As logistics professionals come out from underwater, they’re dealing with the fact that they cannot resume business as usual. Fortunately, these challenges present a new reality and opportunities in remote collaboration. This includes using technology to achieve greater visibility into their organizations, and developing end-to-end, collaborative business processes that involve all the players in the supply chain.

Remote Collaboration in Logistics

Remote collaboration is the use of technology to bring together people from different locations for a common purpose. It’s driven by advancements in cloud computing, real-time videoconferencing, and other forms of telecommunications that have made it easier to collaborate with people across distances. Leaders in logistics can benefit from remote collaboration because it allows them to tap into a wider range of industry experts and connect more easily to their end customers.

One of the biggest challenges in logistics is gaining a true sense of a facility or area that an employee can’t physically visit. This helps with planning and operations, but it’s also important from a security perspective because it allows leaders to understand what areas present risks for their workers and what areas might be hiding dangers. Advances in 360° technology, such as real-time 360° collaboration, allow leaders, customers, and experts to see any area from a remote location.

For example, during the heat of the pandemic, DB Schenker, a global logistics leader, leveraged 360° technology to conduct virtual warehouse tours. During these tours, DB Schenker brings potential customers on site to view their facility and explore their offerings without the time, cost, and environmental impact of physical travel, which in turn helps drive sustainability goals. They estimate saving millions in travel costs.

Below are 5 key benefits of remote collaboration for logistics leaders.

#1 Massive Cost-Saving Potential

Swapping site visits with virtual inspections/tours saves on average $2k per person, per visit. This money can be reinvested into other scalable projects. Remote collaboration is meant to augment an existing collaboration protocol. With the right tools at their disposal, logistics leaders can select which visits they can conduct remotely and how they can reallocate funds to other areas of business growth.

#2 Sustainable Solution

Business travel is a leading culprit in carbon emissions. For example, a relatively short return trip from London to Rome carries a carbon footprint of 234kg of CO2 per passenger.

Reducing reliance on travel allows businesses to reduce greenhouse gas emissions over time, thereby helping organizations meet carbon reduction targets without major disruptions to their business.

#3 Minimize In-Person Disruptions

With 360° remote collaboration, leaders and onsite personnel can get their time back. Instead of spending travel time and several hours on site, leaders can see what’s happening and discuss all the details in a single meeting.

Typical on-site visits disrupt routine workflows. For example, visits such as facility tours or audits may involve schedule changes for on-site personnel. This might only take a few hours out of the day but could significantly disrupt workflow. Leaders that use remote collaboration can reduce or eliminate these disruptions, allowing them to get work done.

For attendees, the average business trip involves 6.9 hours lost that could otherwise be spent productively and often involves a physical and mental drain on the travelers.

#4 Conduct More Frequent Visits

By avoiding logistical challenges with travel, leaders in the logistics space can reimagine how often they want their team or customers to be on site.

With remote tools at their disposal, they can increase the frequency of routine audits or bring customers/stakeholders on site more often for updates and decisions. Having more site visits virtually will only help on the efficiency side and improve quality control.

#5 Maintain Safety of Sites and Personnel

Remote collaboration also provides logistics leaders with another security benefit – personal safety – by allowing them to conduct more business from their homes or offices, away from any danger that might be present at a particular location. Having a remote protocol in effect helps leaders overcome travel challenges or COVID related shutdowns.

At the end of the day, logistics leaders should consider how remote collaboration tools can add value across the entire organization. Creating measurable goals, reallocating funds based on current needs, conducting more frequent visits for customers or employees, reducing in-person disruptions, and increasing access to decision makers are just some of the benefits that come from selecting remote collaboration tools built for site visits.

Technology is not a replacement for all physical interactions. In certain cases, logistics leaders might want their team or customers/stakeholders to visit their locations as opposed to meeting online. Having the option to have meetings with multiple people from different time zones in one space is already our future.

Source: www.inboundlogistics.com

Author: Devon Copley, Founder and CEO, Avatour

Image: www.pexels.com

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The study, which was conducted by MDS Transmodal, identifies the extent of capacity restriction in 2021 that resulted from scheduled port calls being skipped by shipping lines. It measured the number of container ship slots that were expected to be available at the port but never materialized because the lines skipped the port—often because vessels were already fully occupied by containers collected at ports called at earlier on the service.

