Differentiation in the supply chain rests at the crossroads of digital transformation and applied data. Today’s shippers, carriers, and logistics service providers (LSP) face an uphill battle in securing available capacity, allocating resources, and planning for an uncertain peak season. Combined with record-breaking growth within e-commerce, the spot freight market is in a full upswing. According to Supply Chain Dive, “spot rates in the trucking market hit their lowest point in April, down around 25% year over year. Since then, we’ve seen quite a dramatic turnaround in rates. Rates are rising at a time when they usually trend downward. Trucking rates will typically fall throughout the summer until the holidays.” During this time of uncertainty, coping with unexpected changes in freight rates, peak season e-commerce managers must embrace a new ideal—agile logistics within a transportation management system (TMS)—which are capable of flexing to meet changing needs.
In recent years, the ability to apply digital systems to overcome manual inefficiencies and speed supply chain management has grown synonymous with effective supply chain management. Unfortunately, the broader applications of applying data within existing peak season strategies remain out of reach. There is simply so much happening that carriers, shippers, and LSPs lose sight of how generalizations about the market can overshadow smaller fluctuations within localized markets. Limited capacity in the origin point for a given trade lane is not necessarily indicative of capacity availability at the destination or vice versa. Unfortunately, these problems become huge obstacles to applying technology when it comes to peak season planning and e-commerce fulfillment.
Remember that applying data within peak season planning usually means looking to past years’ growth patterns to see potential forecasts and fluctuations. Since 2020 is indeed a novel opportunity for peak season and has already surpassed the typical growth of the upcoming peak season due to the COVID-19 pandemic, this is uncharted territory. Failure to look beyond the generalized assumptions about the market will create turmoil. And limiting resource availability and strategy in anticipation of the coming peak season will lead to rigid processes. Rigidity is the antagonist of agile logistics, limiting the ability of the supply chain to flex and accommodate changes as they occur. While this may not necessarily be a major problem when consumers are willing to accept four or five day delivery windows, it is dreadful when consumers expect delivery tomorrow, if not today.
Agile logistics are informed. Informed decision-making goes into every consideration, applying automation to gather more actionable insights that have a meaningful impact on supply chain efficiency and profitability. In this space, software-as-a-service platforms are evolving to provide big data-as-a-service capabilities through the form of embedded analytics and supply chain connectivity. By giving TMS users the ability to see the data in real time and understand how it impacts overall shipping, companies can better predict changes and source transportation. Moreover, the biggest impacts of the idea of big data-as-a-service serve to improve the routing optimization and lessen the duration of transportation to reap added efficiencies.
As an example, published by Supply Chain Digital, e-commerce behemoths have managed to move their warehousing and storage closer to customers, reducing strain on resources by analyzing trends and understanding customer expectations for a given period prior to ever receiving an order. The same concept can be applied to sourcing transportation—a core component of agile logistics.
Leveraging a data-driven TMS yield significant opportunities to streamline logistics management in these ways:
Modern supply chains must be immensely responsive. In other words, supply chain plans must literally turn on a dime. Failure to accommodate sudden changes within demands or resource availability sets the supply chain up for failure. This is not only unacceptable during off-peak season. But it becomes of the essence to surviving and thriving throughout the coming peak season. Peak season aside, e-commerce demand has never been higher. Failures now will turn into permanent losses for your business. It’s that easy to understand. Fortunately, utilizing a TMS enables agile logistics management and reduces that risk through innovative concepts, including big data-as-a-service.
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