How last mile has changed in the shadow of coronavirus

When the coronavirus first made its way across the U.S. this spring, consumers rushed to stock up on essentials, emptying store shelves in record time. Panic-buying has since slowed, but now shoppers — many of whom still remain in their homes most of the time — have taken to the internet to purchase everyday essentials and engage in a little pandemic-fueled retail therapy. The combination of these consumer behaviors has resulted in a swift uptick in parcel volumes. 

While some shippers were prepared to weather the ups and downs of a pandemic, many have encountered fulfillment issues and transportation breakdowns as consumer demand for their products surged. 

For example, some companies have had to shutter their own warehouses, close manufacturing plants and reduce staff as the coronavirus tore through the country. In turn, this led to dwindling supplies and long wait times for products, with residents in rural locations often waiting weeks for parcels as well as online grocery delivery at the height of the pandemic. 

At the same time, companies were left susceptible to transportation hiccups and increased costs. While carriers provided an essential service by keeping supply chains moving and ensuring products made it to their final destinations, social distancing guidelines made processing orders — and delivering them — more difficult.  For example, a large percentage of commercial passenger flights were grounded, which meant carriers no longer had air transport as a ready means of distribution. Under normal circumstances, approximately half of all air cargo is carried in the holds of passenger planes.

While a number of airlines were piling cargo into the passenger seats of their planes, the capacity was nowhere near normal levels. And in order to manage this high demand and limited capacity, many carriers added surcharges to their services.

“The situations impacting carriers are passed onto shippers,” Logistyx President Ken Fleming said. “Multicarrier management technology is one good way to address that issue. Without it, companies are left to deal with surcharges and fees. If they have multiple carriers from which to choose, there are more options available to manage their costs at a vulnerable time.”

Companies tend to naturally cut spending during market disruptions and financial stress, but Fleming urged shippers to scale and continue to invest in smart solutions during this time. He noted that pulling funding from important projects only hinders productivity and makes recovery more difficult.

Fleming outlined three phases of moving through a disruptive event: reaction, recovery and preparation/prevention. Companies that cut funds too aggressively or lack the proper infrastructure — like multicarrier shipping technology — can find themselves trapped in the reaction phase.

“One of the key things to understand is that COVID-19 is just one type of supply chain disruption,” Fleming said. “There are many other kinds, including weather, trade wars and actual wars. Companies who use this time as a proverbial kick in the pants will have the ability to lean on what was learned during the pandemic later.”

Fleming urged companies to ensure they are using excellent multicarrier shipping software to optimize carrier services within their transportation network to achieve on-time delivery at the lowest possible cost. Beyond this, he encouraged shippers to be realistic, understand the pandemic is affecting the entire industry, and educate managers on the importance of having systems and technologies in place to respond to sudden events.

Ultimately, a company will need plenty of perseverance and patience if it is working to implement new systems and initiatives during a global disruption like a pandemic. Nevertheless, it can be done well.