Skipped ports have become part of how shipping lines are managing their heavily utilized fleets.

“Skipped port calls have multiple effects on shippers,” says James Hookham, director of the GSF. “They create local upward pressure on shipping rates, as shipping line agents ‘auction off’ available slots on the vessels that do call. Shippers also face unexpected surcharges for the handling and storage of delayed containers.

“More pernicious is the wider effect on national economies, especially those of developing nations that lose opportunity to deliver their exports, and hinder the recovery of their economy from the effects of lockdowns and COVID restrictions,” Hookham adds.

Source: www.inboundlogistics.com

Image: www.pexel.com

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Intelligent supply chains. Intelligent technologies, such as automation, remote fleet management, and cargo tracking, are transforming supply chain technology to provide in-depth, real-time insights into locations and cargo status.

Cloud-based GPS and RFID technology provides instantaneous updates on cargo location, whether in warehouses or in transit, and assessing transportation performance and efficiency.

Digital thread. A digital thread is a communication framework that can share information to data consumers in a continuous feedback loop. A communication framework can ensure the entire supply chain is responsive as shifts in volumes, manufacturing, design, and through-life service occur.

For this to be effective, workflows and people need to be integrated. This marks the evolution from supply chain network to integrated value chain, allowing suppliers and customers to achieve collaboration and efficiency while reducing costs.

Demand-driven supply chain management. In transportation and logistics, decisions need to be made quickly and agility is essential. Demand-driven supply chain management has been part of the industry for some time, but the high volumes of data and deep insights require a step up from traditional methods. In the past, forecasting was based on historical demand, but that may not be enough with the influx of data and current demands.

IoT-embedded sensor technologies enabled with predictive analytics and machine learning can gather, analyze, and report insights from the environment and provide real-time responses to stay agile in the face of increasing demands. Data also offers insights to inform decision-making and build strategies and contingencies to adapt to future obstacles and maintain high levels of customer service, sales, and efficiency.

Cyber threats. Bad actors have more opportunities to exploit vulnerabilities in a digital supply chain, especially with third-party vulnerabilities that grant access to the real target. Conversely, manufacturers can have gaps that provide access to suppliers, destroying brand relationships across the entire ecosystem.

Suppliers and manufacturers need a rigorous protocol and evaluation process to assess risk and create stringent security across organizations and partnerships.

Meeting customer expectations. Customers have become used to fast order processing and deliveries and have little patience for delayed orders. To respond to these demands, some manufacturers are switching to centralized distribution and real-time inventory management.

The increasing demand for hyper-customization is also fueling shifts and linking the customers to the supply chain. Rapid prototyping and additive manufacturing are restructuring supply chains and more manufacturers are choosing on-premises manufacturing capabilities with lower waste.

Digitization holds promise for addressing current challenges in the supply chain environment and creating more opportunities moving forward.

Author: David L. Buss , CEO, DB Schenker

Source: www.inboundlogistics.com

Image:

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As we enter year three of the COVID era, companies worldwide are grappling with an all-too-familiar array of supply chain challenges—supply uncertainties, capacity and labor shortages, long transit times, and sky-high transportation rates. Tough times call for fresh strategies. As companies seek to reboot their supply chains for better success in 2022, here are some tips on how to navigate the new normal.

1. Digitize to Manage Uncertainty. Before you develop a supply chain plan, you first need to establish certain parameters—for example, how much lead time a supplier requires to produce a product, and how much demand you expect. Unfortunately, right now, the figures that underlie supply chain plans are anything but solid.

“Supply chain organizations are faced with tremendous disruptions, just trying to respond to the variability that’s occurring,” says Mark Balte, executive vice president, supply chain innovation, at Atlanta-based supply chain solutions provider Logility.

To manage variability, collect as much data as you can about supply and demand and apply machine learning to develop a sophisticated picture of changing conditions over time.

Take demand sensing, for example. “If we put a plan in place four or six months ago, the demand pattern is going to change as we get closer to that demand date,” Balte says. The more data the company collects, the better it can predict actual demand.

