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“Shipageddon”: What Happened, Where Are We Now and What Comes Next?

skin care shipping case study

In a roundtable event hosted by Visible SCM, supply chain industry experts discuss last year’s “Shipageddon,” the current logistics landscape and what shippers can do to prep for this year’s peak season.

Moderator:
• Benjamin Gordon, Founder and Managing Partner of Cambridge Capital

Speakers/Panelists:
• Casey Adams, President of Visible Supply Chain Management
• Jim Cochrane, CEO of Package Shippers Association, Former USPS Chief Customer and Marketing Officer
• Jeremy Bodenhamer, ShipHawk CEO and author of “Adapt or Die”

 

Fill out the form below to access and watch the full panel



Visible Exec Emma Leonard “Top Woman To Watch” by Women In Trucking Association

Visible Supply Chain Management Exec. VP Emma Leonard recognized for spurring explosive growth, saving customers money & mentoring other female leaders.

SALT LAKE CITY–The Women In Trucking Association today is honoring Visible Supply Chain Management Executive Vice President Emma Leonard with the 2021 Top Woman To Watch award for her achievements in fostering growth, helping customers and mentoring other women in leadership. The award recognizes Leonard for her achievements while overseeing transportation and procurement for Visible.

Leonard’s leadership helps Visible fulfill more than 2 million orders per month, resulting in a 99.98% fulfillment accuracy rate. Through her restructuring and implementation, the company went from shipping 125 million packages in 2017 to 150 million packages in 2019, a nearly 20% jump in deliveries.

“Emma has exhibited strong leadership abilities by building and managing a cross-functional team of transportation professionals, analysts and managers. She has successfully implemented a new parcel pricing strategy and scaled that strategy to support Visible’s aggressive growth,” said Casey Adams, President of Visible. “Her efforts have played a major role in achieving double-digit revenue growth year over year.”

Leonard is a global supply chain expert with 21 years of in-depth leadership experience in supply chain, eCommerce, transportation, customer support and operations. During the last 18 months, she successfully renegotiated and implemented contracts, resulting in more than $1.8 million in savings for Visible’s B2B and B2C partners.

In an overwhelmingly male-dominated industry, Leonard advocates for gender equality in the supply chain space through her involvement in AWESOME (Achieving Women’s Excellence in Supply Chain Operations, Management and Education.) She is also a pillar for local women in logistics—mentoring her peers by organizing and facilitating local meetups and networking events.

Leonard immigrated to the U.S. from Ireland when she was a teen. Being a first-generation college graduate, she has taken a particular interest in mentoring women in school. Leonard was a Director of Advancement Services at Salt Lake Community College for two years and won an AAWCC Award (American Association for Women in Community Colleges) for bolstering philanthropy efforts.

The Women In Trucking Association (WIT) is a non-profit organization promoting the Top Women To Watch Award through the association’s official magazine, Redefining the Road.

“Leonard is being acknowledged because her accomplishments exemplify the mission of Women in Trucking,” said Brian S. Everett, Publisher, Redefining the Road magazine. “This noble mission is to encourage the employment of women in the trucking industry, promote their accomplishments and minimize obstacles faced by women working in the trucking industry.”

 

 

About Visible Supply Chain Management (Visible)

Since 1992, Visible Supply Chain Management has provided customized solutions for B2B and B2C organizations. With comprehensive services in e-commerce, direct sales, direct response and omnichannel, Visible can design effective strategies for clients that include transportation, logistics, brokerage, fulfillment and even custom packaging solutions.

 

Visible Supply Chain Management President Casey Adams Honored Among Supply & Demand Chain Executive’s 2021 Pros to Know

Casey Admas

Award recognizes Adams, whose accomplishments are leading Visible through a period of unprecedented growth.

SALT LAKE CITY–Recognized as an exemplary executive, Casey Adams, president at Visible Supply Chain Management (Visible), is being awarded today with a place on the Supply & Demand Chain Executive 2021 Pros to Know list. Visible is an industry leader in shipping, logistics and fulfillment services.

The award recognizes leaders whose accomplishments offer a roadmap for other professionals looking to leverage supply chain for competitive advantage.

“Casey Adams continues to lead Visible successfully through a period of unprecedented growth,” said Jared Starling, CEO at Visible. “The future is full of possibilities, and we look forward to growing the Visible brand through expert strategies, smart technologies and unmatched teamwork.”

In the last year, Adams strategically increased revenue while making significant changes such as streamlining new technologies/techniques, accessing new clients, driving a well-defined corporate culture and implementing managerial changes. Adams established the company as an authorized reseller channel for the US Postal Service (USPS). He also led the launch of a new Warehouse Management System (WMS) focused on the B2C supply chain and picking orders sent directly to consumers.

“While many companies struggled to regain their footing as a result of COVID-19, this year’s Pros to Know winners stepped up to the plate to deliver innovative solutions and programs in a time of crisis and need. These winners collaborated, optimized, developed, educated and played a critical role in the survival and success of their company amid a global pandemic,” said Marina Mayer, Editor-in-Chief of Supply & Demand Chain Executive and Food Logistics. “I am honored to recognize these individuals and teams and extend my utmost gratitude to everyone in the supply chain industry for their time, efforts and innovations to keep our nation’s supply chains afloat.”

This year’s Pros to Know list includes individuals and teams from software and service providers; consultancies and academia; trucking and transportation firms; professional development agencies; sourcing and procurement divisions and more. All award winners helped supply chain clients and the supply chain community at large prepare to meet many of today’s—and tomorrow’s—challenges.

Go to www.sdcexec.com to view the full list of all 2021 Pros to Know winners.

