As the U.S. continues to battle massive wildfires up and down the West Coast, the next natural disaster has hit the country from the other side in the form of Hurricane Ida. The Atlantic Ocean has reached peak hurricane season, with all forecasts pointing to a hectic few months ahead.
The overloaded global supply chain is struggling with increased demand, labor and material shortages, and soaring container rates during this year’s peak shipping season. The next storm could push shippers over the edge with missed revenue opportunities and damaged customer relationships.
The weather has always played a huge role in a supply chain’s ability to deliver on time and within budget. The Federal Highway Administration reports that 12% of trucking delays are due to poor weather conditions. These delays cause trucking companies to lose an estimated 32.6 billion vehicle hours due to weather-related delays annually and cost them as much as $3.5 billion every year. Without a method for navigating the weather’s effect on shipments in today’s volatile market, these losses could have a more significant impact than ever before.
The upcoming storms will hit during the shipping industry’s busiest time of year. Organizations must monitor and mitigate issues that arise from anywhere and at any time to manage the pressure. Here are four ways companies can ensure their deliveries arrive on time.
Diversified Carrier Network
It’s common to rely on a small trusted group of carriers, but shipments could be halted entirely if that group is in an area affected by severe weather. Historically, carrier capacity tightens whenever big storms hit, and any capacity available for booking often comes with incredibly high prices.
To ensure capacity and reduce risk, shippers need to expand their network beyond their contracted carriers to include spot and mini-bids, as well as trusted brokerage partners. A diversified network also gives companies more control over pricing rather than relying on existing, fixed contracts. Shippers can also protect their shipments and ensure carrier compliance by working with a company that automatically checks RMIS and Saferwatch databases.
Set Up Alternative Routes and Modes
There is no shortage of traffic and weather data available, but it takes the right analytics tools to put it to work to prepare ahead. This type of preparation is especially important in hurricane-prone regions like the Gulf Coast and wildfire-prone areas like the West Coast. The Gulf Coast is packed with highly trafficked supply routes — including highways, rail lines, ports and the Mississippi River — while ports in Los Angeles and Long Beach combine to handle more than 25% of all container ships coming to the United States.
Forward-thinking companies can proactively plan by examining historical data from previous years, then matching it up against real-time weather patterns and changes to road conditions that can result in delays. Ultimately, enabling them to plan new shipment routes quickly and even more accurately predict when shipments will arrive.
When natural disasters loom, organizations need to communicate instantly with carriers, shippers and customers about changes, delays, and other issues. Decisions need to be made, even as the events unfold.
Of course, any basic level of supply chain visibility includes tracking shipments in transit, but effective visibility technology should go beyond these standard track-and-trace capabilities. Knowing where the load is located is vital, but that alone isn’t enough to take proactive action to prevent delays. To do that, you need a solution that provides visibility into all the factors that could impact that shipment across the entire supply chain — including traffic and weather—all in real-time.
This type of real-time visibility works to eliminate blind spots. Shippers, dispatchers and drivers can work together as issues, changes or delays occur due to traffic or weather conditions.
After visibility (which tells you what is happening), companies need to know how to handle it, which is where the ability to skillfully manage exceptions comes in.
During wildfires and hurricanes, it takes continuous monitoring to catch issues and manage complexity in a rapidly changing environment. The best systems put all this information on one screen, along with a method for proactively addressing issues right away.
Predicting the Unpredictable
It’s not a matter of if a natural disaster will disrupt the supply chain, but when. Preparing with alternative routes and backup carriers will give businesses the best chance of getting their valuable shipments to their destination. Constant communication and the proper visibility tools technology are critical, along with plans to prevent minor issues from exploding into large ones and keep their shipments moving.
Jason Traff is President & Co-Founder at Shipwell, a cloud-based TMS solution based in Austin, TX that is transforming the supply chain industry by replacing opaque and manual processes through a tech-enabled, fully connected logistics ecosystem with more than 500,000 carrier partners. Prior to Shipwell, he co-founded and ran CopyCat Paintings, a global art reproduction company based in Shenzhen, China that employed over 1,000 artists and shipped to four continents, and Leaky, an insurance technology startup backed by Y-Combinator that provided over $300 million of insurance quotes. He is a Chartered Financial Analyst and holds an MBA from the MIT Sloan School of Management.