Peak season to test retooled supply chains

U.S. businesses continue to grapple with pandemic-induced supply chain challenges that will only get worse as peak shipping season gets underway, according to a survey of supply chain professionals released earlier this month.

The survey, by freight broker and third-party logistics services (3PL) provider GlobalTranz Enterprises LLC, polled 150 supply chain professionals to gauge the impact of Covid-19 on e-commerce order volumes, supply chain decision making, and how businesses are positioned to meet shifting consumer demand going into retail peak season. The results show that challenges persist—particularly around profitability and meeting delivery needs, and when it comes to managing new services companies have been pushed to provide.

“The economic disruption experienced in the last several months has pushed business leaders to make quick adjustments to meet new consumer demands and mitigate delivery problems,” Bob Farrell, GlobalTranz chairman and CEO, said in a statement announcing the findings. “Businesses remain challenged by new demands on their supply chain and need partners that can help them solve issues around sourcing, fulfillment, and final-mile delivery.”

Among the findings, survey respondents cited pandemic-related declines in their companies’ performance, with a third saying they didn’t feel their company was prepared for shifting needs in their supply chain over the last six months. For example:

• 41% reported they weren’t prepared to shift retail stores to become fulfillment hubs in major markets.

• 35% said they didn’t feel they had an omnichannel strategy to adjust to consumer buying behavior.

• 34% said they didn’t feel they had established the necessary partnerships to handle supply chain demand.

However, respondents said their companies have taken steps to expand new technology platforms and e-commerce solutions to meet evolving customer needs:

• 56% of respondents reported adopting a successful omnichannel strategy in the last six months, allowing them to reach consumers from a multichannel approach and a seamless shopping experience across physical stores and digital platforms.

• 81% reported that they made changes to streamline and simplify their payment processes for customers.

• 74% said they are more likely to outsource logistics and transportation services.

At the same time, the data shows that performance issues persist across the supply chain, particularly when it comes to having the resources needed to meet customers’ needs. Many survey respondents said they think this peak season will likely be less profitable, with more disruptions than 2019, as a result.

• 64% said they’ve dealt with more late or failed deliveries than what is typical.

• 59% of respondents said that they are concerned about not having the resources needed to meet peak customer demand, and almost half said they believe their peak season will bring in less revenue than last year.

Among the services companies say they have been “pushed into providing or expanding” in the last six months, final-mile and real-time shipment tracking top the list: 

• At least 6 in 10 respondents reported they’ve experienced an influx of customers wanting last-mile delivery solutions and increased demand for white-glove service (in-home installation, haul away, and so forth).

• At least 8 in 10 said it's important for a company to provide real-time data to everyone across the company, have customized services, offer easy-to-use technology, have a vast transportation network, and provide 24/7 support. 

• 79% reported making changes to their company’s supply chain to handle bulk buying and delivery of larger items.

GlobalTranz conducted the survey in late September in conjunction with communications firm Edelman Intelligence.