 

 

About Visible Supply Chain Management (Visible)

Since 1992, Visible Supply Chain Management has provided customized solutions for B2B and B2C organizations. With comprehensive services in e-commerce, direct sales, direct response and omnichannel, Visible can design effective strategies for clients that include transportation, logistics, brokerage, fulfillment and even custom packaging solutions.

 

E-Commerce Surge Fuels Demand for Corrugated Boxes. Can Manufacturers Keep Up?

ecommerce surge fuels corrugated demand

As ecommerce volumes have soared over the past year, so too has demand for corrugated boxes. According to an IBISWorld report, the cardboard box and container manufacturing industry took in $67.3 billion in revenue last year from January through October. Between June and October, box shipments met 34 billion square feet—an industry record—each month. Global box demand is expected to stay strong as consumers opt to shop online rather than in stores, and experts predict it will be even stronger when the service economy and events pick back up.

 

COVID-19, supply chain challenges interrupt recycling systems

Prior to the pandemic, most shipment deliveries were made in bulk directly to shops and restaurants, and packaging found its way quickly back into the system through recycling. Today, boxes are piling up in homes rather than at restaurants and retail stores, shifting the responsibility to households to dispose of them properly. However, according to USA Today, about 40 percent of Americans either don’t have access to or don’t sign up for curbside recycling. That means a lot of boxes are being thrown away instead of being used to create more boxes.

The pandemic and other factors have also affected the recycling system and availability of raw materials in the supply chain. Factors noted by the Solid Waste Association of North America:

  • Chinese restrictions on the import of recyclable materials have forced the U.S. to find new markets for recovered materials, often at a reduced value
  • Recovered paper from schools, offices and stores no longer available due to COVID closures
  • Delays due to recycling facility safety changes and worker concerns over the virus and PPE
  • Recycling collection paused by some local governments after waste increase from more Americans working from home

Challenges in the global supply chain—container availability in particular—have also contributed to delays in box production. Scrap Recycling Industries reported that North American exporters of scrap commodities are having “extreme difficulties obtaining ocean shipping containers,” due to ocean carriers returning empty containers before U.S. exporters have a chance to use them. There have also been delays in getting pulp fibers used to make boxes into the recycling chain.

 

Manufacturers take measures to keep up with demand

Paper mills are running at full capacity to keep up with demand amid the “tightest market since 1994.” Some manufacturers are converting their machines to produce linerboard, used in the production of corrugated boxes, due to an unprecedented drop in demand for printing and writing paper. Others are taking measures such as investing in their own recycling facilities, contracting out to smaller companies, implementing price hikes due to increased freight and fiber costs—and even capping customer orders.

 

On-demand packaging accelerates retailers’ speed to market

Retailers struggling to get their hands on boxes or seeking shorter lead times should consider working with a partner who can provide on-demand packaging support. Visible operates its own corrugated sheet plant and has onsite machinery, materials and expertise to ramp up and manufacture custom-printed packaging quickly. What we offer:

  • Fast quotes
  • 1-2 week turnaround time
  • High-quality three-color print
  • Flexible run sizes
  • Consulting & design support

Visible also helps customers save on stock packaging supplies by passing on our bulk order savings. We build strong partnerships with key manufacturers, so whether you need peanuts or corrugated packaging, we offer the best products at the best prices.

 

Packaging engineered for optimization

Visible’s packaging engineers work with clients to tackle custom projects, right-size their packaging and minimize parcel costs. Cubic square feet, USPS pricing and a parcel analysis are all built into each packaging assessment. We also help clients optimize the amount of packing material being used to reduce costs while keeping shipment contents protected.

 

Packaging CTA

 

Package design perfection

Visible’s custom packaging solutions include graphics support to ensure the look of your packaging reflects the quality of your brand. We provide:

  • In-house design support
  • 3D custom designs and renderings
  • Packaging mock-ups
  • Point-of-purchase displays
  • Corrugated prototypes

Retailers have faced enough challenges over the past year—getting packaging shouldn’t be one of them. Fill out our online contact form or call 801-300-4007 to chat with a packaging expert today.

 

Reduce Churn & Maximize Savings by Outsourcing Your Subscription Box Fulfillment

Outsourcing Your Subscription Box Fulfillment

Subscription ecommerce has exploded in the past decade, and many subscription retailers have seen a boost in sales in the past year with consumers sheltering at home. In this increasingly prevalent business model, subscribers pay a fee to receive a package of selected or surprise items on a regular basis. According to McKinsey, ecommerce subscriptions generally fall into one of three categories:

  • Curation Subscriptions (55%) – The subscriber receives a curated selection of items, such as an assortment of apparel or beauty products. Customers typically don’t know exactly which products they will receive, so this type of subscription is popular for its element of surprise.
  • Replenishment subscriptions (32%) – Regular, recurring deliveries of same or similar items, like razors or vitamins. This type of subscription makes it convenient for consumers to get their essentials.
  • Access Subscriptions (13%) – Membership gives subscribers exclusive access and “VIP” perks. Primary categories are apparel and food.

 

The impact of COVID-19 on retail subscription

The coronavirus pandemic and consumer shift from in-store to online shopping have fueled the growth of subscription box services. For some companies, pivoting to this model has made it possible for them to stay in business after their previous business models were no longer viable (e.g., in-person or event-focused marketplaces). According to Forbes, many U.S. consumers leaned into subscription box services for the first time during the pandemic, and a survey of more than 1,000 shoppers showed that one in five had purchased a subscription box to have products on hand.

Even before the pandemic hit, subscription services had gained wide appeal. McKinsey research shows that in 2018, the subscription ecommerce market had grown by more than 100 percent per year over the previous five years, and fifteen percent of online shoppers had signed up to receive products on a recurring basis. In 2019, Multichannel Merchant data projected that by 2023, as many as 75 percent direct-to-consumer brands would have a subscription-based offering. Now, this percentage could be even higher. Whether it’s vitamin refills or a monthly box of dog chew toys, consumers have responded to the convenience of getting items they want and need without having to leave their homes.

