However, creating better resilience is far more complex than simply holding more inventory. In this new world of an adjusted version of just-in-time shipping, there is no such thing as a one-size-fits-all solution.

Manufacturers face rising pressures in the form of tightening profit margins and more precise shipping windows. Shipping costs have increased, but so have inventory carrying costs. Manufacturers need to balance this. Efficiency and reliability are key to their long-term success.

It is critical that manufacturers and retailers work with companies with the capacity, flexibility, and understanding to fine-tune shipping needs to fit changing circumstances. When models change, flexibility becomes the most important attribute.

To manage trucking disruptions, shippers should make sure their carrier’s fleet, tools, staff, and procedures are calibrated to meet the needs of this new era. Are they building additional capacity before it is needed? Do they stay ahead of demand?

Shippers will be best served by carriers that carry excess capacity, maintain open lines of communication, and maximize flexibility at every stage of their logistics operations.

Deployed together, these solutions can bulletproof supply chains against future challenges as well as the approaching complexity crunch.

— Steve Hartsell, VP of Sales and Incoming Senior VP of Sales, Old Dominion Freight Line

With these challenges in mind, where should shippers focus their attention and what can they do to mitigate these threats?

Be wary of strict adherence to just-in-time inventory management that cuts excess but can place production lines and other downstream processes in greater peril. Inventory is a buffer; without it, operations are more likely to be pinched in the event of a disruption.

Limit exposure to carriers who are too dependent on a single customer or industry sector. For example, if a carrier is heavily dependent on the automotive industry and plants shut down, that carrier’s trucks won’t be where other customers need them.

Monitor carrier investment in trucks, trailers and real estate to meet your needs. Underinvestment affects a carrier’s ability to provide continuity of service.

The shipper-carrier relationship is a two-way street. What can shippers do to help secure access to capacity when disruption happens?

• Be a shipper of choice. Make it easy for carriers to make deliveries and pickups. Minimize dwell time and make sure your processes are not cumbersome or overwhelming.
• Build out your roster of carriers so you can pivot when necessary. Make sure you have redundancy and optionality built into your supply chain.
• Be able to shift between modes. Remember that when one mode gets pinched, it may take a while to trickle into other modes, creating short-term opportunities for relief. If you have the right technology, you can conduct some rate shopping to take advantage.

— Andy Dyer, President, Transportation Management,
and Kevin Day, President, LTL, AFS Logistics

It pays to focus on a solution. Enable’s Overcoming the Misalignment Between Supply Chain Partners report surveyed nearly 250 manufacturers, distributors, buying groups, and retailers, and finds that those who actively collaborate tend to work more effectively together.

But there’s work to be done. Just 10% of distributors report strong alignment with their trading partners, while approximately half note a lack of alignment about 50% of the time.

The story is slightly different for manufacturers, which points to a disconnect or collaboration gap. Up to 76% of manufacturers report alignment with their trading partners. Collaboration gaps often lead to one partner feeling left out of the process and can create significant friction.

Case in point: 60% of manufacturers say that their relationships have remained stagnant or grown weaker and just 25% of retailers believe their relationships have grown stronger.

Organizations that can overcome these barriers and collaborate effectively across the supply chain may benefit by reductions in inventories and costs.

Pressure on global supply chains has eased in 2023 and shipping costs have dropped, which should alleviate some inflationary pressures and improve supply capacity, the report contends. However, global trade remains relatively weak. Consumer demand may also pick up in 2023, with European markets already seeing slight improvements.

“How we get back to sustainable, long-term growth is the big question facing boardrooms and political chambers around the world right now,” says Regina Mayor, global head of clients and markets for KPMG. “The actions taken over the coming months are likely to play a significant role in the pace and nature of the world’s economic recovery.”

Sustainability is also top of mind, as nearly half of respondents (48%) face increased pressure from consumers, regulators, and industry groups to adopt a greener supply chain.

The report cites the top five challenges supply chain executives say they face in 2023:

1. Hiring and retaining qualified workers (57%)

2. Talent shortages (56%)

3. Supply chain disruptions (54%)

4. Out-of-stocks (52%)

5. Customer demands (52%)

Many companies are responding to these challenges by investing in technology.

For example, labor shortages are forcing companies to examine technologies that improve efficiency and reduce repetitive, manual labor. The hope is that this technology creates an environment with more rewarding supply chain jobs that appeal to top talent and upskill current employees.

The benchmark assesses retailers across 11 specialty retail segments on the implementation of 286 key attributes of unified commerce.

Of the 124 retailers benchmarked, 15 emerged as leaders: Academy Sports + Outdoors, American Eagle Outfitters, Belk, Crate & Barrel, Levi’s, Macy’s, MAC Cosmetics, Neiman Marcus, Nordstrom, Pandora, REI Co-op, Saks Fifth Avenue, Sephora, UGG, and Zales.

The benchmark identifies common challenges in retailers’ efforts to adopt these new business models, which include advanced analytics that create a single view of the business. The data shows that there is still work to be done.

1. Personalization: Identifying shopper intent is the first step to providing a personalized experience; however, just 38% of the retailers studied give their store associates access to shopper purchase history and wish lists across all channels.

2. Real-time inventory visibility: Only 29% of the retailers studied provide real-time inventory statistics on their product detail pages.

3. Convenience and flexibility: Retailers should provide multiple payment and delivery options and the ability to change orders after the sale. Just 15% of the retailers studied offer customers the option to change a fulfillment method post-order, and just 27% provide the ability to return store purchases online.

