Shippers need to diversify their supply chains if they are to avoid bottlenecks in the future, says Coby Nilsson, chief executive officer of Enveyo.
When the pandemic caused bottlenecks and other problems for the supply chain, many shippers found themselves in the impossible position of trying to adjust on the fly, Nilsson says. “They didn't have established carrier relationships, and they even had partners cutting them off, saying, ‘We're going to cap your volumes; we just can't handle this demand.’ So I think it woke them up. Consumers were pretty forgiving through the initial stages of the pandemic, but we can't claim to be surprised anymore.”
There are two aspects to supply-chain resiliency, he says: carrier relationships and technology. Many businesses and shippers have standardized on carrier-owned technology. Larsson says that has put them into a corner. “The first thing you need to address is the technology side, because relationships don't matter if you can't pivot — if you can't adjust and add an alternative carrier.”
Since every shipper is different, it’s imperative that they first determine what their needs are. “You want to model that out before you actually make investments, whether that's expansion or adding a regional carrier, and then you have to contemplate that moving volume may cost you as well because of loyalty-based agreements.”
Assessing a carrier’s capacity and performance is key before entering into a contract. “Time and transit. How are they performing under the current conditions? How are they performing in the regions you’re looking to serve? Maybe they’re really strong in the Southeast and weak in the Northeast. Those are metrics. Those are data points that can be analyzed before you make those decisions. Those are probably the most important things, aside from cost.?”
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