 

How outsourcing fulfillment helps subscription retailers build customer loyalty and maximize savings

While conventional ecommerce involves shipping one-off orders of unique items, subscription box fulfillment often requires sending many of the same product in a tight timeframe. Many entrepreneurs who start their own subscription box businesses begin fulfilling orders themselves and then outsource to a 3PL when it becomes too costly and labor-intensive to perform these services in house.

Outsourcing fulfillment helps subscription box companies mitigate these challenges as well as one of the biggest that the industry faces: churn. Word of mouth is a key trigger for consumers to sign up with a subscription service, especially in the curation and access categories, but they are quick to cancel their service if expectations aren’t met. They are also less likely to recommend a brand after a bad delivery experience. So how can outsourcing your fulfillment help? We’re breaking down the top four ways that partnering with a 3PL helps subscription retailers minimize churn and increase savings.

1) 3PLs can help subscription businesses scale efficiently—without the major capital investment
For many subscription retailers, orders are processed in a peak period once a month, which creates significant fluctuations in volume. Having the flexibility and infrastructure to scale with demand is critical, but doing so efficiently requires resources like space, labor and systems that become expensive—quickly.

Retailers performing in-house kitting need space and labor, but often just for a few days to a week each month. For the rest of the month, that labor and space may not be needed. When you outsource to a 3PL with a shared-space fulfillment center, that labor can be redeployed to perform other warehousing activities. Plus, you don’t have the overhead investment of running your own facility or the burden of paying for space you don’t need. Partnering with a 3PL that can scale efficiently to accommodate volume fluctuations and all your company’s stages of growth will help you save money—and retain clients—in the long run.

 

Fulfillment Case Study

 

2) Packaging done right improves your customer’s experience—and your bottom line

When it comes to returns in the subscription box business, a mistake may not just cost you one order—it could cost you a long-term subscription. Receiving an incorrect or damaged order leaves customers feeling frustrated while also affecting your bottom line in costly returns and replacements.

When you outsource to a fulfillment partner, you’re supported by a team dedicated to accurate picking and packing and trained on how to package orders properly to guarantee safe delivery. There is a detailed process in place strictly followed by employees to ensure an identical, accurate and safely delivered package to each customer.

While the right packaging is critical to prevent damage, it is also a reflection of the brand. Having a professional team that goes the extra mile to uphold a high standard of care when packing your orders can make a huge difference in the customer’s overall experience. A fulfillment partner can also add in marketing materials like inserts and other special packaging touches to help your brand stand out and create a memorable unboxing experience.

Check out our Packaging page to learn how Visible helps clients optimize their packaging, including size, materials and design.

3) Tech-enabled 3PLs deliver greater efficiency, visibility and profitability

One of the most crucial components of an optimized fulfillment operation is the technology driving it. However, purchasing a Warehouse Management System (WMS)—then learning and implementing it—is a significant investment of time and financial resources. Instead, subscription retailers have the option to partner with a professional who already has technology in place specifically designed to manage this type of business.

The platform used to manage your inventory and orders should have built-in automation and integration capabilities for accurate and efficient fulfillment. Systems with these capabilities not only help subscription retailers keep customers satisfied, but also eliminate waste throughout the supply chain and increase profitability. An efficient operation allows you to invest your time in impactful activities that grow your business rather than spend it on activities like manual data upkeep and spreadsheet manipulation. Additionally, the ideal system comes with an integrated web portal and robust reporting capabilities, so you have the transparency and control you need to manage your business and forecast properly.

It isn’t enough simply to have the technology, however. A fulfillment partner must have the technical knowledge and resources required to maximize the system’s capabilities and tailor them to meet your needs. Visible’s WMS delivers expert inventory and order management with the full transparency and reporting customers need to make intelligent business decisions. We are also integrated with more than 40 ecommerce software and shopping cart platforms to make the fulfillment process seamless.

4) Subscription retailers can leverage their partners’ buying power and facility locations for fast, affordable shipping options

Whether subscription retailers have a pre-established monthly delivery date, or customers are able to select their own, it is critical for the order to deliver when expected, especially if they are replenishing a daily necessity. A 3PL should have a strong network of carriers that provides not only high on-time performance but also a multitude of shipping options. Visible has partnerships with the nation’s top carriers, and we leverage our volumes to provide the most affordable pricing possible to clients for every shipping option.

If your customers are geographically diverse, it is recommended that you distribute your inventory across multiple, strategically fulfillment centers. Bringing your product closer to your customers reduces shipping fees and transit times and improves overall efficiency. Learn more about the benefits of having multiple fulfillment centers here.

 

Fulfillment is best left to the experts

Fulfillment, while necessary, isn’t typically where subscription retailers want to spend most of their focus—especially when there are companies that specialize in these services. Professional fulfillment providers like Visible have the staff, technology and resources in place to process orders as efficiently as possible, so customers can concentrate on growing their business with the peace of mind that the logistics are handled. A well-oiled fulfillment machine not only creates savings in the long run but also boosts customer loyalty by delivering accurate, properly packed and timely orders.

 

Fulfillment Audit

 

When the time comes to outsource, keep in mind that many 3PLs are optimized for just-in-time fulfillment rather than the subscription box model, so it’s important to choose a partner with expertise specifically in subscription fulfillment. Visible SCM delivers effective solutions to help subscription retailers meet customer expectations, scale efficiently and minimize churn. To speak with one of our experts, fill out our contact form or give us a call at 877.728.5328.

