PRG News

The rise in e-commerce is continuing at a remarkable pace. In 2017, consumers spent $453 billion online, a 16% increase from 2016, according to the U.S. Commerce Department. That’s the highest growth rate since 2011.

Naturally, this march of e-commerce impacts the fulfillment processes that need to happen in warehouses and other nodes in distribution networks. While traditional channels still need to be served, there is more piece picking and single-line orders to get out the door, and cycle times to hit next-day or even same-day delivery commitments are much tighter than when replenishment to retailers or distributors was the norm. To add to these challenges, this transition in the type and pace of fulfillment work is happening at a time when unemployment levels have plummeted and distribution center (DC) operators are finding labor increasingly difficult to find and retain.

To better understand how companies are managing their e-commerce platforms and related order fulfillment operations, Peerless Research Group (PRG), on behalf of Modern Materials Handling and Honeywell Intelligrated, surveyed 171 U.S.-based material handling executives. Survey results reveal that while organizations are still looking for solutions to better equip DC managers to control widespread, mission critical challenges—such as labor management, order processing and tracking, and warehouse and distribution costs many remain slow to adopt the necessary technologies to improve supply chain productivity.

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In a Transportation Environment where driver shortages and capacity crunches are the norm, a shipper can afford to be picky. By changing your supply chain operations to be a preferred partner for carriers, you can up your chances of securing the available capacity, most desirable routes, and best possible rates on the market today.

INTRODUCTION

In the transportation world, demand is outstripping supply at an alarming rate. Credit the driver shortage, the new electronic logging device (ELD) mandate, a robust economy, and regulations like the Hours of Service (HOS) rules with fueling a seller’s market for carriers and drivers. Increasingly selective about the shippers and facilities that they work with, both entities are gravitating toward the “carrier-friendly” companies that go the extra mile to become shippers of choice.

As the power in the market continues to shift from the shipper to the carrier, shipping consistent volumes; orchestrating prompt loading and unloading; making timely payments; and working with shipping “windows” (versus exact appointment times) can all play a big part in improving shipper-carrier relationships. A large number of businesses are grappling with high levels of frustration, expensive choices, and myriad other challenges that keep them from getting their goods from Point A to Point B, on time and in an affordable manner. Shippers that adopt carrier-friendly business practices not only get lower transportation costs and consistent freight coverage, but they also benefit from stronger and longer-lasting ties with their valued transportation partners.

It’s no secret that high freight volumes coupled with a nationwide driver shortage and new regulations have resulted in unprecedented volatility. As demand outstrips supply, the balance of power has shifted to carriers. In which they are becoming increasingly selective about the shippers and facilities with whom they choose to work. In order to mitigate the impact of the shifting market and grow their business, shippers need to focus on becoming carrier-friendly and positioning themselves as a “shipper of choice.”

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