Check Call: The Amazon Effect

Welcome to Check Call, our corner of the internet for all things 3PL, freight broker and supply chain. Check Call the podcast comes out every Tuesday at 12:30 p.m. EST. Catch up on previous episodes here. If this was forwarded to you, sign up for Check Call the newsletter here.

Inside this edition: the Amazon Effect on the supply chain; AI’s role in forecasting; and some acquisitions and growth sweeping the nation.

The Amazon Effect. Supply chains throughout the country have fallen victim to the “Amazon Effect” whether they want to admit it or not. The Amazon Effect describes the disruption caused by Amazon’s business model and its impact on traditional supply chains. As one of the largest online retailers in the world, Amazon has created a new standard for customer service and delivery speed, which has forced many other companies to rethink their strategies.

Amazon’s ability to effectively use technology that optimizes inventory management, shipping and delivery, and customer service has set the bar almost unattainably high for other retailers and suppliers. This has put increased pressure on supply chain managers to innovate and find new ways to keep Amazon’s pace. E-commerce shippers face intense pressure to keep up with Amazon’s delivery standards and customer service expectations.

Think about it. Anytime a store doesn’t have what you need in stock, you order it on Amazon and sometimes it’s there literally that afternoon.

Amazon’s massive presence in the e-commerce space has created a new standard for delivery speed, convenience and reliability, which has forced other shippers to adapt or risk falling behind. To keep up, e-commerce shippers must invest in technology and logistics systems that allow for streamlined operations and optimized delivery routes. That makes for a costly infrastructure setup that not all retailers can afford.

Overall, the Amazon Effect has transformed the way companies think about supply chain management, creating new opportunities for innovation and collaboration in the industry.

AI is coming for our jobs. That phrase has echoed throughout the supply chain world, more so as AI tools such as ChatGPT and BingAI are becoming more commonplace. Those tools are nice, but how do they help supply chains? Great question. I’d love to tell you. Short answer: integration.

Long answer: ChatGPT and Bing AI are fantastic tools that are trained on data, recognizing patterns and generating responses to those patterns. Ya know, just a few key skills necessary to assist with demand forecasting and inventory management. Right now, ChatGPT is the easiest to integrate into a TMS or existing software, whereas BingAI might have that capability soon, as it’s still early into its launch. The integration into a planning tool can help analyze customer data, market trends and supplier performance. Anything that has data that can be analyzed an AI tool can be used.

It might not be the end of days when it comes to AI, but rather a tool to help us be faster, better and stronger.

TRAC Tuesday. This week’s TRAC lane of the week is Denver to Omaha, Nebraska. A quick 543-mile trip where the beauty of rural Nebraska is on display — spoiler alert: There are a lot of cornfields. Nebraska is the third-largest producer of corn in the U.S. Corn aside, both Denver and Omaha have continued to be outliers in regard to the Outbound Tender Reject Index. Both cities are double or triple the national average of 3.5% rejections. Capacity will continue to be a little tighter in both areas as rejections are elevated, meaning extra lead time on outbound tenders will be key to securing coverage.

Who’s with whom? ITS Logistics just got a little bit bigger. ITS is expanding its Midwest headquarters and adding a third warehouse to its existing location in Whitestown, Indiana, bringing its total U.S. distribution space to 3 million square feet. ITS’ main business is drayage of containers at the port and transloading trucking deliveries in the Midwest where, according to a news release, ITS is able to reach 110 million people within a day’s drive. Turns out being in the middle of the country is a good thing after all.

In other acquisition news. Sage Logistics, a Tennessee-based 3PL, will acquire Byland Transportation, an asset-based carrier. Byland has 48 trucks and 70 trailers that are part of the deal. This is the second fleet Sage has acquired, and it looks like the company isn’t planning on stopping anytime soon. Quoted in an article by FreightWaves’ Todd Maiden, Sage CFO John Hellige said, “This acquisition will allow us to offer a wider range of ‘asset right’ transportation solutions. Our mixture of brokerage, flexible drop trailer solutions, tied to an asset-based trucking operation further expands our ability to provide top-notch service to our clients.”