 

 

The COVID-19 Domino Effect on Supply Chains: What’s Happening, What’s Expected and What You Can Do

covid impact on supply chains

At the Port of Los Angeles, cargo volume was up 50% in the second half of 2020 compared with the first half of the year, a reflection of the pandemic-driven shift in consumer spending from services to goods. The surge of imports—plus COVID-19 infections and shortages of containers and chassis—has created bottlenecks throughout the entire supply chain, leaving shippers to contend with delays and soaring fees.

So when will the situation improve, and what can be done in the meantime? We’re breaking down the challenges shippers are facing, if/when relief is expected and tips for mitigating the impact.

West Coast port congestion sends ripples throughout the supply chain

The word “unprecedented” has been used a lot over the past year, and it’s now being used to describe congestion at the Ports of L.A. and Long Beach brought by surging imports, labor shortages and the rush to get goods in before Chinese New Year.

Although the country’s busiest import gateway has dealt with gridlocks before, this is the first time since 2004 that “drift zones” have been used to manage traffic into neighboring ports. Cargo ships are bigger now and take longer to unload, and for queued ships, the wait appears to range from several days to nearly two weeks.

At the terminals, operators are stacking containers higher and wider in container yards, delaying the release of containers from the complex to distribution centers and rail ramps. As a result, shippers face mounting detention and demurrage charges as well as higher spot rates and surcharges by rail carriers.

Port congestion, now spreading north to Oakland, has been exacerbated by labor shortages brought by COVID-19. Coronavirus infection rates among Los Angeles/Long Beach dockworkers have been called “catastrophic,” as nearly 700 dockworkers have contracted the virus and hundreds more have taken virus-related leaves.

“It’s impossible for dockworkers to ride in shuttle buses between terminals and work together to load and unload ships without having contact with hundreds of people per shift,” said ILWU Coast Committeeman Frank Ponce De Leon. “The rate of infection is growing quickly.”

Outlook: According to Maritime Executive, analysts foresee “little letup” in bottlenecks and port congestion. Volumes are expected to remain strong as the ecommerce explosion continues, and we may even see another surge during the summer months. Fees and delays are likely to remain as the influx of import containers grows and ports continue to operate with limited labor and split shifts due to COVID-19.

To ease congestion at Los Angeles/Long Beach, the Federal Maritime Commission is recommending that shippers import their freight into Tacoma and Seattle, which means warehouse capacity in the Pacific Northwest is likely to tighten. Visible’s 250,000-square-foot facility in Fife, WA has capacity if you need space for storage/distribution or transload support to get your freight moving inland. Please contact your Visible representative to secure space while it is available.

Shippers “priced out of the market” as costs skyrocket amid container shortage

In addition to congestion and COVID-19 outbreaks, the Port of Los Angeles is dealing with a container shortage, leading to soaring shipping costs and delays of goods purchased from China. In order to get space on containers, shippers are paying historically high rates; in fact, demand has pushed rates from China to the U.S. West Coast beyond $4,000 per container. The container shortage and resulting premiums are forcing retailers to decide whether to push back delivery or pay the premium and absorb these costs or pass them onto customers.

“Carriers in their pricing behavior have prioritized short-term profitability over customer relationships,” said Sea-Intelligence CEO Alan Murphy. “For shippers with low-value commodities, the development is nothing short of a disaster, as they are effectively being priced out of the market.”

Not only are shippers paying record-high rates, but they are also getting “sub-standard” service. In December, 44.6% of vessels arrived on time, down from 76.3% a year earlier and the lowest level in a decade.

The container shortage is not just affecting importers. Shipping lines are rushing containers back to China empty rather than waiting for them to travel inland to reach exporters and return to the coast, creating equipment shortages for U.S. exporters. In October and November, carriers rejected U.S. agricultural export containers worth hundreds of millions of dollars and sent empty containers back to China to be filled with more profitable Chinese exports.

Outlook: Container xChange predicts further volatility in coming weeks “with every element of the transpacific ocean freight supply chain under unprecedented pressure.”

“Shippers have options to pay the priority premium for bookings and equipment, but no guarantees,” said Karen Koide, Visible director and global trade compliance expert. “Our team is closely monitoring the situation at the ports and working with our agents to secure the best bookings available.”

While the container shortage isn’t necessarily new, it has reached critical levels and is driving the need for more flexible shipping options. Demand for less-than-container load (LCL) service is likely to grow as shippers attempt to secure space but wish to avoid exorbitant air freight costs. To explore LCL as an option for your business, contact your Visible representative and we will connect you with our team of ocean freight experts.

Congestion, chassis shortages causing further delays as freight moves inland

When COVID-19 first took hold, rail experienced a rapid decline in volume followed by a significant volume rebound. The surge in intermodal volumes between the Southwest and Midwest is challenging inland operations, and an ongoing chassis shortage is causing delays in cargo getting onto the rail.

Chicago, the largest U.S. interior rail hub, is facing record-breaking container volumes and increased dwell times due to the constrained chassis supply. This disruption has spread to St. Paul, Minnesota, where containers have had to idle in BNSF Railway’s St. Paul terminal until chassis become available.

Intermodal carrier J.B. Hunt Transport Services said costs will rise for intermodal service to support investment in new containers, drivers and other equipment needed to mitigate congestion challenges.

Outlook: Even when congestion eases in Southern California, shippers will see contract rates rise to offset the costs of higher container dwell times. While rail service providers are working together to find capacity and equipment solutions, the industry also faces a drayage shortage that is likely to continue. As noted by the Journal of Commerce, COVID-19 has slowed the training of new drivers, as social distancing and other health restrictions limit the number of trainees in a cab with a trainer.

Barge and feeder services are suspended in South China, tightening truck capacity in the Pearl River Delta

To control the spread of the coronavirus ahead of Chinese New Year, the Chinese government is suspending feeder services in South China lasting through February. This creates further supply chain disruption for shippers, as these feeder vessel services allow for containers to move from the smaller ports to central container terminals where they can be loaded onto larger vessels. While trucking may be an alternative, capacity is limited. A shortage of truck drivers lasting longer than normal is expected due to quarantine rules for those who travel during the holiday.

