Above the Fold: Supply Chain Logistics News (November 20, 2020)

Why join Indago? Here’s a reason given by one of our members, the Director of Freight & Warehousing at $1B+ Food & Beverage Company:

“I decided to join Indago for two reasons. One is to be part of a group that provides real time feedback from companies on topics in the supply chain world. The second reason is that Indago supports charities that make the world a better place. It’s a great one – two combination!”

There’s a lot of noise out there. Break through it and join a trusted, confidential research community of your peers. To learn more about what makes us different and apply, please visit JoinIndago.com 

(Please note, membership is only for supply chain and logistics practitioners from manufacturing, retail, and distribution companies; if you’re a technology vendor, logistics service provider, or other type of company, please contact us to learn how you can contribute to the research).

Moving on, here’s the supply chain and logistics news that caught my attention this week:

Holiday E-Commerce Returns: A Headache Gets Bigger 

Back in January 2018, I wrote how product returns are “the hangover headache of e-commerce.” Well, this year, that headache will be super-sized.

“Retailers are setting up dedicated handling sites and striking deals with specialists in reverse logistics on expectations that an upswing in hefty returns will swell once consumers see their bigger, heavier gifts and purchases [like furniture and exercise equipment] in the post-holiday light,” writes Jennifer Smith in the Wall Street Journal. Here’s more from the article:

Come January, said Erik Caldwell, president of XPO Logistics Inc.’s last-mile business unit in North America, “You’re going to have the mother of all returns seasons for heavy goods.”

At XPO Logistics, which handles home delivery and returns for customers including fitness-equipment retailer Peloton Interactive Inc. and Whirlpool Corp., heavy-goods shipments this summer outpaced last year’s holiday volumes. The rate of returns has also increased since the pandemic, from about 10% to “around 11% on much higher volumes,” said Mr. Caldwell.

Most retailers still lack the systems, processes, and expertise to manage returned goods in an intelligent and efficient manner. What separates the leaders from the laggards is their use of online auction marketplaces, business intelligence and analytics, and lotting strategy to improve their liquidation process and effectiveness. That was one of my takeaways from my December 2017 interview with Eric Moriarty, Vice President at B-Stock Solutions, a technology-enabled service company that powers a global network of B2B liquidation marketplaces. Eric’s insights and advice back then are still relevant today, so I encourage you to watch the episode.  

As it has for other areas of supply chain management, will the COVID-19 pandemic serve as a catalyst for change and innovation in returns management? Let’s hope so, otherwise this headache will only get bigger and more painful.

Ocean Container Imbalance + Growing Demurrage/Detention Fees

Tightening capacity is not just a trucking problem; it’s an issue on the ocean side too, especially with regards to containers.

“A surge in Asian imports bound for U.S. retailers stocking up for the holidays is leading to an acute shortage of shipping capacity for U.S. exporters, with agricultural producers now struggling to find the containers they need to send their products to overseas buyers,” writes Costas Paris in the Wall Street Journal. Here’s more from the article:

The high demand in the U.S. for imports has pushed container freight rates from China to the U.S. West Coast seaports beyond $4,000 per container while average prices to ship goods by container from Los Angeles to Shanghai in recent weeks was $518.

For carriers, that means it makes more financial sense to hustle boxes back to Asia rather than wait for them to travel inland for several weeks to reach exporters and then return to the coastal gateways.

In a related story, John Kingston at American Shipper reports that a “coalition led by the Harbor Trucking Association is looking at two routes to get relief from growing demurrage and detention charges on the key East and West Coast ports…Those charges, at their root, are being caused by heavy traffic into the port and a big imbalance between containers coming and those going out.”

And in The Loadstar, Mike Wackett writes that “as Asia-US demand continues to surge, BCOs are struggling to ship contracted cargo and are increasingly turning to NVOCCs to support their fractured supply chains.”

“It’s a no-brainer really,” one Shanghai-based forwarder told The Loadstar. “Carriers can get four times the price for a spot booking and, with a few exceptions, they are not worried about contracts anymore, as it will be a completely new ballgame next year.”

Domestic or international, inbound or outbound, it isn’t easy being a transportation professional these days. Never a dull moment.

Another TMS Acquisition

Yesterday, PCS Software (PCS), a transportation management platform provider for the trucking industry, announced the acquisition of UltraShipTMS, a shipper-focused TMS provider (and Talking Logistics sponsor) with clients in food production, packaging, manufacturing, retail and other industries. According to the press release:

By acquiring UltraShipTMS, PCS will build upon its existing transportation logistics management and fleet management capabilities and expand its capabilities to create one integrated shipper and carrier platform. This will offer users an end-to-end, unified interface for shipping and carrying visibility management.

This isn’t the first time a carrier-focused TMS provider has acquired a shipper-focused one. Earlier this year, for example, Trimble acquired Kuebix (also a Talking Logistics sponsor). As I wrote at the time, the features and functions of a “Shipper TMS” are different from the features and functions of a “Carrier TMS” — except there is one area of overlap: connectivity. That is, both types of solutions need to exchange data and information with each other.

I haven’t been briefed by PCS yet, so I’m not sure if its vision of “one integrated shipper and carrier platform” is similar to Trimble’s vision, but at a minimum, this acquisition is another example of how the definition of TMS continues to evolve — and how standalone providers are becoming the exception in the market.

And with that, have a happy weekend.

Song of the Week: “Let Down” by Michigander

TAGS

TOPICS

Categories

TRENDING POSTS

Sponsors