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Home » To Cope With Supply Chain Disruption, Shippers Need Diversified Networks

To Cope With Supply Chain Disruption, Shippers Need Diversified Networks

February 8, 2022
Geoff Kelley, SCB Contributor
In today’s rapidly evolving environment, where demand is outweighing supply, shippers are prioritizing access to diversified and scaled capacity networks. Shifting away from traditional, demand-reactive sourcing methods to a dynamic capacity network ensures shippers are building sustained resilience and versatility in their supply chains.

As economies evolve to address the changes brought on by COVID-19, supply chains are adapting to meet the sudden spike in consumer demand, accelerating the already rapid shift to e-commerce. Despite efforts to adjust, supply chains around the world continue to experience a significant imbalance, as manufacturers and retailers face shortages across the spectrum from raw materials to finished goods. As high demand levels continue to stress supply chains, the industry is experiencing record-breaking freight rates.

Shippers who have invested in diversified network partners are proving more successful in managing the volatility and accessing market competitive rates. Critical to this approach is networks that are built on a foundation of scaled, diversified capacity and optimized freight moves.

Shippers benefit from networks that combine buying power with diversified capacity providers. For small to mid-size shippers, partnering with the right provider prevents the shipper’s infrequent demand from becoming disruptive to business scalability. The right partner can help to maximize opportunities, enabling flexibility to scale, and allowing shippers to focus on the business as it’s impacted by market trends and disruptions.

As the supply chain continues to become more dynamic, time sensitive and environmentally focused, mode optimization becomes increasingly important. By drawing on end-to-end tech capabilities and data engines through providers, shippers can achieve mode optimization far better and faster than with siloed systems and data sets.

As an example, some if not all larger packages should move by less-than-truckload carriers versus parcel carriers from a cost perspective. Or, rather than LTL, truckload might be a better option, depending on the number of pallets and service requirements. Shippers must take into consideration these examples when shifting to a dynamic and optimized planning strategy.

Data sourcing can be challenging for shippers, with limited access to critical information that can impact decision making. Shippers often turn to the tools invested in by partners to elevate the impact of proprietary data when benchmarked against unique data sets. Drawing on real-time data alongside predictive intelligence allows shippers to adapt and increase nimbleness amid market demand and supply chain stressors.

In a 2020 survey by the Hackett Group, supply chain executives said greater agility was their top focus as they struggled with the effects of COVID-19. The pandemic serves as a reminder that the future remains unpredictable, and shippers need resilience and flexibility to keep up.

By focusing on partners that provide both stability and scale, shippers can remain resilient and flexible. Don’t forget, however: not everything is solved with technology and business intelligence alone. Heightened collaboration and communication with partners are essential to achieving optimal performance, both in the current and future state.

Outlook:

Adoption rates of dynamic, real-time data and business intelligence tools will continue to grow as shippers invest in agile, flexible supply chains. At the core of this flexibility will be collaboration and the ability to manage freight needs across all modes of transportation instead of a traditional, outdated siloed approach. This will be important as capacity constraints continue, and risks such as COVID-19 impact supply chains.

Geoff Kelley is president of Nolan Transportation Group.

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