Above the Fold: Supply Chain Logistics News (January 8, 2021)

Looking at the way 2021 has begun, at least here in the United States, maybe 2020 wasn’t so bad after all?

The storming of the U.S. Capitol on January 6, 2021 was a very sad day in our history. Let us hope that the remaining 357 days of 2021 will bring out the best in us instead of the worst. 

With regards to supply chain and logistics, the new year has begun where 2020 left off, with the pandemic, e-commerce, and digital transformation dominating the headlines. Here is the news that caught my attention this week:

Billions of Parcel Shipments, Millions Arriving Late (and Millions Returned)

We mailed my mom’s Christmas gift via USPS Priority Mail on December 15. Instead of arriving two days later as promised on December 17, it arrived 16 days late on January 2. The package took 18 days to travel 167 miles from Massachusetts to Connecticut.

Apparently, our experience was not unique. “UPS, FedEx, the U.S. Postal Service and other carriers pressed through a record crush of holiday shipments to deliver most packages in time for Christmas — but more than 2 million parcels did not arrive before the big day, according to new data,” reports Kelly Yamanouchi in The Atlanta Journal-Constitution. Here’s more from the article:

Shipping firms delivered more than 3 billion packages throughout the full peak holiday period, which typically starts the day after Thanksgiving.

But some deliveries were made on Christmas Day, and hundreds of thousands of packages were delayed by several days, according to ShipMatrix president Satish Jindel. He expects that will result in more return shipments.

Speaking of returns, as Emma Cosgrove reports in Supply Chain Dive, “UPS expects to induct 1.75 million returns into its system every day this week, which would represent the highest weekly total of returns in the carrier’s history, a spokesperson said via email. The expected 8.75 million returns this week is a 23% increase over the highest week of returns for the 2019-2020 holiday season.”

As I’ve written many times in the past, holiday returns are the hangover headache of e-commerce.

To make the returns a hassle-free experience for consumers, Walmart announced a new service called Carrier Pickup by FedEx. According to the announcement:

Just in time for the busy holiday return season, we are excited to announce that customers can return items purchased online* (shipped and sold by Walmart.com) without ever having to leave home. Now, customers can schedule a return through our new service, Carrier Pickup by FedEx, which is an incredibly convenient way to make that unwanted gift *magically* disappear. Even more magical, this new return option is not only super-easy but also free, and here to stay beyond the holiday season.

Yes, free shipping and free returns are indeed magical, except for whoever ultimately pays FedEx, UPS, and USPS for all of these pickups and deliveries (see “Free Delivery Gets More Expensive”). 

Final thought: Considering the record number of shipments and delayed deliveries, can you imagine how this past holiday season would have gone if Amazon hadn’t invested in its own delivery capabilities years ago? If the company had to rely solely on UPS, FedEx, and USPS for its shipments? It would have been a complete disaster for all. 

The Acceleration of Digital Transformation

In a survey we conducted with our Indago supply chain research community in March 2020, 41% of the respondents expected to make “Many” or “Extreme” changes in how they design and operate their supply chains in response to the Covid-19 pandemic (see “Impact Of COVID-19: Insights From Indago Supply Chain Members”). For many companies, the first step is moving away from paper-based, manual processes and accelerating their digital transformation initiatives.

As Sara Castellanos reports in the Wall Street Journal this week, “Chief information officers in 2020 rushed to build digital capabilities that supported virtual operations, from e-commerce features to expanded workplace communication tools. Many of those projects, spurred by the pandemic, will help set the pace of business for the year ahead, they say.” 

Castellanos highlights many examples in her article, including Kraft Heinz Company that “introduced new digital supply and demand planning tools in the U.S., Europe and Asia” and Walmart that “developed more than 70 new technology features in the early months of pandemic including a two-hour delivery service that was conceived and launched in about two weeks.” The company also expanded its ship-from-store capabilities from 130 stores to 2,400 stores. 

Simply put, if you’re still operating your business like it’s 1999, you will be history too.

Technology News: 3Gtms and PINC

In the technology realm, the trends remain the same: ongoing innovation, partnerships, and funding. 

3Gtms (a Talking Logistics sponsor) announced the availability of its 20.3 release of 3Gtms, “our Transportation Management System (TMS) with significant new features, new modules, access to expanded parcel carrier integrations, and availability of popular customer-requested enhancements.” Read the blog post linked above for all the details, but here’s one new capability that caught my attention: 

As part of expanding support into a new core area of functionality, the Transportation Management 20.3 release introduces a new module called “Dock Door Scheduler.” Created in collaboration with 3Gtms users, the new licensable Dock Door Scheduler module enables shippers to create and manage dock door appointments as part of shipment planning and execution. Users can save time, reduce manual steps, eliminate external notes and manual systems, and streamline the entire carrier appointment process right within their complete TMS system.

As I highlighted earlier this week in “Dock Appointment Scheduling (Insights from Indago),” relatively few companies are using dock appointment scheduling software. Instead, many are using spreadsheets, paper calendars, and online calendars like Google Calendar. In short, their dock appointment scheduling capabilities are stuck in the 90s. 

Meanwhile, PINC (a Talking Logistics sponsor) announced a partnership with Lazer Spot, “the largest provider of critical outsourced yard management services, to bring enterprise visibility and operational excellence to facilities across North America.” Here are more details from the press release:

Founded in 1996, Lazer Spot provides yard spotting, shuttling, trailer rentals and specialized yard services in 400+ locations in North America. PINC digital yard management solutions will empower Lazer Spot’s teams to improve operational efficiency while providing a unique level of safety, visibility, and services to its enterprise customers. Additionally, supply chain and transportation executives will have access to enterprise analytics and performance reports across their distribution yards through the PINC application.

As I wrote in a post last November, for many companies, the most important limiting factor in their supply chains today, especially in their logistics operations, is yard management. It’s the next frontier for digital transformation.

And with that, have a happy weekend!

Song of the Week: “Here’s Where The Story Ends” by The Sundays