The severe winter weather conditions around many parts of the United States are clearly having an impact on domestic freight transportation operations.
That has been made clear in the form of various customer advisories from many brand name carriers, including: XPO Logistics, UPS, FedEx, Union Pacific, BNSF Railway, and many others.
A common theme of these advisories has been along the lines of, as FedEx observed, that these storms are causing hazardous conditions, and even with contingency plans in place, “some service delays and disruptions can be anticipated for inbound and outbound shipments across the U.S.”
In freight transportation, dealing with harsh winter weather is nothing new, to be sure. The Polar Vortex in 2014 is something, which comes to mind for many supply chain stakeholders. And it was felt in the form of slow, delayed, and missed deliveries, with the weather wreaking havoc on our nation’s railways, highways, airports, and barge networks. Nobody was really excluded in that respect.
From a service perspective, Greg Orr, executive vice president, U.S. truckload for TFI International and CFI, explained that the main issues related to serving shippers impacted by these severe weather conditions are two-fold.
“It is all about communication,” he said. “Our professional drivers are trying their best to be safe and continue to move when they can, but it is at a pace that is substantially slower than normal. Continued communication and updates from them is key to our success on existing deliveries. The other side is knowing from a customer perspective which loads are a higher priority. That way we are able to focus on those loads and try to ensure the higher visibility items stay in stock for them. Expectations are extremely tough to manage for all parties involved in cases like this and our priority is keeping our drivers, our assets, and our customers freight safe and damage free.”
As for best practices, or lessons learned, that can be applied, Orr said that it seems like every time a situation like this arises— whether a hurricane, tornado or a massive snowstorm like this one—there are always new things to be learned.
“Probably the best thing that we always take away is utilizing all the tools that we have in our toolbox today,” he said. “Technology continues to change rapidly in our space and communication tools also continue to improve. Yet trusting our professional drivers as ‘captain of the ship’ is the best tool we have. Their ability to make judgement calls on safety and road conditions is something that we trust and respect. We know and we unequivocally support their commitment to delivering safely as being first and foremost.”
Looking ahead, for the companies that he leads, once the weather breaks, the biggest network challenge is getting drivers that have been on time-off back into the network to help fill the gaps is key.
“Our freight demand is starting out at 175% pre book every day this week and we do not like disappointing our customer,” he said. “Our goal is to get as many trucks back on the road as safely as we can when it makes sense. We have been over communicating to each of our customers this week on the challenges and trying to keep them up to date on any new insights that we are gaining. I think the biggest challenge today is for those professional drivers that are out on the road (whether CFI or another company) our hope is that they are safe and that they can access fuel and food. Quite a few locations are shut down due to loss of power and or frozen lines and we are doing everything we can to help support all of our US truckload drivers to ensure their safety and well-being.”
From a retail supply chain perspective, Jonathan Foster, principal consultant, for Proxima, a strategic team of procurement specialists with more than 25 years of consultation and supply chain experience, noted that supply chains will continue to be impacted for a couple of weeks in a best-case scenario.
“Networks were already out balance due to pent up demand, and intermittent pauses to immediate fulfillment from continued lockdowns,” said Foster. “Another large-scale disruption only complicated that. As the snow and ice lifts, people will migrate back to stores to fill the immediate they could not get. This will create surges into markets, while carriers will be working to unbury this backlog, and in parallel deal with a spiking demand. This is dynamic disruption at its core and is literally and figuratively hitting the heart of our country right now.”
And he added that typically in these events, carriers will service local deliveries and start working their way out from there.
“This is particularly true for LTL companies that typically embargo inbound volumes until they create delivery space,” he said. “As a rule of thumb, it will take 3 times the rate of the shutdown to recover fully or 3 days for every 1 day. Further complicating the situation, carriers were already struggling to get the right assets into normal locations given the pent-up ocean demand on the coast influencing markets to a considerable degree. This problem only got worse and rates will typically elevate accordingly for critical shipments. All of us will feel these spikes to some degree in our cost of goods. All products have to have inbound freight before being made, and then typically move through distribution channels before reaching their final retail channel. All areas will face disruption and pricing pressures.”
Ideally, Foster explained that companies have alternative manufacturing locations if one plant is disrupted, but when a region is essentially shut down it impacts so many things.
“Transitioning LTL to truckloads frequently helps to some degree, and this is especially true where companies typically wait on JIT loads, but in severe weather events everything is impacted,” he said. “Dynamic disruption happens and to combat it companies need to be prepared to be flexible and adaptive. Combining that with good strategic relationships and robust processes appears to the one tried and true method of tackling these storms.”
About the Author
Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman