It’s impossible to prepare for a “black swan” event fully; anyone who thinks they are immune is lying. These unexpected disruptions—geopolitical unrest, natural disasters, labor issues, or pandemics—introduce unprecedented chaos that can rattle even the most robust logistics networks and supply chains.
Thus, success nowadays hinges on adaptability and resilience. Businesses stand at the edge, needing to harness chaos rather than be consumed by it. The future belongs to those who can recalibrate swiftly and turn uncertainty into opportunity – especially with the next Black Swan event lurking.
Detailing Recent Black Swan Events
Black Swan events are rare, unpredictable occurrences that can profoundly impact economics and supply chains to their core. In recent years, we’ve faced some alarming incidents, emphasizing the urgency for planning ahead.
The Narrowly Averted UPS Strike
The UPS strike in 2023, though averted, had the potential to create chaos in the supply chain. A study by the Anderson Economic Group revealed that a mere 10-day UPS strike would have cost the U.S. economy an eye-watering $7 billion. Breakdowns include $4.6 billion in losses for customers, $1 billion in lost wages, and over $800 million in direct losses at UPS. Such a strike would have caused “massive disruptions,” large economic losses, and a dent in both consumer and business confidence¹.
The threat of the UPS strike serves as a harsh reminder to diversify logistics operations. By employing UPS and FedEx alternatives, such as sharing vehicles between companies, using different types of vehicles and technologies, or even abstaining from owning a vehicle fleet, businesses can mitigate the risk of relying on a single logistics provider. The narrowly avoided UPS strike underscored the need for flexibility, resilience, and the pursuit of parcel alternatives to avert potential disruptions.
The sudden closure and bankruptcy of Yellow Corporation, the third-largest LTL trucking company in the nation, has shaken the shipping industry, threatening nearly 30,000 jobs and impacting $5 billion in revenue. This event both created a void in the trucking landscape and highlighted the delicate nature of supply chains. It serves as an urgent reminder to businesses of the necessity for a Plan B, emphasizing the importance of relying on alternative carriers and couriers to enhance resilience and ensure that supply chains weather unexpected disruptions smoothly.
Other Black Swan Events
Several other Black Swan events have caught the global business community off guard in recent years, testing the resilience of supply chain systems:
- COVID-19 Pandemic: The COVID-19 pandemic caused a 67% spike in supply chain disruptions in 2020. Despite some planning, 38.8% of small U.S. businesses faced delays, and 17.7% sought new suppliers, signaling widespread unpreparedness.
- War in Ukraine: The war disrupted global chains, affecting industries from food to semiconductors. With Russia and Ukraine commanding significant global trade shares, over 374,000 businesses, mainly in the U.S., were unprepared for such disruption.
- Suez Canal Blockage: The 2021 blockage disrupted 12% of global trade and cost $400 million per hour, exposing the vulnerability of maritime shipping and reflecting a general lack of preparedness.
- Extreme Weather Events: Escalating weather events caused a 36% increase in disruptions in 2022. While some companies plan for weather-related risks, others face significant losses due to unexpected interruptions.
The Negative Impacts on Shipping & Delivery with Black Swan Events
Black swan events have wide-reaching effects, especially for retailers relying on global supply chains. The following details some of the most pressing challenges these organizations may encounter.
Disruption of Supply Chains
Black swan events can halt manufacturing, disrupt transportation, or even shut down ports, causing severe interruptions in supply chains. With the amount of black swan events of the last few years, a Gartner survey highlights this trend, with 76% of supply chain executives reporting more frequent disruptions than three years ago.
Black swan events can lead to escalating costs across the supply chain. For example, transoceanic shipping costs soared 7x in the 18 months following the pandemic’s onset in March 2020. Retailers and consumers today continue to deal with the fallout of ever-persistent inflation, with factors like alternative sourcing and process adaptation contributing too.
Black swan events can halt transport, causing delays while impacting customer satisfaction and company reputation. Shipment delays between China and major U.S. and European ports have quadrupled since March 2022, underscoring the tangible impact of these unpredictable incidents on global commerce.
Inventory Management Issues
Effective inventory management becomes challenging when dealing with sudden demand shifts or limited supplies resulting from black swan events. Despite what retailers have experienced the last few years, Deloitte reports that only one-third of retail executives feel confident about maintaining profit margins.
Black swan events like the COVID pandemic can disrupt the labor market, leading to imbalances and phenomena like the Great Resignation. The near-strike at UPS further illustrated how such unpredictable events can potentially inflict serious economic damage.
Increased Demand Volatility
Black swan events can trigger sudden changes in consumer demand, wreaking havoc on supply chains and fostering economic uncertainty. In the aftermath of several such unpredictable incidents, many retailers continue struggling to adapt to these disruptions and maintain stability.
