Let's Smell the Roses and Stop Demanding Next-Day Everything

Welcome to the 63rd edition of The LogTech Letter, a weekly look at the impact technology is having on the world of global and domestic logistics. Earlier this week, I looked at how inventory and sourcing strategies are changing during the supply chain crisis ™. Today, I’m training my gaze at consumers and whether we should be using the current crisis as a catalyst to rethink our expectations.

As a reminder, this is the place to turn on Fridays for quick reflection on a dynamic, software category, or specific company that’s on my mind. You’ll also find a collection of links to stories, videos and podcasts from me, my colleagues at the Journal of Commerce, and other analysis I find interesting.

For those that don’t know me, I’m Eric Johnson, senior technology editor at the Journal of Commerce and JOC.com. I can be reached at eric.johnson@ihsmarkit.com or on Twitter at @LogTechEric.

Yesterday, a logistics executive at Crocs said to me on a JOC webcast that their average transit time from factory to their distribution center in Ohio had doubled over the pandemic, to around 70 days currently. That tidbit was related to the topic of the session – the growing need for multimodal visibility.

But it was also indirectly an insight into Crocs’ consumers’ expectations. Crocs are super popular right now, and their customers want those shoes on their feet, supply chain crisis™ be damned. A doubling of transit time, on average, isn’t just about the extra inventory carrying costs Crocs incurs. It also hurts the shoe maker’s ability to flexibly get its products to customers.

And since the customer is always right, it really doesn’t matter how messed up the supply chain behind a product is. Or does it? Should we as consumers be re-thinking our expectations, if not demands, of the companies moving our goods?

Let’s think about it this way. The pandemic was a chance to recalibrate what is meaningful to us, socially, emotionally, professionally, but also as consumers. The questions were being asked long before COVID-19 arrived about whether the rocket ship we were riding to fast and free shipping made sense. Do we need everything in an hour? Do we believe that it costs nothing to get us everything in an hour?

Examining those two questions was an afterthought before March 2020. They became existential questions in March 2020. Suddenly, it didn’t matter if it took three days to get something that ordinarily took one. We were happy just to get it. Suddenly waiting six months, instead of two weeks, for a sofa seemed reasonable. Supply chain problems bubbled into the public’s consciousness and that became a baseline for a new type of understanding. Oh, it takes two months to get this pair of shoes to my doorstep? Oh, a COVID outbreak in Vietnam means that product I want might not be available for a while?

As consumers, we’ve been slowly reconciling these shifts back toward pre-e-commerce ubiquity. But as some parts of life turn more normal again, so do those fast and free expectations return. That puts supply chain managers in an awkward spot. Meet something approaching February 2020 customer expectations using a congested, creaking global transportation infrastructure that would struggle with pre-e-commerce expectations, much less current ones.

How do you forecast anticipated sales to account for record demand? How do you execute shipments on those forecasts when the system is so gummed up?

Maybe we as consumers need to take our foot off the gas pedal a bit. Think carefully about what we need in an hour, or next day, and start thinking about what can be sent in a more reasonable timeframe. Maybe we send signals back up the demand chain, letting our importers know that they don’t need to run a 100-meter dash in concrete boots?

The race to find workarounds to satisfy our insatiable desire for consumer goods has had shippers chartering small vessels with higher per-container emissions levels. It has goods that would normally move by ocean going by air. It has vessels racing back and forth across the Pacific, only to idle outside North American ports for weeks.

Our decisions as consumers should reflect a more reasonable reality, and should be helping to induce shippers, carriers and 3PLs to make more rational (and environmentally-friendly) decisions. Slow steaming. Routing goods through a port that requires the shortest truckload haul length. Facilitating dual transactions in ports. Co-loading in containers and 53-foot trailers. Purposely using more fuel-efficient ships.

The entities that move our goods are tracking our actions, and what they hear now is “give me what I want, whenever I want it, and at the fastest speed possible.” If we tell them “get my product in a reasonable time frame and do it in an environmentally responsible way,” they will listen to that too.

TPMTech update

The program agenda at TPMTech in Long Beach Feb. 24-25 is taking shape, with plenty of updates on sessions, speakers, keynotes and networking opportunities to come in the next couple weeks. Stay tuned here.

Here’s a roundup of recent pieces on JOC.com from my colleagues and myself (note: there is a paywall):

• Spoke this week to Thomas Sorbo, a former co-founder of rate benchmarking platform Xeneta, about how shippers haven’t really had time to prioritize ocean freight audit in this messy year of scarce capacity and sky-high rates. He’s co-founded a new venture aimed at helping shippers and forwarders capture their past overspend on ocean freight.

• My colleague Bill Cassidy explored traction and the benefits of dynamic pricing in the LTL market. Definitely worth a read.

Some recent webcasts and podcasts I’ve been a part of the last couple weeks:

• Had a fantastic discussion with Erin O’Leary of the Janel Group, Gregg Mau of Crocs, and Jeff Cronkshaw of LanciaConsult Thursday about the state of the multimodal visibility market, as referenced above. Definitely worth an on-demand watch (free to register).

• Earlier in the week, I spoke with Julien Cote, CEO of visibility provider Wakeo, fresh off a funding round last week. This was also a great discussion – so much to talk about in the world of real-time visibility.

• Really enjoyed this chat with Jose Montoya on CoffeeBreak Logistics. We covered a lot of ground in a short time: forwarder tech, venture capital’s interest in logistics, the current supply chain mess, and more.

Some upcoming events I’ll be involved in:

• Next Friday at 10 am ET on LogTech Live, I chat with Rathna Sharad, CEO of the technology provider FlavorCloud, which helps international sellers manage the travails of global logistics and trade compliance. I’ll be going through my topics of the day, dadjokes and buzzwords explained. The best way to tune in is to subscribe to LogTech Live via the Let’s Talk Supply Chain network.

  

• On Nov. 11, I’m leading a discussion on how technology can (or can’t) help manage the detention and demurrage challenge at US ports. I’ll be joined by Charles Smith, director of international logistics at Guitar Center, and Peter Schneider, president of drayage provider TGS Logistics. Register here for part 2 of the 3-part free webcast series leading up to TPMTech.

Disclaimer: This newsletter is in no way affiliated with The Journal of Commerce or IHS Markit, and any opinions are mine only.