Top 5 Challenges Facing the Logistics & Supply Chain Industries

The logistics and supply chain industries have never been 100% without their issues. However, the challenges once faced by logistics providers have been exacerbated by COVID-19. Single-handedly, the pandemic has impacted the world on a social, economic and political level, forcing the entire supply chain to adapt and modify its process, from production and inventory management to warehousing and order fulfillment

Here are the top five challenges logistics and supply chain managers are seeing:

1. Labour Shortages

Even before the pandemic, workforce shortages plagued the logistics and supply chain industry. There is something to be said about the lack of interest from the public in this line of work. As demographics shift and older workforce members leave the business to retire, new, younger people have been entering the industry at a lesser rate. 

When COVID-19 happened in 2020, the situation only got worse. Truck drivers and warehouse employees found themselves stuck inside due to lockdown or having symptoms. Many chose not to return to work after receiving more money to stay home under emergency unemployment benefits. The supply chain quickly falls apart without licensed and trained employees available to fulfill orders.

2. Centralized Inventory  

As the saying goes, putting all your eggs in one basket is never a good idea. The same can be said regarding the supply chain and relying too heavily on centralized inventory where stock is stored and shipped from a singular location. 

While many companies have relied on this method for simplicity's sake, should something go wrong, a business is unable to access the goods required to complete order fulfilment. Decentralizing inventory across multiple warehouses is key to avoiding delays and meeting consumer demand.

3. Rising Transportation Costs

The impact of inflation has created a ripple effect across the logistics and supply chain industries. With oil and gas prices on the rise, along with increased equipment costs, shipping goods domestically and internationally has become more and more expensive over the past two years. 

Whether packages are transported via ship, plane, train or truck, these cost increases affect a business's ability to profit. Companies have been forced to charge consumers more to receive the same products to avoid ruining their bottom line.

4. Consumer Behaviour 

With eCommerce continuing to dominate the market, more and more customers are choosing to shop online instead of in-store. Along with this change in buying habits comes the expectation that customers will be able to track and know exactly when their products will arrive. 

Offering fast and accurate shipping plays a significant role in a consumer’s decision when choosing where to shop. Even with established brand loyalty, a poor customer experience will have shoppers abandoning one company for another. Therefore, logistics and supply chains must be able to meet these expectations or risk being left behind. 

5. Embracing Large-Scale Technology 

If you own an eCommerce business, you understand the value of being able to track and monitor inventory. Previously, traditional supply chain models were simpler to get source materials and products where needed. Adopting new technology is necessary to manage the introduction of a modern supply chain and omnichannel fulfillment brought on by a customer’s need for flexibility and convenience. 

While expensive to implement at first, having insights into data provides a level of visibility and control not available without it. Managing complex systems ends up being less complicated and costly with automated processes, artificial intelligence predictive capabilities and interconnected databases.

Overcome these Challenges with a Trusted 3PL

Do you have an eCommerce business and are attempting to handle your own logistics services? You do not need to deal with these challenges alone. 

Envoy Warehousing and Logistics offer a strategic partnership for small to medium-sized businesses in the B2B and B2C sectors.

As a third-party logistics provider, we have the resources, infrastructure and expertise to navigate the struggles of eCommerce fulfillment for you. By putting your trust in our team, we can manage all aspects of your logistics, from inventory management to warehousing and distribution.

Contact us today or get a quote to learn more about how Envoy can make your brand’s order fulfillment a breeze.

Have a question about our pricing? We offer cost-effective and transparent pricing.

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