Blog
Southern Border Shutdown: Supply Chain Concerns for Ohio 3PL Firms
Our third-party logistics supply chain partners in Cleveland are adept at helping clients navigate all challenges impacting the timely flow of goods to their final destination. Sometimes, the issue is a faraway natural disaster or social unrest. Other times, it’s homegrown regulation or infrastructure challenges.
Right now, there’s swelling concern over recent promises by President Donald Trump to shutdown the U.S.-Mexican border if neither Congress nor the Mexican government takes what he deems decisive action to stem the tide of illicit drugs and illegal immigration into the U.S. Ohio 3PL partners at On Time Delivery & Warehousing are watching the situation closely, and have begun mapping supply chain contingency plans.
The likelihood of an actual border shutdown isn’t clear. While some of the president’s allies in Washington D.C. have stated a total border closure would be “catastrophic” to U.S. supply chains, the president isn’t exactly known for always toeing the party line. He’s said that secure borders take priority over trade. He has floated a potential compromise: A border closure solely permitting the back-and-forth flow of commercial trucks. Whether that would be enough to blunt the biggest supply chain impacts isn’t certain.
Meanwhile, trucks at the Mexican border have reported long delays this month, after U.S. Customs and Border Protection officers were abruptly reassigned from import regulation to immigration processing, according to Bloomberg.
For us, this is not about choosing political sides. Our role as an Ohio 3PL partner is to be prepared for all scenarios with the goal of minimizing the product and financial losses for our clients – and that’s what we intend to do.
Ohio Trucking Logistics Partner Reduces Client Risk Amid Labor Disputes
Trucks and truck drivers are integral to U.S. supply chains, moving 70 percent of the nation’s daily freight-by-weight and generating $700 billion in annual revenue, according to the American Trucking Associations. So mounting discontent by truckers nationally over a range of issues isn’t something our Ohio trucking logistics team – or any one else with a supply chain relying on truckers – can afford to ignore. The biggest problems, truckers say, are beefed-up regulation, lack of adequate training and proposed gas tax hikes – all of which put their safety and financial security at risk.
Many of these complaints have merit. However, the tactics being proposed by some fed-up truckers via social media is deeply concerning. A national trucker protest planned for this month vows to “shut down the nation’s highways.”
The likelihood of this actually happening is unclear, but partnering with a dedicated third-party Ohio trucking logistics company ensures you have eyes/ears on the ground – and won’t be blindsided. Safety will always be our top goal. So too is minimizing our clients’ direct impact if/when transportation industry and labor disputes arise.
Ohio Truckers Protest Regulation, Safety Concerns
Workflow in Flux? Outsource Cleveland Warehousing for Flexibility, Less Risk
Ballooning e-commerce in nearly every industry has rendered Cleveland warehouse space in short supply. Faced with increasing consumer demands and fewer options, more Northeast Ohio businesses are opting to outsource Cleveland warehousing and distribution operations rather than keep them in-house.
Companies with seasonal, fluctuating or uncertain profit margins or those planning on a substantial expansion or contraction generally conclude it makes little sense to keep these resource-heavy duties in-house when those who outsource Cleveland warehousing to a third-party logistics firm are gleaning more benefits with less cost/hassle. Those who manage their own warehousing will be dealing with increasingly stiff competition from those who outsource. In addition to fewer choices and soaring e-commerce, there are sky-high transportation expenses, evolving technology and expanding federal regulations.
Ohio’s Warehousing Market Primed for Growth
Ohio is within one day’s drive of half the U.S. population, making it an attractive site not just for many national/international buyers, but by manufacturers but distributors and workers. Some businesses prefer greater control of day-to-day warehousing and are reticent to invite a “middleman” into the mix. But when you outsource Cleveland warehousing and order fulfillment to a first-rate third-party logistics firm, you can devote more valuable resources on things like product development and innovation, sales, marketing and customer service.
If you need more proof of the benefits of third-party warehousing, take a look at Penn State researchers’ data in 21st Annual Logistics Study in 2017 revealing the number of Fortune 500 companies using third-party logistics doubled from 46 percent to 90 percent in 15 years. Small businesses too can carve out a significant advantage when they outsource Cleveland warehousing, particularly when sales are inconsistent throughout the year.
How to Know It’s Time to Outsource Cleveland Warehousing
Even the best products won’t move if they’re routinely delivered late, damaged or not at all. A client may forgive you once, maybe even twice, but you aren’t likely to get another crack at it beyond that – and your competitors will be ready to seize that opportunity.
In deciding whether to outsource Cleveland warehousing, Northeast Ohio businesses should analyze the totality of their resources and capacity. Sometimes even if it can be handled in-house doesn’t mean it should be. Warehousing and distribution is a constant and at times delicate balancing act that involves more than merely securing space. You need qualified managers to oversee it and reliable workers to keep goods moving smoothly. As distribution centers multiply in Northeast Ohio, skilled warehousing workers are becoming just as tough to find as space. It won’t save you money in the long-run if you have to cut corners on quality, service or safety when times are lean.
