Technology and Supply Chain Digitalization

Now is the perfect time for supply chain digitalization. The pandemic added a lot of volatility to global supply chains that already were volatile and unpredictable. Since then, the market dynamics have intensified.

For starters, the pandemic exacerbated the employment situation. Today, logistics jobs remain unfilled. And many companies are struggling to find employees with the requisite skill sets. (CSCMP Supply Chain Quarterly, Q3, 2022). Nonetheless, many companies are turning to technology to fill the skills gap.

Next, digitalization is still in its infancy, according to the CSCMP survey. Only 31% of 300 survey respondents are implementing or deploying digitalization programs.

That said, 93% of companies are pursuing digitalization in varying degrees. That means while actual implementation is only beginning, most of the industry recognizes the value of digitalization.

The logistics industry is at a crossroads. Businesses recognizing that can prosper by seizing the digitalization trend early.

But you shouldn’t digitalize your supply chain for the sake of doing so. No business, large or small, has the budget for that. Smart IT investment for the future requires direction and focus.

In terms of utility, you should focus on customer service, the market climate, and your budget. By following this plan of action, you can increase the chances of modernizing your supply chain. We’ll call this a purpose-driven approach to digitalization.

Taking a purpose-driven approach means considering the digitalization of routine business processes. It also means preparing for non-routine events, such as peak season. Finally, it means transforming your supply chain to deal with a persistent and heightened-risk environment.

Without further ado, let’s start with the transformation of routine business processes.

Digitalize Routine Business Processes.

To remain competitive, supply chains must adapt to the New Normal because business has changed. Supply chains must be more responsive, customer-centered, and risk-capable.

At the most basic level, you have an opportunity to optimize processes like never before. The impetus for change exists. It’s time to address your supply chain gaps from end-to-end (E2E) from your suppliers to your customers.

That change in view replaces siloed thinking, which prevented optimization. Siloed thinking and processes led to suboptimization. Now, the industry has the tools and technologies to support a strategic view that enables optimization.

Transforming your routine business processes also means looking for ways to reduce costs and achieve sustainability. That can mean several things.

Cost reduction entails meeting customer expectations efficiently. That’s not to say you’re not only focused on reducing costs. That’s old thinking. Today’s approach calls for taking a customer-centered approach and working backward from there.

Digitalization is also ideal for building-in sustainability. Incorporating a system built for the long term that considers compliance with legal and regulatory matters will ease the burden of pivoting from existing operations to future operations.

With ESG (environment, social, and governance) on the rise, digitalizing for these factors makes compliance easier.

The lesson here is to prepare for the future, not just today, through supply chain digitization.

Supply Chain Digitalization for Peak Season.

As you transform your business processes, you must think beyond the routine. Remember, supply chains operate in more than one environment.

Peak season is a good example of how your supply chain must adapt to seasonal changes. Those changes could be wild swings, or they could be more manageable.

Thinking about how to smooth out seasonal changes can make a tremendous difference to your resources. You have an opportunity to optimize your employees, your processes, and your budget.

You can further optimize your resources, supply chain digitization will allow you to better manage seasonal swings.

Again, starting with your customer, look for ways to enhance customer satisfaction with technology.

Providing visibility into orders encourages engagement. An improved returns process, for example, can also deliver greater customer satisfaction. And open communication fosters transparency in your operations.

All that makes peak season much easier to manage. And increasing flexibility to accommodate peak season is a great opportunity. But that’s not the only reason.

Digitalize to Enhance Supply Chain Risk Management (SCRM).

As stated above, the business environment has changed. Now, too, how you conduct business must also change. You must change to stay relevant and responsive.

In particular, that pertains to how you manage supply chain risks. Risks today are more frequent, more destructive, and more costly. Therefore, you must bulletproof your supply chain E2E and in-depth.

The simplest way to do that is to automate for threat protection and mitigation. It’s not the only way. Digitalizing for enhanced SCRM is a powerful way to bulletproof your supply chain.

You ought to focus on integrating and synchronizing lateral and horizontal communication. That means broadening communication internally and externally to your suppliers and your customers.

That’s not easy to do. But introducing automation to help enhance communication is well-advised.

Another way to enhance SCRM is to enhance your supply chain security. Now is a fitting time to address cyber security threats to your supply chain.

Like other supply chain risks, cyber threats are on the rise. And they're more devastating and costly.

