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.
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.
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
Cleveland 3PL supply chain management teams recognize the additional cost for many businesses amid the U.S.-China trade war is potentially crippling, involving $250 billion in Chinese export tariffs and $110 billion on U.S. goods. The Section 301 remedy tariffs have been unrolled in phases this year, and more are scheduled for next year. The Section 232 tariffs on aluminum and steel have also hurt bottom lines globally.
Hopes are high an accord will soon be reached, but in the meantime, firms and industries reliant on Chinese manufacturing and parts (and there are many) should be mapping their game plans if they haven’t already. The aide of an experienced 3PL supply chain management company can help businesses navigate these challenges and curtail impact.
Whether the tariffs will have the desired economic policy impact remains to be seen, but it’s not impossible that even if this one ends, a new one won’t suddenly crop up. Tariffs are one of those adverse market forces outside our control for which companies need to prepare because of the dizzying blow to American manufacturers and shippers, jobs and consumer prices. As a long-time Cleveland 3PL supply chain management partner, On Time Delivery & Warehouse works to formulate strategic supply chain approaches – tailored to each client – to help minimize distribution and financial woes.
Warehousing bottlenecks are a source of time-consuming and costly delays that ultimately chip away at customer confidence. A once-in-a-while warehouse bottleneck might be manageable, but even an occasional bottleneck can signal larger, non-obvious systemic issues that are hurting your bottom line. If this or constant in-house warehousing bottleneck headaches sound familiar, it’s time to discuss these concerns with an knowledgeable Cleveland 3PL provider.
Outsourcing warehousing services to a third-party logistics firm is sometimes the smartest way to manage complex and/ or fluctuating operations long-term – and avoid warehousing bottlenecks.
No matter what size your business, reducing unnecessary supply chain costs can result in a significant savings – assuming you can accurately identify and efficiently address the weak links.
Anyone who works in Cleveland supply chain management service knows that all for-profit companies are going to incur a “cost to serve.” But is your company’s “cost to serve” reasonable? Can you lower it without risking a major blow to quality or customer satisfaction?
Supply Chain Loopholes Vary by Industry, Service, Location
The answer will depend a lot on the type of product or service you provide. For example, let’s say your Cleveland supply chain involves the packaging and delivery of building products to construction sites. Not only are you managing a complex schedule thanks to the heavy equipment and various contractors involved – your deliveries MUST be precise and on time. Certain materials like mixed cement can be totally wasted if there aren’t workers on site. If elements like weather are consistently a problem in one region, you may need to consider whether you can re-route around that area altogether. If you are in the grocery or restaurant industry, it will be critical that your deliverables be properly packaged, sometimes limited to one product-per-pallet and that delivery dates and times are accurate to the minute – otherwise the shipment could be unusable.
Understanding not just your industry but also your customer base is priority No. 1. You need to be able to serve their needs, but also make sure the cost of doing so is still sensible. One analysis in the International Journal of Production Economics found in supply chain cost reviews by 30 companies in 10 different industries, most were falling short when it came to the estimated standard supply chain cost compared to actual cost.
One of the best ways to cut your Cleveland supply chain costs is to work with a dedicated third-party logistics partner. On Time Delivery & Warehouse 3PL providers can help you better pinpoint what exactly in your chain of supply is causing you the biggest headaches and cost bleed-out. Despite wide variances between industries and companies, there are a few supply chain our third-party logistics professionals have seen consistently cause problems. If any of these issues sound familiar (or you’re having trouble identifying exactly which supply chain loophole is costing you most or what to do about it), a third-party supply chain management team can be an invaluable resource.
Some think of logistics and supply chain management as simply moving goods from one place to the next. In reality, it’s a complex and dynamic trillion-dollar industry, with outsourcing proven to be mission-critical for companies edging out competition.
Reliable supply chain management partners know it’s always been a challenging field, though it’s true lately many of us are facing down some tough realities. Those include higher rates, capacity shortages and now a pending trade war and import/ export uncertainties. This tightening of the market (especially in ground transportation) means those of us on the front lines need to be innovative now more than ever – while also holding true to the best practices and relationships that allowed us to ride out past tumult.
