After nearly a year of nationwide shutdowns, social distancing and major retail and commercial real estate closures, there is no doubt e-commerce is the future for consumer and B2B industries.
To be accurate, the Coronavirus disease (COVID-19) pandemic did not spark the e-commerce movement—rather, it accelerated the inevitable and pushed industry leaders, business owners and consumers alike to examine the systems, infrastructure and norms that have previously facilitated the exchange of goods from one party to another.
The supply chain endured considerable shock over the last 12 months—demand for certain products skyrocketed while others plummeted, companies were forced to reconfigure their workforces and set up to comply with COVID-19 health precautions. Suddenly, it wasn’t only about getting product to the store; it was about getting product to the consumer, and in the fastest way possible.
While the industry prepares for another year of uncertainty, we’ve also learned some lessons about what it will take to build a more resilient, nimble supply chain for the future. Going forward, here are some key trends to watch and core areas where investment is needed.
The rise of the inland port
The sheer volume of product being developed and distributed—not to mention increasing pressure on speed to fulfillment—demands strategic space to facilitate and optimize supply chain efficiency. Simply put, we need more infrastructure that is equipped to receive the mass influx of domestic and international goods coming through the ports.
This means companies are looking for more than just a storage facility with a connection to the closest port. They are looking for a strategic partner to make connections, provide counsel and offer ground support for their operations.
Looking ahead, reinvestment in brownfield sites and old mills and manufacturing plants will be critical to inland port development and supply chain operations. Reinvesting in these sites creates efficiencies with cost and land availability, takes advantage of existing infrastructure and brings jobs back to communities.
Transportation optionality and connectivity
As suppliers and distributors grapple with the challenge of finding space to support increased product volume, heightened traffic through the warehouse and growing consumer demands, the inland port’s capacity for connectivity will be key.
In particular, faster delivery timelines have created a rise in supplier interest for rail connectivity between the coastal port and inland port. While trucking remains a pillar of the supply chain economy, reliance on a singular mode of transportation, in many cases, is simply not sustainable, and too much truck traffic can create serious delays coming and going from the site, disrupting process and flow. Having a rail option can alleviate some of the pressure from that system and allow companies to move more product, at a faster pace, in and out of the warehouse.
Ultimately, a multimodal system that includes rail, highway and marine transportation is needed to facilitate greater efficiency and resiliency in the supply chain. Going forward, we need to see significant national investment in infrastructure on all fronts—from highways to ports to inland warehouse and storage facilities and marine and freight connectivity. This will also require re-investment in electronic tolling systems and other resources to maintain these channels.
An integrated communications approach
The need for heightened connectivity doesn’t stop with transportation. As we contemplate the supply chain of the future and the role of the inland port, continued investment in technology and communications will be critical.
Whether it’s a ring light or a part to repair a broken heater or refrigerator, next-day delivery is no longer the exception—it’s becoming the expectation. At the same time, customers want consistent live tracking updates. Over the last several years, the industry has seen a gradual movement toward device modernization to streamline communications and tracking. But, the last year has taught us that this modernization is not merely aspirational—it’s essential. The industry needs to see a collective effort towards an integrated communications system that allows different players and devices throughout the process to more effectively talk to one another. This will not only create efficiencies across the supply chain, but result in fewer delayed or lost shipments.
A renewed commitment to sustainability
From a technology perspective, automation is another top priority for suppliers as they look to scale their business model to better respond to the needs of the customer. As more companies consider warehouse modernization, there’s also a unique opportunity for a renewed commitment to sustainability.
The green technology that only a few select companies could afford 10 years ago has advanced to the point where it’s more cost-effective. And with the addition of automated systems such as conveyor belts, users will need more energy than ever before. By investing in large format solar arrays, modern lighting and other sustainable options, users can demonstrate care for the environment, and in some cases, become net producers of electricity. In this way, warehouses could essentially become miniature power plants, selling power back to the grid.
An investment in people
Over the last year, we’ve seen a greater awareness and appreciation for essential workers and the often-invisible systems that keep our society running. This includes port and warehouse workers who continue to risk their health to keep our economy running and deliver essential goods to businesses and consumers.
Moving forward, we need to see a strategic, concerted effort to invest in these workers. This includes revisiting employee benefit programs, introducing wellness initiatives and cultivating workforce development programs—not simply because it’s the right thing to do, but because it’s the only way to ensure supply chain resiliency and longevity. Placing an emphasis on the development of careers in the transportation, distribution and logistics industry sector is our best defense against another shock to the system. And, it’s how we empower the people on the front lines to share their insights and spur innovation.
The last year has been one of trial and error, questions and critical lessons and challenges and subsequent innovations for supply chain players. Now, we begin the task of not just operating, but leading through the tension of a pandemic that still rages and an economy that requires immediate attention, rebuilding and restructuring. This will require a commitment from all key players to invest in critical infrastructure, technology and education, but the result will be a stronger supply chain that’s prepared to withstand future challenges.