Many supply chain trends affect the market, most notably those around peak season. The reality is simple; the record-breaking peak season is here. As Supply Chain Dive explains, “to mitigate increased costs from the challenges, 59% of executives said they were increasing product price or shipping costs for consumers, and 36% were taking a margin hit to keep prices level.” Shippers are turning to every venue and solution in an attempt to meet demand, but it begs the question, “how will the supply chain evolve in the coming months?” Such evolution will result from investment in both technology and strategic partnerships. This three-part series will explore the value of 3PL and why the top supply chain trends affecting the industry are making such partnerships more important than ever.
Higher-Than-Average Rates Lead to Higher Annual Contract RFPs
Conducting annual requests for proposal (RFP) processes can be a headache. Shippers hope to negotiate a constant price for such lanes at a constant price to keep their landed spend in check. However, consistent issues in the market such as driver shortage, high rates, and tightening logistics capacity emphasize the value of regular and data-driven RFPs. Failure to account for market dynamics will inevitably lead to losses and significantly higher-than-average rates on RFP responses. With that in mind, more shippers are turning to expert 3PLs like Wicker Park Logistics to streamline the negotiations process and help avoid excess rates in annual RFPs too.
A Lack of Resilience Has Led to a Mad-Dash for Capacity
Without the proper resources to recover from the common difficulties throughout the supply chain, shippers will continue to have problems throughout operations. Fluctuations in the market can cause issues with capacity and cause shippers to have issues with locating trucks. In response, working with a 3PL can provide them with high-quality capacity and other services to provide end-to-end logistic solutions.
Sustainability-Driven Initiatives and Fuel Cost Changes Will Also Influence Transportation Spend
As fuel prices continue to steadily rise, another of the top supply chain trends to watch, it can and does have a drastic effect on fuel surcharges, operating costs, and cause other increases. Working with a 3PL can give shippers the upper hand to stay ahead of the fuel cost changes and find sustainable options. An example of this includes network optimization, such an increase in fuel costs and inventory management could make shippers want to seek out opportunities closer to a critical market. Involving sustainable practices can reduce costs and bring more importance to being environmentally responsible throughout the supply chain. Seeking a cleaner alternative to the average pollutant of fuel can help companies avoid paying the higher price while taking the proper steps toward sustainability. A 3PL can provide shippers with more in-depth information on current operations throughout the supply chain and make the right changes to improve the bottom line.
Trouble Forecasting ETA Due to Late Shipments
Finding ways to curb late shipments are another area of top supply chain trends driving change in the market. Customers want their freight on time. Delays and a late shipment can cause stress enough on a shipper alone; however, it will also add difficulties with forecasting the estimated time of arrival (ETA) and can affect the customer’s experience. A 3PL can provide freight market forecasting, visibility tools, asset management, and continuous communication and collaboration to avoid confusion over ETA and schedules. A 3PL can use analytics through tech stacks to provide accurate predictions and end-to-end visibility for shipments and deliveries. Such information is imperative to forecast expectations and mitigate delayed freight when massive disruptions occur.
Greater Demand Begets Disruption in the Top Supply Chain Trends
Various circumstances have caused a demand surge throughout this year, adding unprecedented pressure throughout the supply chain. As a result of this demand, freight costs continue to rise, shipping delays occur far too often, and many anticipate the shelves will be empty during this peak season. Shippers can utilize supply chain solutions through a 3PL to provide advanced management features to counteract these difficulties. Greater demand on the industry also results in further disruption. However, working with high-quality, transparent 3PLs helps shippers find meaningful capacity across more carriers and potential brokers. It’s a continuous cycle of expanding the network to find more capacity. Period.
Diversification of Carrier Networks Creates Problems Managing Freight Too
Many companies seek out carrier diversification to try and receive better rates, faster shipments, and improved customer service. Such diversity can cause issues with too many contracts and confusion with freight management despite the appealing benefits. Furthermore, to avoid such problems and still have the ability to work with a promising carrier network, a digital freight broker can provide logistic solutions to help. A 3PL can provide freight tech stacks to increase visibility and allow shippers to properly keep tabs on the carriers with a carrier scorecard and analytic strategies.
Know the Supply Chain Trends Inside and Out by Letting the Experts Keep Tabs on Them for You
Shippers should understand the issues that may arise throughout the workday, but they must also prepare for the future. With the expectation of rising again through 2022 due to increased gas and insurance prices, shippers must prepare not to fall behind. A 3PL can provide a beneficial answer to that issue and help shippers continue to grow business despite the circumstances around them. To partner with a 3PL you can trust, connect with Wicker Park Logistics today. In part two, we’ll take a deeper look at how a 3PL solves the above challenges more efficiently.