Consumers are impatient that supply chains are still unreliable, even as economies are reopening. Tempers and patience are short; people just want their goods, and they want them yesterday, but logistics teams can’t make any promises.
There was little appreciation for just how fragile the system was pre-COVID-19. Delays happened, but because goods largely arrived in time, if not on time, flaws went unseen. The initial impact of the virus broke supply chains, when factories and ports closed and aircraft were grounded. Instead of restoring them, the surge in demand from late 2020 only opened those fault lines into chasms.
Today, we’re grappling with an unpredictable situation. It’s not just that goods are moving slower; there’s no way to know just how slow they’ll be. There’s a shortage of shipping containers, ships, trucks, trains and particularly of drivers. It’s estimated there’s only around one driver for every nine open postings.
At the same time, the trend toward larger ships means fewer ports can accommodate them, so ports get backed up more easily. If one ship is delayed, it interrupts the progress of far more goods, and larger shipments need more rail and road services, raising the risk of congestion. The rise in extreme weather conditions is also forcing ports and railroad terminals to close intermittently.
Change in any one of these variables means delays, possibly in conditions that you and your customers didn’t anticipate. While previously you could trust that items would arrive within an acceptable window and in an expected condition even with a delay, now it’s impossible to predict how long the delay may be.
On top of that, the holiday shopping season placed even more stress on supply chains. You can’t call on magic to deliver late or lost packages. However, there are ways you can help lower stress, minimize damage and deliver positive service.
Improve visibility into shipment progress. Enable businesses to find ways to deal with delays and rerouting, by offering real-time visibility into shipment progress on both a micro and a macro level.
On a micro level, customers need to know exactly where each individual shipment is located at any given moment, so they can change the route or shipping method when needed, and update their end customers accordingly.
On the macro level, you need to share insight into the ebb and flow of goods across the system, so you can optimize the supply chain; choose the best shipping method, routes and contractors, and keep updating those choices. Doing so requires not just low-latency location data, but also advanced analytics which can gather and crunch information swiftly.
Optimize shipping routes. Air routes are becoming more competitive than earlier in the pandemic, making them a viable alternative at times to clogged marine or road lines.
To help customers fulfill their promises, logistics teams need the flexibility and agility to mix and match air freight, marine shipping and road freight, even once shipments have already set out on their journey. This in turn requires trustworthy data logging options that can cope with changing transportation methods. Today's solutions don’t need wired connections or expensive hardware, hold up under all temperatures and conditions, and can follow the shipment wherever and however it travels.
Offer transparency into shipment conditions. When you’re in a volatile shipping situation, it’s crucial to share real time information not just about where the shipment is located, when it’s expected and what’s causing the delay, but also the condition of the items.
Longer shipping times and an increased likelihood of delays, rerouting and changes in shipping methods means increased need for full knowledge about shipment conditions, including humidity, tilt, jostling, temperature and shocks. Customers need to know if items are close to expiration, or in temperatures that exceed recommended parameters. Quality assurance demands full visibility, especially for sensitive items like food, pharmaceutical products and electronics.
Integrate logistics capacity. Few logistics companies have spare capacity, but those that do are starting to share it, for a fee, in the form of supply chain as a service (SCaaS). For example, giants with in-house logistics like Walmart Inc. and Amazon.com Inc., which might have a near-monopoly on shipping in specific local areas, are offering smaller logistics companies the option of hiring their surplus capacity.
The trend is small, but it’s growing. Research shows that 35% of companies involved in logistics either currently offer SCaaS, or plan to explore it over the next year.
Businesses around the world are struggling to cope with the fallout of the broken supply chain. Logistics companies can’t heal the wounds, but by offering better visibility, optimizing shipping routes and pooling capacity, they can help lessen the pain for their customers.
Niko Polvinen is chief executive officer of Logmore.
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