Every corner of the supply chain is feeling the economic and business impacts brought on by the COVID-19 pandemic. Around the country, shippers, carriers and 3PLs are still grappling with social distancing practices and adjusting their day-to-day operations to work-from-home realities.
In early March, freight transportation technology provider SMC³ implemented remote work strategies to maintain continuous service during the coronavirus pandemic. Early on, the company deployed its IT operations team to ensure all systems continued to operate at peak proficiency. While it’s impossible to know when company employees will once again work together in the same building, SMC³’s myriad teams have been hard at work supporting customers and providing uninterrupted LTL and truckload technology assistance.
SMC³’s Chief Commercial Officer Brian Thompson recently detailed what the company has been hearing about the pandemic from its supply chain partners.
What are SMC³ customers saying about the current state of the industry?
The common thread with all our customers is that they are looking to work more efficiently in terms of both time and expense management in the current environment. Shippers and 3PLs are now looking to manage their providers with bid-management and rate-shopping tools; ensure they don’t overpay for services with advanced audit capability; and increase the visibility of shipments in transit. We’ve see an increase in the number of requests to demo our Bid$ense application, a tool that can manage both TL and LTL bids. We also still see shippers and 3PLs looking to test the market rates and add to their pool of carriers, as the entire supply and demand equation for freight services is changing more rapidly than ever.
Freight is still moving, and people are still working, but the freight peak we saw with all the panic buying has passed. Volumes are starting to go off a cliff. People aren’t buying large durable goods, so carriers are starting to see some stagnation; they can only live off toilet paper and hand sanitizer for so long. Carriers are also looking to analyze and respond to bids more efficiently with high-caliber analytical tools. They’ve got the additional challenge of managing profitability in a rapidly changing market environment. Carriers are suddenly looking at lanes that used to be drastically headhaul lanes turning into backhaul lanes over night. As lane balances are shifting so dramatically, they need a tool that helps them manage these issues. Those that have invested in profit management tools, such as SMC³’s Cost Intelligence System, are going to come out winners when this crisis is over.
What are SMC³ customers most concerned about, given the current state of the market?
Carriers are paying very close attention to the market. As freight transportation providers, their capabilities are swinging drastically each day. Like I said before, the supply and demand equation is swinging back and forth, and lane balance has shifted with little warning. So it’s a particularly challenging time for them. But the customers we’re hearing about with the biggest problems right now are retailers; that’s where the majority of the pain seems to be. Consumers stopped going to stores even before retailers were forced by state governments to shift to online-only operations, and so retailers have seen a significant decline in their business. Retailers with strong, established e-commerce models are adjusting better than those that rely solely on physical stores. Of course, it takes technology to facilitate the e-commerce model.
So how are these supply chain businesses preparing for life once social distancing is done?
Most of them are in fire-fighting mode. They are searching for technology that they can deploy quickly to solve their problems today with a low outlay of capital. Some have put longterm, strategic projects on hold in favor of proven solutions they can plug in right now.
Anytime you’ve got an event like this, folks are very, very cautious about watching their budgets and making sure the ROI is there on any investment they make. Before the pandemic, stakeholders may have been interested in testing the waters with bleeding-edge technologies, but during this time, these same companies are flocking to the more time-tested and reliable providers.
There’s a sense of urgency in everybody’s actions because at times it might feel like the sky is falling. But will companies be operating in this way forever? No.
Will the pandemic have a lasting impact on how business is conducted?
We’re all learning from this experience. The importance of technology, with remote connectivity, can’t be overstated. Everyone will be more efficient and productive in the long-term when they promote and implement these new technologies.
Technology in transportation was already a hot topic, but it’s going to be even more important moving forward.
Supply chain stakeholders across North America look to SMC³ for freight transportation data technology solutions to make optimize their businesses. To learn more about SMC³’s tools, as well as the company’s upcoming educational events, visit the website here.