According to Cybercrime Magazine, the costs of recovering from cyberattacks are staggering. By 2025, the costs of recovery are projected to be about $105 trillion annually.

Defending against cybercrime alone should make it worthwhile to digitalize your supply chain.

Supply Chain Digitalization for the Future.

As stated above, the future is now. That’s true at least in terms of transforming for responsiveness and resilience.

Your supply chain must not only keep pace with technology. It must also keep pace with your competitors and your customers. Digitalizing strategically enables a networked supply chain, which fosters collaboration.

Furthermore, your supply chain must be flexible. That means building agility and resilience in your supply chain. Planning your network for routine business, peak season, and heightened-risk events will provide the flexibility you need.

At American Global Logistics, we’re all about reducing complexity and volatility. Taking a purpose-driven approach, we can help you optimize performance, reduce costs, and reduce risks. We strive to prevent, avoid, or mitigate disruptions.

Let’s jump on this digitalization trend together while it’s in its early stages.

Contact us to learn more about how we can help you can build a more responsive, customer-centered, and risk-capable supply chain.

Achieving Seamless Intermodal Operations: Resolving a Persistent Bottleneck

Why Intermodal is a tough issue to resolve

Intermodal operations failed to move containers seamlessly almost overnight.

What once worked now fell apart.

The bottlenecks manifested themselves at every port. No port was spared the snarled backlogs of containers sitting at and stacking up at ports. Movement of cargo seemed to come to a halt.

Intermodal operations came into focus during the pandemic and its aftermath. Industry professionals and consumers alike gained insight into the complexities of seamless flows.

In this post, we’ll look at the significance of resolving the persistent bottlenecks at ports.

We’ll delve into why resolving this issue is important. We’ll present the status of intermodal operations. Then, we’ll look at resolving this issue sooner rather than later.

Moving on, we’ll discuss what capabilities a reliable 3PL needs to manage intermodal disruptions. Finally, we’ll explore how you can alter the operating landscape for competitive advantage.

That’s a tall order, but keep reading, and you’ll see resolving intermodal operations is within reach.

Why it’s important to resolve intermodal operations

Before discussing why resolving intermodal operations is important, we need some working definitions.

First, intermodal operations and transloading often get confused. So, here are two basic definitions. These definitions come from InBound Logistics (Feb. 2023)

INTERMODAL SHIPPING:

“Intermodal shipping means moving a product from one point to another while keeping the product in a single container. The transport in the original container might utilize several different transportation modes, but the same container holds the stock throughout.”

TRANSLOADING SHIPPING:

“With transloading shipping, freight is loaded and unloaded, depending on where the cargo is in the supply chain process and the mode of transportation. At each supply chain transfer point, freight moves via containment modules.”

“When shippers, rail carriers, or truckers approach a trans-load facility, cargo gets offloaded from one container into a different container. At either end, freight gets stored in a specific container, such as Rail car, Tank car Flat car, Box car, Container ship, Semi-truck, and plane.”

Now that we’ve sorted that out, we can get into why it’s important to resolve this issue.

The pandemic exposed points of congestion like never before. The bottlenecks in the supply chain were most evident at the ports globally.

So, how does untamed congestion unravel previously functioning supply chains?

The list is long, so we’ll itemize them for brevity.

This list highlights the complexities surrounding intermodal operations. Solving this problem is not something you can undertake by yourself. The problem is too big. It has too many tentacles, reaching into too many areas.

It affects performance, labor, costs, and capacity. Another issue not listed is intervention by local, regional, and national governments. Laws, policies, and regulations also affect intermodal operations. Coordinating each stakeholder’s position by itself is an epic challenge.

Now, let’s look at the status of intermodal operations with the pandemic in the rearview mirror.

Intermodal Operations Status

The question is: “Has the industry learned any lessons from the pandemic?”

To answer that, let’s review what’s happened since the pandemic.

First, industry stakeholders are benefiting from a more benign operating environment. That makes untangling the intermodal bottlenecks easier. Some favorable conditions allowing for grappling with intermodal issues are below.

A supportive environment makes tackling this issue much easier. Norfolk Southern, for example, is building infrastructure in Georgia to relieve port congestion at Savannah and Charleston.

The installation of new cranes will enable an increase in container capacity while reducing congestion.

Along with a favorable operating environment and innovative solutions aimed at resolving intermodal issues, the future looks brighter than it did during Covid-19. That raises the question of when we can expect to see improvements take hold.

