Supply chain bottlenecks throughout the world continue to disrupt the logistics industry as we approach what’s looking to be another challenging year. According to a survey by the U.S. Census Bureau’s Small Business Pulse Survey (SBPS), two-thirds of manufacturers reported domestic supplier disruptions from July 12th to July 18th. Simultaneously, 16% of businesses reported foreign supplier delays that very same week. The issues: labor shortages, factory shutdowns, and especially continued lockdowns that critically damage supply chain efficiency.
More broadly, these issues illuminate how significant upstream challenges can negatively impact a business’s downstream operations. Bolstering your operations for success should include establishing a firm line of communication with your final mile carrier. After all, once you get your product into your warehouse or distribution center, you want it out the door and into your customers’ hands and retail shelves as quickly as possible. When businesses and their final mile carriers don’t effectively communicate, businesses can suffer frequent and unnecessary costs that cut into your bottom line.
Here we outline 3 strategies that companies can easily adopt to enhance information flow and transparency, and power your business through 2022—and beyond.
Communicate all shifts in your volume capacity
Say you have a large quantity of finished product that’s ready to be shipped out, and one of your carrier’s trucks arrives to pick it up and bring it to your customers. In many cases, that’s business as usual. But what if you have more to transport than your carrier has truck space? Some of your customers will have to wait until another truck can arrive, and therefore, might receive their parcels late. Not only that, you may end up having to pay for an additional truck and driver. Alternatively, what if your carrier sends more trucks than is necessary? You just spent more money than you need for services.
The source of both of these volume-related issues? All too frequently, it’s a lack of open and frequent communication between manufacturer or distributor and their final mile carrier.
You can avoid both scenarios of spending more than necessary by agreeing upon a robust communication pipeline to manage volume expectations. By sharing early on with your carriers the most up-to-date forecasts on projected volume, your last mile provider will be better equipped to coordinate operations in a way that’s most efficient and cost-effective for the both of you.
Give your final mile carriers a seat at the table
Providing your carriers with the information they need to operate at optimal levels requires including them in your company’s internal conversations around critical subjects like network density, volume, delivery capacity, and more. When everyone has a seat at the table, there’s no need to have the same conversation twice, and there’s less chance of misinterpretation. Instead, your carrier partners learn pertinent information first hand, and can swiftly act on it. Transparency is not only a safeguard that information is clear and correct—it also ensures that any questions, as well as alternative solutions, are addressed at the outset. You may glean key insights from your partners as a result of these conversations that you didn’t even anticipate.
Stronger relationships with your last mile carriers is a byproduct of transparency, and should not be undervalued. Fostering a positive relationship with your logistics provider helps them better plan delivery schedules, and, in turn, provide your customers with the highest quality service possible. And let’s not forget, bringing your carriers in on key logistics discussions can also yield cost-saving discount structures down the line.
Formalize frequency of conversations around upstream issues
Having bridged the communication gaps between you and your final mile carriers, it’s also the time for open, comprehensive, holistic discussions on the impact upstream challenges are having on your downstream operations. Make monthly or quarterly planning sessions with your supply chain vendors part of your standard operating procedures. The information you share is critical for carriers to effectively and efficiently plan for proper network capacity.
During these discussions, it’s extremely helpful to let your final mile carriers know who’s manufacturing your goods, and how those goods are being transported to warehouses. You should also inform your carriers whether you are getting any signals that they should anticipate upstream delays arising from ocean shipping and port of entry issues.
Experienced and savvy final mile carriers are resilient, and can pivot to respond to upstream impacts only if they’re given proper notice and sufficient information. Without it, carriers operate in reactive rather than proactive mode, which is not the ideal approach for their business, or yours.
Open communications help mitigate the effects of supply chain bottlenecks
Now more than ever, in the face of supply chain bottlenecks, it’s important to build transparency into your partnership with your last mile carrier. Not only will you enrich your relationship, you set a path for saving money and time and securing top-quality service.