But there could be another way of utilising resources and partnerships to work a lot more effectively going forward. A way that would support our retailers and customers, and ourselves. Cross collaboration between logistics providers and retailers, suppliers and partners is a fantastic opportunity to maximise resources available, and increase efficiency and sustainability across the board. 

We’re talking about the possibility for collaboration across 3PLs and retailers to plug the gap when it comes to limited resources, availability and efficiency. Collaboration can open the door to minimising costs, filling empty legs, securing warehouse support, sourcing drivers and fulfilling customer contracts. The opportunities are clearly there, so what are the challenges with cross collaboration in this way that have made it difficult to adopt before now?

Collaboration: the challenges and pitfalls

Here are four reasons that are likely putting the stopper on cross collaboration, and challenges we’ll need to overcome if we are to pursue it successfully in the future. 

1. Commercial advantage 

Perhaps one of the main reasons that collaboration isn’t widely utilised is because of competition – a little healthy competition never hurt anyone, and for many 3PLs the goal will be to maintain commercial advantage over their competitors. This is also how growth is facilitated, using pricing, strategy and resources to create a unique proposition that attracts and retains customers. If a collaborative process opened up a 3PL’s playbook to their competitors, it could stunt that commercial advantage. 

2. Customer penetration

In a similar vein, many will be reluctant to give competitors access to their customers and contracts – ones they’ve worked hard to secure. It is a worry that by collaborating with fellow 3PLs who have traditionally been competitors, it might open up opportunities for undercutting prices, gaining customer insights and securing new contracts. Discretion will likely be important to give those the confidence to approach collaboration across the board. 

3. Pride

There’s also the element of control, and saving face – we all take a great deal of pride in our work. Having worked hard to achieve success it could be difficult to relinquish the level of control that will be needed to allow for successful collaboration and more open lines of communication across providers and partners. Industry leaders benefit greatly from having a successful, recognised and respected brand, with their customers relying on them to meet their expectations. There is an element of trust that will be needed to collaborate successfully and an understanding that collaborators will uphold the same standards and work ethic. 

4. Customer hesitation

On the flip side of the coin we also have to take into consideration how our customers will feel about more collaborative solutions. It’s understandable that there would be hesitation from a retailer’s perspective. For example, if a 3PL was utilising resources across retailers, there’s the question of which retailer is prioritised? Similarly 3PLs would need to ensure a level of consistency across collaborative services to deliver the experience the customer is accustomed to under one company or brand. These are definitely the factors that need to be considered from a customer service standpoint. Is it possible to be fully committed and reliable when sharing or distributing resources in this way?

Is there still potential?

At WIN, we are constantly looking to the future and are positive about the opportunities available to us that will help the industry to not just survive, but thrive as one of the UK’s most important sectors. We believe a more collaborative approach is essential for our future and that, collectively, we need to start thinking differently as to how we can use the assets we have to continue driving forward. 

It’s not just us either, industry collaboration was discussed amongst other trends in a panel (The state of logistics in a post Covid and Brexit world) at the recent Multimodal Exhibition, held at Birmingham NEC. Paul Durkin, chief customer and innovation officer at Wincanton noted, “the general lack of capacity will also see more collaboration, […] It’s about moving the dial forward.” Chris Warn, global logistics director at Pentland Brands, agreed, suggesting “We’ll see retailers supporting each other and more collaboration across the whole sector.”

Collaboration as an approach also isn’t such an outlandish idea – we already do it in certain areas of our businesses. Many companies operate across multiple sectors in order to make the most of their resources throughout the year. This multi-sector presence enables companies to shift and adapt resources to meet changing demands based on trends, habits and external circumstances. Peak trading is a great example of this, when we shift our focus and resources to retailers during peak season. Similarly the effects of Covid-19 are proof that adaptability will be an essential strategy for the future. 

Embrace and adapt

While there are definitely still challenges and pitfalls to navigate, collaboration can definitely be a positive way forward to ease pressures within our industry. We need to start sharing more resources and be willing to adapt so we can maximise opportunities as and when they arise. Collaboration is definitely coming so we have to embrace it. The likes of Amazon’s Relay network are already setting the precedent for how transportation is changing, combining two emerging trends: digital and collaboration.

It’s also something we champion at WIN, with our successful Brokerage Service which aims to connect clients to viable resources and opportunities from our network. It’s not about harbouring resources, connections and customers for the sake of ourselves – we won’t survive this way. It’s about making the most of what’s available from multiple sources to get the job done as best we can.

Join the conversation on social media – do you think collaboration is key for moving forward?

The cause of HGV driver shortages has been widely discussed, including by us, with a number of factors impacting the retention and attraction of new drivers to the profession. But what about the effect of the shortages, and the number of other supply chain shifts that are shaking up our industry? 