“We can begin planning earlier, perhaps make a change,” Balte explains. Maybe a company expects a shipment at the Port of Los Angeles. “I was planning to move it to a distribution center in Colorado,” he says. “Now I may only want to move part of it to Colorado and some to Dallas.”

Opportunities abound to collect data that supports decisions, with new Internet of Things (IoT) devices coming on the market all the time. “But companies should begin the journey now, at least collecting data within their own enterprise, and then extending that outside the enterprise,” Balte says.

Data from publicly available sources, carriers, and IoT devices in company-owned or supplier factories can enhance the knowledge base, producing better forecasts.

2. Rate Sources for Risk. Data analytics can also help you develop more resilient sourcing strategies. For instance, Stanley Black & Decker, based in New Britain, Connecticut, analyzes risks its suppliers face due to COVID infections or various other challenges. Those risks point to potential supply chain disruptions.

“We’re able to quickly narrow down the list of higher-risk suppliers that we can evaluate much more carefully to see if their production rates have been hit,” says Guru Bandekar, chief supply chain officer for the company’s Global Tools and Storage business.

Stanley Black & Decker dual-sources or multi-sources components whenever possible. If supply from one vendor starts to look uncertain, the company can shift more order volume to a different supplier.

When dual- or multi-sourcing isn’t possible, Stanley Black & Decker maintains safety stock, setting the volume based on how long it would take to recover from a disruption. “If it will take us five weeks to re-source that part, because it takes time to get a new supplier up and running, then, to put it simplistically, we want to have five weeks of safety stock,” Bandekar says.

3. Move Your Manufacturing. Supply chain disruptions have dramatically driven up freight rates and lengthened transit times. A container shipment from Asia to the United States that would have cost less than $2,000 a few years ago cost as much as $20,000 in 2021, according to Bloomberg.com. And capacity shortages and port congestion have added weeks to the crossing.

“A shipment from Asia to the United States used to take four weeks by ocean,” says Mustafa Hossaini, business development manager at Westec Plastics Corporation, a contract manufacturer of plastic parts in Livermore, California. “Currently we see transit times of six to eight weeks.”

Since the start of the pandemic, Westec has experienced an uptick in inquiries from U.S. companies that might want to move their production from overseas to the United States.

While labor costs in the United States are relatively high, in some cases, domestic production cuts shipping costs so much that the math works out in favor of reshoring.

Hossaini cites a company whose drug delivery product uses plastic parts made in Europe. “They told us that on the last batch of products they received, the shipping costs were $8,000,” he says. “Our shipping rate to them would literally be $150, because they’re located a half hour away from us.”

Companies might also embrace domestic manufacturing to gain convenience and peace of mind, since they can easily visit a contract manufacturer to oversee quality issues and resolve problems, Hossaini says.

In addition, reshoring might eliminate language barriers. And many U.S. companies want to promote their products as “Made in America.”

Stanley Black & Decker strives to source components and assemble products as close as possible to the markets where they are sold. When local labor rates make this hard, the company controls costs through automation. Although the company has used this strategy since the advent of new tariffs in 2016, localization has grown even more important since the start of the pandemic, Bandekar says.

4. Get Flexible with Carriers. In an era of scarce capacity, shippers that strive to accommodate truckers’ needs have an easier time getting freight on the road. “We advise companies to be as flexible as possible with transit times, hours of operation, and trucks they would accept,” says Dave Menzel, president and chief operating officer at Echo Global Logistics, a third-party logistics (3PL) company based in Chicago.

Say a shipper wants a load picked up at 9 a.m., but the carrier can’t supply a truck until 1 p.m., Menzel says. If the shipper really wants that truck, it might adjust its schedule.

Shippers should also strive to get trucks loaded and unloaded quickly, to minimize downtime for truckers. “If a facility has a reputation for long lines and difficulty getting loaded or unloaded, then that facility is a lot less attractive, and trucks will choose different options,” Menzel says.

Fast loading and unloading are especially hard these days, when a tight labor market and COVID-related absences can leave shippers short-handed. Logistics managers should keep that in mind when they book appointments with truckers.

“They should be realistic about what they can load in a given day,” Menzel advises.

