Benjamin Disraeli said, “The secret of success in life is for a man to be ready for his opportunity when it comes.” There are some retailers – whose industry is characterized by high volume imports from China and elsewhere – who can vouch for the verity of this statement. They’d be the ones who were able to flex their supply chain and logistics plans to overcome some very challenging obstacles in the last 12 months. The ability of some retailers to modify their transportation programs on the fly, in response to serious external disruptions (i.e. West Coast Port closures) reflects their readiness to grasp a competitive opportunity when it presented itself this year. What are the contours of the opportunity and how were some retailers prepared to seize it while many others weren’t?
Opportunity Knocks – The Wall Street Journal reports the West Coast ports’ share of container imports fell precipitously year over year between May 2014 and May 2015 according to U.S. Census Bureau data. Not surprisingly, East Coast and Gulf Coast ports saw a corresponding rise in volume over the same period of time as illustrated in the image below.
Now that Western ports are reopened though, the Journal reports that there hasn’t been a return to the previous equilibrium. While some of the volume has returned to Long Beach and Oakland, there is still a significant contingent that continues to bypass the West in favor of eastern and southern entry points. It seems that a segment of shippers whose businesses rely on imported goods have made other plans while the labor drama played out. Anecdotal evidence would indicate that those retailers who could make an easy transition, have done so and see no reason to revert back to the questionable reliability of their former transportation plans.
The retailers surveyed for this post categorically reported heavy reliance on their TMS solutions to effectuate the quick and seamless shift in shipping lanes from origin points in California to origin points in Louisiana, Georgia and New York. A transportation manager for a large protein producer who wished to remain unnamed shared, “without the ability to model different scenarios and modify our routing guides quickly and easily, we certainly would have been at the mercy of the fates like so many of our competitors were during the port closure. We owe a good deal of our ability to drive competitive advantage to our logistics IT solutions like our TMS and transportation optimizer tool.
If you’re a retailer without a solid logistics IT solution in place, don’t let opportunity pass you by. Be prepared to capitalize on the next market disruption by putting the right technologies in place today.