improvements. As a result, GPT-4.0 has a larger memory than previous versions. While GPT-3.5 could only handle around 8,000 words, GPT-4.0 can now read, analyze, or generate up to 25,000 words. GPT-4.0 also has a strong sense of ethics built into it. For example, ChatGPT added filters to its original engine (GPT-3.5) to prevent it from giving inappropriate answers.

Overall, GPT-4.0 is significantly smarter than its previous model and scored in the 90th percentile on the Uniform Bar Exam. With the development of GPT-4.0 and its advanced natural language processing capabilities, we can expect significant improvements in virtual assistants, chatbots, and customer service interactions. By utilizing these technologies, users will have a more accurate and personalized experience in answering their questions.

The logistics industry could benefit from improved communication between customers and service providers. Customers could track their packages or schedule deliveries more easily with a chatbot. The chatbot would be able to understand the customer’s needs and provide customized responses based on their individual situation.

In addition, GPT-4.0 could help logistics companies improve their internal communication. For example, by using virtual assistants, employees could easily access information or complete tasks without having to navigate complex systems.

Ultimately, GPT-4.0 can improve customer and employee communication and efficiency in the logistics industry.

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DELIVERY
June 29, 2021 By user

The 10 Most Used Maintenance Plans

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PACKAGE
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Our Mission 2040: Zero Emissions

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PACKAGE
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Be Smart About Packaging, Product Design

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DELIVERY
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