Warehousing and transportation companies are essential businesses during the COVID-19 outbreak. But activity at the dock doors can put workers and facilities at risk. A tool that enables you and your carriers to book dock appointments in real time reduces congestion and helps keep everyone on schedule.
A report was recently published by Supply Chain Digest, suggesting that supply chain relationships can be improved for better business moving forward. The report is an attempt to get closer to how these relationships are faring in the current moment and what parties on both sides need to make them stronger and more efficient. The editors surveyed over 44 retailers and 165 consumer goods manufacturers including companies like Procter & Gamble, Target, Big Lots, Home Depot, Nike, and JC Penney.
Walmart and PepsiCo are the companies with the best supply chain management, according to a new report by Kantar-Retail Poweranking, a retail analytics firm in Norwalk, Connecticut. According to the company, over 550 manufacturer and retailer respondents participated in the annual study.
Warehouse and distribution space is expanding rapidly in the U.S. due to strong demand. According to a new report by the CBRE Group, a global investment firm located in Los Angeles, pro forma rents exceeded breakeven rents by 20-40%.
New warehouse development has not been hindered by the spike in construction costs, mostly because the supply of modern logistics facilities is limited. The majority of construction costs is represented by land acquisition; today, land costs range between $45-to-$170 per square foot.
The most expensive part of the country to build a 500,000 square-foot warehouse is Los Angeles, followed by Inland Empire, California; central New Jersey; Portland, Oregon; Pennsylvania’s I-78/81 corridor; Houston, Texas; Chicago, Illinois; Phoenix, Arizona; Dallas/Fort Worth; and Atlanta, Georgia.
The biggest boom right now is in Atlanta, Dallas/Fort Worth, and Inland Empire. However, the greatest rent spread between pro forma rents and breakeven rents is: Chicago at 43%; Atlanta at 38%; Phoenix at 35%; Pennsylvania’s I-78/I-81 corridor at 30%; and Los Angeles at 27%.
David Egan, CBRE’s global head of industrial and logistics research, said that the traditional perception that oversupply will threaten the market is wrong. Instead, he said “there is a very big spread between kind of the bottom line breakeven and the pro forma rents” which “means the market will generally absorb what the developers need.
“The economics are on the side of the developers, and there is a good case to be made for the developers to continue to build. Things are not getting overheated, and if the market does soften a bit, there is a cushion to move the rents a bit and still make money. There is good economic reason for development,” he said.
How have you expanded your warehouse and distribution space over the last few years? If you haven’t, do you have plans in the future? If so, what are factors that have led you to expand? Please let us know in the comments below!
Earlier this year, we sent an email to our customers asking them for feedback on all aspects of our products and the service we provide. Respondents were told that for every completed survey, we would make a donation to a worthy organization of their choice. Once the survey was completed, they were asked to pick one of several charities listed.
The global economy forces partnerships among companies throughout the world. While the obvious benefits of such far-flung agreements are reduced labor and manufacturing costs, as well as speed of delivery, there are potential risks. Breakdowns in the supply chain, however minor, are particularly threatening to the overall process because they can affect all parties, both upstream and downstream. And no one wants a slowdown.
With so much at risk, how can companies minimize or mitigate disruptions in their supply chain? What areas are worth looking at for risk management? What habits can a company adopt to prepare for legal disruptions that might be disastrous? Here are a few ways to start:
1. Get to know your supply chain neighbor. No matter where you are along the supply chain, do what you can to get a full assessment of the company you rely upon the most to get products moving. For example, manufacturers need to have comprehensive knowledge of their suppliers, distributors, and retailers while all three should get to know the manufacturer. This should involve establishing key contacts, creating protocol for notifying upstream and downstream partners of potential problems, and other due diligence efforts that will keep supply moving.
2. Make sure your contracts are comprehensive. The global nature of your partnerships can mean you are at the mercy of laws of other jurisdictions, which exposes you to a wide range of liability. Before you sign, make sure your contracts are comprehensive and protect you by giving you legal recourse against whichever responsible party in case of a supply chain disruption or product recall. Know your rights, but also know your obligations and the obligations of others so risk is shared.
3. Get insurance that is airtight. If you are involved in a liability claim or another kind of supply chain dispute you don’t want to be either uninsured or underinsured. You need to understand every kind of risk involved and have insurance that has you covered. For example, a class action lawsuit involving food product recalls can create liability exposure in the millions of dollars. You need to have insurance that forecasts scenarios like that to make sure you are protected.
4. Get the details right. Good record keeping may feel like a chore, but it will save you when disaster strikes. Besides making sure that all your contracts are executed correctly, make sure you properly archive paperwork related to every aspect of your business: contracts, insurance policies, and commercial documents related to equipment and facilities, etc. You don’t want to be stuck in the dark in case of a liability claim or an equipment breakdown.
5. Seek home court advantage. The challenges of foreign partnerships can include slow communication and the difficulty of obtaining access to information. But you may also be exposed to rules that may be outside the jurisdiction of the Canadian and U.S. court system. The way to reduce that risk is to secure home court advantage through arbitration clauses in your contracts or via your terms and conditions.
Want more tips? Check out this article in Inbound Logistics that gives you more ways to reduce risk when operating with global supply partners.
What do you do prepare for potential problems in your supply chain? Give us your tips in the comments below. Visit argosoftware.com or call us at (888) 253-5353 to set up a demo or learn more about our suite of products for Logistics Service Providers (3PLS and Transporters).