Shippers should also provide leeway when drivers arrive a bit later than planned. “Instead of telling them they need to get a new appointment, and the next available one is in two days, you might say, ‘If you miss your appointment by an hour, we will work you in,'” Menzel says

5. Collaborate. Good relationships with carriers and customers can also help shippers better deal with challenges such as uncertain transit times and shortages of crucial resources.

For instance, Stanley Black & Decker relies on strong partnerships with carriers and logistics providers to gain a steady flow of information about the progress of containers on the water.

“We can use that information to predict when we will get the product and then make commitments to our customers, to the best extent possible,” says Bandekar. “Customers want speed, but if they can’t have speed, they want predictability.”

The company also works with over-the-road providers to manage mutual challenges. “What can they do to get more chassis, or attract more chassis toward our supply needs?” Bandekar asks. “What can they do to attract more drivers?”

Stanley Black & Decker and its carriers hold many more conversations on such topics these days. “We are helping them prioritize, and they’re helping us understand the challenges so we can prioritize based on the changing dynamics,” he says.

Shippers may also overcome obstacles by sharing information with customers. “Don’t be afraid to discuss with customers the problems you’re facing, because they are going to face the same problems,” says Lewis Black, chief executive officer of Almonty Industries, a Toronto-based mining firm that is a major producer of tungsten.

Almonty serves customers in the electronics, medical device, aerospace and other industries. The company’s challenges these days include trouble procuring consumables such as drills, explosives and various grades of oil, as well as slow shipping, tight capacity, and high freight rates.

Sometimes, asking for a favor can help. “We ask our customers to send us a spare container if they have one,” Black says. Or, they might ask a customer that manufactures drill bits to send some half-finished drill bit or ones they are going to recycle. “Send them to us and we’ll use them,” he says.

6. Retain Your Talent. The Great Resignation has hit supply chain organizations hard. Companies, especially those involved in e-commerce, are trying to add front-line workers and new facilities to meet increased demand. “But at the same time, you have constant and accelerating workforce turnover,” says Dan Johnston, co-founder and chief operating executive of WorkStep in San Francisco.

WorkStep addresses the supply chain labor shortage with two technology platforms—Hire, a recruitment tool, and Retain, which employers use to gain insights to reduce employee turnover.

Companies have traditionally treated warehouse associates, drivers, and other supply chain workers as cogs in a machine, easy to replace, Johnston says. But in today’s tight employment market, that mindset has changed.

“If you can keep the talent you have, you have to compete less for this incredibly hard-to-find new talent,” he says. “And you can deliver more goods at a better pace to your end customers.”

WorkStep’s customers use Retain to collect feedback from employees periodically, asking their opinions on factors that affect job satisfaction. Using a mobile phone or similar device, the employee takes a minute or so to answer a survey. Retain aggregates and analyzes the results, spotlights areas of concern, and then, when the company makes corrections, tracks how those changes influence turnover.

Using Retain, a 3PL that runs 350 warehouses learned that managers in some of those buildings weren’t following correct orientation procedures for new employees. “You might see an average satisfaction with orientation of 90% across the organization, but in 10 buildings it was 50%,” Johnston says.

By correcting those and other problems Retain uncovered, the 3PL cut turnover among new hires by 36%.

7. Improvise. Beyond strategies to help navigate the current supply chain environment, companies might also benefit from tactical creativity.

Black recalls a time in the 2000s when Almonty Industries struggled with a shortage of rubber tires, which the mining company’s underground vehicles consume in large quantities. “What we came up with was very rudimentary, almost medieval,” he says. “We started making steel wheels with wooden tires.”

Almonty improvises in a similar way to beat today’s shortage of shipping containers. These are especially hard for Almonty’s European operations to get hold of, since the shipping lines focus so heavily today on their lucrative Asia-to-North America lanes.

“There are no containers around, but there are lots of old shipping containers in scrap yards,” Black says. Almonty retrieves those old containers, welds them back together and installs new, government-approved security latches.

“We have someone driving around who rings us up and says, ‘I saw an old shipping container in pieces in a scrap yard,'” Black says. “We send a truck down there, buy it, and bring it back.”

Unfortunately, once Almonty uses the recycled container to ship tungsten to the United States, someone there grabs it and the company never sees it again.