Compliance with New Regulations
Black swan events often spark new regulations, compelling companies to adapt swiftly. During the COVID-19 pandemic, firms faced new rules from agencies like the CDC and OSHA. Similarly, geopolitical shifts like Brexit and the China-U.S. Trade War introduced trade, travel, tariffs, and other regulations.
Current risk management strategies often fail with black swan events, demanding a proactive stance. A report by PYMNTS and Citi underscores this urgency and urges organizations to plan ahead with payment management solutions, including global transaction monitoring.
Recovering from black swan events poses challenges in restoring supply chains and engaging customers. KPMG reports that ¾ of global companies see raw material costs as 2023’s top threat, with inventories still growing year-over-year. Emerging trends like AI-driven automation also highlight opportunities and challenges in customer engagement.
The Challenges of Single Sourcing
Relying on a single carrier exposes businesses to risks like service interruptions and impaired customer experiences. Consider the following:
- Service Interruptions & Customer Experience: Relying on a single carrier leads to potential major delays from labor disputes, technical issues, or logistical complications. The potential UPS strike illustrated this, as it could have irreparably harmed operations and customer experience.
- Flexibility, Reach & Capacity Constraints: Relying solely on a single carrier can extend delivery times, limit agility, and cause delays during peak periods, affecting customer satisfaction and shopping behaviors.
- Unpredictable Price Shifts: A single carrier’s power to increase prices without competition may unpredictably raise shipping costs. Parcel alternatives can prove beneficial here, allowing for better cost control.
The Benefits of Carrier and Courier Diversity
The benefits of diversifying carriers and couriers instead of relying on a single carrier are undeniable, clear and straightforward:
- Strengthening Resilience: A multi-carrier strategy incorporating FedEx and UPS alternatives builds a robust defense against disruptions. With the flexibility to pivot when challenges arise, this resilient approach ensures uninterrupted service, surpassing what single-carrier systems can offer.
- Enhancing Service Quality: A diversified carrier approach capitalizes on unique strengths, delivering unparalleled service quality. Focusing on timely delivery, specialized handling, or robust customer support crafts a bespoke experience that exceeds customer expectations and leads to likelihood to recommend (LTR).
- Competitive Pricing and Flexible Solutions: Embracing carrier diversity fosters competitive pricing, enabling businesses to negotiate terms aligned with their needs. This flexible structure caters to diverse customer demands, balancing affordability and adaptability.
Multi-Carrier Shipping Platforms
Multi-carrier shipping platforms optimize service and cost, offering clarity and control in managing diverse carrier networks. Here’s how these tools provide unique advantages in the face of black swan events:
Technology That Connects
Multi-carrier platforms utilize cutting-edge technology to manage an extensive network of couriers. Whether connecting with internal or external fleets, these platforms serve as a virtual hub, matching and dispatching deliveries based on specific requirements. Moreover, they can integrate with existing Transport Management Systems (TMS) for a seamless, flexible approach.
Improving Visibility and Efficiency
With 100% end-to-end network visibility, these platforms provide unparalleled insight into every step in the delivery process. From order placement to proof of delivery, everything is transparent and trackable.
Automated Solutions for Delivery Optimization
Automation drives multi-carrier platforms, assessing factors like weight and timing to find the best courier for each delivery. This sophisticated system instantly aligns with shipment needs, taking the guesswork out of selection and reducing costs.
Enhanced Customer Experience Management
A positive customer experience is vital, and these platforms facilitate this by capturing proof of delivery and obtaining customer feedback. Ensuring a smooth and satisfying fulfillment experience builds customer loyalty and trust, resulting in a completed delivery and a delighted customer.
Security Compliance and Standards
For businesses concerned about data security, multi-carrier platforms follow rigorous standards. Adherence to protocols like SOC 2 compliance and alignment with ISO 27001 ensures that sensitive information remains protected. The use of trusted platforms like Microsoft Azure adds another layer of assurance.
The Role of a Last Mile Delivery Platform
Black swan events are inevitable, but a resilient last-mile delivery system ensures business continuity regardless of severity. OneRail, a leader in this field, showcases the benefits of carrier diversification and innovative solutions for retailers.
Embodiment of Resilience and Diversification
OneRail’s platform embodies resilience through carrier diversity. Providing parcel alternatives to traditional carriers such as FedEx and UPS equips businesses with the flexibility needed to navigate supply chain disruptions, guaranteeing consistent and prompt deliveries.
OneRail’s Diverse and Expansive Network
OneRail’s vast network, which includes over 12 million drivers, 600 courier entities, and partnerships with more than 65 logistics companies, spans every major U.S. city. Serving various industries from retail to healthcare, OneRail offers a flexible alternative to FedEx and UPS, enabling businesses to optimize their delivery processes with efficiency.
