3 logistic challenges for the rest of 2019
The summer ended and with it we have the question of how will the instability of the supply chain affect the success of the next high season of holiday breaks and daily operations. Here are some challenges that will probably define the supply chain for the rest of 2019:
Amazon the e-commerce giant has a logistics network capable of reaching the majority of American consumers in one day. This company announced a rapid expansion of its shipping services on the same day and in a day, which caused panic in the retail sector. Other important companies such as Walmart have challenged Amazon’s power movement with their own similar fast shipping plans, but e-commerce companies that don’t have that level of resources are increasingly worried.
Many e-commerce companies have responded to this new normality by buying or leasing real estate near secondary markets, or by partnering with logistics providers with these resources. By diversifying distribution and distribution assets, Internet retailers expect to reduce shipping times and with this, remain competitive.
Continuous growth in reverse logistics is a guarantee for the rest of 2019 and beyond.
As electronic commerce dominates retail sales and the omnichannel makes a surprising return, these companies must deal with an increase in returns. Consumers return billions of dollars in merchandise they bought online each year and want the process to be easy and free (this practice was initiated by Amazon).
Senders turn to third-party logistics providers (3PL) for help in this area, 24% of respondents in the Annual Third-Party Logistics Study of 2019 said they outsource this process, and 44% of 3PLs say that they offer reverse logistics support services.
Tariffs are a topic of daily discussion for most supply chain managers. The growing trade dispute between the USA and CHINA shows no signs of stopping, as negotiations have collapsed several times.
US companies seek to increase costs, in significant percentages, for raw materials and components. Many American manufacturers and retailers can no longer afford to absorb import costs of goods and have begun to pass them on to customers.
The shipping industry in the Pacific saw a short-term boom as US and Chinese companies bought excess inventory before fares were implemented, businesses are falling and carriers have too much capacity. National land carriers are also suffering because cargo demand is negatively affected by high levels of inventory held by US importers.
Many other industries beyond transport also struggle to adapt to this new commercial environment, including telecommunications giants, agriculture, car manufacturers, manufacturers and many more.
SOLUTION: BE PREPARED
Amazon will not go anywhere, consumers will not stop returning items, and it seems unlikely that tariff wars will end in 2019. Unfortunately, supply chain volatility is the new normal. You have to diversify your assets, technology, suppliers and relationships with partners to address these challenges and combat the risks and disruptions facing the supply chain in 2019 and beyond.
In DICEX we see these issues first hand and we always seek to get ahead with information to the client and strategic partners so that we can prepare and take action on the situation that could come later. For now, we must be advancing according to technology to meet customer needs and find appropriate sales channels according to the type of merchandise in question.
For all these issues we have specialized departments that support customers and suppliers / Strategic Partners at every step, always aiming to increase or maintain their sales depending on the current situation in the country.