How to Prepare for Supply Chain Disruptions
Get ahead of the expected and the unexpected
Every year we see predictable supply chain disruptions that come from seasonality spikes and annual events. Produce season and extreme winter weather cause delays. The Lunar New Year causes factory shutdowns and halts imports. And for three days each spring, CVSA’s International Roadcheck takes thousands of trucks off the road, often resulting in capacity constraints that impact shippers across the country. This is normal. And successful companies have plans in place that allow them to keep things running smoothly during these times.
But, as we’ve clearly experienced over the past year, some disruptions are impossible to see coming. And for shippers that aren’t prepared, these things have the power to wreak havoc on supply chains, especially when there’s already so much pressure on the freight market resulting from COVID-19.
That helpless feeling
Three weeks ago, a 1,312-foot-long freight container ship blocked marine traffic in the Suez Canal for six days, causing a floating traffic jam in one of the world’s busiest trading routes. The result has been ongoing delays and serious concerns about container availability. And in February, severe winter weather caused gridlocks in states that didn’t have the infrastructure to handle those levels of frigid temperatures. This resulted in freight embargos in critical shipping lanes that kept many shippers from being able to deliver, not to mention exacerbating capacity challenges that were already causing severe disruptions.
And with hurricane season on the horizon and more uncertainty around COVID-19 impacts, there could be more to come as we move through 2021.
It's these types of situations — that haven’t been planned for — that can cause shippers to feel helpless. If you’ve ever walked into work and realized you can’t move anything because the carriers you’ve partnered with have embargos or simply don’t have access to drivers or equipment, you understand that feeling. What do you do other than tell your customer you can’t deliver on what you promised?
In today’s climate where capacity and driver shortages are top industry news stories, it’s more crucial than ever to plan for more than just the interruptions you can see coming. It requires a dynamic supply chain, with logistics partners that can get creative with solutions, can flex with the market and can offer alternative mode options.
How successful businesses minimize impact
ArcBest partners with businesses of all sizes, and we’ve seen companies navigate these types of unexpected disruptions exceptionally well. We’ve also seen some that haven’t. Those that come out on top tend to take a strategic approach to capacity and do some key things to help mitigate risks and get ahead of problems.
Successful companies typically are acutely aware of predictable disruptions, normal seasonality and expected capacity constraints. They also have access to technology that offers complete insight into their supply chains. They use these insights to create a vulnerability audit and an emergency plan. And, perhaps most important, they build strong partnerships with their logistics providers, collaborate frequently and are open to new ways of doing things.
Can your capacity partner flex with the market?
When demand changes quickly, the market fluctuates and capacity tightens, having the ability to shift volume and easily flex is critical to moving into a contingency plan quickly. To ensure you’re equipped to do this, take a hard look at your capacity partner(s) to fully understand their limitations and ability to diversify.
If your organization partners with one logistics provider that coordinates all your needs, make certain that partner has access to their own capacity as well as multiple other capacity outlets. If you use asset-based transportation providers without diverse options, make sure to maintain good relationships with multiple providers so you can quickly pivot when capacity tightens. While the annual RFP and RFQ process is great for budgeting purposes, if it’s your sole focus, you may be missing out on your ability to serve customers and take advantage of fluctuations in the market.
Here are some questions you can ask of your current provider/provider mix to help ensure you’re not left scrambling to figure out a plan:
- Do they have geographic or volume limitations?
- Do they have access to capacity outside of their own assets?
- Do they have the expertise to think differently and look for other options that can increase capacity and improve efficiency?
- Can they flip a switch and do a mode shift quickly?
- When capacity gets tight, how are your shipments prioritized?
Your partner(s) should be nimble enough and have the resources and experiences to change your supply chain when it’s needed, including how freight moves and the mode it’s tendered on.
With the right contingency plan in place, you can use your supply chain as your competitive advantage.
Prepare for today and the future
Events over the past year have proven that things can change literally overnight, for better or worse. Partnering with a logistics company that’s equipped to pivot with your needs can help ensure you keep delivering on your promises, even when the market shifts. That’s where ArcBest comes in. We’re a leading logistics company with diverse capacity options, integrated technology and a remarkable team of problem solvers who create day-to-day supply chain solutions and contingency plans — so you’re prepared for whatever comes your way.
Schedule a discovery call with us today. And in the meantime, see how a leading medical equipment manufacturer overcame a 400% increase in demand in our latest use case.