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Implications of an Ancient Strategy in Modern-Day Logistics
Implications of an Ancient Strategy in Modern-Day Logistics
June 10, 2020
As with any event causing major disruption to normal life and business operations, COVID19 will continue to have a ripple effect across all industries for some time. These ripples will continue to cause companies, regardless of industry, to reevaluate their processes and procedures. In the logistics industry, we’ve already begun to see effects in the form of leaner logistics, increased digital focus, and a huge shift towards diversification. Diversification of a logistics strategy can include anything from having more than one supplier or manufacturer in more than one location, incorporating a mix of transport modes, or adding options for large (national) and small (regional and local) carriers.

Diversification is in no way a new strategy, in fact, it’s one of the oldest, referencing back as early as 950 BC and the writings of King Solomon. The concept of diversification is commonly applied to investment portfolios and financial strategies, but the principles are also relevant to the world of logistics. During Solomon’s reign, he controlled multiple trade routes and was responsible for constructing an elaborate and profitable web of alliances. Trade routes and partnerships for profit…it seems almost intuitive to apply those ancient diversification concepts to today’s logistics industry.

Diversification, as an over-arching concept, involves minimizing risk and reliance associated with single external sources or mainstays in order to achieve a more optimal performance overall. Diversifying the carriers included in your logistics strategy distributes the risk and improves cost and service scenarios by reducing reliance on a single mode or carrier. Large fluctuations to carrier capacity can be caused by events as unexpected and catastrophic as a pandemic, or as common as a union strike or peak shipping. In constrained environments such as these, higher volume does not necessarily equal better discounts. If any single carrier is operating with volume greater than its capacity, prices will rise significantly.

Multi-carrier shipping systems have always put shippers in the driver’s seat by providing the power to ship with the optimal carrier on a case-by-case basis, but now more than ever, more carrier options equals more value to shippers. A multi-carrier shipping system, such as ConnectShip, allows you to choose from a multitude of carriers, each with multiple modes or geographic areas of focus. You can evaluate shipping rates and delivery commitments on a per shipment basis or configure your shipping system to automatically select the lowest cost or shortest transit time. A successful supply chain is contingent on having options – investing in carrier diversification gives you the options you need to succeed.

Krista Barnes
Marketing Supervisor ~ ConnectShip
Krista Barnes joined ConnectShip as a web development specialist in the Marketing department in 2007 . During her time marketing ConnectShip solutions, Krista has been instrumental in the current and future direction of the company website, product marketing, communications, and event production. A graphic designer by trade, she has helped to evolve and then rebrand the company’s identity into what it is today. Krista earned her Bachelor of Arts in Graphic Design and Art History from Oklahoma State University.