With the change in demand for many types of small businesses, and are you managing your supply chain needs properly?

With national economies reacting to a state of ever changing conditions, transportation companies are along for the ride, and just like everyone else, trying to adjust in real time.

With so many of us on lockdown, the change in the logistics landscape is generating some interesting statistics:

• Commercial transportation in the U.S. and Canada is operating at 89% capacity for heavy truck
• Transportation to grocery stores is at 90%
• Passenger flights are down a whopping 96%
• Grocery sales are up 38%

Diversification Is A Necessity

The foresight to see potential opportunities before they happen, develop strategies to reduce risk, and provide the ability to flex up or down will be key to success in the market.

Because they can quickly pivot to transport a variety of items, independent owner operators may realize the most benefits. If existing contracts are not at risk, a plan to assist another industry when volumes are down can be an effective option.

Old Systems Are Being Challenged

Those companies who have been resistant to technology are having a tough time under the current conditions, but that pain should provide incentive to review technology’s new tools.

Transportation, like many industries, is dealing with a long-standing and experienced workforce with many still using manual systems. Most of the day spent calling and emailing transportation providers, and juggling spreadsheets.

Regardless of how much experience your workforce has, it was probably not prepared for a disruption of this magnitude. Making the right decisions becomes an increasing effort as they’ve never experienced this kind of event before.

Businesses faced with unexpected demand have a difficult time trying to find capacity. In these situations, a customer would benefit from real-time API solution to get rates, truck confirmations, and then have a platform provider to source and assign the transportation vendor.

The Next Disruption Will Happen

When the next wave comes, companies that have invested in technology will be in a better position.

With the right technology, analytics, and metrics, companies could spotted trends as early as January. The analytics would have identified some of their clients increasing full truck loads to their stores.

In this scenario, analyzing the data wisely meant they had time to react before the disruption hit the market. Companies without a technology base had no idea and were unprepared.

Your plan of attack depends on your business, and the size and scope of your industry. It can be an opportunity to step back and measure the effects on your business and ask tough questions.

Funding technology projects is always a challenge, and transportation traditionally does not have the necessary capital to invest in expensive technology. In this case, there may be an opportunity to create more inexpensive offerings with mobile capabilities.

Adapting With Agility

This disruption will cause some companies to fail, others to flourish by adapting to serve what the market needs. The best defence is reviewing and reflecting on the data now to make fact-based decisions. As they say; “Go Science!”

COVID-19 will undoubtedly accelerate the demise of any who were already struggling. Any company that was marginal before the pandemic will surely not survive. And therein lies the opportunity for others more nimble to fill the gap.

Without appropriate processes and technology, responding to the next disruption will be nearly impossible. Companies that survive will have taken the opportunity to observe, learn from mistakes, re-evaluate strategies, and will ultimately be ready for the next round.

Despite unprecedented recent challenges, supply chain analysts say many 3PLs qualify as essential critical businesses. Without them, the businesses that rely on their distribution systems simply can’t survive.

Selecting the right logistics partner in a crisis has never been more important. You may even need to consider multiple 3PL partners to mitigate risk if your products are diversified.

The Basics

3PLs receive new inventory from manufacturers before shipping it to consumers. They can also handle retail distribution and returns. Ultimately, they deliver your orders with an out-of-box experience.

When should you enlist a 3PL?

With social distancing forcing some 3PL employees to work remotely, a 3PL partner that is efficient with automation and paperless warehousing is a good bet. Looking for those that began their digital transformations before the pandemic may be in a better positioned to service businesses and deliver your preferred customer experience.

Waiting until you’re overwhelmed by order growth isn’t a smart move. By breaking fulfillment promises you make to customers, you damage your brand. It also prevents you from being wholly focused on growing your business.

These three key questions will help you determine whether you need a 3PL:

Are you fulfilling a significant number of orders per day?

Calculate the costs of a potential partnership with a 3PL to stay fluid. Likewise, estimate the growth potential—opportunities you’re not currently able to pursue–by outsourcing fulfillment.

Are you running out of storage space for inventory?

Sometimes brands forget to include holding costs in their fulfillment expense calculations. Compare your current storage expenses with estimates from 3PLs. See if bundling costs with outsourced fulfillment is a better value.

Can your business’s infrastructure cope with the demand?

If you’re expecting a sustained spike in order volume—not just flash sales or promotions—estimate the costs and overhead necessary to meet demand. Compare with the costs of outsourcing fulfillment.

Types of Top Level 3PL Providers

The size and specialization of your business matters. Some 3PLs may only serve certain segments of the supply chain, or specialize in one or two areas. Larger established firms offer end-to-end execution, integrate seamlessly, but full service comes at a price.

Full-Service 3PL Providers

COVID-19 has made clear the importance of having real-time inventory visibility. The pandemic has also put efficiency in greater focus. Not only is knowing your stock levels a critical metric, so is operational efficiency and logistical considerations – does shipping inventory from the location closest to the customer actually show a cut in shipping costs?

Full service 3PLs offer:

• Inventory intelligence
• Brand the fulfillment experience
• Easy integration
• Same-day fulfillment

Warehouse and Distribution Type 3PLs

Warehouses that distribute are the most common type of 3PL – storing, shipping, and handling returns. Innovative warehouses can help you offer an Amazon Prime-like type of shipping in as little as two days. If you’re expanding aggressively, international warehouses can help build a global supply chain.

The best warehouses act as trusted advisors to their customers by offering product fulfillment workflow best practices. Especially with COVID-19’s impact on order volume.

When considering a warehouse solution, evaluate the following criteria:

• Warehouse network
• Pricing
• Shipping carrier rates
• Insurance
• Daily cutoff time for fulfilling orders
• Delivery service levels
• Management tools

Transportation Based 3PLs

A pandemic will spotlight how crucial it is to have a single point from which you can track orders worldwide, in real time, and automate delivery notifications.

Transportation-based 3PLs move goods between locations in-between locations. As an example, they might transport inventory between the factory and your warehouse, or you and your retail buyer.

Consider the following factors when choosing a transportation provider:

• Origin location
• Destination location
• Timeframes
• Shipping methods
• Service levels
• Pricing and discounts

Specialized May Be Better

Along with these top level types of 3pl services, there are a number that specialize on specific services, and combine select services such as distribution, or shipping and receiving among others.

Depending on the size of your business and unique needs, a specialized provider may be your best choice.