LONG-TERM SHIFT

While pandemic-related disruptions have prompted many changes, companies are not likely to revert to the old ways as the virus finally runs its course. “These capabilities we are building will be the way we operate in the new normal,” says Bandekar. “It’s a long-term shift.”

COVID has thrown a spotlight on issues that have always existed. But when normalcy comes back, other environmental issues, such as global warming and forest fires, will continue to disrupt the flow of goods.

Says Bandekar: “The way we manage our supply chains in the future will be much different from how we managed them in the past.”

Source: www.inboundlogistics.com

Image: www.pexels.com

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A survey carried out by booking portal Freightos found that 46% of air cargo carriers now enable instant rate searches for quotes on their websites compared with 10% in 2019.

Meanwhile, 33% offer e-booking with instant confirmation compared to 25% in 2019.

But there is still room for development, with 21% offering instant allotment booking and 4% allowing payments to be made online.

Freightos said that the most widespread digital stride among air carriers was the leveraging of third-party platforms to extend their online reach.

The research shows that 46% of leading air carriers provide instant rate search through third-party platforms and 42% also enable e-booking through these channels.

Shipment tracking is also widely available, with 42%providing this as an option.

Freightos said the adoption of third-party platforms was higher in air than ocean, where just 18% offer e-booking on portals.

“In the fragmented air market – compared to the consolidated ocean market and the growing leverage the pandemic has shifted to ocean carriers – airlines are eager for the low-touch access to new customers, new segments and new geographies that platforms represent, even at the cost of making price and service comparisons easier,” Freightos said.

“And the volatility of air cargo during the last two years served as a catalyst for this trend.”

The overall shift to digital booking was accelerated by the pandemic, the company said.

“The rush on PPE early in the pandemic, just as passenger travel plummeted, was an extreme example of the volatility in the air cargo industry over the last two years.

“The fast pace of air transport only quickened as labour shortages and ever-shifting quarantine requirements led to frequent operational changes.

“This environment accelerated the ongoing search many carriers had already been engaged in for improved internal efficiency and faster ways to communicate and transact with customers.

“Like in ocean freight, the pandemic accelerated the pre-existing trend toward digital connectivity.

“While carriers made gains in their website offerings and API connections, the biggest shift was in leveraging third-party platforms to extend their reach.”

Johnny Rubio, chief commercial officer of Silk Way West, said that online booking portals allowed carriers to introduce e-booking without a massive amount of investment in resource and capital and also makes its services more visible to a wider customer base.

IAG Cargo head of distribution Peter Roberts added: “Not only have our e-bookings increased, but the average weight per e-booking has too, suggesting that customer trust is growing.

“In addition to improving both customer satisfaction and our reach, the data unlocked through e-booking enables better business intelligence and a data-driven strategy.”

Source: www.aircargonews.net

Image: www.pexels.com

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The use of the passenger cabin for cargo, known as cargo-in-the-cabin flights, have been operating since 2020, after the EASA issued approvals and exemptions for the transport of cargo in passenger cabins on a case-by-case basis.

These approvals and exemptions were time-limited and while the EASA extended the rules in August 2021, it will not extend the timeframe again, it said in a statement on April 11.

The decision to allow cargo-in-the-cabin flights followed the grounding of passenger aircraft at the start of the pandemic and the subsequent high demand placed on freighter aircraft. In addition to the use of cargo-in-the-cabin flights (with seats in place and seats removed) the pandemic also saw a number of airfreight stakeholders invest in passenger to freighter aircraft conversions.

However, passenger operations – and therefore the availability of bellyhold capacity – are beginning to ramp up while the need to transport urgent pandemic related cargo such as PPE has eased.

The EASA said it “has concluded that the logistical challenges that arose in 2020 as a result of the Covid-19 crisis no longer exist to the same extent”.

In its Issue 6.0 guidelines for “Transport of cargo in passenger compartment – Exemptions under Article 71(1) of regulation (EU) 2018/1139 (The Basic Regulation), published on April 11, it further explained: “Cargo capacity in the holds of passenger aircraft is expected to increase by summer 2022, thus reducing the pressure on the logistic chain.”