If you depend on Cleveland supply chain management, you may be interested in these surprising statistics offering insight into the industry – and where it’s headed.
Third-party logistics is more than just a contract. It’s a relationship. On Time Delivery & Warehouse 3PL partners trust us to perform materials management and product distribution functions, but for us, it goes beyond that. We represent an extension of our client to their clients. Many shippers need customized offerings with a broad range of capabilities – encompassing freight shipping, trucking, warehousing and distribution. We deliver that. Ultimately, though, it’s about forging a long-term, mutually-beneficial accord.
Finding the Best Cleveland 3PL Partner
Market research released by IBISWorld last month revealed there are nearly 19,000 third-party logistics providers in the U.S. – a figure expected to grow the next five years, given the uptick in consumer spending, industrial production and trade. Northeast Ohio and other areas around the Great Lakes are concentrated in 3PL providers because of the high volume of manufacturing, trade and other commercial activities.
That means shippers have an array of choices in third-party logistics options. Choosing the best for your needs means weighing a host of factors (i.e., expanse of valuable carrier networks, service areas, supply chain and freight costs, freight accounting, performance auditing, punctuality, scalability, financial strength, responsiveness, technological tools/ data-sharing, excellent industry references, corporate culture, etc.). However, evaluation of the third-party logistics relationship shouldn’t stop once you’ve signed a contract.
Truck driver benefits and wages are ballooning across the U.S., even as freight-hauling capacity has diminished in the face of ever-higher demand. In turn, small businesses (especially retailers and distributors) are saddled with soaring shipping charges, an expense that’s proven crippling for some. Truckers deserve good wages for the vital job they do. But businesses hoping to stay afloat would be best-served with a Cleveland 3PL partnership to help keep costs in check.
The American Trucking Associations group, representing owners of fleets, reports annual trucker salaries climbed 15-to-18 percent in the last four years, with the exact rise varying based on the nature of fleets and routes. Overall, private fleet driver salaries topped $86,000 last year – a $13,000 increase from just four years prior. A truckload driver on irregular national route (basically an entry-level post) can now expect to pull in about $53,000 – up from $46,000 just a few years ago. This trend is not braking anytime soon, The Wall Street Journal reports, because the demand for trucking is higher than ever and companies are increasingly counting on freights with full truckload and less-than-truckload capacity to ensure consumer expectations are met.
One silver lining for our clients is trucker turnover is down, meaning those on the road are increasingly more experienced – and that’s a very good thing in terms of reducing roadway liability.
Some elements of this higher-cost transportation landscape simply can’t be avoided. Even with higher pay drawing in more drivers, there are still only so many truck drivers, so many trucks and so much space. As a trusted Cleveland 3PL, On Time Delivery and Warehouse leaders work to help minimize this impact for our customers. To augment reliability and consistently meet demands of this new standard “get-it-there-sooner” market, we must offer competitive truck driver compensation. We must supply them with the best equipment, as well as advanced transportation management software to ensure efficiency. But we also work to help clients sift through an expanse of carrier options to pinpoint the best choice. We identify and bridge supply chain gaps that bleed businesses of time and money. We offer transparency so clients can track their goods at every leg of the journey.
The U.S. truck capacity shortage is putting a serious kink in supply chains across the country. The trucking industry is saddled with increasingly stringent regulations, dwindling drive time hours and fewer drivers entering a field that’s already understaffed. Economic growth – while certainly a good thing – has compounded the capacity issue, and it isn’t likely to wane anytime soon. Getting ahead by partnering with a reputable 3PL provider in your region will improve your supply chain transparency and lower your costs long-term.
No industry is untouched by the truck capacity deficit because virtually all businesses – large and small – rely on efficient trucking to keep goods flowing – intact, on budget and on time.
A top-tier Cleveland 3PL provider like On Time Delivery & Warehouse can help mollify your truck capacity troubles by addressing inefficiencies and performance gaps in your supply chain. These weaknesses will have an increasingly profound effect on productivity and profits in the current climate unless you tackle them head-on. Most companies need help to do it right.