Freight Contract Management

The New Digital Supply Chain: Chaos Transformed to Predictability

Grant Sernick
December 4, 2023
min read
The New Digital Supply Chain: Chaos Transformed to PredictabilityThe New Digital Supply Chain: Chaos Transformed to Predictability

The global onset of the COVID-19 pandemic in early 2020 created a perfect storm in the global supply chain.

On the consumer side, demand shot through the roof for some products (toilet paper, personal protective equipment), while it dwindled for others like formalwear. Supply chain providers trying to meet these new demands while also dealing with pandemic-related shutdowns were suddenly confronted with ballooning freight rates, extremely long lead times, unavailability of containers and chassis, and costly demurrage fees. Remember the long line of anchored ships off the coast of Los Angeles, waiting to unload their goods? What about the long lines of truckers waiting to get into the ports? It’s a reality to which nobody wants to return.    

Some shippers on the bleeding edge of technology had started digitizing their supply chains months earlier as part of a strategic effort to optimize processes; others hadn’t yet thought about supply chain digital transformation. The former seemed to bounce back from the pandemic rather quickly, but for some shippers, supply chain recovery from that catastrophic event was measured in years.

A little more than a year after COVID shutdowns reached the U.S., the Ever Given vessel blocked the Suez Canal in March 2021, holding up $9.6 billion worth of goods each day.

In the summer of 2023, drought conditions lowered ocean levels, leading to delays in sending cargo across the seas.

The pace of supply chain disruptions – everything from more intense weather events hindering cargo movement to labor actions forcing shippers to find alternative routes – has sped up continually in recent years. It’s now the status quo: An exception-ridden, complex supply chain is the new norm. To combat this reality, shippers are moving beyond traditional supply chain solutions to a new digital supply chain, one that enables both reactive strategies and proactive thinking by providing complete visibility of the product throughout the supply chain. Once companies can truly see the impact of shipping issues on their product supply and react in real time to challenges, they can truly future-proof their organization.  

With the complexity of today’s global supply chains, even minor disruptions can lead to significant shipment delays and freight transportation backups. That can cause extreme headaches when the products in these shipments are time-sensitive. Look at the global value chain as a series of conveyor belts, with each stakeholder – the company providing raw materials to be finished into a final product, the myriad carriers used in every delivery – representing a different belt. Each belt should be moving at the same speed, shuttling along goods through the value chain. With each disruption, belts slow down or get stuck entirely. The ripples reverberate around the world.

Shippers are combating logistics challenges by embracing the digital supply chain, a blend of reactive strategies and proactive thinking sewed up in a cloud-based technology platform. While digital supply chain transformation is nothing new, traditional supply chain solutions are falling woefully short in today’s world of supply chain disruption. In fact, some of the earliest digital tools might not be getting the job done.

True Product Visibility is the Missing Link in Supply Chain Digitization

Shippers embrace digital supply chains and strategies to solve thorny business challenges and bring a little bit of predictability into a very unpredictable — and constantly changing — industry. Before the pandemic, some of this predictability came in the form of digital supply chain tools that promised shipment visibility. But during the pandemic, even if shippers had pinpoint visibility into the shipment lifecycle, they weren’t able to execute on that information.

It’s not enough to simply know where shipments are in the supply chain. Knowing there is an issue without being able to do anything about it is a helpless feeling. It’s also incredibly inefficient. All that visibility data, not to mention all the other data points associated with each shipment, can also lead to data paralysis. Soon, a single supply chain chokepoint has created a bit of organizational quicksand.

With true supply chain digitization, shippers can react to the unexpected, creating new plans to keep shipments on track in the face of supply chain disruption. Customer expectations are met, and production and supply chain costs are optimized. The goal of every shipper should be supply chain collaboration among disparate stakeholders in silos. On a global or even national scale, this orchestration can only occur in a highly digitized supply chain founded on unimpeachable technology.  

The wrong digital supply chain solution can lead to an ineffective use of resources and company time, with the only output being subpar results. Meanwhile, customers are becoming dissatisfied, and competitors are taking away market share. In the rush to digitize manual supply chain processes, shippers may have forgotten this fact. Researching technologies and really checking into both the solution and the company providing it are crucial steps in creating supply chain resilience for continued success against logistics disruption.

