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: Warehousing automation will be key; the automotive sector is hot for 2023; and an upsetting trend hits too close to home.
Warehousing is one of the major components of any major 3PL. With the rise of e-commerce, warehousing is going to become a bigger factor in shippers’ choices than before. Efficiency is crucial to the standardization of warehousing processes. Improving efficiency through process changes can result in both money and energy savings.
The big challenge facing e-commerce warehousing operations, outside of equipment upgrades and employee retention, is returns. The National Retail Federation reported in 2021 that 16.6% of total merchandise was returned (worth approximately $761 billion). 3PL warehouse partners will have to have an answer for dreaded returns. Retail is seeing the peak of returns right now. The post-holiday return season is a logistics nightmare. The nightmare comes from excessive inventory that never seems to be the right inventory consumers are looking for, plus the returns and finally the new inventory orders that are what the customers are actually wanting.
Leveraging the use of automation will be crucial in establishing warehouse standardization. Sure, autonomous technology and robotics will always help with process improvement, but as staffing continues to be a problem for warehouses, automation where possible will be the key. Not only that, autonomous technology massively helps with meeting sustainability goals.
The next big market for 3PLs in 2023 is predicted to be the automotive industry. Report Linker has released The Global Automotive 3PL Market 2023-2027 study. It turns out increasing auto parts manufacturing and increasing investments in the logistics industry are the driving factors for auto manufacturers partnering with 3PLs. The study found that the cost reduction 3PLs provide coupled with the technological advancements will drive up demand in the market.
If automotive is your specialty, then it’s going to be a good year to keep up relations with automotive manufacturers as they move to improve operations to make up for lost time as a result of the pandemic.
TRAC Thursday. The TRAC lane of the week is from Grand Rapids, Michigan, to Cape Girardeau, Missouri, a trip that is just over 500 miles. Although capacity is tightening in Grand Rapids, spot rates for this lane have fallen as January comes to a close. Spot rates are coming in around $3.02 for this lane, meaning an all-in rate of $1,562 before margin should secure this lane with minimal issue.
Who’s not with whom? It’s depressing when layoffs hit close to home. Quiet Logistics, now known as Quiet Platforms, is the 3PL acquired by American Eagle Outfitters at the end of 2021. It is closing its facility in Jacksonville, Florida, laying off 74 employees. The Jacksonville facility is one of the six fulfillment centers. The layoffs, according to paperwork filed with the state of Florida, will take place between March and May of this year.
Sadly, there’s more. Uber Freight has laid off 150 people in the digital brokerage side of the house. The managed transportation services are unaffected as Lior Ron, CEO of Uber Freight, said, “The legacy Transplace business is experiencing record momentum and we [Uber Freight] are uniquely positioned to help customers navigate a rapidly evolving logistics landscape.”
While this is not the news anyone wants to hear ever, things will be a little more bleak before they get better. As always, my email is just a click away, and if you have been impacted by layoffs, I highly suggest taking a peep at FreightCareers.com to see if anything else in the world of supply chain strikes your fancy.
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Source: freightwaves - Check Call: The future of warehousing
Editor: Mary O'Connell