Strategic Alliances Adding Depth and Reach
OneRail’s network, rich in diversity and excellence, is revealed through strategic partnerships. Collaboration with Trimble infuses world-class mapping, enhancing delivery accuracy. Association with SAP PartnerEdge® streamlines enterprise technology. Partnerships with tech leaders like Microsoft Azure, Project44, Oracle, and Redwood and integration with systems like OMS, WMS, ERP, and POS further demonstrate OneRail’s comprehensive approach.
Visibility and Tracking in Last Mile Delivery
Control and transparency are paramount in last-mile delivery, where 53% of shipping costs reside. Unforeseen disruptions emphasize the importance of last-mile tracking, taking center stage in logistics.
The Importance of Visibility and Tracking in Last-Mile Delivery During Black Swan Events
Last-mile tracking, guided by GPS and RFID, is the north star for delivery systems, particularly amid black swan disruptions. By actively monitoring goods, enabling real-time oversight and predictive management, its importance is invaluable. A TCN Inc. survey highlights this, revealing that 73% of consumers would abandon a brand after just one negative experience, a marked rise from 42% in 2021.
How OneRail’s Real-Time Tracking Capabilities Can Help Businesses
Partnering with OneRail, Premier Pet Supply not only navigated a disruptive period but also scaled its operations. Utilizing real-time tracking, expanding delivery zones by 50%, and increasing deliveries by 10%, the collaboration yielded substantial savings even amid uncertainty: $10K annually on vehicle wear and $60K yearly in labor costs.
The Shift from Omnichannel to Unified Commerce
In the ever-changing world of retail, the industry is continuously evolving to meet consumer demands. Now, more than ever, the shift from omnichannel to unified commerce necessitates urgent adaptation.
Discussing the Ongoing Transformation in the Retail Industry
The transition from omnichannel retail to unified commerce is a strategic response to a world driven by online shopping and consumer preferences. Where omnichannel focused on merging online and physical shopping experiences, unified commerce goes further, overcoming the fragmentation and inefficiencies of siloed fulfillment processes to meet today’s elevated customer expectations.
How Unified Commerce Positions Retailers to Stay Ahead in Today’s Market
Unified commerce integrates various retail aspects into a seamless experience, meeting and anticipating customer expectations. By embracing real-time inventory management and intelligent forecasting, retailers become more agile and attuned to their customers, positioning themselves to thrive in complex and volatile market conditions.
Explaining How OneRail’s Platform Supports Unified Commerce
OneRail’s platform exemplifies how integration across sales and delivery channels can ensure continuity even during supply chain disruptions. By providing an alternative to FedEx and UPS, OneRail offers increased flexibility and control, allowing retailers to optimize carrier networks, maintain competitive pricing, and enhance the customer experience. Unified commerce is no longer the future; it’s the present, and solutions like OneRail are vital in making it a reality.
The Potential of Outsourced Fleet Management
Outsourced fleet management is another flexible and efficient strategy for businesses to thrive in a demanding e-commerce environment. Here’s why:
Increasing Importance of Last-Mile Delivery
Last-mile delivery has taken center stage in the e-commerce era, driven by customers’ desire for immediate gratification. With North American growth projected at $62.71 billion from 2023 to 2027 (CAGR 14.85%), reflecting B2C e-commerce and premium services, outsourced fleet management emerges as an efficient solution to meet these increasing demands.
The Benefits and Potential of Outsourcing Fleet Management
Outsourcing fleet management enhances flexibility and capacity to handle disruptions. This hybrid approach adapts to peak times and unexpected surges, providing real-time insight into delivery operations. Moreover, it simplifies route planning and exception management, reducing complexity and leading to financial savings as a preferable alternative to parcel carriers like FedEx or UPS.
How OneRail’s Platform Enables a Comprehensive and Resilient Delivery Strategy
OneRail’s fleet management system, OneRail Driver, is a scalable UPS alternative, offering a flexible last-mile delivery fleet. It features fast driver onboarding, advanced route optimization, real-time tracking, automated dispatch, and comprehensive analytics. With up-front pricing and no hidden fees, it combines the best of in-house and outsourced delivery, creating a resilient and transparent delivery network for businesses.
Final Word: Embracing Carrier Diversity for a Resilient Future
In a market increasingly marked by unexpected and disruptive black swan events, the diversification of carriers and couriers has become an essential strategy for success. By integrating solutions like OneRail, businesses can transform their logistics operations, infusing them with the flexibility and resilience necessary to thrive.
The moment to reevaluate your current carrier approach has arrived. Get a demo with OneRail today, and embrace the future.