When Is Intermodal Expected to Improve?

Achieving consensus on most things logistics seems difficult to attain. However, a general survey of stakeholders seems to be quite consistent.

The consensus seems to indicate operations will normalize to pre-pandemic times in 2023 (JOC.COM). Some say relief will come in the third quarter of 2023.

Also, logistics companies concur with these assessments. Knight-Swift and J.B. Hunt see a brighter future ahead in 2023, signaling that the worst is over. That means progress should continue as enormous challenges come to an end.

Just as massive challenges converged during the pandemic, their resolutions are also converging.

What capabilities does a 3PL need to address intermodal’s unique issues?

A 3PL needs a combination of capabilities that include services, technology, and personnel.

Starting with services, an ideal 3PL has complete supply chain solutions. It should include an array of shipping capabilities. Specifically, they would include full truckloads, LTL, intermodal, and drayage, to name a few.

IT should have seamless technology solutions that support those capabilities. That technology should be user-friendly and allow for customized solutions.

Finally, an ideal 3PL has the people—employees and leaders—that can bring it all together. A 3PL’s employees can execute the delivery of cargo from the point of receipt to the point of delivery.

Employees are experienced and qualified transportation and logistics experts. That enables them to execute against customers’ requirements. Employees work individually and in teams to solve problems following a data-based approach.

Leaders understand what gaps exist, especially those at the ports. Just as important, they know how to leverage trucking and logistics solutions helpful to the customer. Orchestrating people and processes focused on resolving intermodal issues is a difference-maker.

While many gaps in seamless logistics flows exist along the pipeline, gaps in intermodal operations are dominant. If a 3PL can fix some intermodal issues, the advantages of those efforts would be beneficial.

They can lead to a competitive advantage compared to your industry competitors.

Conquering intermodal operations for competitive advantage

The pandemic revealed issues in global supply chains. One of the issues that stood out was the failure of intermodal operations.

The government's intervention to address the issues at the nation's ports further demonstrated the importance of addressing intermodal issues.

The complexity lies at the heart of many logistics issues. Achieving seamless intermodal issues is chief among those. That’s why it makes sense to outsource your logistics operations.

Better yet, partnering with a 3PL that has the capability to ease intermodal disruptions can pay big dividends. An experienced and qualified 3PL can keep your cargo moving while minimizing intermodal issues.

At American Global Logistics, we have the capabilities to deal with intermodal issues. We have the total package: services, technology, transportation and logistics experts, and leadership.

Our teams help improve your competitive —advantage, keeping your cargo moving.

Contact us to learn more about our unique capabilities. We’ll explain how we take the complexity out of intermodal operations for you.

How to Choose a 3PL/4PL during Supply Chain Disruptions

Supply chain disruptions were plentiful in 2022, and they’re projected to continue into 2023 and beyond.

Disruptions forecasted to continue or increase include operational and technological risks, strategic risks, legal, regulatory, and compliance risks, and financial risks. 

The main issues affecting global logistics and supply chains stem from politics, economics, and ecology.

Given today's turbulence, the typical logistics and supply chain dynamics are more adverse than normal. Hence, we have the New Normal.

Because of the game-changing supply chain disruptions, operating solo as a shipper has become untenable. In fact, it’s become precarious.

That calls into question whether you have the right 3PL/4PL for the New Normal. Specifically, is it equipped to manage the disruptions of this new operating environment?

The dynamics have changed (we covered those in our last post). So, it makes sense that different criteria should apply in choosing a 3PL/4PL.

This post will look at the capabilities required to manage these enormous challenges. And that will inform the selection criteria you should focus on.

The majordisruptors pressuring supply chains listed above present shippers with enormous challenges. Conducting business as usual won’t work anymore. That means you must pivot in a major way—now.

An article in Forbes cites four ways to address these disruptors: “…through technology, partnerships, new customer strategies, or a focus on new markets.”

Looking at the major risks you face in 2023 helps to make clear the criteria you should apply in choosing a 3PL/4PL.

Leveraging Technology

Technology is at the forefront of resolving today’s logistics and supply chain challenges. The advancement of technology has made this a leading solution given today’s confusion and volatility.

A 3PL/4L with robust capabilities will allow you to:

These capabilities are must-haves. Organizations that have these capabilities will enhance your business’s agility and resilience. They can take your business to the next level in an orderly manner if properly applied.

