The Novel Coronavirus pandemic is absolutely playing havoc on supply chains globally and for numerous reasons. For some shippers it is collapsing demand and leaving unprecedented idle capacity. While for others, it is resulting in instant peak volume outside of regular seasonal peaks. Here are three reasons why logistics management software like TMS, YMS Freight Audit and others is essential to the survival of business during events like global pandemic.
When there is significant uncertainty in the world, like we’re seeing with the COVID-19 pandemic currently impacting supply chains and all manner of economic activity, it underscores an often-overlooked reality of supply chain management practices – that significant disruptions can and will occur without warning, testing the ability of organizations to remain buoyant during times of extreme uncertainty.
The best illustration prompted by the current situation comes from a Reuters report today. “A surge in demand to ship the flood of crude oil unleashed by Saudi Arabia and its OPEC peers is sending freight rates surging and forcing buyers to seek out space on smaller tankers after the largest ones have been booked out, shipping sources said. Freight charges to ship oil in Suezmax tankers… have in some cases increased ten-fold amid a shortage of very large crude carriers (VLCCs)…”
Coming at a time when the pandemic is depressing global consumption of oil thanks to plummeting travel plans and shelter in place orders, it seems counter intuitive that demand to move oil would be at record high volumes. Yet, this is the nature of uncertainty. Similarly, shippers manufacturing surgical masks, ventilators and other biomedical products will be dealing with skyrocketing volumes while those manufacturing luggage, party supplies and other impacted industries will see orders and shipment volumes fall off sharply. So how does logistics management software prepare shippers to accommodate any business environment – even those that materialize in the wake of unexpected events?
By Providing Historical Data on Market Rates During Regular Peaks and Valleys
Whether your industry is slammed right now or cooling your heels on the sidelines, it can be difficult to gauge how much you should be paying for freight in real time. Having TMS and Freight Audit software in place, shippers have a repository of historical data to leverage in pursuit of accurate pricing in any market environs. Without such data, a shipper is much more subject to the whims of the market and can wind up overpaying when using anecdotal evidence to arrive at rates.
By Fostering Strong, Mutually-Beneficial Relationships with Carriers, Warehousing and Other Partners
Users of TMS, YMS and other supply chain software solutions are equipped to engage in more collaborative partnerships with freight carriers and other supply chain service providers. The predictive capabilities unlocked by automated shipment planning, scheduling, tracking and other functions enables a shipper to be more cognizant of its partners’ valuable time. Over the long term, those shippers are able to build lasting relationships with their partners that pay dividends during times of crisis when it counts most.
By Furnishing Upstream and Downstream Visibility to More Effectively Coordinate with all Facets of the Supply Chain
A properly integrated supply chain – one where every slice of the tech stack is delivering best-in-class functionality – boosts overall supply chain throughput. This visibility connects sales/purchasing with manufacturing, warehouse management, transportation logistics, freight yards, and customers with one version of the truth regarding where orders are from end to end. This kind of cohesion across the enterprise is a prerequisite for superior competitive advantage. Finding technology providers with the wherewithal to connect effortlessly to all the relevant platforms is worth the time and effort required to do so.