Tis the Season to be Agile – WSI
If you work with a capable 3PL, you may rest assured that you already have the supply chain agility needed to meet any challenges the New Year may bring.
The holiday season came early this year—and not just because the neighbors down the street started putting up decorations the day after Halloween. As the trade war continues to heat up between the United States and China, retailers have been left scrambling to stuff their peak season stockings before each new series of retaliatory tariffs takes effect. As a result, Los Angeles, Long Beach, Oakland, and other West Coast ports have been posting record volumes of inbound cargo from Asia since June.
The question now remains: Will there be a slowdown? Tariffs or no tariffs, retailers have continued to import products at steady rates to meet peak season demand. But what happens in 2019? Some experts claim that the increased traffic will continue into the first quarter of 2019, but others say orders from Asia will drop dramatically at the start of the New Year.
Only time will tell who is right. Meanwhile, commerce rolls on and shippers must find ways to adapt. It’s times like this when third-party logistics (3PL) partnerships shine. When the experts at your 3PL leverage their considerable expertise to support your operation, supply chain fluctuations and disruptions can be more easily mitigated. A 3PL can provide the following to help you address any number of tariff-related concerns, such as:
• Cost savings. New tariffs may drive up the cost of some raw materials and finished products by as much as 25 percent, which means you’ll need to find other areas to cut costs. A 3PL can help you find affordable warehousing, leverage other relationships to help you consolidate shipments, and use state-of-the-art technology to optimize routes and delivery—all of which may assist you in offsetting not only the cost of the 3PL, but the increased tariff expenditures associated with your products.
• Capacity. Whether you’re frontloading shipments into the nearest available port in advance of the next round of tariffs or simply find yourself struggling with the ongoing capacity crisis, a 3PL partner may well be able to secure capacity that you cannot find on your own. Your 3PL will have carrier partners across multiple modes to get your cargo from point A to point B.
• Scalability. If you spent the past six months ramping up for peak season, dialing your supply chain back down can be a challenge. By their nature, 3PLs are flexible and capable of scaling your services, capacity, storage space, and workforce up or down with your demand far more easily than you can do with your own internal assets.
• Technology. To remain competitive, 3PLs must stay updated with the latest supply chain technologies. As a partner to your logistics provider, you gain the benefits of this technology without the investment or overhead. This can be particularly useful when you’re planning to move more shipments than usual, or if you’re trying to navigate shifting regulations and tariffs associated with international trade.
Don’t let a trade war ruin your holiday season or your New Year. If you work with a capable and trustworthy 3PL, you may rest assured that you already have the supply chain agility needed to meet any challenges the New Year may bring head on.