If you have suppliers located in the Pearl River Delta, please work with them as well as your Visible representatives to find alternative routing and/or transportation methods for cargo.

Air is an option, but space remains tight out of China

Due to port/rail congestion and the global container shortage, some companies are opting to pay for faster shipping options like air cargo. Air freight space remains tight from China, and flights to the U.S. will be in greater demand closer to Chinese New Year. As a result, air freight rates are increasing daily and even by the hour.

Globally, rates are more than double, and they are 2.5 times higher from China to Europe and the U.S. than a year ago. According to World ACD, rates soared 80% in December, from $1.80 per kilogram to $3.27, before tapering off 10% going into January.

Outlook: Experts predict the air cargo market will be back to pre-pandemic levels by the end of March due to the strong demand. The passenger side of the airline industry, on the other hand, is expected to remain “depressed” until vaccinations become more widespread in Q3 and Q4. International travel is likely to return slowly, which means fewer aircraft to assist with long-haul trade. Airline industry officials say they don’t expect a full recovery until 2024.

What can shippers do to mitigate these challenges?

Although supply chain challenges are expected to worsen before they get better, we’ve compiled a list of tips and strategies to help mitigate the impact:

  1. Get orders in as soon as possible—ideally six weeks in advance of the vessel leaving. Early orders mean greater access to bookings and better rates.
  2. The difference between long-term contract rates and spot rates is “unprecedented,” but shippers can limit the damage by accurately predicting volumes. According to Flexport, “predicting the volumes you are going to ship has never been as important as it is this year.”
  3. Diversify your ocean freight suppliers.
  4. Have emergency stock on hand so you can wait longer between bookings if needed.
  5. Transload freight to get goods to regional markets more quickly.
  6. Bring freight into alternate ports. Although there is some congestion in the Ports of Tacoma and Seattle, the situation is less severe than in the Ports of Long Beach and Los Angeles.
  7. Postpone bookings until after Chinese New Year if possible.
  8. Keep in mind that air freight is still an option. Book as early as possible and jump on good rates if/when you can get them.

It is also important to have a supply chain partner with a strong global network of agents and carriers for a better chance of securing space and getting your freight moving as soon as possible. As COVID-19 continues its streak of supply chain disruption, having an experienced and agile partner you can count on is a serious competitive advantage. Visible has trusted agents all over the world, strong carrier relationships and fulfillment centers across the country to get product to your customers as efficiently as possible.

Our comprehensive suite of supply chain services includes:

  • Ocean/air freight solutions
  • Domestic transportation
  • In-house customs brokerage
  • Fulfillment
  • Parcel
  • Packaging

Check out our video to learn more about our solutions and how Visible helps customers overcome supply chain challenges: Tackle Supply Chain Challenges with Visible SCM – YouTube

Visible is here to get your freight moving. For more information about our services, contact our experts at 877.728.5328 or fill out our contact form today.

 

PSS & GRI Effective Dates

PSS and GRI

2020 has been called “the year of surcharges,” but carriers are continuing to impose peak surcharges in 2021, citing high demand and capacity concerns. As shown in the charts below, peak surcharges for FedEx and UPS are in effect until further notice. Last week, FedEx announced an additional $0.30/parcel surcharge for Express and Ground Residential packages that will take effect Feb. 15.

These rate increases are in addition to the carriers’ annual General Rate Increases (GRIs). FedEx and UPS shipping rates increased an average of 4.9% (effective Jan. 4 and Dec. 29, respectively), while USPS raised their Priority Mail service 3.5% and First-Class Package service 6.2% starting Jan. 24.

 

PSS GRIs Surcharge

PSS GRIs Surcharge

 

An effective way for shippers to mitigate the impact of these rate increases and the volume restrictions imposed by carriers is to implement a multi-carrier strategy. Our team has the expertise and proprietary technology to help clients identify the optimal shipping solution for their business—plus, we’re partnered with premier shipping automation software companies to ensure retailers have access to the best tools and options available.

Contact our team for additional information on carrier rate increases, support with your multi-carrier strategy or a free parcel audit today.

 

 

Supply Chain Stats to Kick off the New Year

2021 shipping stats

From carrier performance during an unprecedented peak season to the number of ships stranded off the West Coast, we’re breaking down the latest stats in logistics.

 

2020 peak season breaks records and carrier preparation pays off

  • The 2020 peak season was the busiest ever, with more than three billion parcels delivered, according to ShipMatrix data.
  • Although two million parcels were not delivered by Christmas Day, USPS, UPS and FedEx posted on-time delivery percentages in the 90s from Nov. 22 to Dec. 26. This feat is particularly notable for the US Postal Service, which delivered a record number of packages during the holiday season and handled additional parcels due to customer volume restrictions imposed by UPS and FedEx.
  • UPS anticipated that 8.75 million returns would be entered into its system the week of Jan. 4, a 23% increase over the highest week of returns for the 2019-2020 season.

 

Carriers increase rates to cope with demand

General rate increases (GRIs) take effect this month as well as peak season surcharges. While these carriers routinely announce rate increases, this time they cite the impact of COVID-19 and resulting surge in residential deliveries as the primary drivers.

  • UPS has increased their ground, air and international rates by 4.9%, plus across-the-board surcharge increases.
  • FedEx Express package and freight standard list rates have increased an average of 4.9% for Domestic, US Export and US Import services.
  • FedEx Ground and FedEx Home Delivery standard list rates have increased an average of 4.9%.

For more information on GRIs and surcharges, or how they will impact your bottom line, please contact your sales representative or account manager.

