Supply Chain Trends in 2016: A Year of Defining Change.Transportfolio by C.H. Robinson
It’s been a big year for the transportation industry. From the Panama Canal opening to a record year in ecommerce, the happenings of 2016 have kept everyone on their toes. When I think about what we can take away from this year and what we can expect in 2017, three major themes come to mind.
Year of the Customer
I’m calling it the year of the customer, as it is every year at C.H. Robinson. What’s unique about 2016 is the breadth of our customers. They continue to span beyond an organization’s transportation professionals. This is in large part driven by supply chain visibility needs and technology changes.
Shippers want their people to be able to locate the trucks, see what’s on them, and know how they’re getting to their distribution centers—all without having to call the transportation department. This means more companies are trying to bring forward technologies to make it easier to gain access, service, and visibility. What we have to ask ourselves is, “What will that increased visibility mean for the supply chain?”
Year of Global Revolution
This year was a strong reminder of the power of growth and risk in the global supply chain. The Panama Canal is a prime example of a global vision being realized. When it opened, it revolutionized shipping lanes from China to the East Coast. According to our research with the Boston Consulting Group, the expansion has the potential to shift 10% of container traffic to East Coast ports by 2020. Since the expansion, the Panama Canal has enabled larger ships and more goods to make the trip, providing shippers and carriers with more options, while keeping a competitive cost in the market.
The Hanjin bankruptcy, on the other hand, is a powerful reminder and example of the risk we face in the global world. Supply chains are complicated and we’re exposed to more risk with global transportation. The collapse of this container shipping company is the largest bankruptcy in history and it will be interesting to see its ripple effect into 2017.
Year of Ecommerce
Ecommerce and final mile deliveries are as big this year as they have ever been. Customers’ purchasing behaviors are changing, and in order to meet those demands, supply chains must shift to support that behavior. More consumers continue to buy online—placing smaller orders, more frequently. This year’s Cyber Monday proved that. According to a 2016 sales report, Cyber Monday 2016 saw a new record with $3.45 billion spent online. It is officially the largest online sales day in U.S. history. Likewise, Chinese online shoppers celebrated “singles day,” their largest ecommerce day, where Alibaba, China’s ecommerce giant, hit record sales across the globe. And with more efficient supply chains, items that were once traveling thousands of miles after an online order was placed are now traveling just hundreds of miles to get to the consumer faster. We’re seeing some deliveries in an hour or less, which is significantly shaking up the supply chain. This raises the question, “What capacity is there to make those final deliveries?”
This year came with a lot of change, innovation, and growth. What can we expect for 2017? All of that and more. With the rise of autonomous vehicles and global procurement, 2017 is gearing up to be another big year for the transportation industry. What do you think will be hot topics in 2017? Take the poll below!
— C.H. Robinson (@CHRobinsonInc) December 20, 2016