The EASA said that in accordance with the guidelines it has “determined that the exemptions delivered in this context will not be extended beyond the current validity of July 31, 2022. The same applies for existing approvals that have been granted based on the use of the Deviation on transportation of cargo in passengers compartments.

“This Deviation can also not be applied to any certification projects for which the approval is issued after that date.”

The Civil Aviation Administration of China (CAAC) last year ruled that from January 2022 the passenger cabins of China-registered aircraft would only be able to carry pandemic-related cargo.

However, contacts have told Air Cargo News that Chinese carriers have continued with cargo in the cabin flights past the deadline.

European regulator extends temporary-freighter exception into 2022

US extends cargo-in-the-cabin exemption

Chinese airlines to refit seats in response to stricter cabin rules

Source: www.aircargonews.net

Image: www.pixibay.com

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Many corporations have taken proactive steps toward improving customer and employee satisfaction and have appreciated the rewards of taking this stance. At Legacy, we found that truck drivers truly enjoy and value their job despite recent challenges and there is a good reason for this.

In contrast to an office, drivers spend their days on the open road enjoying the beauty of the countryside or the bustle of the city. They experience the freedom of working on their own and the reward of delivering valuable products to customers every day.

Maintaining a strong driver workforce to meet demand has become increasingly important. Acute shortages of front-line truck drivers have directly impacted the supply chain. It is critical that companies nurture these valuable team members for long-term retention.

Ensuring employees, particularly drivers, are happy is an initiative that every employer should take seriously. Legacy identified the following five key factors that contribute to improving and optimizing truck driver retention rates.

2. Understand the market for quality drivers and build compensation packages accordingly. Wages, as well as bonus structures, are accelerating rapidly as demand increases. You must remain continually competitive to attract and retain good drivers. Creative benefits, like providing streaming services, can help round out your offerings.

3. Stay in communication with drivers. This ensures that they understand the value of their job, can provide powerful feedback, and bring new ideas to management from their on-the-road perspective. Listening often is a valuable way to keep drivers happy and engaged.

4. Recognize high performance. When drivers go above and beyond in terms of safety, service, and productivity, provide incentives and formalized recognition programs to show your appreciation. It also makes sense to establish highly visible key performance indicators so both management and staff are working toward the same goals.

5. Use technology more effectively. Technology is a powerful tool that can help drivers find routes, use safer roads, and minimize traffic jam situations. Fleet tracking devices and transportation management systems can be used to optimize their drive. AI-powered dashcam programs that proactively help protect drivers from potential accidents can drive safety and compliance improvements.

The individuals on the road ensure customers’ products make it to their destination safely and on time. This is vital to our economy’s livelihood.

Manufacturers, consumer goods companies, and retailers must get creative, smart, and strategically savvy when it comes to overcoming the challenges of supply chain demand through transportation effectiveness, and that includes a major consideration of how they attract and retain quality drivers.

While it’s becoming a balancing act between higher costs and meeting demands, one fact is certain—without a strong transportation system, backed by happy drivers, customers would not receive their products on time.

Author: Mike Glodziak, President & CEO, Legacy Supply Chain

Source: www.inboundlogistics.com

Image: www.pexels.com

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For more than a month, the Ukrainian army has been resisting Russian occupation in a bloody battle. Although the people of Ukraine and Russia suffer most directly from the war, the rest of the world has also indirectly fallen victim to Putin’s decisions. I have already explained the impact the war in Ukraine has had on the freight sector as a whole, but I would now like to highlight the ongoing air transport sector. It is currently suffering not only from soaring fuel prices, but also from a lack of capacity, which is also having an irreversible effect on consumer wallets around the world.

Capacity is affected not only by ban but also by destruction

In early March, two weeks after Russia’s invasion of Ukraine, Northeast Asia-Europe’s transport capacity had fallen to 22% since the pre-war period. Now, almost a month later, it is even lower. The capacity of air carriers is most affected by the sanctions imposed on Russia. As a result, the delivery of goods to Europe is banned for the largest Russian cargo airline operator Volga-Dnepr, whose subsidiary AirBridgeCargo has more than 800 different cargo aircrafts. However, this is not the only aspect that affects the capacity of hauliers. Aircrafts destroyed as a result of war, which rubs salt into the wound of the industry, also play an important role. For example, in the battle against Hostomel Airport, the industry lost a historically unique specimen – the world’s largest cargo plane, the Mriya. Although the Ukrainian government has announced that every effort will be made to rebuild the plane, it will take time and at least $ 3 billion. It has also recently been confirmed that AN-26 and AN-74 aircrafts have been destroyed as a result of the Russian invasion.

