The holiday retail season is upon us, and already the first lumps of coal have been delivered, with retailers such as Neiman Marcus and Walmart experiencing unwanted downtime on their websites over the Black Friday weekend. And as we move away from Black Friday, and closer to Christmas day 2015, the pressure will shift from “can I order it?” to “can you get it to me in time?” for most retailers.
Just two years ago, UPS was brutally criticized for their inability to deliver on time some shipments that were guaranteed to arrive on Christmas, due to the volume of packages exceeding the capacity of their network. And consumers continue to be wary. So what can retailers do to improve their chances of a successful holiday season?
Shippers large and small continue to look for ways to innovate the global supply chain and transportation logistics, in order to avoid such missteps, and keep customer trust. The reality of self-driving trucks is already upon us. We see companies such as Target, Walmart, and Amazon in early stages of the grocery-delivery market to meet the increasing instant gratification demands of the digital generation.
And the sky is no longer the limit as Amazon and Google work to make drone delivery a reality. The goal in all of these efforts is to find innovative ways to deliver more goods in the most efficient, effective, and optimized way to ultimately speed time-to-market, drive more revenue, and compete in the future global value chain.
By 2040, U.S. freight volume will grow to 29 billion tons—an increase of 45 percent just to support the steady increase of the just-in-time demands made by consumers and businesses alike. We just can’t “physically” meet those demands fast enough, especially around the holidays. So the question is: Can we leverage technology to “virtually” accomplish the same goal?
WHO WILL CAPITALIZE ON “FLEET BURSTING”?
The cost of managing vehicles, fleets, and drivers is increasing and customer satisfaction is suffering due to lack of insight and predictability. Businesses are addressing these factors by outsourcing or leveraging third-party logistics (3PL) carriers, in addition to private fleets, to save costs, deliver goods, and meet the ever-changing demands on the delivery fleet.
Demand constantly fluctuates, going up during peaks and going down in off-peak or when demand declines. When companies have the ability to virtualize their fleet, why wouldn’t they leverage 3PL or for-hire vehicles during peak rather than have underutilized capacity year round just to access during peak times?
In the same way we use on-demand computing resources and cloud technology to manage spikes in compute capacity, known as cloud bursting, we can use transportation delivery resources as we need them by leveraging any available space, vehicles, carriers, etc. on demand as you need them—fleet bursting.
The challenge with this today is that organizations have a blind spot when it comes to 3PL and many times even their own private fleets, introducing operational inefficiencies and contributing to more waste. Organizations are looking for ways to improve delivery performance and operational efficiency and need solutions that help them adapt to the diverse, connected, just-in-time world. By leveraging real-time intelligence that can solve transportation issues before they turn into costly mistakes, companies can drive waste out of operations, improve delivery performance, and ultimately ensure customer satisfaction. Using the data at their fingertips is critical to the success of their transportation operations.
PICK UP THE PACE
Global logistics need to keep up with the pace of innovation and the growing number of smart physical objects interconnected by technology known as the Internet of Things. A recent Trend Report released by Cisco and DHL estimates that there will be 50 billion devices connected to the Internet by 2020 compared to 15 billion today.
Enterprise transportation and logistics and fleet management teams need to join in this conversation and take the necessary steps today that will enable them for global supply chain success in the future. Businesses need to become more agile and nimble, quickly responding to ever-changing customer demands. Real-time visibility into delivery performance at any point in time gives you the data and business intelligence needed to act before impact.
Not only do you need the information at hand to make quick, smart business decisions, but you need the ability to actually address transportation problems and change the outcome before they turn into costly errors. Tapping into this intelligence in real-time enables retailers and shippers to save time, money, and resources, and run a more efficient operation.
This holiday season will be another test, as retailers and delivery companies strive to drive out waste and increase efficiency and productivity, and make sure as many boxes reach as many homes as possible before December 25. This is survival of the fittest. Let’s see who makes it, and who falls this season.
By Brett Conner
Published in Inbound Logistics