 

Leased warehouse space at all-time high; warehouse rents likely increase at slower pace

  • New leases of 179 million sq. ft. for warehousing and distribution were signed in Q4, pushing the year’s total to an all-time high of 569 million sq. ft., according to a report by Cushman & Wakefield. This increase is due largely to the explosion of ecommerce, which takes up to three times the space that traditional retail distribution operations require, as there are no retail shelves or brick-and-mortar storefronts to store the stock. Additionally, businesses are moving their supply chains closer to consumers to improve delivery speed and order turn time.
  • Warehouse rents are likely to increase at a slower pace in 2021 compared to 2020, according to the same Cushman & Wakefield report. Industrial rents in the US went up an average of 4.6% from Q4 2019 to Q4 2020, setting a record high last year. Warehouse and distribution rents rose 5.6% in the same quarter.
  • It’s not just rent that’s at an all-time high—construction is too. As of Q4, there were 360.7 million industrial square feet under construction with 94% of it intended for warehousing and distribution.

 

Retailers seek to automate their fulfillment centers

General rate increases (GRIs) take effect this month as well as peak season surcharges. While these carriers routinely announce rate increases, this time they cite the impact of COVID-19 and resulting surge in residential deliveries as the primary drivers.

  • Over the next 2-3 years, retailers’ usage of pop-up distribution centers (DCs) will more than double, increasing from 12% to 26%.
  • Micro-fulfillment centers will nearly double, rising from 15% of networks today to 27%.
  • 64% of respondents provide buy online, pick up in store (BOPIS) services and contactless shopping, but usage of these offerings will decrease by roughly 7% over the next 2-3 years (likely due to vaccinations and shoppers returning to stores).
  • 14% of respondents have automation across their fulfillment locations today, and another 21% expect full automation in the next 12 months.
  • 17% of drug store/health and beauty retailers have all fulfillment locations automated—more than any other vertical.

Other insights regarding supply chain plans over the next 12 months:

  • Almost 40% of respondents want to improve picking processes and reduce warehouse/DC costs.
  • 38% of respondents want to improve workforce management, including associate retention, employee engagement, and productivity.
  • Also listed as top respondent priorities are improving real-time inventory visibility (36%) and assortment management (36%) to drive higher sales and margins across channels with localized customer insights.

 

Logistics hiring strong in December

According to the US Bureau of Labor Statistics, core freight transport and distribution sectors added 52,900 jobs last month, as package delivery, warehousing and trucking operators staffed up to meet surging demand from online shoppers and high-volume customers.

 

Port delays lead to cargo ships stranded off US Pacific gateways

  • +40 cargo ships were lined up waiting to get into the ports of Los Angeles and Long Beach as of Jan. 13. Small and medium-size companies have been hit particularly hard by the cargo backlogs, which have left retailers waiting for weeks for goods stuck on ships at sea or at the port. Labor shortages at the ports are largely to blame for the backup as freight terminals cope with the surge in COVID-19 cases that hit California and slowed cargo handling operations.
  • 76 million 20-foot equivalent units (TEUs) were imported into the US last month—20.4% more than December 2019 and the fastest growth pace since August 2010, Panjiva reports.
  • Volume at Port of Los Angeles is expected to be up more than 80% YoY between Jan. 17 and Jan. 23, and up nearly 148% YoY between Jan. 24 and Jan. 30. Congestion at West Coast port facilities is expected to continue into at least February.

 

Fewer blanked sailings over Chinese New Year 2021 than ever before

  • Container carriers are expected to provide more capacity out of Asia over the Chinese New Year holiday, beginning Feb. 12, than in any other year. Across the transpacific, Asia-Europe and transatlantic trades, 7% and 0.6% of sailings have been cancelled in February and March respectively, compared with 19.9% and 9.4% sailing cancellations in the same months last year.
  • As a result, there is a YoY increase in TEU capacity of 6% this month over January 2020. February and March are up by 34% and 17% respectively.

 

Contact Visible Today

Now that you know what’s happening in the world of supply chain, let us know where you need support. Visible Supply Chain Management has thousands of satisfied customers who rely on our team for their shipping and logistics needs. Contact us today to start the conversation of how we can help you navigate the new year and have a prosperous 2021.

 

 

2021 Supply Chain Trends

2021 supply chain trends

The coronavirus pandemic demonstrated that in order to succeed, businesses must build supply chain resilience, improve their agility and keep innovation at the forefront to meet customer expectations in times of disruption. As noted by eMarketer analyst Andrew Lipsman, “certain ecommerce behaviors…permanently catapulted three or four years into the future in just three or four months.” So what can we expect in 2021? Here are the top supply chain trends expected to emerge or accelerate in the coming year.

 

Greater investment in supply chain resilience

According to a survey of supply chain professionals by Association for Supply Chain Management (ASCM), investing in risk management and resilience will be a top company priority and the biggest supply chain management trend of 2021. Following the demand and supply shocks caused by the pandemic, companies with strong supply chain resilience were better equipped to balance their supply and demand needs than those with less resilient supply chains, who are now playing catch up.

As businesses work to fortify their supply chains, diversification of suppliers, manufacturing and transportation options is likely to continue. Between the tariffs, factory lockdowns and logistics disruptions in China, companies have learned that supply chains are fragile when they rely too heavily on a single company or geographical location. In 2021, they’ll be focused on building contingency plans and understanding their entire supply chain structures to identify and mitigate or eliminate these kinds of vulnerabilities.