To Asia around Russia

Due to the war, many air carriers have decided not to cross the airspace of Russia, Ukraine and also Belarus, citing the safety factor of employees as the main reason. This position has been publicly confirmed by industry giants such as UPS, DHL and FedEx, which own about 1,000 cargo planes. I believe that not only the issue of security, but also the image and political pressure of the company played a major role in making this decision. Now that most companies in various sectors are leaving Russian territory, thus clearly expressing their political position, the big logistics and freight companies must not lag behind either. It is clear to them, as to any other business expert, that the image of a company is easy to tarnish but hard to polish, and the smartest way to avoid becoming a black sheep right now is to turn your back on Russia.

Consumers become the victims

A series of all the above decisions and events will inevitably increase the costs for air cargo carriers, which will not only hurt market players but also consumers. There are already companies in the industry that are increasing the additional costs for international freight. One of them is FedEx, which took such a step in March. Although the company is one of the first to change its pricing policy as a result of events, it will certainly not be the last.

The most logical solution – more cargo planes

Once again, as in the Covid-19 outbreak, when the industry was struggling with a lack of capacity, the most effective solution is to transform passenger planes into freight transport. Such restructuring of airlines would significantly increase the capacity of air cargo carriers. Moreover, according to Insider, it is more profitable than buying new cargo planes. According to the media, such a move could save companies hundreds of millions of dollars. Airlines such as Qatar Airways and the Emirates Group, known to the general public as passenger airlines, took this step in early 2020. At the end of March, Alaska Airlines joined them, adapting five different passenger planes for cargo transportation.

Whatever the future decisions of air carriers, one thing is clear: only by working together in a crisis situation will it be possible to meet the needs of both the industry and the customer.

Author: Roland Peterson, logistics expert

Image: www.pexels.com

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Although human health disruptions fell 68% year over year, 2021 saw the most factory fires ever recorded in a single year. The uptick is mainly due to gaps in regulatory and process execution as well as a shortage of skilled labor in warehouses, the report says.

The platform sent 491 alerts for supply shortages, including semiconductor chips, plastics, paper, and raw materials. Supply shortages are driving consolidations, mergers, and business sales as companies look for a quick cash boost or optimize the supply chain to best serve their customer base, the report says.

North America experienced the most supply chain disruptions (5,417), followed by Europe (2,838) and Asia (2,128). The most impacted industries were life sciences, healthcare, automotive, high tech, and general manufacturing, says Resilinc.

TOP 6 DISRUPTION EVENTS OF 2021

1. Factory fires

2. Mergers and acquisitions

3. Business sales

4. Factory disruptions

5. Leadership transitions

6. Supply shortages

Source: www.inboundlogistics.com

Image:

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Whether you anticipate a retail demand surge or it happens unexpectedly, you need to be able to manage that sudden order spike in ways that don’t harm customer relationships or your bottom line.

Here are nine ways companies across the retail supply chain capture and fill orders when demand surges.

1. GO DEEP WITH SUPPLIERS.

Have “what if” conversations with suppliers. Identify the products that are likely to experience a spike, and pose surge scenarios to suppliers and manufacturers to learn how—or if—they can meet increased demand levels.

“Any company that buys anything should have conversations about what happens if demand doubles or halves,” advises Michael Zimmerman, partner and analytics practice leader at consulting firm Kearney. The solution might involve a financial investment to guarantee capacity or contracting product manufacturing elsewhere so you have options.

2. MAKE DECISIONS AT THE FACTORY.

Consider committing to factory capacity before you need it. That’s what Mark Burstein, industry principal at supply chain technology provider Logility recommends. If, for example, the manufacturing timeline for a product is three to four months, he says, a retailer might not receive a surge order until 150 days later. Booking capacity early moves your surge order ahead of others who haven’t ensured that protection.

