The weeks leading up to Thanksgiving and the subsequent holiday season is often the start of increased capacity constraints and a precursor to the supply chain challenges that typically remain for the rest of the year. In the current market, there is already a lot of activity that is drawing from normal OTR capacity, and things have gotten tight throughout many direct-to-consumer (DTC) channels.
This year, additional natural events such as hurricanes, earthquakes and fires have exacerbated the tightening of capacity, creating an even more demand-stricken environment. So, what can shippers do as the holidays are getting closer to mitigate potential supply chain troubles?
The Driver Shortage and Scheduling Woes
First, it’s becoming increasingly more important to support the driver base. According to the American Trucking Association (ATA) president and CEO, the “industry is short 50,000 drivers. And if the trends continue, that number will double to 100,000 in just five years.” Journal of Commerce also reported that concerns may continue to grow as the ELD mandate goes into full effect and some drivers may opt to retire rather than adapt to the new technology.
During the holidays, many drivers also want to be able to shift their schedules to have some time home with their families. Therefore, carriers will exhaust their efforts to reposition their assets so that their drivers can have that time. As capacity tightens, it becomes increasingly more difficult for carriers to alter their commitments as well as balance their drivers’ schedules.
The Amazon Effect
In recent years, there has certainly been a shifting mindset from retailers – the “Amazon effect” is real, and it’s being driven by consumers. The Amazon effect is dictating that shippers get to their customers faster – sometimes in only one or two days – and we’ve likely only scratched the surface of this trend. So, what can organizations start doing inside of their own transportation networks to meet evolving consumer expectations?
As the market continues to shift, it’s clear that companies are exploring every option and thinking long-term. Meeting DTC needs requires an agile supply chain, exceptional supply chain planning and processes and technology that enhance execution. It also requires comprehensive connectivity with all business partners – from suppliers to manufacturers and distributors, retailers and transportation companies.
Forecasting Supply Chain Hurdles
An important thing that shippers can do during the holidays is to ensure alignment with the supply chain as it relates to expected forecasts. This, along with an understanding of the open/close hours and staffing levels of all shippers and receivers, is critical. Shippers and receivers could be closed for as much as a three to four day stretch, so it is important for shippers and carriers alike to ensure that they get the right information regarding how they will staff and execute operational procedures during impactful holiday times.
It’s also critical to ensure that the transportation and supply chain departments are tightly aligned with the rest of the organization to facilitate these strategies. Even mature companies sometimes forget to share with the supply chain group that there’s a big promotion going on. For maximum operational success, cross-functional communication throughout a shipper’s entire organization is key not only going into the holidays, but throughout the entire year.
How are you preparing your supply chain operations for the holidays?