Trade Talk: The five miles of uncertainty
Find out why shippers need to look at more than the first and last mile when making supply chain decisions.
Shippers need to look at more than just the first and last miles.
There is no such thing as an average day in the logistics industry. Logistics managers are used to managing the “known unknowns,” such as weather events that force cargo re-routes reroutes, or supply and quality-control issues that require sourcing new manufacturers. However, it’s the “unknown unknowns” that now keep logistics managers up at night. The factors they can’t control, like trade agreements, changes in fuel requirements for ships and climate change, that are disrupting the industry.
Logistics managers who succeed will adopt a “dynamic” supply chain strategy—one where they can minimize the impact of these so-called unknown unknowns. While nobody has a crystal ball, JLL’s in-house supply chain economics expert, Dr. Walter Kemmsies, reveals a framework for the “five miles of uncertainty” to help today’s logistics managers anticipate potential threats across their entire supply chain and adjust their strategy accordingly.
Why focus on five miles, not rather than just the first and last? The U.S. supply chain infrastructure is predicated on imports, meaning shippers’ transportation costs typically include both head-haul and back-haul routes. In a nutshell, this means service providers’ return return-trip costs for importers are baked into current transportation and delivery rates.