There is nothing logistics operations can do to prevent natural disasters like hurricanes and other bad weather, but that doesn’t mean you should sit back and wait. The recent storms that hit Florida are a scary reminder of what can happen and how disruptive weather can be. And, with winter arriving soon, there is no doubt more disruption is coming.
Companies often underestimate how much something happening in another part of the country can impact them, no matter how far away it is. The effects of natural disasters on supply chains can extend outwards of the region and not just affect the local area.
Events like snowstorms and other extreme weather can create a chain reaction. Dealing with these situations is a lesson in the importance of contingency planning. The goal is to create greater supply chain resilience, which is hard for most companies to do alone.
Companies may feel the impact of, for example, a damaging weather event quickly, or it may take several days. The obvious problems can include delays with important inbound materials that impact production schedules. This then delays getting shipments on the road, making deliveries late and impacting customers.
After a few days, however, other problems begin to appear and begin to compound. Inventory management can become more complicated as some stock will become low, and docks get congested because of a lack of truck capacity to pick up loads. It’s likely, too, that there will be an increase in late-notice cancellations as carriers expecting to have capacity have equipment delayed in other parts of the country.
And remember, all this is out of the control of shippers who are not in the local area and are having bad weather. This is just the result. If you happen to have freight scheduled for the impacted areas, there will obviously be delays in making deliveries there, too.
Adding insult to injury, all these factors will typically lead to higher shipping rates as demand increases for the limited capacity. It’s easy to budget for seasonal changes to freight rates, such as produce season or during peak holiday shipping, but it’s not so simple when it comes to the weather. Logistics managers aren’t looking for bargains during times like these, but they don’t want to be taken advantage of either!
The reason natural disasters and bad weather are so disruptive is because they are not the norm. But preparedness is still necessary. A snowstorm in the Northeast can matter to the shippers in the Midwest and vice versa, but it’s hard because you usually never know until it’s happening.
Preparedness needs to focus on two areas:
The obvious challenge is that these priorities can work against each other. Maintaining delivery performance in times of stress can come at a premium. The most significant shift in thinking for most shipping operations during a major disruption is the need to be more flexible and creative with their processes. In other words, they need a solid plan B.
Here is what logistics preparedness looks like:
Access to on-demand spot capacity: Contracted rates don’t do any good if there is no truck to pick up the freight. Companies too tied up with contracts don’t often maintain relationships with carriers that offer reasonable spot rates.
Flexibility in scheduling: Schedules become even more unreliable during times of stress. So, each shipment can take more time, and communications like truck ETAs and product availability are all a little less certain.
Live track and trace: Knowing there can be delays makes having technology that can provide real-time track and trace more important. It helps keep everyone (including concerned customers) updated on what’s happening with shipments.
24/7 support: On the best of days, problems still happen in logistics. Companies need to make sure they have partners who are responsive and bring a solution mindset to the situation.
Safe and reliable carriers: Finding capacity on the spot market comes with risks. Being too quick to contract with a carrier without adequately vetting them will lead to other, potentially bigger problems and wasted time.
Options for expediting: Sometimes the situation is serious enough that expediting the shipment is the only option. But even expediting can be done cost-efficiently, it just takes an awareness of the available options.
There are other details that can work for or against companies dealing with these types of challenges.
For example, it’s not just possible, it is likely that some of the due dates you are working towards on the orders are not actually required. Taking the time to ask for a day or two extra to make a delivery can go a long way to easing the stress and cost of getting freight on the road. You don’t know if you don’t ask.
Finding carriers looking to reposition equipment can be a big win in times like these. The carriers’ operations are likely just as disrupted as yours. They are scrambling to cover the loads they have committed to while still trying to protect their margins and contain costs. Assumptions you have might be outdated about where carriers can serve, and their costs may have changed.
As a small warning, with LTL, be sure to check if their networks are impacted regionally. It is important not to assume what’s usually a two-day transit is still that.
The more access to carriers, the greater the likelihood of finding some available space. The time of crisis is not the time to start looking. Having your plan B in place requires you to develop more relationships and options with the help of a broker. Here is our suggestion.
Loadsmart’s Freight Brokerage can provide access to the on-demand capacity you’ll need when disruption happens. You never know when you will need additional trusted and vetted carriers to enable flexibility in dealing with the fallout. Our 24/7 support and great shipping technology will ensure your deliveries keep happening without unnecessary delay.
The time to prepare is before you need help. Talk to a transportation specialist to get prepared for the future.