High-quality logistics facilities cropping up all over the place in big markets like Atlanta, Dallas and Chicago. But even secondary markets like Cleveland, Nashville and Louisville are growing at a rapid clip too. 3PL services reportedly account for 61 of the 100 largest warehousing and industrial space deals in 2018, according to commercial real estate brokerage CBRE. Industry insiders don’t expect a slowdown.
Companies that want to keep operational costs in check may consider scrapping warehousing altogether, particularly considering the speed of modern shipping methods (goods aren’t going to remain on warehouse shelves for long, if at all). However, warehousing is still a hugely important link in the business supply chain.
When you outsource Cleveland warehousing functions, you have a better shot of bolstering profit margins because you’re more likely to be able to take advantage of:
- A centralized location(s);
- Better service with experienced warehousing and transportation workers;
- Value-added delivery;
- Flexibility for scaled or seasonal growth.
If you are considering changing up your Cleveland warehousing strategy, On Time Delivery & Warehousing, Inc. can help you map a plan that makes the most sense for your unique business model – and help you make adjustments as necessary.
If you have questions about outsourcing Cleveland warehousing and distribution 3PL partnerships, contact On Time Delivery & Warehouse by calling (440) 826-4630 or sending us an email.
Additional Resources:
On-Demand Warehouse Space Gains Traction in Tight Real-Estate Market, Dec. 23, 2018, By Jennifer Smith, The Wall Street Journal
Midwest Facing A Skilled-Worker Shortage As Warehousing Boom Continues, July 18, 2018, By Jess Mador, All Things Considered, NPR
Ecommerce, 3PLs Account for 61% of Major Warehouse Deals in 2018, Feb. 25, 2019, By Mike O’Brien, MultiChannelMerchant.com
More Blog Entries:
Public Warehouse v. 3PL Service Providers: What’s the Difference? Feb. 25, 2019, Cleveland Warehousing 3PL Blog
Dedicated Northeast Ohio 3PL Can Drive Down Your Trucking Liability Risks
As a longtime Northeast Ohio 3PL provider in Cleveland, On Time Delivery & Warehouse has a battle-tested supply chain network of carriers and routes spanning the U.S. market and beyond – on ground rails, overseas and in the skies. For most domestic deliveries though, we rely on commercial trucks.
We’re certainly not the only Northeast Ohio 3PL to do so, though our longstanding, loyal customer backing affirms our stake as one of the most trusted supply chain management companies in the Midwest. The U.S. Bureau of Transportation Statistics reports 70 percent of the 50 million tons of U.S. economy freight moved daily is hauled by commercial trucks. Our trucking services clients have the advantage not just of our expansive carrier network, but our own fleet of trailers, box trucks and flatbeds.
Trucking is often the most cost-effective ways to move freight domestically, though as you probably know, it’s not exactly cheap either. Working with a 3PL trucking service can help, getting you better deals on less-than-truckload services and more. In fact, one of the greatest benefits of working with a Northeast Ohio 3PL instead of managing trucking services in-house is: Third-party logistics providers can help reduce your trucking liability risks.
This is an especially key consideration for many firms, given the risk of commercial truck crashes is on the rise.
Public Warehouse v. 3PL Service Providers: What’s the Difference?
A recent analysis by commercial real estate and investment firm CBRE Group, Inc. revealed retail-to-warehouse conversions are soaring, in large part due to the way people shop. Big box stores are becoming less lucrative while e-commerce is booming. As this trend continues, Cleveland 3PL service providers at On Time Delivery & Warehouse urge companies to recognize there is a big difference between companies that solely provide public warehouse space and the extensive services you get with a third-party logistics firm.
The retail-to-warehouse place-trading involves a broad range of projects, including demolition of old malls and remodeling warehouse retail stores into distribution centers. CBRE also found that while demand for warehouse space overshot supply last year by nearly 30 million square feet. Industrial real estate availability fell to its lowest level since 2000, with only 7 percent up for grabs. Retail space, on the other hand, is much more prevalent. However, just because the space is there doesn’t mean it’s primed and move-in ready. Issues have included trouble with rezoning (which requires local government buy-in) and difficulty convincing other stakeholders like co-tenants to go along.
Companies in Cleveland looking to expand or outsource some of their warehousing services must understand that while public warehouse space-only services do offer some benefits, they’re far less than what you get teaming with Cleveland 3PL service providers.
Cleveland 3PL Helps Identify Your Top Supply Chain Weakness
As long-time Cleveland 3PL providers, the On Time Delivery & Warehouse team is trained to quickly spot any hint of a supply chain weakness so we can either address it fast or – better yet – avoid it altogether. That keeps our partners from losing profits, customers and investor faith.
