Mounting disruptions over the past 12+ months have shown both shippers and consumers how a seemingly distant, concentrated event can quickly ripple through the supply chain and “hit home,” wherever that may be.
In early 2020, major Chinese factory shutdowns caused by the coronavirus outbreak quickly taught the world how vulnerable eCommerce can be to interruption. Most recently, the Suez Canal logjam gave further lessons in Supply Chain 101, pulling the curtain back on the shipping and logistical complexities often taken for granted.
From sourcing and manufacturing, to fulfillment, warehousing, and transportation, these events’ effects can touch every aspect of a company’s logistics network. Being prepared to manage these situations requires a holistic view of your operation and real time decision-making capabilities to prevent and reduce compounding losses and inefficiencies. A proven third-party logistics (3PL) partner like Kenco can help shippers manage, orchestrate, and provide the visibility needed to mitigate the myriad impacts and challenges of the next supply chain crisis on each link of your supply chain.
Distribution & Fulfillment Impacts and Solutions
The labor market remains fiercely competitive due to exploding eCommerce volumes and high unemployment driven by the pandemic. Further congestion and shipment backlogs also add to unpredictable demand swings which call for highly flexible labor solutions.
Solution: Having the dedicated warehouse and workforce management tools provided by a 3PL like Kenco allows shippers and their warehouse managers to focus on optimizing operations, not staffing. Efficient and intelligent warehouse management will continue to prove essential to managing volatility and increasing productivity.
Increased Safety Risks:
Increased sensitivity to employee wellness, social distancing, and enhanced sanitation practices are all byproducts of recent supply chain crises, which have added to the complexity of properly staffing operations to meet demands and remaining compliant to keep the workforce safe while hitting KPIs.
Solution: As states phase out restrictions at different cadences a 3PL like Kenco – whose shippers operate across verticals and state lines – has the resources and scale to continuously observe and report on changing best practices and regulations across both industries and borders, helping shippers remain safe and compliant.
Material Handling Equipment (MHE) Impacts and Solutions
Volatile Demand Swings:
Accurately forecasting demand becomes increasingly difficult amidst crises. Fleet managers are faced with making rapid, unexpected, and often costly decisions about increasing or decreasing their MHE levels to effectively manage product volume.
Solution: The right 3PL partner can significantly reduce transition times when addressing demand swings by identifying key operational milestones that signify when to begin readjusting MHE levels. Kenco also has standardized fleet options in place to be readily deployed.
Overutilization of MHE:
Handling unplanned high demand levels can lead to equipment utilization overages, which incur fees on leased equipment and added wear-and-tear on owned MHE.
Solution: By leveraging the nimble, customized MHE solutions provided by 3PLs like Kenco, fleet managers can stay prepared to quickly adjust MHE levels to match demand swings. A 3PL can identify the right combination of rented versus owned MHE to enjoy the most flexible fee options that reflect demand and can pivot if needed.
Transportation Impacts and Solutions
Rising Shipping Rates:
Already surging volume and demand is amplified by the shortages, congestion, and delays resulting from crises like the Suez Canal and nationwide lockdowns. This adds to the competition among shippers all trying to secure favorable shipping rates.
Solution: Kenco’s access to technology and data through its transportation management systems (TMS) solution – Kenco STARR – gives shippers favorable market rates customized to individual load characteristics.
Limited Access to Capacity:
Like rates, finding and securing capacity has been a top priority and challenge for shippers over the past 12+ months. Events like skyrocketing eCommerce orders and containers stuck at sea all eat into the available capacity in the market.
Solution: 70+ years of relationship building culminates into Kenco’s robust, vetted carrier network. Immediately available to customers through Kenco STARR, shippers have options to secure the capacity needed so they can focus on delivering products on schedule.
As supply chain disruptions evolve and continue to challenge shippers in new ways, having a single, trusted partner to help guide and engineer solutions to mitigate losses is paramount. While you can’t always predict the challenges that lie ahead, you can position your supply chain with the agility, visibility, and resources needed to weather what’s next. To learn more about how your company can be better prepared, visit Kenco’s supply chain solutions page.