Quick Solutions for Merchants to Conquer Supply Chain Obstacles!
The ongoing global pandemic has caused significant disruptions to the shipping industry, leading to a backlog of over 200,000 shipping containers off the coast of Los Angeles. This issue is not isolated to the US, as ports in Europe, Asia, and other regions are experiencing similar problems with FedEx and UPS also facing delays.
One of the key factors contributing to these delays is a shortage of 80,000 truck drivers in the US, a deficit exacerbated by the Coronavirus. To address this, retailers are encouraged to hire truck drivers and trucks on contract to pick up and transport goods. Additionally, hiring extra carriers and renting containers wherever possible can help alleviate the pressure on the current workforce.
In an effort to minimise human contact and reduce the risk of infection, embracing a Touchless, or "Don't Touch" paradigm in materials handling and storage is recommended. This could involve implementing drop shipping and avoiding sending goods to centralised distribution centres.
Retailers are also likely to face difficulties in getting all the inventory they need to satisfy demand, especially during the Holiday season. To mitigate this, retailers should put their team on high alert, spend more on logistics, and proactively manage all aspects of their logistics network.
As of October 15, 2021, there are 584 container ships stuck outside ports worldwide, double that of the same time last year. To combat these delays, retailers could consider routing ships with goods to less congested ports.
Another solution is to establish local, mini "Pop-Up" distribution centres and storage facilities close to ports or points of highest customer demand. This would help reduce the need for long-distance transportation and speed up the delivery process.
Shipping costs have dramatically increased due to these delays. To offset these costs, retailers could consider chartering airplanes and air freighting goods to their destinations. However, this option is likely to be more expensive with both FedEx and UPS increasing their rates.
In the face of these challenges, retailers NOW can drastically increase inventory flow into their channels by leveraging AI-driven supply chain optimization tools. These tools can enhance demand forecasting, automate inventory management, and optimise transport routing dynamically to reduce costs and delivery times while maximising truck load efficiency.
Lastly, ensuring these ports are working 24-7 can help reduce congestion and speed up the overall process. Consumers may go to other retailers with inventory or choose not to buy at all if demand is not met. Therefore, it is crucial for retailers to take proactive measures to ensure they can meet consumer demand during these challenging times.
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