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Seeing lot of posts about odd/missing/late shipments of products from major shipping carriers, i.e. UPS, FedEx, and USPS. Had my toe in supply chain industry for 16 years in manner or another and I can tell you that this by far the most constrained the network's ever been.
Lots of things play into constraint even in normal years, i.e. higher volume in Q4 especially after BF/CM and ramping up to Xmas. But this year? This is way beyond on that, and here's why. Covid was taken seriously in the US in March, then everyone started shopping online...
What also happened in March when everything shutdown is new safety measures were enacted for social distancing. When you shop online your order's inventory is being fulfilled through a warehouse (WH) and requires humans to process the order.
Those same humans working in the WH's now have to follow the same safety protocols which means a MUCH less efficient order process. This sounds small but it's not, there's a reason why warehouses are always looking for automation and reducing cost.
In order to run a physical product business that fulfill orders only the business has to be VERY careful how they operate their WH(s). It's a gigantic cost and has to be monitored constantly for inefficiency and opportunity. Even in normal times this is the case.
The next thing they need is a strong labor force, this sounds simple as well but it's not at all. Most WH's are located in areas that are near a major carrier's hub, this is be design. The closer they are the later than can pick customer orders each day to make shipment same day.
Well that local labor force is often presented with a lot of WH choices and the companies compete for that labor, different pay, perks, etc. So the market for WH works is often getting canabalized and it can be tough to find workers, especially during peak holiday needs.
Add in the Unemployment Insurance (UI) + $600/wk extra federal money and a low paid worker is not likely to return and risk their health as well. Not judging on anyone, just stating facts. All these things were going on for months and causing a ton of strain on supply chain.
So now you've got a WH that is running most likely overcapacity with spiked online business, inefficient labor process, a reduced labor force because of social distancing, and a lack of labor force. Sounds awful right? It gets worse.
Now add in the same social distancing requirements and overcapacity to shipping networks. When you order a package it typically doesn't ship from point a to point b. The networks are designed to move products through "hubs" along the way to your home as quickly as possible.
Those hubs, as automated as they are, still have workers that need to perform jobs, and have similar issues with labor force as the WH's picking your products do. Add to this record amounts of holiday orders needing to be moved through shipping networks and you've got a disaster.
For first time ever I've heard stories of WH's waiting for their daily carriers to arrive and the trucks simply don't show up. There's just not enough capacity and labor to process the volume moving through the nations network. It's not just the lateness either, it's visibility.
All major carrier networks have website tracking tools where Jane Doe can watch her package along the way to delivery. I'm seeing more stories about seeing no update and the package just arrives. This is because those systems are overloaded as well.
This is the ultimate "stress test" ,if you will, on the nations (and world's) supply chain and frankly I'm amazed that it hasn't completely broken down. (I didn't even touch on manufacturing which has similar and it's own unique issues too).
Some companies have done better than others at managing this, as is the case with any challenge. As a supply chain guy I'm extremely impressed with what has been able to be accomplished. The innovation and quick turnaround it took to keep things moving is astounding.
Amazon has trained us that we should expect everything in 2 days (or less), this has set customer expectations at an all time high from whomever you order from. Have you called/emailed/chatted with a company about where your shipment is or that it is late in the past few weeks?
Order fulfillment is not easy or simple. So next time you see your UPS/FedEx/USPS package has actually been delivered in this pandemic, whether or not it was late, just be thankful. It took a whole lot more than you think to make that package land on your doorstep. End rant.
