Logistics experiencing a supercharged evolution
Adaptation at speed has been critical to flow of goods and finding the opportunities in this period of massive peaks say webinar participants
With the peak season upon us, and intense demand in the transportation industry, Reuters Events sat down with three industry leaders in the transportation and logistics sector, to hear from them about the impact of the pandemic on their corporations, and how it has altered their operations looking forward.
Handling a shockwave
According to contributors, they felt they had worked through three key stages in the wake of COVID-19, starting with a state of reaction and coping, through to adaptation, and finally to a period of maximising opportunities.
“We went through various phases of our journey through COVID-19, the first one was complete chaos. Everything that was being thrown at us every day was brand new, and you have to work out a brand-new operation every single day,” said Charles Brewer, COO of Canada Post. “We saw a shock wave of disruption across the globe” added Jamie Lansdell, Regional Manager Automotive & Mobility at Expeditors, “within Wuhan, and then greater China, and then we saw parts of the US and Europe go on to lock, and we’ve seen this gently migrate into different areas’.
We haven’t built an infrastructure for barbecues and kayaks
“Everybody, to their credit, was very quick to react to the COVID situation, and try and make the best of a bad situation,” said Alan Edwards, Client Executive (UK and Northern Europe) at Tradeshift, speaking of how the next stage logistics and transportation corporations have worked through was a time of adaptation. As Brewer stated, “you get to a position of ‘I get it’ and you start to work in that new environment.”
As demand picked up again at the end of Q2, companies had to work in a new set of rules and regulations. This was particularly noted by Brewer, who spoke of how Canada Post became more used to the health and safety regulations for the time, but found themselves dealing with goods that didn’t fit into their current infrastructure. “[We’ve been] handling huge volumes and also some rather bizarre volumes like kayaks and barbecue sets” said Brewer, “operators are having to deal with this increased demand and also this increased shape and size.… We haven’t built an infrastructure for barbecues and kayaks.”
This period of adaptation has continued as peak season began, and all three guests spoke about the intense demand they were facing, which they referred to as “peak-on-peak’.
We delivered the same amount of parcels … that we had forecasted we would do in 2029
“About four or five Mondays ago we delivered the same amount of parcels … that we had forecasted we would do in 2029,” said Brewer, “we’re nine years ahead in terms of the volumes that we’re handling, with pretty much the same infrastructure.”
As this peak demand continues to grow, power has shifted from the buyer to the carrier, with capacity waning, and demand sky-rocketing. “The infrastructure is under stress,” said Lansdell, “I’m sure over time that we will come through this, and as we come out the other side, we’ll all get to assert some of that power back, but for the moment I think that is the nature of the world.”
Foot on the accelerator
This is clearly a time of intense acceleration, challenging transportation services in particular. It’s “a tipping point in terms of how we operate” noted Brewer. “I tend to be an optimist. I think there’s a flip side to Covid.… It’s helped us to realise that we need to invest at an accelerated rate in our infrastructure, and whether that be physical or digital or anything else, we now have our foot firmly placed on the accelerator.”
Covid has been an enabler to move things faster, and to bring through technology or to break through bottlenecks into actually capitalising on some opportunities
Lansdell agreed: “Covid has been an enabler to move things faster, and to bring through technology or to break through bottlenecks into actually capitalising on some opportunities.”
Technology and AI coupled to frontline data are clearly at the front of the agenda for transportation services. “It’s about being smart, using automation and technology as best we can to create incremental capacity,” said Brewer. Lansdell agreed, “Data is the lifeblood of making decisions of how businesses can move forward.… Now these walls have broken down, how can organisations really look forward to preparing themselves better for events that are coming up?” Services must be able to procure the correct systems to make themselves future-proof and agile, and give themselves a strategic advantage at present. “Specifically, I think we’ll see a lot more AI capability coming,” commented Edwards.
The rules of the game are still changing every single day
“The rules of the game are still changing every single day” remarked Brewer but the breakdown of those long-established rules is also leading to a time of opportunity in logistics, despite the headaches it may cause. “Volatility is the new normal’ said Lansdell, and whatever the post pandemic world may look like, transportation services are learning, at an accelerated speed, how to handle the fluctuations and, critically, how to create an adaptable business model that can handle the peaks and troughs of the coming years.