Reducing supply chain disruptions with integrated logistics

COVID-19 not only disrupted supply chains but redesigned them. The pandemic forced the shutdown of some markets and accelerated others. For instance, at the pandemic’s peak, supply chains were affected by a 69% reduction in the U.S. restaurant business. At the same time, the food sector grew in double digits. Similar trends are observed in the construction industry, which registered a decline in revenues by more than 10% in 2020. In contrast, the corrugated packaging industry has double-digit growth as a result of increased e-commerce.

Changes in consumer behavior have also caused drastic changes in cargo patterns. COVID-19 accelerated e-commerce, with sales growth from $ 598 billion in 2019 to $ 861 billion in 2020, an increase of 44%. Data from the consulting firm McKinsey puts the growth of e-commerce in context, noting that the prevalence of e-commerce in the U.S. has increased by ten years for 90 days by 2020. Dramatic changes in capacity needs have increased demand for carriers with the flexibility to help customers meet the challenges of the COVID-19 supply chain. McKinsey noted that at this point, maintaining logistical flexibility is key to reducing disruptions to the core and essential services.

Flexible logistics solutions during a pandemic include redeploying drivers and assets from customers who have declined in business with other fleets where higher capacity scenarios are needed. Redirecting resources back and forth between cargo less-than-truckload (LTL) and a dedicated fleet balances capacity for customers who need more or less capacity based on their business during COVID-19. Flexible logistics solutions during the pandemic have also seen some carriers provide additional capacity and continue to play a vital role in helping shipowners adapt quickly to market and demand changes.

Rapid and serious changes in capacity in different distribution modes occurred not only at the top of COVID-19 but continue today, creating the need for integrated solutions in the supply chain. An example of this is the sharp increase in online orders, which has created widespread challenges for supply chains around the world. The volume constraints on small consignments experienced by huge supply chains in the fourth quarter of last year led to deliveries usually made in consignments by LTL suppliers. This situation worsened LTL networks, prompting shipowners to turn to the truckload spot market to move traditional LTL shipments in bulk, increasing these prices and causing a drop in acceptance rates.

Integrated distribution centers provide shipowners with the opportunity to store their products, manage their dedicated fleet, use truck and brokerage services, and have access to the next-day LTL network under the same roof. These solutions give customers a unique advantage of instant overflow options that effectively address orders’ dynamic daily quantities. Consider a situation in which the customer’s special fleet is at total or close capacity. In this case, transport providers with integrated distribution centers can simply transport shipments with several doors down and inject them into the LTL network via a connected cross-dock device. This means that the load, which usually needs to be delayed, will be delivered on that day if it is in the service area’s coverage area.

Integrated supply chain solutions offer shipowners a full range of transport, storage, and warehousing. It also provides distribution services that provide same-day and next-day distribution capabilities, assembly capabilities, added value to projects, last-mile delivery, improved delivery integrity, extended cut-time, consolidation, and deconsolidation. These solutions accelerate customer supply chains and create operational efficiencies that help control distribution and delivery costs. Organizations are taking action in the future to improve supply chain flexibility in order to better prepare for future disruptions. One of the steps recommended is to help organizations respond quickly to disruption.