So, one vital criterion in choosing a 3PL/4PL today requires technology and expertise.

Partnerships During Supply Chain Disruptions

It’s a given that there’s strength in numbers. This axiom is true more than ever.

Partnering with a 3PL/4PL is not just expedient, it’s essential to success.

Globalization, specialization, and an increasingly competitive landscape challenge even the most adept shippers. This increases complexity. You’ll have more success in tackling these challenges with a partner.

But just any partner won’t do. You need a 3PL/4PL that is reliable, efficient, and affordable. You need a 3PL/4PL with a proven track record. It must deliver reliable, consistent, effective, and efficient services.

More important than that, you should look for a 3PL/4PL that is focused on your business. Customer-centricity is a strategic attribute of the New Normal. It’s changed business in a way that can make a difference between success and failure.

But there’s another often-overlooked criterion: “employee-friendliness”. That’s right, employee-friendliness, like customer service, has become a strategic differentiator.

New work consisting of remote work, work in the office, or hybrid work has changed the workplace. The best and the brightest will gravitate towards organizations that embrace new ways of working. Employees have choices, and they will vote with their feet.

As you consider outsourcing your logistics operations, you shouldn’t overlook employee-friendliness.

New Customer Strategies

As the New Normal takes hold, if you haven’t already done so, you should evaluate new customer strategies. This takes on many forms.

First, in taking a strategic view, you’ll want to look at your customer strategy. You should compare it to today versus what you think it needs to be tomorrow. There are no set number or types of strategies. Here are some possibilities to consider.

These are broad goals that you should deconstruct. Again, many possibilities exist for each goal. What you come up with should be tailored to your needs.

Next, you will want to identify what you can do in-house and what you can outsource. To improve customer service, you might consider improving your product returns process.

Then, you’ll determine whether to do that in-house. With the increasing complexity of logistics and supply chains, you would likely want to outsource this function.

That brings us to which organization you should outsource to.

To find partners, go back to your criteria. Specifically, assuming you agree, you would seek a 3PL/4PL that delivers reliable, consistent, effective, and efficient services.

Further, they should have a track record of performance. Examining a track record will give you insight into their ability to deliver what you need. At the strategic level, you’ll want a 3PL/4PL that is agile, resilient, and affordable. And it should also be customer- and employee-friendly.

That’s your starting point. Now we’ll look at choosing a 3PL/4PL that can assist you in focusing on new markets.

Focus on New Markets

Your business is operating in a different world. It’s more competitive. It’s riskier. And it has changed the old ways of doing business forever.

To remain competitive, you will likely want to diversify and expand your business. Exploring new markets is one way to grow your business. Demographics are changing, and so are buying patterns. So you’ll need to consider those impacts on your business.

Seeking new markets in which to do business is an excellent way to do that.

Going at it alone will make your job tougher. The obverse of that is, you guessed it, to partner with a 3PL/4PL. Doing that would simplify the accomplishment of your goals to enter new markets amid supply chain disruptions. After all, entering a market entails levels of complexity you may not be equipped to manage.

If you’re considering entering new markets, you must address logistics support.

First, you’ll want to use the general criteria set out above. Then you‘ll need to drill down to determine whether a prospective partner has the scope and scale to support your entry into new markets.

This is not an all-inclusive list. It’s not intended to be. Rather, it highlights the levels of complexity involved that you should consider.

You must do your homework in choosing the right 3PL/4PL. That starts with your strategic view of what you want to accomplish, aided by the criteria listed above.

You would then further refine those criteria into relevant support criteria.

Rising Above Supply Chain Disruptions

Seeking a qualified 3PL/4PL that can operate seamlessly in the New Normal is critical to your mission accomplishment. Therefore, you should invest the time upfront to identify your specific strategic goals and objectives and then match them to the capabilities required to support those goals and objectives.

Taking a systematic approach helps to simplify choosing a suitable partner. It also makes this undertaking less stressful and less time-consuming.

At American Global Logistics, we’re positioned to support our clients to survive and thrive in today’s turbulent times. The transition is underway whether you’re ready or not.

We’re ready because we’ve prepared ourselves. We adapted when we saw that a new era was coming. More importantly, we’ve applied our own experience in transitioning to the New Normal to support our clients successfully.

That’s what separates American Global Logistics from the rest of the pack.

We want to do the same for you.

Contact us today to find out how we can help you thrive in today’s turbulent times.