Logistics Providers Work to Address the Amazon Effect

With its always-on accessibility and two-day shipping, Amazon is dominating e-commerce while also impacting shippers' decision making and driving change throughout the supply chain and logistics industries.

Amazon has changed expectations not only in e-commerce but also in the supply chain in general. "I don't know how many times I hear, 'I go on Amazon and have it tomorrow.' We do it as consumers, and we're seeing everyone trying to shift that into a B2B model," said Andy Moses, senior vice president of sales and solutions for Penske Logistics. "That is setting a very high standard for manufacturing plants that want something the next day."

To enable faster deliveries, those within the supply chain are working to shorten lead times and are providing more frequent, smaller deliveries. "Instead of the truckload hub-and-spoke model, I am going less-than-truckload (LTL) or zone skipping to speed the process," Moses explained.

The move to LTL and zone skipping can cost the same or less than a truckload delivery. "If you aggregate buying it, the cost is comparable. It comes down to the density and the right amount of volume going to the geography," Moses said.

On the distribution side, Moses said the industry is seeing smaller warehouses hold high-moving products that are located closer to consumers. "We haven't seen anyone in a long time with an 800-million-square-foot warehouse," he said.

However, in some industries, creating an Amazon model for production can be difficult. "Amazon is a distribution center. The supply chain for a Tier-One or Tier-Two supplier looks different," Moses said.

Many supply chains weren't set up to meet those kinds of demands, which could create opportunities for third-party logistics providers who can collaborate with shippers, analyze data and provide supply chain transparency, as well as real-time information, to enable data-driven business decisions. Increased visibility into the supply chain allows users to optimize routes, manage drivers and ensure goods remain in motion — all of which helps meet rapid-delivery expectations.

To address this issue, Penske created the ClearChain^®Technology Suite, which works to provide high-level and detailed views of all supply chain movements to ensure nothing stops. The speed with which deliveries need to occur leaves little room for error in the supply chain.

With ClearChain, users can drill down into all of the information associated with an order, including the status, scheduled pickup and delivery, actual pickup and delivery, origin, destination and the part-level detail of each shipment.

ClearChain technology suite also supports customer and order management; route planning and scheduling; and fleet management and dispatching; as well as onboard communication to optimize routes and keep the supply chain moving.

Because ClearChain provides instant visibility, Penske associates and customers can work together to mitigate any disruptions before they occur and find the best way to navigate around them, keeping products on track and minimizing delays.

ClearChain provides:

• High-level and detailed views of all supply chain movements to ensure nothing stops
• Information associated with an order, including status, scheduled pickup and delivery, actual pickup and delivery, origin, destination and part-level detail of each shipment
• Support to customers and order management
• Route planning and scheduling
• Fleet management and dispatching
• Onboard communication to optimize routes and keep the supply chain moving