At the same time, Burstein encourages retailers to forecast demand not just for products, but for raw materials as well, and to position those materials at the factory early. “With the materials in place, you can direct them to both high demand and most profitable products,” he says.

He also recommends saving time and touches by shipping finished goods directly from the factory, bypassing distribution centers completely.

3. PRE-SELL TO CUSTOMERS.

Taking a page from book publishers that have long used pre-orders to gauge demand for a book and determine how many copies to print, retailers of other types of products are now surveying customers to determine interest in a product.

“Retailers are getting smarter, thinking about how they can start to pre-sell and put customers in line to buy products ahead instead of waiting for a Cyber Monday surge,” says Troy Graham, vice president of business development at e-commerce solutions company Descartes Systems Group. This approach also assures customers that they will get the product, he adds.

4. PUT SOME OF THE ONUS ON THE CUSTOMER.

Third-party logistics provider Flexe is seeing results with brands that advise customers to “get it while you can.” Flexe clients using this scarcity strategy to manage demand spikes are better able to promise and then meet a customer delivery date.

“This strategy allows brands to get items to the customer quickly, but it’s also on the customer to make that happen by heeding the ‘while supplies last’ messaging,” says Megan Evert, senior vice president of operations, Flexe.

5. OUTSOURCE SURGE FULFILLMENT.

Flexe offers a launch fulfillment service designed to handle surges inherent with product introductions. Typically, the manufacturer ships inventory to Flexe facilities in multiple markets selected for their proximity to anticipated demand. “When the brand knows it will have a severe spike, we can partner and distribute the inventory appropriately so that no one site has to ship 300,000 orders overnight,” Evert says.

Outsourcing surge fulfillment makes sense for other types of situations, too. “We’re not saying outsource your entire fulfillment,” she adds. “This is a way to respond to the dynamic situation we’re all experiencing. Don’t make it harder by trying to do all of this yourself.”

6. IMPROVE DELIVERY TIME BY FILLING ORDERS FROM THE BACK OF THE STORE.

Increasingly, retailers looking for ways to get high-demand orders to customers more quickly are using a micro-fulfillment model that involves filling orders from the back of brick-and-mortar stores.

That’s what one of Pat Fitzpatrick’s outdoor action sports clients does. “A small warehouse keeps enough inventory for three to four days, but pushes everything out to stores for fulfillment,” says Fitzpatrick, vice president of sales and marketing for commercial storage solutions company McMurray Stern.

Companies can use this approach strategically according to demand locations, he says, or to improve delivery times in areas farther from a fulfillment center but closer to a store.

7. RAMP UP REVERSE LOGISTICS.

Graham sees an increased focus on reverse logistics. “As we think about spikes in volume and limited inventory, retailers are looking at returns and asking, ‘How do we get them inspected and back to sale quickly?'” he says.

Micro-fulfillment makes that easier. “If you take returns in the store, you can get the product back into inventory much quicker,” Fitzpatrick says.

8. CARRY MORE INVENTORY THAN YOU’D LIKE.

Many retailers have gone from “just in time” inventory management to “just in case,” stocking excess inventory of products most likely to benefit from a demand surge.

“The volatility and unavailability of some products has led retailers and consumer packaged goods companies to emphasize inventory over anything else,” says Zimmerman. “They want more to sell and they will pay extra for it and store more of it.”

Short-term warehouse space marketplace Chunker helps companies do that by connecting them with temporary surge storage capacity. Operating like “an Airbnb for warehouse space,” Chunker provides a buffer that lets retailers and brands stock up on inventory without committing to a long-term lease.

“Warehouse space comes with risk when companies have to sign a lease,” says CEO Brad Wright. “Shorter-term, more agile storage lets them flex their storage up and down.”

9. LET GO OF BEST PRACTICES.

Increasing inventory carrying costs and other recent survival strategies are counter to pre-pandemic best practices. “But perfection is not the goal here,” says Evert. She recommends being thoughtful about what you can do to increase the chance that the product will get to the consumer. When the best practice approach isn’t an option, consider alternatives.

“Without that, you’re losing demand,” she says. “In the worst case, you fail to realize you have to move faster and to save pennies, you lose the whole sale.”

Source: www.inboundlogistics.com

Image: www.pexels.com

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