Visibility Issues Come To A Head
Wants Become Needs in COVID-era Supply Chains
20 May 2020 // For several years, visibility and its associated technologies have been at the top of Gartner’s “User Wants and Needs” and “Gartner Predicts” surveys.
In the current time of COVID-disrupted supply chains, those “wants and needs” have gotten a lot less theoretical and a lot more real. With thousands of airfreight flights canceled, dynamically changing schedules and limited capacity, there’s less certainty than ever in transportation. March freight capacity on passenger planes plummeted 44% compared to last year. Even with more dedicated freighter flights, total capacity is down 25% from March 2019.
The cost and complexity of moving goods is rising every day, Paul Golland of freight forwarder PG Logistics told the Wall Street Journal. “You used to get a quote valid for 30 days. Now, you’re getting it valid for 24 hours, because tomorrow the situation may change again.”
And that’s just the airfreight situation. Ocean, ground and even rail are in disarray, too, as supply and demand curves plummet.
In such a chaotic environment, the questions become: Do you know what your supply chain looks like today? How will tomorrow’s shipment be routed? And, where exactly are those goods we moved a few days ago?
Case in point, The Heineken Company, which recently cried in its beer all the way to Manhattan Federal Court. Some 15,000 cases of lager—360,720 little green bottles and cans to be exact—froze when Heineken says they were inadvertently left outside at a Chicago-area rail yard where temps ranged from zero to minus-twenty-two degrees Fahrenheit. Beer freezes solid at plus-fourteen degrees, so the result was a lot of iced Heine-cubes with a taste that was “irreversibly changed” according to the complaint.
Heineken charged that its logistics partner should have stored the product right away in its climate-controlled warehouse. The case was settled out of court late last month, but wouldn’t it have been nice to know ahead of time that there was a little too much brrrr in the brew?
Internet of Things (IoT) sensors can sense conditions like temperature and humidity. And, platforms like our own ChronosCloud can make sense of that data—correlating it across partners and automatically notifying managers if goods stop moving or environmental conditions are trending bad. Ideally, the situation would be detected before suds become duds.
In Heineken’s case, we don’t know whether the freeze resulted from transit disruptions, COVID-related staffing issues or just plain negligence. What we do know is that this stuff is going to happen a lot more as transportation infrastructure struggles to recover from pandemic disruptions.
If you don’t have full visibility of your goods—or don’t have the systems or manpower to navigate the oceans of data that multi-party supply chains generate, let’s talk.
Heard On The Dock
“You, as a company, either have world-class digital capabilities or you are falling behind.”
--Mike Jackson, Chief Executive Officer, AutoNation
Wall Street Journal Logistics Report
While You Were Shipping…
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A Freight Recovery Stuck in First Gear (Journal of Commerce). “Much will depend on consumers’ willingness to return to spending,” says Ben Hackett of the research firm Hackett Associates. Still, JoC sources estimate a 20-30% reduction in container volumes, 25-30% less airfreight capacity and more than 80,000 lost trucking jobs.
Truck Orders Drive Off A Cliff (Wall Street Journal; subscription access) Orders for heavy vehicles hit their lowest level ever as carriers wait and see what equipment they’ll need. In all, April orders were down 73% from a year earlier and 44% compared to March according to FTR, an industry research group. To make matters worse, even trucks in production are expected to be delayed due to parts shortages in the US and Mexico.