The WMS market will see a 17.3% compounded annual growth rate—culminating in a market worth more than $51 billion by 2030—predicts an Insight Partners report, Warehouse Management System Market Size, Share, Growth, Trends and Global Forecast to 2030.

WMS solutions are also integral to drop shipping, which many ecommerce retailers use to improve inventory turnover ratios. WMS solutions are able to circumvent order in/order out traffic as a key driver for growth.

The Asia-Pacific region is also expected to see growth in the WMS market due to its emphasis on strengthening logistics infrastructure to improve workflow management.

Although the region is currently experiencing a shortage of warehouse space, 86 million square feet of added warehouse space scheduled to open in 2023 should help ease that burden. This new space will further boost the WMS market, the report predicts.

A. Supply chain disruptions have affected multiple industries this year. A closed-loop approach to your company’s logistics needs allows you to access thousands of additional carriers, enforce business rules throughout the shipment process, identify incorrect charge codes, and easily recoup hard-dollar savings.

The cloud-based transportation management system (TMS) focuses on optimizing the transportation segment of the supply chain. TMS works on the edge of the enterprise, connecting all transportation stakeholders such as carriers, freight forwarders, internal and external shippers.

TMS benefits are well documented, including routing compliance, cost containment, visibility, event management, and trade compliance. Whether it’s a small letter or an ocean container, any shipment can flow through the Fortigo TMS to any region in the world.

A cloud-based TMS with a Software-as-a-Service (SaaS) delivery model can significantly accelerate the return on investment. This is because the TMS vendor manages the hardware, infrastructure, software, tools, and personnel. Upgrades are seamless, and there is no need to schedule deployment windows to support upgrades, fixes, and patches.

Fortigo’s Freight Audit service eliminates overcharging and identifies incorrect charges based on several criteria such as carrier service level agreement, negotiated rate sheets, and volume discounts. Additionally, we ensure negotiated contracted rates are honored for each charge code in an invoice. Our users enjoy industry-leading features, and Fortigo is the only TMS provider to be a certified Freight Audit provider by FedEx for both parcel and freight (LTL).

The Fortigo closed-loop ecosystem brings together a TMS and Freight Audit and Payment (FAP) service to ensure maximum visibility and hard-dollar savings.

Q. How does a closed-loop solution support supply chain operations on both a regional and global basis?

A. Historically, global companies have used TMS solutions geared towards a specific geography. This is changing with new cloud-based offerings such as Fortigo that allow one TMS for any shipment and any geography. This includes all shipping modes and freight characteristics across multiple locations.

With one system of record, there are no limitations to the number of carriers, rates, or shipping data. This allows companies to operate both regionally and globally while optimizing their transportation network.

Upon customer funding, Fortigo’s freight audit system can pay carriers in any geography and with any currency. Pairing Fortigo’s Freight Audit service with our TMS can compound savings for customers. This allows you to deploy a closed-loop logistics solution on a global scale, maximizing the savings potential while also improving transportation efficiency and visibility.

Fortigo’s one-stop system offers a proven track record of transportation savings and provides features that simplify all aspects of a global, enterprise supply chain.

Q. What do shippers need to know about current conditions and how we got here?

A. In peak years with tighter capacity and an increasingly fragmented and competitive supplier base of carriers, we’ve seen inflation for shippers increase by 6% in 2015 and 12% in 2018. Recent macroeconomic events steadily drove shipper truckload rates to new heights as inflation increased 23% in 2021.

The tides turned for shippers as markets started softening in early 2022 as capacity loosened and eventually turned into a surplus. By April 2022 the market inverted, with spot rates dropping below contract rates, pushing shippers to get creative and shift their procurement strategies again.

Q. Where do you anticipate the market heading and what new trends will have a lasting impact on shipper strategy?

A. We anticipate that rates will continue to drop or remain at lower levels in 2023. One of the key bid rollout periods occurs in the spring season, and we’re starting to see these new replacement rates starting to enter our data and driving further cost reductions for shippers. During this time, shippers shouldn’t expect to entirely recoup losses they endured, but there is a sizable opportunity for shippers to shift their approach from cost containment to cost reduction.

In the most recent Signal Report from DAT iQ, our team of experts provided the following guidance:

“Shippers should continue to take advantage of the inverted market to secure lower contract rates, but also to shift more loads away from the routing guide (after meeting carrier commitments) to leverage the spot market. We believe that the trend of using a mix of contract and strategic spot rates will continue beyond the current soft market.”

With more capacity available, shippers have regained greater leverage in negotiations—for now. Keep in mind shippers would be well-advised to build and maintain strong, cooperative partnerships with carriers regardless of market conditions.

Mid to large shippers in the U.S. generally ship over 80% of their freight under contract, avoiding the spot market if possible. In that context, the improved perception and increased strategic usage of the spot market, especially on low volume live load lanes, has certainly been one of the most significant recent trends.

The transportation and logistics industry is constantly changing, and shippers must be proactive in anticipating and adapting to new trends and market conditions to stay ahead of the competition. By leveraging accurate rate and capacity data, shippers can drive fair negotiations with carriers, find new cost savings opportunities, remain competitive, and navigate this complex landscape and come out ahead in the long run.

Chad Kennedy is group product manager for DAT iQ and responsible for delivering benchmark reporting solutions to customers. Prior to joining DAT in 2018, he led the transportation department for CHEP, where he was a customer of DAT for nine years. At CHEP, Kennedy leveraged data analytics and his prior experience as a manager with a small trucking company to partner with carriers and brokers to improve cost and service.

With more than 15 years of experience in transportation and data analytics, Kennedy has now focused his efforts on solving analytical and benchmarking problems for shippers, carriers, and brokers.