The announcement that EV CL Chill went into administration at the end of September is a stark sign of the times, and demonstrative that ongoing issues are having significant impacts in real-time and on big players in the industry. Despite having achieved a cash-generative year for 2020, EV CL Chill still struggled with a loss of key customers and acute driver shortages. In addition, cases of large supermarket retailers struggling to secure haulage for seasonal produce, warnings of toy shortages, and general availability across the board are all concerning as we head into the eye of the peak trading storm. 

Although warnings of shortages and empty shelves have been circulating for months, demand doesn’t seem to be waning – our customers still want to provide the goods, and end-consumers still want to buy. The need to deliver come Christmas is still very much a priority.

Supply chain struggles

So exactly what is causing struggles within the supply chain? Based on our experience, here are the most common areas of concern in the industry currently:

• Driver shortages and lack of haulage

The lack of HGV drivers has permeated the news for months now, and for good reason. This is still a huge area of contention and something that is having an impact across the supply chain. The domino effect of these shortages is that our customers cannot secure haulage to fill their shelves on time, and international imports are having to be diverted away from the UK due to a backlog of containers that can’t be moved quickly enough. 

Essentially delayed deliveries, empty shelves and petrol shortages are all results of a significant lack of skilled drivers to get products directly to the end-consumer. With the onset of the peak trading season and an increase in volume of goods to be moved, our driver shortages will be an ongoing challenge. 

• Inflated prices

We are seeing inflated prices across areas of the supply chain that are, quite simply, not sustainable long-term. The cost to transport one container from East Asia to Europe is now 10 times higher compared to its pre-pandemic cost – a result of global supply chain issues exacerbated hugely by Covid-19.

Similarly, due to demand, HGV drivers have seen some staggering pay increases that some argue either aren’t sustainable, or still not attractive enough to encourage drivers to join or stay in the profession. The result is a strategy for the short-term that could end up alienating smaller firms that can’t compete with such costs, and consumers who simply don’t want to pay for it. 

• Seasonal demand

An increase in consumer demand for Christmas 2021 is putting a lot of pressure on an already strained supply chain – unsurprisingly. Our retailers are desperate for haulage that can guarantee seasonal stock is on the shelves (with particular pressures for food retailers and grocers who require chilled haulage for seasonal produce) in time for consumers craving a ‘normal’ Christmas following last year’s last minute lockdown fiasco. 

Although peak trading is always challenging, the addition of driver shortages, inflated prices, and increasing consumer expectations have come together to create a perfect storm for the upcoming period. The question now is, can we mitigate these factors successfully enough to see us through 2021?

Supply chain solutions

We are seeing a number of trends across the industry that have been introduced to cope with peak trading demand – here’s what’s shaping the 2021 peak period:

• Price hikes

As mentioned, inflated prices within the supply chain are not sustainable and therefore price hikes are already being predicted to hit consumers in order to cover increasing supply chain costs. It has been reported that UK supermarket prices could rise by as much as 5% during the peak trading period.

While demand is high and availability uncertain, there’s potential that consumers will be willing to pay for these price hikes for the time being, in order to secure products for the seasonal period. But what about for the long-term, and how far will price hikes need to go to cover costs?

• Certainty over selection

While peak trading usually drives retailers to expand product lines and increase stock volumes, 2021 may see a shift in focus to product certainty over selection. With delayed and fragmented deliveries making it difficult for retailers to match customer expectations across their business, a commitment to delivering less, but with more certainty may be the way through the peak period. 

Retailers are already adjusting their approach to peak brand messaging in order to manage expectations, and those that have control over their own supply chain are likely to benefit from being able to promote its reliability. 

• Temporary visas

The government announced its plans to provide temporary visas to 5000 HGV drivers and 5500 poultry workers for three months in an attempt to provide short-term relief for the haulage industry. This scheme is to run up until Christmas Eve in a clear attempt to see the UK through the seasonal period. But with a shortage of 100,000 HGV drivers, will this be enough? Not to mention the possibility that this temporary scheme may not even be all that appealing to overseas workers? 

• Prolonging the peak trading period

No toys or turkeys – these are the warnings that are resulting in consumers being advised to shop early if they want to guarantee their Christmas goods. 48% of consumers have started Christmas shopping earlier as a result. 

Starting Christmas shopping earlier may help to manage expectations and spread demand, particularly when paired with clever brand messaging that promotes current availability over future uncertainty. But with the supply chain already under strain, does this also inadvertently put further pressure on it by prolonging the peak trading period?

The shape of things to come

The reactions we’re seeing to current supply chain issues are short-term attempts to survive the 2021 peak trading period, managing expectations and meeting demand as best they can. But we question how successful and sustainable they can really be? Are we instead on the brink of a fundamental shift in commercial approach, in an effort to deal with a shifting supply chain and ever-increasing consumer demands? 

What happens in 2022 – when we are still feeling the effects of driver shortages, global supply chain issues, Brexit, and changed consumer habits?  Is the reaction we’re seeing to peak trading highlighting our need for a more sustainable supply chain and ultimately signalling the shape of things to come?

We’d love to know your thoughts – join the conversation over on our social media pages.