Order Fulfillment in Review: March 2016
The end of Q1 had us casting a keen eye over the future of our industry, exploring various avenues of the future of order fulfillment. Thanks to rapidly advancing technology and the greater expectations of the modern consumer there was a lot to examine last month, but that doesn't mean the everyday supply chain news stopped flowing. As ever, we keep up with the headlines so you don't have to. With that in mind, here are the stories, news, and views that mattered in March, summarized in our monthly fulfillment review.
Fulfillment Review: March 2016Just as the Tri-state attempted in vain to shed the shackles of winter, the supply chain headlines were unable to show much in the way of a spring bloom. The sluggish start to the year for sectors such as road and rail freight pervaded into the March headlines. It wasn't all winter blues, however, as you'll see from our selection of stories below:
- Payrolls were cut across some key sectors for the supply chain, as the country's trucking companies, railroads, and warehouse operators saw a third straight month of decline. Overall, the sector saw almost 6,000 positions lost from February to March, fueling concerns that flagging demand and economic headwinds from China will be a long-term drag on international freight movements.
- Unfortunately, rail freight volumes offered no silver lining to the employment numbers, posting notable drops across all modes of transport in February. There was more positive news on America's roadways, however, as the American Trucking Association reported a tonnage increase. Road freight volumes increase by 7.2 percent compared to January, while they were up an encouraging 8.6 percent year-on-year.
- Despite the doom and gloom in some areas of shipping, things are looking up for East coast imports. Figures released last month for the first two months of the year show cargo coming into the eastern seaboard at an increased clip, with February alone posting a 22.7% rise over the same period last year.
- FedEx announced the launch of a new service called CrossBorder, aimed at facilitating smoother e-commerce shipping solutions as more customers shop internationally. The company and its competitors are moving to address the limitations associated with international shopping, like customs restrictions and compliance requirements, as increased connectivity and wealth growth lifts more people into the ranks of "cross-border consumers."
- Academics at the University of North Texas report that they've potentially found the "perfect formula" for reducing inventory levels without sacrificing customer service. Based on managing inventory levels to theoretical minimums rather than pushing costs onto suppliers, the researchers hope that their model will be applied across various areas of the supply chain so that they can test their claims.
- Despite a lack of near-term economic optimism and industry employment concerns, we did find some numbers that allow us to end on a high note. Hexa Research reports that the market for third-party logistics (3PL) providers is set to surpass $925 billion by 2020. This suggests that even with short-term concerns starting to peak, long-term global demand should be enough for the sector to weather the storm and sail into calmer waters as we close out the decade.