In a tense showdown between UPS and the Teamsters, a catastrophic supply chain disruption was narrowly averted as the threat of a massive strike loomed large. This potential outcome could have impacted millions of customers nationwide, causing chaos and delays deliveries. With UPS’s massive scale, handling 6% of the daily U.S. supply chain on average, this was a given.
The possibility of any major disruptive event, such as the recent Yellow Freight bankruptcy, brought to light the vulnerability of the nation’s supply chain, already strained by previous disruptions and challenges. From COVID-19 to ongoing issues with transportation and labor shortages, the supply chain had been on thin ice. A UPS strike would have been the tipping point, further hampering the flow of goods.
Such a scenario emphasizes the importance of carrier diversification and a multi-carrier approach. Using a single carrier leaves you highly susceptible to disruptions beyond your control. You must partner with more than one carrier to spread the risk and mitigate the potential impact of a disruptive event. Additionally, be aware of alternative delivery options and consider supporting local and regional carriers.
Mitigating Risk with Informed Decision-Making
When considering multi-carrier options, take into account several important factors (cost, service quality, coverage, financial stability and reliability) to create a balanced scorecard that factors in risk. While cost is undeniably a significant aspect, it should not be the sole deciding factor. Opting for the lowest-cost carrier might lead to compromised service quality, adversely affecting customer satisfaction and loyalty. Striking the right balance between cost and service is essential to ensuring timely, reliable deliveries while also managing shipping expenses effectively.
Using good data is key to making well-informed carrier selection decisions that maintain the desired balance. Leverage advanced data analytics and monitoring tools to accurately assess carrier performance and reliability. Analyzing historical shipping data provides valuable insights into a carrier’s track record, which identifies patterns and potential risks associated with certain providers. Clean data offers visibility into ongoing shipments, letting you identify potential issues early and take proactive measures to mitigate disruptions before they happen.
Implementing contingency plans is another vital aspect of building a resilient supply chain. Develop alternative shipping routes and establish relationships with backup carriers in case of an emergency or sudden disruption. Having these backup options in place allows you to swiftly reroute shipments if your primary carrier encounters challenges. This reduces the potential for major losses and minimizes delays of customer orders.
Safeguarding Your Data
The UPS strike scare highlighted potential gaps in the resiliency of most supply chains. Thus, shippers need to reevaluate their strategies and seize this opportunity to strengthen operations. One key factor to overcome these challenges lies in having accurate, well-organized data. Aligning with the right partner to support your overall strategy is extremely important, and the ability of that partner to provide insights and recommendations is paramount.
A trusted partner can help you combine data into an overall control tower approach to end-to-end visibility and transportation logistics governance. Reliability, security and expertise are the cornerstones of a trustworthy data management company. Thoroughly research potential partners, focusing on established firms with a proven track record in handling data for logistics and supply chain. Look for client testimonials and case studies for insights into effectiveness satisfaction levels.
Through prioritizing reliability, security and expertise, shippers can confidently entrust their data to a partner that will enable them to optimize logistics operations. This will allow you to effectively mitigate carrier risks and build a more resilient supply chain through a multi-carrier approach, benefiting customers and your business.
Steve Beda is the Executive Vice President at Trax Technologies