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Here to Stay | Supply Chain Agility
Trends Poised to Be Around Long After 2020
Here to Stay | Supply Chain Agility
Trends Poised to Be Around Long After 2020
December 3, 2020

C
hristmas level volumes in April. E-commerce taking its stronghold as the shopper’s choice. Businesses redefining what it means to be agile. A non-traditional year calls for non-traditional logistics, but the impact is not temporary.

All transportation modes have seen their ecosystems change in an expedited way, speeding and slowing their demand, unpredictably so. According to a recent Wall Street Journal article about the state of supply chain resilience:

“The rapid growth of e-commerce during the pandemic follows strong gains in 2019 by the U.S. parcel delivery sector, which the report said grew 8.5% from the year before to become a $114 billion market. Trucking costs rose 3% last year, the report said, while spending on rail slipped 1.4%.....Warehousing costs could increase by 5-10% to keep stock on hand.” (State of Logistics report, published by the Council of Supply Chain Management Professionals)

And, in the midst of all this, Amazon’s air freight network is quietly growing to keep the promise of quick delivery between its fulfillment centers; an internal strategy...at least for now. Our eyes are now open to uncertainty. These adaptations are here to stay. We’ll cover talk of inventory buffers, agile warehousing, diversified transportation spend, and of course, shipping technology.

Which Changes are Here to Stay?


Regional carriers as workhorses in B2C

The value of regional shipping networks is not new. The “trendiness” here is that regionals have an unprecedented scenario on their hands, one that is requiring their full attention and maximum capacity. Supply Chain Dive recently reported that shippers were “already working with regionals, but the volume caps pushed big-box retailers and global companies in droves to regional parcel carriers.” Here are the highlights:



  • In the B2C space, retailers like Walmart can only make a partial bet on their default shipping decisions, leaning more heavily on regional services in an environment that is anything but the default.

  • Even the special service partnerships between major carriers, namely those involving the United States Postal Service, have been strained in 2020.

  • For a business wondering if regionals are the right strategy, Nate Skiver via Supply Chain Dive suggests that volume by origin is key to identifying potential volume shifts. There is no “one-size-fits-all”.



E-commerce molding the supply chain into an agile force

"Brands need to get crafty right now to survive and thrive long past our current circumstances. One method we’ve seen especially useful is the use of stores as mini-fulfillment centers," said Radial Chief Commercial Officer Tim Hinckley.

Mini-fulfillment centers are most recognizable in retailers such as Target, which has leveraged inventory visibility to stand up a logistics network out of the stock room. This linked article points out a few factors for the rest of us to consider in leveraging e-commerce fulfillment. Here are the highlights:



  • Dispersing risk is the key, but demand shifts pose a threat to any scaling efforts.

  • Long-term contingencies in which “uninterrupted operations supersede cost-benefit analysis.”

  • Strategies around outsourcing vs. in-house that allow warehouses to make flexible decisions



Adaptable warehousing and transportation choices will be favorable

Hallmark procurement strategies in cleaning, grocery, and consumer packaged goods have been challenged. For example, “Like many industries, the cleaning product supply chain relies on a just-in-time approach, making it difficult to radically move the output meter in a short timeframe.” Howard Bochnek, VP of technology and scientific affairs at American Infection Control

More substantial process changes might not sound appealing, but the selected publications offer several paths to achieving an agile supply chain. Here are the highlights:




Operations teams combining caution and efficiency

The pandemic thrust a major challenge on warehouses specifically. Staggered pick and pack operations, sick leave policies, even break room configurations are on the minds of operations managers, whose vital in-person teams support an outsized impact.

Several technological advances are allowing warehouse workers to do their jobs more effectively and safely, most notably on the topic of artificial intelligence and machine learning.

"It also knows how many people should be within that aisle within a specific time based on the number of people in the aisle and if too many tasks are going to that aisle." Diego Pantoja-Navajas, VP of cloud warehouse management development at Oracle


Closing Remarks

It’s difficult to predict how post-pandemic logistics will look, but if current trends are any indication, those who take the lessons of 2020 to heart will set the standard. For further reading on these trends and topics, visit the blue hyperlinks in this blog. Stay tuned for more from ConnectShip's Blogistics industry blog.



Ludwig Dischner III
Marketing and Commercial Project Analyst ~ ConnectShip
Ludwig joined ConnectShip in the fall of 2019 as a Marketing Analyst, bringing his skills in brand development, project management, content production, and some musical talents, too. Ludwig is an integral piece of the team, communicating logistics solutions to a wide range of audiences and improving ConnectShip's project management. Ludwig holds a master’s degree in strategic communication and project management from the University of Oklahoma, after graduating from the University of Tulsa with a bachelor's degree in business marketing. He looks forward to any project that allows him to meet and interact with people.