This is Part 2 of a multi-part series addressing logistics imperatives necessary to manage uncertainly and disruptions heading into 2022. You can find Part 1 here.

Managing Labor Shortages Means Working Smarter, Not Harder (Continued)

The entire world owes a huge debt to the drivers, warehouse associates and other essential logistics workers who kept supply chains moving during the worst months of the pandemic. Continued labor shortage and lack of legislation are leading to overworked labor and high turnover. In their 2021 State of Supply Chain Execution Report, as mentioned in part 1, Blue Yonder and Reuters Events found that 63% of retailers and manufacturers have been affected by the availability of labor over the past year. Grounds for labor shortage concerns are increasing.

Employers are upping the game for labor attraction and retention: Walmart, Target, and Amazon announced paying college tuition for their employees. Many employers are actively improving conditions and offering technology training and transferable college credits. While these trends are very positive, productivity among warehouse and transportation sector are still decreasing because of other forces in play, like the consumer trends toward e-commerce, which means increased operational complexity and exposed inadequacy of warehouse, transportation and order management systems.

State-of-the-art technology can help automate decision making, reconfigure processes, support more efficient workflows and implement best practices that significantly amplify human efforts. Technology can relieve some of the burdens of overtime and excessive stress that logistics team members have been experiencing since early 2020.  

For example, Traxion, Mexico’s largest logistics provider, brokers services and optimizes loads, capacity, freight and routes via an AI-enabled optimization engine that gathers real-time data and autonomously makes the best decision on the fly, without human intervention. This dramatically cuts down on the physical and analytical demands placed on supply chain professionals every day. 

As transportation management solutions automate the processes of procuring carriers, planning truckloads and determining optimal routes, the result is a huge productivity boost. When inevitable disruptions occur, AI engines can quickly make proactive decisions that reset the supply chain in real-time — for example, finding new inventory, a new carrier or an optimized route — without hours of manual analysis. Humans will always be at the heart of the logistics industry, but advanced technology makes their lives easier and their organizations more efficient.

More Than Ever, Acting Sustainably Makes Good Business Sense 

The 2021 State of Supply Chain Execution Report, conducted by Reuters Events Supply Chain in partnership with Blue Yonder, found that 53% of manufacturers and retailers, and 50% of logistics providers, are investing in sustainability programs. And with good reason. 

Worldwide, virtually every country is mandating stricter environmental regulations, with the goal of minimizing carbon emissions and mitigating the effects of climate change. U.S. President Joe Biden recently announced a goal of cutting greenhouse gas emissions in the country by up to 52% by 2030, compared to 2005 baseline levels.

Because the global transportation industry is a primary contributor of emissions, eliminating miles and otherwise reducing the carbon footprint is the responsible thing for logistics organizations to do. According to the U.S. Environmental Protection Agency, growing supply chain complexity means that, by 2040, the freight transportation segment will produce more emissions than all other transportation segments combined, including passenger, unless dramatic action is taken.

Focusing on more sustainable operations isn’t just the right thing to do — it’s both the smart and profitable thing to do. 

Again, advanced technologies, enabled by AI, can help. Based on pre-defined sustainability objectives, AI optimization engines make smart, environmentally responsible decisions that take trucks off the road, minimize paperwork, reduce waste and support other green initiatives. At the same time, these decisions improve financial metrics and profit margins by optimizing the productivity of physical assets and reducing the company’s fuel and energy costs.  

SuperFrio, a leader in the refrigerated logistics industry in South America, won the 2020 Energy Excellence Award given by the GCCA (Global Cold Chain Alliance), based on its sustainable supply chain improvements. By implementing a warehouse management solution that automated and optimized processes, the company reduced its annual consumption of bond paper by 40%. 

Prepare for the Future, No Matter What the Future Brings

If the past two years have taught us anything, it’s that we need to brace our supply chains for the unexpected. Fortunately, logistics teams can apply ever-advancing technology solutions to prepare themselves for an uncertain future.

By transforming siloed, disconnected supply chains into connected, fluid and responsive ecosystems, AI and other technology innovations can help logistics organizations quickly enact an orchestrated, synchronized response across the supply chain in real-time. 

We will never have the capability to sense a global pandemic, or an event like the Suez Canal blockage, in advance. But state-of-the-art logistics technology can identify these types of supply chain challenges at the earliest possible moment and position the supply chain for success in the face of new obstacles. Whatever happens in 2022 and beyond, the world’s logistics leaders will be those companies that adopt advanced, AI-enabled technology today.

In Part 3, we will continue to explore how to improve sustainability.