Nearly two years into the pandemic, today’s congestion issues and logistics logjams are not expected to end anytime soon. It is imperative brands fortify their supply chains to best navigate the current environment and prepare for what unexpected challenges may lie ahead to limit future disruptions.

A burning question facing retailers is if and when customers will return to purchasing in stores similar to pre-pandemic patterns rather than buying nearly anything and everything online.

Historically, many shippers have bifurcated their buying decisions, supply chains and fulfillment strategies based on sales channels, which generally provides a lower cost basis when done well. However, to thrive today, retailers must embrace omnichannel fulfillment strategies.

Looking ahead, omnichannel optimization will be critical to current business models. Newly defined consumer behaviors will meet and synthesize with various buying patterns. In some industries and within certain demographics, e-commerce may retain its status as the primary buying channel. In some situations, however, there will be a reversion to a combined model of traditional brick-and-mortar retail and e-commerce. It is crucial for retailers to be more agile to meet customer expectations within a variety of purchasing methods, whether online, a mobile phone app or in-store.

Automated fulfillment solutions support the demand for speed and accuracy. Automated technologies, such as put-to-light walls, sorters, conveyors and pack-and-apply machines, can offer faster and more efficient handling of units while reducing the demand on teammates to perform highly repetitive tasks.

The pandemic has underscored automation and robotics can provide a defensive strategy to supply chain disruptions caused by the lack of labor availability.

Here you can read opinion articles about automation and is the future really so bright as it seems.

RETHINK DELIVERY STRATEGIES

Many retailers were surprised by the capacity constraints in the parcel delivery network at the onset of the pandemic created by the influx in online orders. In the past, the emphasis was on securing the lowest cost with the best incentives, typically through one parcel provider. However, in order to best address network constraints moving forward, shippers need to adopt a more diverse delivery strategy.

For many, this means using multiple national parcel delivery carriers along with regional providers. This ensures they have the capacity to get their products to the end consumer when needed to create a satisfactory purchasing experience.

Additionally, we continue to experience capacity challenges out of Asia. The pandemic reduced capacity at a much quicker rate than the reduction of trade demand, increasing freight costs and decreasing transit reliability.

Ongoing port congestion is forcing many retailers to consider air transportation. Because passenger belly space remains lower than pre-pandemic levels due to limited international travel, retailers are renting entire cargo aircrafts to help offset capacity issues.

With this in mind, it is critical brands rethink delivery strategies. For many, this means shifting from a single-source supply chain to establishing multiple manufacturing centers with their own supply chains and delivery strategies in order to be more agile.

By embracing an omnichannel mindset, automation technologies and diverse delivery methods, brands will have the strategies in place to best navigate unexpected logistics logjams in the future.

Source: www.inboundlogistics.com

Author: Josh Jungwirth, EVP ofFreight Forwarding, GEODISin Americas

Image: www.pexels.com

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Shippers must navigate a daunting array of complex challenges when operating in today’s often turbulent supply chain landscape. Potential pain points are rampant.

Fortunately, shippers can turn to a variety of solutions and tools that can help drive capacity, control for rates, enable visibility, manage inbound and outbound execution of shipments, and improve the freight audit and payment processes—cumulatively addressing those nagging obstacles that frequently surface.

ORDER MANAGEMENT

For instance, a lack of information on inbound orders can cause shippers to need to devote additional costs to labor throughout the supply chain. However, an order management tool within a transportation management system software solution can serve to provide shippers with full visibility for tracking and tracing shipments and the capability to manage events.

That visibility includes a view of purchase order fulfillment and creates the ability to quickly review with the supplier the timing of the shipment to schedule labor at distribution centers for outbound shipment execution.

When shippers struggle to find capacity from their providers, it leads to increased freight spend and labor costs. Getting status updates on shipments also can eat up time and resources. Through outbound shipment execution tools, shippers can take sales orders and interface with a transportation management system to manually or auto rate and auto tender shipments to transportation providers. Shippers can gain visibility of shipments down to part level, order number; receive alerts for shipments out of the delivery window; and at the same time control costs.

SPOT AUCTION

Global inbound shipments have been in turmoil in 2021 and are forecasted to remain that way at least through the first three quarters of 2022. Ocean shipments, in particular, are facing not only capacity challenges and longer transit times, but extremely high rates.

