Building a Trustworthy Network

Q4 Capacity: Focus on avoiding e-commerce disruption

As we end the home stretch of Q4, transportation market capacity constraints are at the forefront of our minds. Expectations around transit times continue to pressure logistics service providers. Both air and ground volumes continue to rise. E-commerce sales are projected to increase by 10 billion dollars from last year, with an expected total of S134 billion in online sales alone. These factors considered, there is the increasing anticipation of how home-delivery demands will distract focus and attention from a company’s freight business, leading to increased costs and a higher risk of revenue loss. Limited capacity can disrupt raw material and finished goods distribution, impacting everyone from the Executive Suite to the manufacturing and distribution floor. Increased freight costs are painful but the risk of not getting product to shelf or a late IT equipment install is even worse. Both soft and hard costs can quickly multiply, placing intense pressure on the supply chain professional.

In a 2016 study titled “Selecting and Managing a Third-party Logistics Provider,” executive director of University of Tennessee’s Global Supply Chain Institute (GSCI), Paul Dittmann expressed the importance of your 3PL partners during this year-over-year e-commerce demand increase. He wrote, “Companies will want to partner with their 3PLs to help navigate the maze of a constantly changing business model,” says Dittmann. As an industry, we can now see the need for niche 3PLs for more specific freight business, such as high value electronics or medical devices. There are also companies who have shipments that are necessary and critical to meet production deadlines or launch dates for a new product. “They’re products for which the consequence of non-delivery is much more than the value of the product being moved,” describes Dennis Stanley, Vice President of Business Development at Pegasus Logistics. “It has serious implications for their company.” Niche 3PLs are the focused partners for companies who don’t rely heavily on home-delivery services and need to ensure there are solutions specialized for their specific business.

With the perfect storm of industry disruptions, it’s important that your 3PL knows your business and your business purpose. Pegasus Logistics helps to solve fundamental business problems through tailored and effective logistics and supply chain management. Don’t just ask us. Talk to our many stakeholders that help us win every day. Whether it’s a raving fan client or one of our outstanding partners, you’ll hear consistency in our mission and purpose.

“A superior customer experience provided by a passionate, committed group of people who chose to make a difference in the lives of others.”