A single supply chain weakness has the potential to stymie productivity, spike company costs and hamper a business’s ability to deliver quality.
In recent years, there have been numerous instances wherein a supply chain weakness forced a business to close its doors – temporarily or permanently – or curtailed its ability to offer key products. Worse, those failures made big headlines.
Consumers Expect Speedy Cleveland Last-Mile Delivery Services
Perhaps the most significant moment in any supply chain is the one in which the goods reach their final destination. Cleveland last-mile delivery services providers know creation of a stellar product isn’t going to mean much if the correct one doesn’t make it – on time and intact – to the customer. On Time Delivery & Warehouse is one of the most trusted names in Cleveland last-mile delivery service precisely because we’ve made this such a top priority. It’s literally part of our corporate identity, and we use the latest technology in order to ensure last mile delivery services in Northeast Ohio that meet or exceed the expectations of your customers.
One of the reasons we’ve been able to serve this need so well amid the constant, frenetic pace of e-commerce growth is that in addition to our expansive networks for shipping, freight, trucking and warehousing, we’re also centrally-located for many supply chains near a Midwest urban center.
A recent report issued by industrial researchers in Chicago noted that while there is rarely a one-size-fits-all approach to urban warehousing in logistics, companies are increasingly relying on third-party firms that already have an integrated network of functional last-mile delivery centers, boots-on-the ground services and practical knowledge of issues likely to arise. Our understanding of the unique challenges and opportunities within this Northeast Ohio community uniquely positions us as a dedicated 3PL, poised to carve out competitive advantages for our Cleveland last-mile delivery services customers.
Ohio 3PL Supply Chain Managers Keep Your Goods Moving Amid Government Shutdown
As long-time Ohio 3PL supply chain managers, On Time Delivery & Warehouse is in the business of helping clients navigate everything from minor quirks of tricky logistics to major, unexpected supply disruptions and market changes. The U.S. federal shutdown that began Dec. 21st has the potential to threaten supply chains – in the U.S. and globally – on several fronts as the political gridlock drags on, especially if both sides dig in their heels for weeks or months, as the president has said might happen.
If you think government employees and a few federal contractors are the only ones impacted by a government shutdown – think again. Federal motor carriers, freight shipping carriers and agricultural suppliers are just a few examples of entities our Ohio 3PL supply chain managers know can be squeezed when official stalemates stretch on. Sparring and posturing in D.C. and between U.S. and international leadership are often regrettable but inevitable realities. Resolution of those issues is slightly above our pay grade, but what our Ohio 3PL providers can do is help our clients be prepared as possible.
We may not know when this government shutdown will end or if/when there will be another. We do know these issues have a way of cropping up again and again. When they do, we’ll be ready. We have a long list of contingency plans that include alternative suppliers, routes, transport methods and storage facility options that we can deploy at a moment’s notice. This helps our clients keep their goods and services moving and minimize losses, even if they can’t be avoided altogether.
Cleveland Warehousing & Distribution Labor Crunch Leads More to Lean on 3PL
Cleveland warehousing, distribution and fulfillment centers are grappling with a worsening labor shortage, some struggling to meet rising demands fueled in significant part by e-commerce. Nationally, it’s been a challenge that has businesses looking to launch or expand warehousing operations considering not just large consumer concentrations but an ample supply of qualified workers as well. 
CBRE, a commercial real estate and research firm, released recent analysis revealing the need nationally for an additional 226,000 warehouse workers this year and the same in 2019. That’s a 25 percent spike in the five-year annual average. Low unemployment is complicating matters. A smaller labor pool is smaller means higher wages.
Companies shopping Cleveland warehousing options soon learn this is a dynamic but mature market. Often, costs are more manageable when they team with an established Northeast Ohio third-party logistics firm.
Cleveland 3PL: Greener Supply Chains Help Keep You Out of the Red
Sustainability has become a hot topic in Northeast Ohio supply chain management circles, especially as scientific projections on impacts of climate change become increasingly urgent. As long-time Cleveland 3PL providers integral to Midwest supply chains, On Time Delivery & Warehouse managers know there is much evidence to support the assertion that companies committed to greener, more sustainable supply chains help guard against numerous financial, reputational and legal supply chain risks.
A recent HSBC Navigator survey found that of 8,500 business leaders in 34 markets globally, one-third are making sustainability-related changes to their chain of supply in the next three years – specifically prioritizing more environmentally-friendly practices. This is better for the planet obviously, but that’s not the only reason. Our Cleveland 3PL supply chain experts have long known these benefits go both ways. Economic drivers for greener supply chains, according to the HSBC survey, include:
- Greater cost efficiency
- Improved revenues
- Better overall financial performance