Autonomy and Stability | The Golden Tickets in Shipping

Autonomy and Stability | The Golden Tickets in Shipping

On a fundamental level, humans have tiered needs that have to be met before they can pursue creative or self-actualizing tasks. This basic framework is outlined in the ever-popular Maslow’s hierarchy of needs. Through a somewhat parallel comparison, businesses also have a tiered ladder of basic functions that should be met before other goals or tasks are the focus. Translated to a business as a whole, the basic levels of Maslow’s hierarchy of needs, could be equated to autonomy and stability. Businesses need autonomy and stability in some form in order to further develop and innovate.  

In recent months, one of the biggest areas that has become problematic for businesses, particularly e-commerce businesses, is shipping. This includes the transportation and shipping of goods to a retailer, along with shipping from the retailer to the end customer. Businesses and consumers alike with any pulse on supply chain or retail know that even getting goods into the United States is both extremely expensive and time intensive, not to mention the duopolistic carrier environment that is home to rate increases, surcharges, capacity constraints, etc.  

This unique set of circumstances has created an issue for e-commerce businesses that rely on goods manufactured overseas and third-party transportation to move and deliver those items. It has built an environment of dependability and instability: the opposite of what businesses are hoping to establish. 

Businesses are completely dependent on freight and parcel shippers for the distribution of goods and when there are backlogs, capacity constraints, surcharges, etc, businesses have no choice but to follow suit and do what must be done to get their product where it needs to go. As a result of this, businesses are lacking stability. Everything down to their revenue is affected by highly volatile shipping costs and unpredictable sales due to inventory hold ups.  

These factors put businesses in a constant state of catch up. They have options, but they are cumbersome and expensive: overcommunicate supply chain issues to customers, create work arounds for getting their product, push back product launches that have been planned for months, the list goes on and on.  

Bret Bonnet, Co-Founder and President of Quality Logo Products, shared that, “We are accustomed to shipping multiple trucks worth of goods from our facility every day; usually on average two or three trucks. Last year, and again this year, UPS is limiting us to only one truck per day after Thanksgiving. The long and skinny is since we operate in the B2B space, UPS is allocating the majority of their fleet to facilities that service retail sales. In order to get around this limitation, we actually bought two box trucks and are now making twice daily trips to our nearest UPS hub (40 miles away). It’s not cheap, it’s not fun, and the hub is a mess, but it’s the only way to continue to honor our regular client obligations during the holiday months.” 

Unfortunately, Brett and Quality Logo Products are not alone in their struggles. 

It is key for shippers to have the leverage that they need in order to effectively build carrier contracts that are beneficial to them, especially when creating contingencies is now purely in the hands of shippers themselves. Q1 of 2022 will be critical for shippers to reevaluate their shipping plan and create an ideal mix of carriers and service levels that allow them to have both autonomy and stability in their shipping operations and therefore, business overall.