 

Alternative fulfillment options and contactless transactions

Brick-and-mortar retailers without an online presence scrambled to create one this year when in-store shopping came to a halt. Omnichannel retailers—those with both physical and online stores—were able to keep their businesses going by offering convenient fulfillment options like curbside pickup and buy online, pick up in store (BOPIS). The trend toward contactless transactions was accelerated during COVID-19 and is expected to continue in 2021. In fact, according to a CommerceHub survey, 67% of respondents said they will continue to use curbside pickup when the pandemic is over. Retailers will need to pay attention to how consumer behavior changes as the COVID-19 vaccine is distributed and have the flexibility to adapt accordingly.

 

More convenient returns

Consumers don’t just expect a convenient shopping experience—they also expect a convenient returns process. To make product returns as easy as possible, retailers are adding more in-person drop-off options—no box or shipping label necessary—which are expected to become more common. Physical stores are planning to make returns more convenient by accepting returns from other online retailers at their locations, giving existing and new customers a reason to come into their stores. According to RetailWire, the “ecommerce winners” will be the retailers who make both buying and returning easy.

 

The rise of micro-fulfillment centers

As ecommerce volumes soar, retailers will continue seeking ways to get items to customers as quickly and cheaply as possible. One solution expected to trend in 2021 is the micro-fulfillment center, a smaller facility closer to consumers that has the automation of a larger warehouse. This model, said to be the future of online grocery shopping, works best for items with high-turnover and that run out relatively quickly, or where the trend can easily change.

Although micro-fulfillment centers offer close access to customers, execution can be a challenge without a logistics partner and the technology to track and manage decentralized inventory. An alternative for retailers that we’re likely to see more of in 2021 is the conversion of stores into mini-distribution centers.

 

Greater focus on the final mile

After the explosion of ecommerce this year, companies’ last-mile delivery strategies will be a critical focus in 2021. In order to stay competitive amid surging online purchases and returns, companies will need last-mile control and end-to-end visibility to manage the flow of products to/from customers, deliver to customers on time and facilitate returns with ease.

 

Sustainability strategies

According to a Harvard Business Review survey, 65% of consumers say they want to buy products from purpose-driven brands that advocate sustainability. With the pandemic-driven increase in online purchases, consumers will be thinking about how sustainable their shopping habits are, forcing retailers to offer more sustainable delivery choices. Here are three sustainability trends to watch for in 2021:

  • More eco-friendly warehouses. The shift toward eco-friendly warehouses is expected to continue in 2021. These facilities are equipped with LED lighting for reduced emissions, efficient HVAC systems for lower energy consumption and energy management systems that monitor the usage of electricity, heat, water and gas
  • Shift from linear to circular supply chain systems. Circular supply chains encourage continuous reuse of materials to minimize waste, as opposed to the traditional linear supply chain that follows the path of “produce, use, discard.” According to a 2020 Gartner survey, more than half (51%) of supply chain professionals said they expect the focus on circular strategies to increase over the next two years. (Example: Transitioning from single-use pallets to reusable block or plastic pallets that have a longer useful lifespan and can be recycled into new pallets.)
  • Greater focus on post-purchase recycling processes. Retailers will likely put a greater emphasis on recycling and how to engage customers in the recycling process. Some apparel companies, for example, provide discounts to those who drop off used clothing to be recycled. Recycling processes will become a customer expectation and have an impact on new sales for retailers.

 

Warehouse robotics and AI

The supply chain disruptions brought by COVID-19 have created a renewed sense of urgency behind warehouse robotics and artificial intelligence (AI). Per Gartner, AI is divided into two categories for supply chain application: augmentation and machine learning automation. Automation is replacing human decision making and action using a combination of hardware and software, whereas augmentation is the use of technology to support and improve human behavior, both in decision making and task execution.

As warehouse labor gets tougher to find and the pandemic continues, warehouses are shifting to technology and automation to do more of the work. For example, autonomous mobile robots (AMRs) and automated guided vehicles (AGVs), including floor cleaners, forklifts and pallet movers, are expected to be more widely accepted for driving efficiencies in warehouse management and operations. Statista reports that the global warehouse automation market is estimated to surpass $30 billion by 2026 from $15 billion in 2019.

 

Surging parcel volumes and carrier price hikes

Parcel volumes are expected to remain historically high in 2021. Traditional in-store shoppers who turned to online shopping during the pandemic may not return to the stores, or return to stores less frequently than before the pandemic. Shippers should be aware that due to these volumes, FedEx and UPS rates are increasing an average of 4.9 percent. Depending on the service you use and your package characteristics, you could see increases above or below the average. FedEx recently announced it would continue with the new trend of “off-season” surcharges in 2021, and they changed the description of its surcharges from “temporary” to “peak,” indicating that these fees may be around a while.

 

Contact Visible Today

Visible Supply Chain Management has thousands of satisfied customers and clients that rely on our company for their various shipping and logistics needs. Contact us today to start the conversation about how we can help your company navigate the new year and prosper in 2021.

 

 

Cyber 5 Recap: Shopping Starts Early, Cyber Monday Breaks Records

cyber 5 featured

This year’s Black Friday/Cyber Monday weekend didn’t bring major surprises, but it did break with tradition and set new records. We’ve put together a recap of the biggest sales weekend in ecommerce and what’s on the horizon as we head into 2021.

 

The holiday weekend saw record sales, but less growth than anticipated due to early shopping

Cyber 5, the five-day shopping period from Thanksgiving through Cyber Monday, was a huge weekend for ecommerce. According to data from Adobe Analytics, consumers spent a record $34.36 billion on retail websites, up from $28.49 billion for the same period last year, and online sales rose 20.6% year over year. While this percentage is up from 17.7% last year, it is lower than projected estimates, as shoppers took advantage of retailers’ pre-Thanksgiving discounts and shopped earlier to avoid out-of-stock items and shipping delays. More than half of all shoppers (52%) said they took advantage of early seasonal sales, according to an annual survey released by the National Retail Federation (NRF) and Prosper Insights & Analytics.

