The chaos in the supply chain has ripple effects down to the last mile. AxleHire Founder Daniel Sokolovsky is responsible for ensuring his company can meet those last-mile delivery demands. Sokolovsky said that much of the disruption takes place in the middle mile, but firms like his must be ready to react as goods enter logistics networks, and that means building up good communications networks.
MODERN SHIPPER: With the current freight capacity situation in this country, how much of that has trickled down to the last mile, and are you seeing issues meeting demand for final movement of goods to customers?
SOKOLOVSKY: Capacity issues, wherever they occur in the supply chain, always impact last-mile deliveries—however, the most significant cost increases recently are happening with the middle mile and linehaul transportation. AxleHire has found that finding ways to automate or use technology when we have to absorb new capacity is the best way to reduce costs and mitigate errors. In addition, when there are middle-mile delays due to capacity challenges, it’s critical to have good communication with the end customer. Good communication is also crucial for creating scalable and flexible solutions, like coming up with a quick fix on the fly.
MODERN SHIPPER: It seems like every segment of the economy is suffering from a labor shortage. Are you seeing the same thing in the last-mile segment, and how does that impact delivery guarantees as we head into the holiday season?
SOKOLOVSKY: Like other carriers, AxleHire is experiencing issues with the labor shortage, especially delivery drivers. But, unlike many other last-mile carriers, AxleHire is adept at dealing with unexpected changes, like a driver shortage, in the supply chain. We are also used to going to great lengths to fulfill our promises to our customers. For instance, AxleHire knows how to quickly spin up micro hubs to utilize the labor we do have better, making it easier to get more deliveries done within a tight time window. Undoubtedly, there will be issues throughout the supply chain this 2021 peak season, so middle-mile and last-mile providers need to be flexible and agile to ensure the highest on-time rates and a good delivery experience.
MODERN SHIPPER: We have recently seen a record number of cargo ships sitting offshore in California waiting to be unloaded. At some point, there could be an influx of items into the U.S. supply chain and the floodgates of goods could be unleashed. Is the last-mile delivery network in this country prepared to handle an onslaught of goods, should that occur prior to Christmas?
SOKOLOVSKY: The hold-up with the cargo ships sitting offshore in California affects the middle mile and distribution first, so it doesn’t immediately affect parcel delivery. Given that these ships have already been sitting so long, AxleHire doesn’t anticipate anything we don’t usually see. Nevertheless, we’ve prepared for most situations. Plus, we know how to be flexible if something comes up. Once these goods start to consolidate and decisions get made about when and where they’ll end up, that’s when last-mile logistics come into play.
MODERN SHIPPER: For shippers that rely on last-mile providers, has the chaos of 2020-2021 altered their relationships with carriers in any way? Are there new demands that the carriers must meet? Are there enough carriers to meet the demands?
SOKOLOVSKY: The recent shift away from big carriers has given AxleHire and other regional carriers a new opportunity to step up and prove their worth to provide more flexible, efficient, and cost-effective last-mile delivery. One thing that has changed, as far as demand is concerned, is that more customers are expecting next-day delivery. However, with faster shipping speeds comes increased complexity with both the middle-mile and last-mile networks. Unfortunately, most carriers are not able or prepared to quickly make the changes necessary to accommodate new demand.
MODERN SHIPPER: Technology continues to evolve, and last-mile carriers rely on not just their own technology, but successful integrations with technology from shippers and retailers. What technology trends are you seeing develop in this regard that maybe, if not for the experiences and supply chain disruption that we’ve seen recently, we may not have seen or may not have seen develop for several more years?
SOKOLOVSKY: The increase in demand has accelerated delivery automation, including the use of delivery robots, autonomous driving, remote-controlled delivery, and micro-mobility vehicles. In addition, since customers rely more and more on online shopping and e-commerce, transparency during the delivery process – from shipment to delivery – is essential for consumers. To quickly handle network changes, capacity increases, and better communication with the end customer without sacrificing on-time rates, shippers need to work with carriers whose technologies can accommodate the new delivery demands.
MODERN SHIPPER: It seems almost impossible right now to accurately predict what will happen in the supply chain, but if there is one thing you are most confident will occur during this peak shipping season, what would it be?
SOKOLOVSKY: It may be an obvious answer, but on-time delivery will be more affected and impacted this 2021 holiday season than last. Unfortunately, the worst is yet to come due to ongoing labor shortages and unpredictable online ordering this ’21 holiday season coupled with inventory allocation issues.
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