EACH JANUARY FOR THE PAST SEVERAL YEARS, I HAVE TRIED
to predict what’s in store for us in the coming months. Some of my
predictions have been reliable, while others have not—for example, I
really thought the Dallas Cowboys would be in the Super Bowl in 2014.
I hope to do a bit better with my 2015 predictions for the supply
chain world, which faces a decidedly mixed outlook. On the one hand,
Still, there are plenty of unknowns out there.
Looking ahead, I see five other developments that
bear watching:
1. Amazon. Already somewhat of a trendsetter
in the industry, the online retail giant will likely
continue to set the standard for online shopping.
Whether it involves drones, robots, huge distribution centers, or Sunday deliveries, there’s no question Amazon leads the field when it comes to innovation. I think it
is important, however, to recognize Amazon for what it really is—a
mega-logistics service provider. I believe its competitors will start to
seek ways to capitalize—at least partially—on Amazon’s strengths,
rather than try to compete head on.
2. Infrastructure funding. In May of this year, Congress will once
again be forced to deal with the can it kicked down the road last year
with regard to the funding of road and bridge projects. This time
around, extending the present funding will not be an option, as legislators are under enormous pressure to come up with some type of plan.
Even so, don’t expect to see a comprehensive solution to this critical
problem.
3. Dimensional weight pricing. As FedEx and UPS shift parcel customers over to dimensional or “dim” weight pricing (a system of pricing shipments based on weight and cube, rather than weight alone),
I believe we will see some innovations in package design. Since there
has been no significant penalty for shipping air and packing materials,
shippers have had no real reason to make substantial changes. I think
that’s about to change and that the end result will be more efficient and
BY CLIFFORD F. LYNCH fastlane
What’s ahead in ’ 15?
cost-effective packaging. In addition, I think it’s
only a matter of time before dim weight pricing
spreads to the less-than-truckload (LTL) sector.
4. Reshoring and nearshoring. The trend
toward bringing production back to (or near)
the U.S. will continue, although in my opinion,
progress will be slow. Although there are cost
and human relations reasons for moving out of
Asia, the major commitments and investments
some manufacturers have made there will make
it extremely difficult to reverse earlier decisions.
5. Logistics service providers. The coming year will be
challenging for some logistics service providers (LSPs),
particularly those that lag
behind when it comes to
technology and processes.
The marketplace has become
increasingly commoditized,
with users of outsourcing
services coming to view
these offerings as basically
interchangeable. That means
what some providers have considered to be
value-added services have become expected
offerings—the price of admission to the bidding process. It will be a good year for LSPs to
take a hard look at the value they are offering,
particularly in such areas as visibility and analytical capabilities.
Whatever challenges the new year might
bring, there’s reason for hope. In the difficult
past few years, most supply chain managers
have demonstrated an uncanny ability to capitalize on both the positive and the negative.
This year will be no different.
Clifford F. Lynch is principal of C.F. Lynch & Associates, a provider
of logistics management advisory services, and author of Logistics
Outsourcing – A Management Guide and co-author of The Role of
Transportation in the Supply Chain. He can be reached at cliff@
cflynch.com.
