Are Layoffs and Logistics Turnover Putting Your Supply Chain At Risk?
3PLs are undergoing a series of layoffs, driving increased logistics turnover. What happens when your key account manager is laid off or leaves? Is your logistics partner equipped to quickly and effectively address any personnel gaps on your account team? In this post, we’ll address key attributes shippers should look for in a 3PL or Managed Transportation Services partner that can help you mitigate the risk of layoffs and employee turnover.
Logistics Layoffs: The Whiplash Effect of COVID
The COVID-19 pandemic drove sharp increases in consumer demand. In response, many shippers and logistics companies rapidly expanded their workforce to keep pace, taking on new operations, account management, and carrier sales employees.
Now, the supply chain has, for the most part, recovered from the pandemic. Customer demand and global supply chain issues have cooled, and some 3PLs have concluded they are overstaffed for the current market. The recent round of logistics layoffs is yet another unwelcome result of the COVID-19 pandemic. As President Truman once remarked, “It’s a recession when your neighbor loses his job; it’s a depression when you lose yours.” So what do you call it when key people at your logistics partner lose their jobs, or simply move on to a role at another company? Depending on how your 3PL is structured, the impact to your logistics network and supply chain operations could be significant.
How Logistics Turnover Puts Your Supply Chain at Risk
When key people leave your 3PL, your risk factors for missed pick-ups and deliveries, overpaying for loads and simple, avoidable mistakes can increase. When members of your day-to-day account team are replaced by employees that are unfamiliar with the unique needs of your supply chain, you can expect there will be missed opportunities for consolidation, optimization, and cost savings too.
But there are strategic risks as well. If shipments of your products do not arrive on time and in full, you run the risk of customer dissatisfaction. And if your products are not on store shelves, not only can consumers not purchase them, but they may switch to a competing brand. Getting them to switch back can be a costly and time-consuming exercise.
Mitigating Risk: What To Look for in a Logistics Partner
If you’re worried about the potential impact of disruptions to your logistics operations due to logistics turnover, here are some steps you can take to ensure your logistics provider is prepared to serve your needs now and into the future.
- Communication: Open and honest communication should be the bedrock of your relationship with your 3PL or 4PL. (We think this is so critical, we built our entire company and culture around the importance of truth and transparency). Ask your logistics partner about their succession plans should key members of your account team leave their organization. Don’t wait until key people depart—start planning for disruption now.
- Executive Involvement: Are key executive leaders at your 3PL or 4PL involved and engaged with your supply chain challenges? Hands-on management by members of the executive team ensures that they understand the nuanced complexities of your needs and is a good indicator that your logistics partner values you and your business. This involvement and attention increases the odds that supply chain disruption due to layoffs or turnover will be minimized.
- Employee Tenure: Layoffs aren’t the only driver of employee turnover. Since the pandemic, “The Great Resignation” phenomenon has driven historically high turnover rates for organizations across multiple sectors of the economy, and logistics and supply chain has not been immune to this trend. When evaluating your logistics partners, ask about employee retention rates and average tenure. Businesses that put an emphasis on retention can offer greater stability in the face of industry volatility.
- Employee Training: Employee training is another key factor driving retention and ultimately, the quality and stability of the service you receive from your logistics partner. Ask your partner if and how they cross-train employees. Doing so can add critical bench strength to ensure seamless service in the face of disruption due to everything from illness to weather events and employee turnover.
- Systems and Processes: Beyond having the right people and executive support, does your logistics provider leverage the right systems and processes to ensure seamless service? In other words, if your account lead were hit by a proverbial bus, would key information about your logistics operations vanish with them? Is your 3PL’s knowledge of your business primarily “tribal” or is it codified in SOPs and business rules that have been established within your TMS? Are there established processes that take the guesswork and potential for costly missteps out of the equation? Look for a partner that leverages technology and processes that drive scalable, repeatable success even in the face of staffing disruptions.
Sheer Logistics: An Extension of Your Team
Ensuring your supply chain is running smoothly is stressful enough. Don’t let layoffs and logistics turnover add to your worries.
Sheer Logistics was founded in 2009 on the bedrock principles of transparency, truth and trust. Unlike brokerage-centric 3PLs, Sheer was purpose-built to deliver Managed Transportation Services and technology solutions to help middle-market companies reduce costs, create efficiencies, deliver actionable business intelligence, and improve customer satisfaction.
We combine people, processes, and technology to develop holistic, customized solutions for our shipper clients. Our expert staff acts as an extension of your team, supporting your growth without the need for adding headcount. At Sheer, we’ve charted our own path, and fostered a unique culture, and we’re proud of the results: long-standing, successful client relationships supported by exceptionally long-tenured employees and our powerful and agile SheerTMS and SheerExchange logistics tech ecosystem. To learn more, please reach out to us at 866.200.5884 or info@sheerlogistics.com
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