Trends—August 2014
Speed Reading: The Same-Day Book Delivery Race is On
Amazon had no sooner expanded same-day delivery for select products in six new cities—Baltimore, Dallas, Indianapolis, New York, Philadelphia, and Washington, D.C.—than Google and Barnes & Noble teamed up to deliver books with similar speed.
Using Google Shopping Express, bibliophiles in the Big Apple, west Los Angeles, and San Francisco can purchase books and have them shipped the same day, with a choice of three delivery windows.
That Barnes & Noble is now venturing into the same space as its virtual foe is notable. Online retailers increasingly understand they need to use expedited shipping to differentiate from their competitors. Amazon wrote the book on it. But traditional sellers are catching up to speed and leveraging omni-channel convenience and flexibility to enhance the customer experience and deliver more value.
In much the same way as Walmart is using its supercenters as de facto DCs for feeding inventory to smaller store formats, Barnes & Noble stores are becoming dual-purpose replenishment centers. Google staffs employees in Barnes & Noble stores to "pick" books off shelves and coordinate transportation with local couriers.
4 Ways to Become a VIP Shipper Partner
What does it take to become a preferred shipper in the eyes of your carrier? It’s ultimately a matter of economics, according to Transplace‘s Preferred Shipper Program survey, which identifies key factors carriers consider when evaluating shippers.
The results of the study, which includes data from more than 75 carriers, can help shippers better understand best practices that curry favor among carriers.
"Shippers are looking to improve transportation operations, and a significant way to do so is by aligning efforts with carrier partners to improve efficiency and overall benefits to all parties," says Ben Cubitt, senior vice president, consulting and engineering for Transplace, a Frisco, Texas-based 3PL.
Transplace’s research identifies four areas where companies can focus attention to build stronger carrier partnerships:
- Economics remain the most important factor influencing how carriers evaluate shippers. Payment terms and average length of time until payment are key areas for many trucking companies, with 63 percent ranking this as a "major factor" and 36 percent considering it "important but not critical." The majority of carriers surveyed consider 30-day payment terms acceptable; remittance in fewer than 30 days differentiates shippers. Volume potential and positive credit rating are also consistently rated as major factors.
- Driver productivity is a focus for carriers, and one of the most critical factors in shipper freight profiles or practices. Of those surveyed, 97 percent consider dwell time an "important or critical" factor in determining a shipper’s preference status.
- Carriers look for driver-friendly practices, especially those that enhance productivity, such as on-site parking and bathroom availability. Regular updates on loading and unloading status, and a guard shack for drivers to receive instructions, also rate high on the list.
- The scope of the shipper/carrier relationship, and the level of partnership, can also affect preference status. A shipper’s effort to understand carrier costs with respect to equipment and driver recruitment, as well as its willingness to communicate about important issues, are ranked as the two greatest factors that impact the relationship.
In addition, treating drivers with respect and as a valuable network asset can impact the way the shipper is viewed by an entire carrier organization.
Shippers Take a Chance on Risk Management
When it comes to contingency planning, supply chains are engaging in risky business, according to Managing Risk in the Global Supply Chain, a study conducted by the Global Supply Chain Institute at the University of Tennessee (UT) on behalf of UPS Capital Corporation.
Remarkably, 90 percent of the more than 150 supply chain executives surveyed do not measure supply chain risk when outsourcing production, and none use outside expertise to assess supply chain risks.
"The supply chain is the area of a company where executives must balance operational efficiencies with customer and company needs, all without having direct control over many of the moving parts," says Paul Dittmann, executive director of the Global Supply Chain Institute and the study’s author. "Visibility of material movement, and control of the supply chain, becomes even murkier in the global environment, putting global supply chains at greater risk."
UT researchers also report that normal day-to-day challenges—unexpected delays, cybersecurity, supplier failures, and warehouse shortages—often overwhelm executives, giving them little, if any, time to plan for major interruptions such as natural disasters or political disruptions.
Who Cares? Rating Supply Chain Risks
Supply chain executives are most concerned about quality issues; terrorism not so much. Rating of Concern on a Scale of 1-10 (10 indicating greatest concern)
Source: Managing Risk in the Global Supply Chain