Resilience Requires Digitally-Driven Product-Level Visibility

Digital supply chain solutions that provide product-level visibility give shippers the superpower of logistics agility. This ability to react to supply chain disruptions by switching routes, modes, or types of delivery breeds supply chain resilience, the only bulwark against the always-changing global logistics arena. That’s one of the many lessons learned from the pandemic.

When the world’s supply chains suddenly faced zero demand and started shutting down in early to mid-March 2020, CEOs needed to know quickly what product was on order and how to get out of those orders. They needed to see all of the outstanding purchase orders, what was on the water, and what had been ordered and manufactured but had not been loaded onto a boat. With the latter, they would have to pay for the goods, but not the transportation costs, duties, and taxes.

Fast-forward a few months. Everyone was working from home. Demand started to skyrocket, but capacity was scarce — and if you could get products on a vessel, the shipping costs were 10–15 times higher than normal. Due to labor shortages, ports were backlogged with ships waiting to get in, leading to massive demurrage charges. Shippers needed to know where containers and products were, and what their port options were. Could they adjust? And if they couldn’t, what would be the cost?

No one saw any of this coming, as is the case with most supply chain disruptions. The key to resilience is the capability to know how to deal with the unexpected and unknown. Shippers need a solution that puts data regarding products and costs at their fingertips, so they can make decisions to get shipments back on track.

A Leader In Today’s Digital Supply Chain

The turbulent supply chain world, a world of constant disruption, is made tranquil through supply chain digitization. 3rdwave, a leader in digital supply chain solutions, brings shippers this tranquility through a holistic transportation management system. Empowered with a TMS from 3rdwave, shippers ensure proactive management of supply chain exceptions, keeping the shipment lifecycle moving despite supply chain disruptions. Even when the global supply chain is humming right along, a good TMS can help shippers reduce shipment delays through detailed shipment planning backed up by real-time visibility and tracking. Ballooning freight transportation costs are kept in check through execution and cost visibility at the SKU level for all shipments ensures.

The leadership behind 3rdwave got here via global trade. In the late 1980s, they first developed an enterprise solution for a Canadian food importer/exporter, eventually evolving that tool to create an import/export offering for companies operating both Canada and the U.S. Now the team counts among its clients Fortune 50 companies, shippers and other beneficial cargo owners operating throughout the world.  

Building Proactive Resilience with 3rdwave

3rdwave’s tools are designed for international transportation and can seamlessly manage trade compliance along with freight transportation. Shippers use 3rdwave to take control of international shipment planning and execution. It’s total transportation life-cycle management: plan, create, manage, repeat. Users tap into 3rdwave for shipment planning, execution, drayage management, and automated freight audit – all in a single platform. Working from a centralized location, not to mention knowing what the final freight bill will look like before it even shows up, allows shippers to focus on making products instead of becoming logistics and global trade experts. They can stick to the plan or adapt to supply chain disruptions, knowing either path is easy with the 3rdwave TMS.

3rdwave Enhances Supply Chain Predictability

Some shippers pick a digital supply chain tool only to find that instead of presenting a tailored solution for a business with established supply chain processes, they must change their supply chain to fit cookie-cutter technology. 3rdwave’s international TMS enhances predictability for shippers with real-time shipment tracking and big data analytics without requiring process change. 3rdwave makes it easy to integrate and get up and running on the platform, capturing data from a shipper’s supply chain partners immediately. This increased collaboration breeds predictability – calculable, expected outcomes that form the foundation for future plans. Exceptions-based alerts mean that if supply chain disruptions don’t occur, in-the-moment execution and future planning aren’t muddied up by superfluous alerts. While it’s great to know that shipments are on track, most shippers only need to know what’s wrong … and how to get things moving again.  

International Shippers Achieve Logistics Agility With 3rdwave

At 3rdwave, customers achieve supply chain agility through strategic visibility. This means shippers have access to a wide range of data points, on both a micro and macro level, to make informed decisions about supply chain operations. 3rdwave allows shippers to act on this data through automation and coordination tools, giving them a competitive edge while they avoid disruption and optimize transportation spend.

Supply chain digital solutions, like a robust TMS, are purpose-built to navigate increasing supply chain disruption in a complex, multilayered global ecosystem. 3rdwave’s international supply chain solutions make it easy for shippers to plan, budget, and execute shipments. After delivery, users tap into thorough supply chain data to measure and improve logistics effectiveness. Contact us to learn how 3rdwave helps international shippers create resilient supply chains.

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