Operating in these markets means relying heavily on spot auction tools and automated bidding solutions to identify and lock in the best possible rates that match capacity and transit needs. Spot auctioning can be executed for all modes in a timed automated tool for both inbound and outbound shipments.

CONTRACT MANAGEMENT

Contract management is a necessary condition for successful end-to-end procurement and supplier performance—and arguably even more critical than the “sourcing” phase in the end-to-end supplier engagement process. Contract management tools can improve business functioning, control spending through better visibility of spending and identification of future savings, help to monitor and evaluate suppliers, and ensure compliance with clear rules and procedures.

PROCUREMENT TOOL

An RFP bid/tender sourced in one tool for multiple transportation providers offers the ability to run global multi-modes and establish tasks and activities. Shippers can build a generic bid and quickly view the low-cost providers. They also can award and allocate multiple providers a percentage of the lane or lanes that need carriers.

FREIGHT AUDIT AND PAYMENT

Tech-based tools can help avoid early payments (driving cash flow), duplicate payments, and late payment penalties, while ensuring shippers take advantage of payment terms. They also provide data for future rate negotiations and invaluable visibility to supply chain costs.

Source: www.inboundlogistics.com

Author: Dave Maddox, Senior Vice President, Global Supply Chain Sales & Marketing, nVision Global

Image: www.pexels.com

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European shippers and freight forwarders have once more alerted the European Commission on the current practices of liner shipper carriers as European supply chains are becoming more distorted.

The associations will meet the Commission early in the new year to further demonstrate the damage carriers’ behaviour is causing to trade growth at a time of economic recession.

In a joint letter to the Competition Directorate of the European Commission, the European Freight Forwarders Association (CLECAT) and the European Shippers’ Council (ESC) have informed the Commission on issues arising from carriers’ ongoing practices. These relate to the violation of existing contracts, the establishment of unreasonable conditions concerning the acceptance of bookings and the unilateral setting of rates far in excess of those agreed in contracts.

This situation is particularly affecting small European businesses with limited financial reserves. A telling example is that a French company producing electric bikes may go out of business as the company is not receiving spare parts out of Asia. Due to the delays and the lack of space, combined with the surge in tariffs, this start-up business is making losses and may not sustain in the near future, as the company is not able to finish its products for sale. The adverse consequences of carriers’ practices are felt equally by many larger companies, including retail, fashion, automotive, cosmetics and IT businesses.

Carriers have been reserving for themselves the ability to change rates whenever they see fit notwithstanding the specific rates and charges agreed. Carriers are continuing to top their rates with surcharges, general rate increases, etc. Similarly, shippers and forwarders are being confronted with refused bookings and rolled cargo if carriers deem it more profitable to accept higher rated cargo for a particular sailing. Unacceptable practices also include imposing an extra fee as a price for accepting cargo at a new tariff charge, simply refusing to accept bookings at all for customers, forcing a customer with contract rates to move it to spot rates at much higher price. For instance, the Shanghai Shipping Index reached a new record high of 2641,87 USD per TEU on Christmas day.

The disruption in the supply chain because of the unprecedented number of blank sailings (up to 30% on some trades), combined with the lack of reliability (with only 50% of ships on time over the last year), has led to the current shortage of empty containers. Carriers are trying to ship containers back to China as fast as possible, simply because there is a need and profits are extremely attractive. But this has meanwhile led to a domino effect in as far as there is general shortage of equipment for European exports. As a consequence, forwarders and shippers are now also confronted with all sort of new surcharges such as ‘equipment imbalance surcharges’ which carriers are imposing. If carriers decide to ship empty containers back to China for commercial reasons, is it doubtful whether it is justifiable to implement an ‘equipment imbalance surcharge’.

Last year, shippers, forwarders, terminal operators and others in the maritime supply chain expressed their dissatisfaction with the decision of the European Commission to once more extend the block exemption regulation for liner shipping, which it considered a one-sided exercise to the benefit of the carriers. Consortia agreements authorise carriers to collectively agree on  blank sailings. The current shortage of capacity has enabled carriers to significantly raise rates on spot market cargo and for cargo under contract. The unreasonable practices of carriers regarding container equipment, rates and demurrage and detention charges present a serious risk to the ability of economic recovery in Europe.

ESC and CLECAT, whose members have been particularly affected by unilateral carrier rate and service changes, encourage the European Commission to take actions similar to those of competent authorities in other parts of the world.

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