The overall number of consumers who shopped in stores and online during the Thanksgiving holiday weekend came in at 186.4 million, a slight drop from last year, according to the NRF survey.

Cyber 5 eCommerce Sales by Day

 

SOURCE: Adobe Analytics, December 2020

  • Thanksgiving hit a new record for online sales, with 21.5% year-over-year growth to $5.1 billion.
  • The number of online shoppers on Black Friday exceeded 100 million for the first time—up 8% over last year—and online spending reached a record $9 billion.
  • Small Business Saturday logged 68.2 million online shoppers, up 17% from 2019 with a gain of nearly 10 million consumers.
  • Americans spent a record $10.8 billion online on Cyber Monday, making it the largest online shopping day in U.S. history, according to Adobe Analytics.

 

In-store traffic drops (unsurprisingly)

As expected, in-store shopping was down due largely to the pandemic and store closures on Thanksgiving. In fact, traffic to stores on Thanksgiving fell 55% from last year, and traffic on Black Friday dropped 37%. “Shipageddon” is expected to push last-minute shoppers who missed holiday shipping deadlines to the store, especially the week before Christmas.

 

Support for small business increases

77% of holiday shoppers said they were more interested in supporting small, local businesses struggling during the pandemic this year, according to the NRF survey. On Small Business Saturday, the number of online shoppers was up 17% compared with last year. Small businesses saw a 501% increase in online sales on Cyber Monday.

 

Retailers manage consumer expectations

As carriers continue to contend with capacity challenges, retailers have worked to manage consumer expectations around product availability and shipping delays for the holidays, displaying disclaimers on their websites and urging shoppers to buy early.

This messaging around shipping delays appears to have been effective, as shoppers said they will shop earlier this year knowing delivery times may be longer. Retailers also helped incentivize early shopping by offering pre-Thanksgiving discounts—some of which even kicked off in October.

 

Shoppers take advantage of alternative fulfillment options

Curbside, drive-through and in-store pickup options have become increasingly popular this year due to COVID-19 concerns. In addition to providing convenience, these offerings increase retailers’ capacity to fulfill online orders and help shoppers avoid delivery delays. On Black Friday, in-store and curbside pickup increased 52% over last year, according to Adobe. Curbside pickup sales grew 30% year over year on Cyber Monday. Salesforce reports that retailers who offered these options during the first days of Cyber Week increased digital sales at a 26% higher rate than retailers that did not.

 

Looking ahead

  • Although carriers have hired thousands of seasonal workers, it is predicted that up to seven million packages per day could be delayed between Thanksgiving and Christmas. Even more delays are likely to occur if the COVID-19 vaccine is approved for distribution during this time.
  • As we head into the new year, shippers preparing their budgets should take into account the general rate increases (GRIs) and increased handling surcharges that will soon take effect.
  • CBRE predicts that as much as $70.5 billion worth of holiday purchases this year are expected to be returned, putting additional stress on supply chains and creating heightened demand for warehouse space.
  • All signs point to a bright future for ecommerce, which means volumes will continue to surge and volume-capping by carriers is likely to continue. To deliver a positive customer experience in 2021, shippers should begin strategizing and building solutions with their supply chain partners as soon as possible.

 

Contact Visible Today

Visible Supply Chain Management has thousands of satisfied customers and clients that rely on our company for their various shipping and logistics needs.  We’re here to help you today.  Contact us at 877.728.5328 to start the conversation about how we can help your company.

 

 

Case Study: Visible, USPS Deliver Thousands of COVID-19 Tests Amid “Shipageddon”

After Carrier Caps Shipper’s Volume, Visible and USPS are Prepared to Deliver in 48 Hours

Visible has more than willingness to make the impossible possible for our customers. We have the expertise, partnerships, technology and agility to do it effectively.

 

In this video, Visible President Casey Adams shares how our team averted a “Shipageddon” crisis and helped a logistics provider deliver thousands of COVID-19 test kits after having their volume capped by another carrier a week before Black Friday. Click here to read the Utah Business press release.

 

Challenge

Ecommerce package volumes have surged since the start of the coronavirus pandemic, straining carrier capacity. Because of the significant increase in demand, some of the major national carriers have put caps on customer volumes. In fact, just this week, Nike, Gap, and many other large retailers have had their volume capped with little or no notice (additional information is available here).

In this case, a large logistics provider was informed by their carrier just one week before Black Friday that their volume would be capped at 17,000 COVID-19 test kits per day. With 35,000 daily test kits to ship, this left the company with 18,000 remaining test kits to deliver. The shipper needed a solution quickly and at the worst possible time: “Shipageddon,” a term being used to describe the overwhelming demand for carrier capacity and the resulting delays this holiday season.

 

Solution

The logistics provider contacted its technology partner, SHIPSTORE, a multi-carrier shipping software, and the SHIPSTORE team asked Visible for a solution. Visible contacted its partners at USPS and confirmed that they had the capacity to take on this business as well as the resources to ramp up and deliver the tests quickly. Because of Visibles long partnership with USPS and status as an authorized USPS reseller, Visible was also able to secure favorable Priority Mail rates.

Within 48 hours of engaging Visible, the customers account was set up, including implementation, integration, credit checks and credit application. During this timeframe, SHIPSTORE was also set up to write to Visibles public API in order to access labels and allow Visible to provide payment terms to the shipper, which was vital to their ability to continue shipping.

In addition to ensuring the 18,000 COVID-19 test kits were delivered on time, Visible provided support as a consultative resource, helping its customer build a multi-carrier strategy that would mitigate the risk of similar challenges in the future.

 

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Contact Visible Today

Visible Supply Chain Management has thousands of satisfied customers and clients that rely on our company for their various shipping and logistics needs.  We’re here to help you today.  Contact us at 877.728.5328 to start the conversation about how we can help your company.