All’s quiet up at the North Pole right now. Elsewhere, however, changing traffic congestion patterns are forcing logistics experts to think long and hard about their holiday fulfillment strategies.
Increasing urbanization and population density are taking a toll on our aging national surface transportation infrastructure. Choke points on American highways cost millions of dollars annually in lost productivity and wasted fuel. A single bottleneck on the 405 freeway in Los Angeles, for example, is projected to cause $3.2 billion in lost revenue by 2023 according to researchers at INRIX.
These “hot spots” result in costly delays for shippers and freight forwarders, especially last-mile delivery providers. Many are coming up with new strategies to deal with more traffic congestion.
Many of the worst congestion hotspots are, not surprisingly, in some of our biggest cities — cities that are, not coincidentally, also key centers for international shipping. That means changes to traffic flow and congestion present challenges for everyone along your domestic (and, often, international) supply chain, starting at the port and extending all the way to the front porch.
So, what can warehousers and logistics experts do to minimize the impact of increasing traffic this holiday season? Here are some tips:
Use Historical Data
The data-rich world we live in presents a lot of opportunity for improving on-the-ground logistics. Data can be used to plan shipment routes that avoid traffic hot spots, as well as to select shipment times based on holiday congestion from the years prior.
Historical traffic data is especially valuable for modeling what-if scenarios, allowing you to test out variables before the holiday rush hits a fever pitch. These models can address everything from staffing to fulfillment fluidity using real information gathered from IoT devices, GPS data, logs, and more.
Warehouse Optimization
Fulfilling orders takes time, even in highly-efficient operations. Using up-to-date software in your warehouse helps locate and move product faster, which saves time you may need later on down the supply chain.
Your Warehouse Management System (WMS) should allow you to track product as it progresses through your system, which presents an opportunity to analyze your system for inefficiencies. Using your warehouse software smartly, especially in conjunction with IoT devices, helps keep an eye on product as it moves, preventing lost packages in your fulfillment system.
Even small things, such as putting your most popular items somewhere easily accessible, will make a big difference when the rush starts.
Make Sure Your Resources Are In Place
Don’t run out of trucks (or drivers!) when demand is up. Your modeling with historical data will give you insights into how many drivers and warehouse workers you should need — hire them early and be prepared for holiday labor shortages that may occur.
Remember, holiday traffic can slow down the flow of drivers between facilities and delivery sites, leading to vehicle shortages that create delays. Having a full staff will help you be ready for anything.
Use Smarter Delivery
A lot of fulfillment services today are experimenting with smaller specialty vehicles designed to make quick deliveries locally, especially in dense cities where larger trucks have difficulty maneuvering. Smaller vehicles tend to navigate increased congestion better than big rigs, in part because they can access local roads and small highways that don’t allow semis.
Typically, last-mile is the most cost-intensive link in the supply chain. Up to 28 percent of the total cost of shipping goes into last-mile, making it especially susceptible to major overruns due to on-the-ground complications like unexpected congestion. Make last-mile run smoothly and you’re saving both time and money.
Increased Communication
One great under-utilized value add: the ability to keep your consumers in the loop with SMS updates. A lot of people like having the ability to closely monitor progress during the shipping process. Increasing customer communication is actually pretty easy, too — automatic notifications that send an email when goods hit the road are a great first step.
pick up their goods, rather than leaving them to the elements and/or potential theft. If you offer some form of financial incentive beyond saving on shipping and handling costs, you can drive this
With a little planning, your holiday season can be as headache free as it is profitable. Sure, changing traffic patterns present a difficult challenge for people who move goods for a living. They also present a great opportunity for creative business people to get an edge on their competition and make the Christmas season a little extra merry.
To learn more about how Globecon can empower your supply chain, contact us today.