Dispatch From the Director: Staying Ahead of Change with Connectivity and Data Optimization
Being a shipping manager is, for the most part, one of the most clearly defined and straightforward careers in the world; get shipments to customers on time and don’t spend too much money to get it done. Likewise, for carriers, the objective is complementary: keep freight moving, keep the assets full, and eke out some profit.
Prior to 2020, for the most part, these roles and activities were typically well managed and only caught the attention of the C-suite on the rare occasion when something went wrong, such as an angry key customer or a manufacturing unit waiting for a critical raw material.
Because of what we have all experienced with collapsing supply chains in 2020, supply chain and logistics issues, normally operating in the background, are quickly becoming the central operating concern of many organizations. If you are that shipping leader, either on the shipper side or the carrier side, you might feel a pang of dread when you think about how much more could go wrong in the coming months, which is a lot.
The world is experiencing a cascade of logistics challenges: capacity, demand, labor contractions, bottlenecking of epic proportions, even whole container ships clogging up the Suez Canal. Now imagine how our collective challenges might manifest when pent-up demand is unleashed this summer. As the economy and society start to “normalize” you can bet your last dollar that many dollars are going to be spent on solving seemingly intractable issues.
Up to now, shippers and carriers have been accustomed to a routine cat and mouse desire to somehow get a better deal from each other. Shippers seek the lower rates and improved service. Carriers seek higher price without increasing cost to serve. This behavior is breaking down though. Savvy shippers are quickly migrating to carrier partners that provide needed visibility and connectedness. Carriers are partnering with shippers that provide accurate and predictable flow with little or no change order activity.
Right now, these parties have a rare opportunity to harmonize their collective efforts. If you are a leader in logistics, you have this moment in history to convince your purse-keepers that this is the time to upgrade your transportation management system and your warehouse management systems, foster integrations between suppliers and carriers, increase data mining, and integrate data feeds with key suppliers. Likewise, seeking partnership with companies that offer connectivity and optimization between carriers and shippers is arguably the fastest growing phenomenon in the industry today.
The winners in logistics are actively engineering data bridges with their key logistics partners and clients. Additionally, there is a whole sub-industry expanding in the field of integration and data optimization. An automated supply chain and logistics platform has been predicted for decades. The technology exists today. But now, importantly, so does the will. That change, will change, everything.
Do not miss this opportunity to confront reality with your executive committees. Advanced analytics, connectivity, visibility, and optimization between shippers and carriers is moving into the realm of necessity.
Here at the Transportation Institute we are teaching the leaders of tomorrow to recognize the signals of changes and how to utilize technologies that stay ahead of the curve.
What are your strategies for optimization? Let us know at du-dti.@du.edu.
David Fisher, Executive Director