GlobalTranz survey highlights shipping challenges amid peak season and COVID-19

A survey recently issued by Scottsdale, Ariz.-based GlobalTranz Enterprises LLC, a full-service 3PL focused on freight brokerage and technology, examined myriad aspects of how the ongoing COVID-19 pandemic is impacting things like e-commerce order volumes, supply chain decision making and what shippers are doing to meet changes in consumer demand, with peak season rapidly approaching.

The survey was commissioned by GlobalTranz and fielded through an online survey by Edelman Intelligence, with its findings comprised of feedback from U.S. residents 18 years of age and above, employed full-time, work at a company with more than 500 employees and either be a primary or partial decision maker in regards to their companies’ supply chain management and logistics needs. 

GlobalTranz explained that the survey’s findings point to many examples of how the ability to ship goods and meeting delivery times have been impacted by COVID-19-driven economic shutdowns and stay at home orders. And it also noted that shippers are still adjusting to e-commerce activity, at record levels, coupled with a longer peak season and ongoing supply chain issues, too.

A key theme of the survey focused on how roughly one-third of the survey’s respondents indicated their companies were not prepared for shifting supply chain needs over the last six months.

That was supported by a few key data points, with 41% of respondents saying they were not prepared to shift retail stores into fulfillment hubs in major markets, 35% saying they were lacking an omnichannel strategy to adjust to consumer buying behavior, and 34% noting they had not established the necessary partnerships to handle supply chain demand. 

LM Group News Editor Jeff Berman spoke with GlobalTranz Senior Vice President, Sales and Solutions, Ross Spanier about the survey’s findings.

LM: What were some of the reasons cited for 59% concerned about their ability to meet peak season demand and why this year will be less profitable?

Spanier: Despite the fact that many businesses have already heavily invested in an e-commerce dominated future, the pandemic has accelerated trends that were expected over the next five years into a matter of months. Suddenly, businesses needed to shift their supply chain strategies to manage sourcing challenges created by the pandemic, and retailers had to shift channel strategies to meet a surge in residential delivery.

As we enter peak shipping season, businesses are navigating a perfect storm of market conditions that is impacting their ability to reliably secure the capacity they need to ship goods to stores and to consumers. Surging e-commerce orders, tight truckload and LTL capacity, higher delivery surcharges and overwhelmed parcel carriers are all factors that retailers have to contend with during a holiday shopping season that will feel very different from past years.

LM: Was the statistic regarding 35% of respondents indicating they lack an omnichannel strategy surprising? Why were they lacking one?

Spanier: Achieving full omnichannel capabilities is a real challenge for retailers as it requires significant investments in people, training, technology, and infrastructure. Developing an omnichannel strategy on paper is not the same as implementing it across an ecommerce and brick and mortar store network that is fully supported by the supply chain.

As e-commerce sales increase, so do the fulfillment challenges. Many retailers scrambled to leverage local stores to handle increased delivery and demand, through Buy Online, Pick-up In Store (BOPIS) and/or through curbside pick-up and returns. Turning retail locations into fulfillment hubs is also particularly challenging for retailers that lack the space to store additional inventory. Additionally, retraining store staff and retooling technology to work in harmony across these new order and fulfillment points is not trivial. and Changes of this nature, especially across large retail store chains, is a huge effort, and executing it in the midst of an unprecedented pandemic only added to the challenge.

While the challenges are real, the imperative for retailers to evolve in order to serve customer needs is clear: 87 percent of the survey respondents reported that they have adopted an omnichannel strategy as a result of the pandemic. This shift underscores the importance for retailers of meeting customers where they are and serving them based on their specific needs.

Supply chain is the backbone for omnichannel, and we are in the midst of a technology evolution aimed at leveraging data to better deliver timely, actionable insights into the flow of goods across networks.

LM: Do you think that the 74% of respondents pointing to the likelihood that they will outsource transportation and logistics services will continue to increase? 

Spanier: As customer demands increase and supply chain grow in complexity, it’s not surprising that supply chain decision-makers are looking for logistics partners that can provide technology, access to capacity, and expert help, whether that is advising them during uncertain times or helping them implement new supply chain strategies. This trend was in motion before the pandemic and is expected to continue.

LM: What are/were some of the reasons for supply chain optimism over the next three months (49%) and year (86%)? 

Spanier: One of the interesting findings in our survey was that while a vast majority of businesses were compelled to adopt new supply chain strategies in response to the pandemic, 88% of the respondents indicated that these changes would be lasting. The strategies they may have adopted out of short-term need are paying dividends that are worth continuing into the future, and this is reflected in terms of optimism for future performance. Even with peak season expected to be a bumpy experience in terms of available capacity to ship goods, companies have started to adjust from to the new reality and understand how they can continue to operate in the post pandemic world. Alongside the uncertainty, there are numerous positive trends in the overall health of the US supply chain and overall economy. We’re seeing import volumes grow to record highs following pandemic lows and a variety of industries are starting to show signs of growth. Overall, businesses feel like they’re in a position to plan again after operating in survival mode for most of 2020.