During black swan events like Covid-19, resilient supply chains are not a luxury — they’re imperative.
Covid-19 has had a devastating effect on some supply chains. From port closures to staff layoffs, the rapid market fluctuations in capacity, volume, and pricing have made the first quarter of this year the most challenging one in recent memory—for shippers, carriers, and brokerages alike. According to the Institute for Supply Chain Management, nearly 75 percent of companies have experienced supply chain disruptions due to coronavirus-related transportation restrictions, and that number is expected to rise.
Not surprisingly, more than 100,000 small businesses are projected to close permanently as a result of Covid-19. But just as these market forces have crippled some organizations, others have proven to be resilient when they are needed most. Why does one company thrive in unpredictable markets while another struggles just to keep the lights on?
Turns out a handful of supply chain best practices can make all the difference, helping drive success in even the most challenging conditions. Shipwell has been working with our customers to uncover these principles, allowing them in turn to provide continued support for their critical-industry customers during Covid-19.
Putting data analytics into action
Packaging companies have played a major role in getting goods to consumers, especially during the recent surge in e-commerce. One such company provides large-volume shipping clients with boxes, mailers, and packaging supplies, as well as packaging equipment and consulting services.
With the onset of Covid-19, many companies have been tasked with efficiently handling a sudden influx of freight. On the Shipwell platform, the number of shipments increased 42.6 percent over the last three months. In contrast, Shipwell saw nearly 50% of capacity being taken off the market starting in mid-February. This company met those challenges by applying actionable data analytics provided by the Shipwell TMS solution, and by leveraging the platform’s automated workflows.
In addition, the company had long since used Shipwell to austomate cumbersome and time-consuming manual processes, such as soliciting carrier rates via email, which put the company in a better position to handle the challenges of Covid-19. Real-time tracking and continuity of communication were other key advantages.
Actionable insights are key to keeping the supply chain running without interruption.
Organizations are inevitably faced with dramatic market fluctuations, among many other stumbling blocks. DAT Solutions recently reported that the national dry van rate rose 3.4 percent in March, and that wholesale rates climbed in 88 out of the 100 busiest lanes in the span of two weeks. In volatile situations like this, actionable insights are key to keeping the supply chain running without interruption, and this is where data analytics can play an important role. Using a mix of prescriptive and predictive analytics such as price benchmarking, companies can gain visibility into pricing, capacity, and other variables, helping them act proactively and make business decisions that help ensure capacity and reduce costs.
Tapping into capacity
Imagine checking out at the grocery store, but finding that the store has no bags to hold your items. One company that designs and manufactures plastic bags for grocery stores, retailers, restaurants, and other businesses nationwide is working hard to make sure that doesn’t happen. These bags help protect our food from external contaminants such as germs and harmful bacteria, something consumers need now more than ever.
Due to quarantine-related container issues overseas and port congestion in the Gulf of Mexico, the company recently found itself with four BOLs of inventory on one vessel, then having that vessel delayed for a week in the Gulf. Such delays have been common, and have been steadily increasing since February.
Once it made it to port, the next month’s shipment had already arrived. The company was under tremendous pressure to unload quickly — not only to get shipments moving to stores but also to avoid steep demurrage charges. The company turned to Shipwell’s robust carrier network and exception management services to do the impossible — unload 14 containers per day, as opposed to their normal rate of five per day. Since the onset of Covid-19, Shipwell has added nearly 2,000 new carriers to the platform, and by tapping into these resources, this company was able to replenish a month’s worth of inventory in just four days.
Having access to a broad and trusted carrier network can help shippers stay on top of orders.
In volatile markets, capacity can vary on a daily basis. In a tight market, it can be particularly difficult to keep shipments moving — and at a reasonable cost. Having access to a broad and trusted carrier network can help shippers stay on top of orders, especially when spot capacity is required to fill gaps in normal shipping operations.
Counting on the cloud
Food supply is always a crucial sector, but with access to food becoming a significant issue during Covid-19, timely food shipment is imperative. Some large e-commerce suppliers like Amazon temporarily increased their shipment times as a result of Covid-19, in some cases delaying food deliveries by several days if not weeks. By contrast, food and beverage customers on the Shipwell platform have maintained OTD rates of 98%.
Especially during Covid-19, food and beverage companies require efficient shipping that minimizes waste and helps keep costs low. But when shipping requirements change practically from one day to the next, the situation calls for new levels of agility. One company that’s committed to meeting the food supply challenge during Covid-19 has continued producing, packaging, and assembling high-quality, shelf-stable food products, then distributing them to major branded food companies, even as demand increases.
This company was able to quickly implement new lanes in order to move critical shipments to impacted food banks. And they were able to increase their shipment volume by having access to Shipwell’s carrier network for spot capacity, and by leveraging Shipwell’s cloud-based TMS platform. With advanced, automated TMS technology, it takes minutes to implement a new lane, while it would take hours to do so by manually sourcing carriers via email and online searches.
Covid-19 has forced many companies to move out of their traditional environments and begin supporting remote operations practically overnight.
Covid-19 has forced many companies to move out of their traditional environments and begin supporting remote operations practically overnight — to meet government mandates and to ensure the health and safety of employees. In fact, 42 out of 50 states issued stay-at-home orders in April. Making a transition of this magnitude can, by itself, cause disruption across the organization, putting supply chains at risk even without the upheaval going on externally. In these scenarios, remote access to systems is critical, as are reliable communication channels. Cloud-based TMS solutions can solve for both.
Preparation is powerful
These forward-thinking companies were able to adapt to dramatically changing circumstances with very few hiccups, in part by having powerful supply chain solutions in place ahead of the pandemic. For companies like these, the right TMS solution can make all the difference.
“Our shipping and visibility platform has put our customers in a good position to weather this storm,” says Jason Traff, President and Cofounder of Shipwell. “And because it’s cloud-based, it can help companies navigate future market disruptions while also de-risking their infrastructure spend.”
During black swan events like Covid-19, resilient supply chains are not a luxury — they’re imperative. With an uncertain future and so many factors beyond our control, now is the time for shippers to have supply chain solutions that put power back in their hands.