2
 min read

The Silver Linings of COVID-19 and Supply Chains

The COVID-19 pandemic is almost officially two years old in the United States, and over the past two years, both shippers and consumers have adjusted and re-adjusted their behaviors countless times.

Often the negative effects of the pandemic are in the spotlight, but as in every situation, there are silver linings, and we are highlighting three areas that shippers have [hopefully] embraced at this point in the pandemic.  

Better Planning and Forecasting  

“The early bird gets the worm” has never been a more applicable proverb as retailers and shippers that had contingency plans in place and inventory well forecasted were much better off than shippers with no options in place.  

Inventory and sourcing soon became an issue for retailers, especially small operations that did not have the same resources as larger stores. For example, products that were previously sourced outside of the United States were experiencing long wait times due to port congestion. Therefore, some operations looked for alternate, more local options to create, source, or formulate the same product domestically.  

However, this did come with a cost, but instead of passing the increased costs on to consumers in the form of higher prices, smaller operations felt forced to absorb the higher costs to keep prices competitive with their larger competitors.  

Silver lining: Shippers have started looking further down the pipeline in their planning, creating a situation where everyone benefits from more accurate inventory, fewer stock-outs, less stress, and happier customers.  

Communicating with Carriers

Having effective communication with the carriers has never been more important. This means having collaborative conversations that help your operation create contingencies that allow your business to grow and develop while still having capacity and options with the carriers you work with.  

In 2022, your carrier contract should not be hyper-focused on rates and economics, instead it should be about being better aligned with the carriers in terms of what your business’s goals and strategies are and how your contract can reflect that.  

Silver lining: Shippers have realized that it is important to have an ongoing, positive, and allied relationship with the carriers they work with to have smoother peak seasons, better customer service, and economically beneficial contracts.  

Investing in Direct-to-Consumer Channels  

With the ongoing shift to online shopping, smart businesses have significantly invested in their direct-to-consumer channels.  

The process of companies revisiting D2C strategy through the lens of technology is key in understanding the true cost per SKU. In addition to reviewing any new supply chain costs that may be a result of the pandemic, understanding cost per SKU will help businesses build a customer experience strategy that ensures profitability while also effectively reaching and interacting with customers.

Especially in today’s world of free shipping on all orders, or free shipping on all orders over $X, not understanding your true costs associated with every single item can be dangerous to your profitability.  

Silver lining: E-commerce shippers have a massive opportunity to continue to invest in and grow in the D2C arena, an investment that will continue to pay off as consumers increasingly rely on and turn to online shopping.  

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