Shippers are facing a myriad of challenges in 2023. WARP, a tech-powered network of cross-docks and carriers specializing in middle-mile solutions, released its 2023 Hot Supply Trends Guide for Shippers based on recent conversations with Fortune 500 shippers and their challenges and views heading into 2023.
The following are trends highlighted in the survey.
The Downfall of National Carriers
The national carriers’ ‘Hub and Spoke’ model of yesteryear has led to steep rate increases, damaged shipments, and delayed on-time delivery rates. As a result, more shippers will inject into sortation centers closer to their end customers, removing the traditional costs and constraints of national carriers’ middle mile networks. As shippers explore their key market areas, more emphasis will be placed on cost and risk management, especially through last mile plus middle-mile carrier diversification.
Consolidation and Specialized Fulfillment
With increased consolidation in the fulfillment market, regional and specialty 3PLs will begin to specialize further and find unique value props that allow them to compete against larger competitors. The rise of “asset light” fulfillment will give way to interconnected fulfillment and distribution networks, lessening the asset intensive burden of bringing new facilities online with scale.
Connected Systems
As supply chain(s) move into the cloud, one of the most talked about concepts is “connected supply chains/connected systems”. While structures such as EDI and API have long stood as the pillars of information transfer in the industry, we’ll see a further marriage of data inputs/outputs as the number of systems and complexity of systems increases.
Last Mile Diversification and Specialization
When it comes to last-mile delivery, no one provider is a silver bullet for all package types. By using a wider array of last mile providers, shippers will have greater flexibility to split volume dynamically based on size, cost, and speed of delivery. This is only made possible with increased visibility and performance in LTL + FTL middle freight providers such as FlockFreight, Convoy, Uber Freight, and WARP.
Distributed Inventory and the Multi-nodal Network
Through a variety of factors including – SKU velocity, channel velocity, proximity to point of production/manufacture, and customer density – more informed decisions will be made on regional and local inventory placement. Whether for the purpose of cost or transit time, the balancing of inventory control with inventory location will become increasingly important.
While the “Amazon effect” has the supply chain world buzzing with two-day delivery, there are other, sometimes more important reasons to place inventory closer to end consumers. Natural disasters, a global pandemic, geopolitical uncertainty, and a whole slew of other factors are leading to a resurgence in localization of supply chains to hedge against uncertainty, even more so than decreasing time in transit.
Communication and Task Automation
With the advent of programs like OpenAI and its ChatGPT tool, as well as blockchain and other protocols, we will continue to see the rise of admin/baseline task automation throughout the supply chain. Our systems are put together with duct tape! The typical mix of EDI, API, webhooks, etc. calls will continue to be consolidated under common protocols that improve the universality of communications within the supply chain industry.
