ChainLink 2020 2nd Quarter
TECHNOLOGY DRIVES COVID-19 RECOVERY
Emerging from a massive supply chain disruption comes with a lot of uncertainty. Companies are now focused on recovering from and responding to COVID-19, while
preparing for 2021.
John Richardson Supply Chain Master
As we look beyond the second quarter of 2020, technology will play a critically important role in business recovery. Utilizing a TMS to select the best freight lanes, track shipments and analyze supply networks will be key in transitioning from a supply chain into a “supply web.” Transportation Insight is constantly analyzing the state of the transportation marketplace, helping our partners optimize and master their logistics network. Our industry scrutiny helps companies of all sizes drive cost-savings results. READ MORE
Learn how at www.transportationinsight.com/mastered
MARKET UPDATE: COVID-19 CURRENT IMPACTS
TAKE FULFILLMENT FATE AWAY FROM AMAZON
Retailers and e-tailers adjusting business strategy in response to changes in consumer demands should consider Amazon’s evolving role in e-commerce – and transportation. When product delivery, customer satisfaction and profit margin are at stake, can you really count on Amazon to prioritize your interests?
Get the latest on transportation industry trends so you can protect performance and continue to serve end customers during – and after – disruption. • Identify weak links before a break • Target areas of opportunity now and post-COVID-19 • Understand rate, volume and capacity trends Access our current Market Update now for the latest supply chain changes affecting your business. WATCH THE WEBINAR
ChainLink 2020 2nd Quarter
STATE OF U.S. TRANSPORTATION
Price Index Performance: 2007-2020, By Quarter, Through Q1 2020
Source: U.S. Bureau of Labor Statistics
WHAT DOES THIS DATA MEAN? The Producer Price Index (PPI) measures the average change in selling prices received by domestic producers of goods and services over time, from the perspective of the seller. In other words, the PPI measures the trend of the cost of everything manufactured in the United States. The custom-produced performance index above reflects the rate of change in the PPI compared to the rate of change in transportation costs across the Parcel, LTL and Truckload modes. A direct reflection of conditions created by COVID-19, modes that move smaller shipments are experiencing steady pricing overall, as e-commerce usage from a largely remote-based workforce drives residential parcel delivery volumes. Meanwhile rates in the Truckload market are dropping sharply.
As COVID-19 shelter-in-place and quarantine guidelines drive a spike in residential deliveries, parcel carriers’ commercial volume is plummeting. Expect the global pandemic to open the door on a very competitive environment for surviving businesses and an aggressive pricing environment for carriers working to rebound from a costly first half of 2020.
We expect major shifts in both pricing and billing. While spot and volume quotes are going down, contract rates are staying firm. Bill auditing is going to become incredibly busy, as back offices consolidate and take on additional roles. Although expansion may not restart until 2021 don’t expect capacity constraints this year.
With continued downward pressure on rates, shippers should have an opportunity to examine their strategies for spot and contract markets. Carriers are aggressively seeking volume, often offering incentives. There’s opportunity for quick savings, but avoid the urge to chase every rate cut. A judicious response allows you to avoid cutting into carriers’ core volume and your transportation partner’s profitability.
ChainLink 2020 2nd Quarter
HOW IS YOUR SUPPLY CHAIN BUILT? Is your supply chain built by ants, or by grasshoppers? Preparation and good business practices today can ensure your supply chain can sustain in any business condition.
With the potential for reduced ocean capacity and consolidation coming, cost optimization must have the attention of every logistics management team. Through technology and analysis, companies can align logistics operations with their budget. READ MORE
Inbound freight orders and ocean capacity from Asia will ultimately determine rates moving forward. Don’t anticipate many changes ahead of the May 1 re-negotiation date, but that could all change based on decisions made by ocean carrier alliances. READ MORE
PARCEL: U.S. Postal Service
COVID-19 is driving the USPS to a perilous brink. Shippers that rely on USPS services as part of a multi-network shipping program can still utilize postal offerings and gain cost efficiencies. Proactively planning contingency strategies using similar commercial services will insulate you from unexpected financial risks that emerge in crisis. READ MORE
Post-COVID-19 truckload procurement strategies should focus on reducing carrier network size and increasing capacity commitments at competitive rates. This requires a careful balance of contract, spot and brokerage opportunities. Technology tools allow you to identify performance gaps while rebalancing your transportation network to serve your freight needs. READ MORE
In the current environment, everything comes at a price. How much your company pays for international freight depends on how quickly you need it. Expect ocean rates to remain stable, but service will be delayed as ships make multiple port stops before crossing the Pacific Ocean. On the other hand, air rates will continue to stay high until airlines resume flying passenger flights across the ocean. An expert partner can help you navigate the changes and keep freight moving at the optimal rates. READ MORE
ChainLink 2020 2nd Quarter
OPERATIONAL SUPPLY SOURCING The manufacturing sector stands to face the most disruption from indirect spend management. Normal supplies manufactures rely on – everything from copy paper to breathing masks and personal protective equipment – is being disrupted by COVID-19. Now more than ever, it’s important to take advantage of group purchasing power and dedicated sourcing. Working with a team that specializes in indirect spend management helps you get access to the supplies your business needs, at both a price and speed your company expects.
DATA QUALITY AND MANAGEMENT Is your data ready to support your supply chain adjustments after COVID-19? Supply Chain Master John Richardson joins Talking Logistics to discuss data readiness and the vital role data management will play in supporting effective go-forward supply chain design. Watch his interview with Adrian Gonzalez for insight that will help you master your supply chain to protect future business performance.
With rates softening, now is a good time for many companies to look at the open market. Anyone shipping freight between 8 feet and 28 feet of capacity may be able to get a better rate through bidding. Transportation Insight is encouraging and facilitating communication with your shipping
partners to manage service expectations and options.
WATCH THE VIDEO
Free Assessment to Reduce Risk in Your Supply Chain
Transportation Insight is helping companies re-set their supply chain in the wake of COVID-19 disruption by offering unprecedented visibility in next-day fashion. Contact us today for high-level Supply Chain Mapping that gives you a one-on-one consultation with a Supply Chain Expert and a take-away that helps you reduce supply chain risk. Within 24 hours of your consultation, we provide a one-page report that includes: • High-level mapping of network flows and processes
• Review of end-to-end supply chain – not just transportation piece • Identification of gaps that lead to future operational and financial risk
Master your supply chain with an expert partner that gives you an actionable map to reducing your supply chain risk.
877.226.9950 www.transportationinsight.com firstname.lastname@example.org 310 Main Avenue Way SE Hickory, North Carolina 28602
Your Supply Chain. Mastered. We have the team, the tools and the technology to unlock the power of your supply chain so you can realize value today and drive growth tomorrow.
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