Customer expectations for low-cost, quick delivery of goods have been rising in recent years, but customers continue to expect their orders to be shipped inexpensively and quickly even amid a global pandemic and economic downturn, a survey shows.
Logistics visibility provider project44 recently completed a survey of 600 supply chain professionals and 1,000 consumers throughout the United States and Europe to understand the views of customers and companies during the downturn and the COVID-19 pandemic. In 2018, J.B. Hunt Transport Services Inc. started to work with project44 to integrate its visibility platform with J.B. Hunt 360, the Lowell-based carrier’s technology platform.
Customers continue to have high delivery expectations in the wake of the downturn as 83% of customers do not expect companies to stop providing fast delivery, the survey shows.
Even in a struggling economy, companies must create sustainable delivery methods without sacrificing efficiency, according to a report on the survey. It shows 78% of customers are more likely to purchase from companies that put a priority on sustainability in the delivery process.
The report also shows supply chains are not prepared to evaluate the security of third parties as data volume and sharing continue to increase amid the quick delivery of goods. However, 82% of customers say companies need to do more to protect the security of their data.
“These findings echo what we see in the research community as well: smart data management enables effective supply chain management. But, as data sources and data integrations proliferate, we are all now only beginning to understand the opportunities and the challenges that real-world supply chain data coordination will present,” said David Correll, research scientist at the MIT Center for Transportation and Logistics. “Ours is a field that is wide open, with big opportunities for profitable problem solving.”
Customers expect visibility and transparency in the delivery process, and 89% said they do not expect companies to sacrifice these demands or expected arrival times of shipments in an economic downturn.
“These customer demands have become an inflection point for faster digitalization and transformation,” said Jett McCandless, founder and CEO of project44. “As speed and visibility remain a priority, efficient supply chains will be at the center of business recovery and growth.”
More than half of supply chain professionals said they could be doing more to prepare and survive a downturn, and those who have adopted strategies to increase the efficiency and speed of shipments could better handle existing challenges in the market. But 44% said changing customer demands for delivery made preparing for a downturn more difficult.
Only one in five supply chain professionals said they would maintain the same delivery options they offered before the downturn. The demand remains high for fast, transparent and low-cost delivery, and operational efficiency and visibility are important to meet those demands, the professionals said. However, only 21% of supply chain professionals said they would not change their delivery options as they are core to their customer experience. Yet, most of the professionals are not prepared to meet the high expectations, regardless of economic conditions, according to the report.
INCREASED SUSTAINABILITY FOCUS
Customers continue to look to purchase from companies with sustainability initiatives, and 40% said they plan to make more purchases from such companies. And, 17% said they will only purchase from companies with sustainable shipping practices. The report also shows 60% of customers would pay more to shop from these companies, with 35% willing to pay up to 10% more on shipping. And, 18% of customers would pay up to 25% more on shipping.
More than half of supply chain professionals said their company has adopted a sustainability plan because they felt pressure from customers or competitors to do so. About half of the professionals are making delivery processes more efficient to address sustainability concerns, and 21% are using real-time visibility to improve efficiency to address the concerns.
Supply chains are struggling to balance sustainability, costs and the delivery experience, and 45% of supply chain professionals said increasing customer demand for fast, transparent and low-cost delivery has created challenges to implement sustainable supply chain and delivery practices. Also, 69% of supply chain professionals struggle to maintain or improve operational efficiency while also taking part in sustainable practices.
Following are ways supply chains are working to be more sustainable: 49% are making their delivery processes more efficient, 40% are using more sustainable materials and resources and 27% are using fuel-efficient or zero-emission transportation options.
In J.B. Hunt’s annual shareholders meeting April 23, shareholders, with 54.5% of the vote, approved a shareholder proposal on climate change that would require the company to issue a report on how it plans to reduce its total contribution to climate change and aligning itself with the Paris Agreement’s goal of maintaining global temperature increases below 2 degrees Celsius.
The company’s board of directors was against the proposal and could “undermine the company’s ability to compete in the transportation marketplace, reducing our profitability and harming the financial interests of our stockholders,” according to a statement from the board of directors. The report will require the company to publicly disclose how it would reduce greenhouse gas emissions and give its competitors “insight into management’s strategic business plans and operational goals and ultimately could impair the company’s ability to achieve greenhouse gas emissions reductions.”
In 2018, J.B. Hunt added five Mitsubishi Fuso eCanter trucks to its fleet, and they were the carrier’s first all-electric trucks.
“We’ve always been trying to look at ways to reduce our carbon footprint,” Craig Harper, chief operations officer for J.B. Hunt, said in 2018. “We do a lot of that with our intermodal operations.”
Recently, Harper noted that J.B. Hunt 360 is helping to improve efficiency and remove waste in the supply chain. The technology platform allows the carrier to match trucks and loads and provides transparency and visibility into the supply chain. As a result, the carrier to make more efficient use of its trucks and trailers, he said. And converting truck freight to intermodal shipments also can help to improve efficiency.
“We know for a fact that intermodal is 250% more efficient than over-the-road trucking,” Harper said.
Along with the addition of its first all-electric vehicles in 2018, J.B. Hunt also ordered 40 Tesla Semi trucks and recently started to test the electric Freightliner eCascadia.
While supply chains are making efforts to increase sustainability in their shipping practices, they have only started to measure these efforts, according to the project44 report. More than one-third of supply chain professionals said they have just started to measure their sustainability or climate impact, and an additional 27% are not measuring their impact. More than half have a sustainability plan, and 51% have had one for less than two years.
DATA SECURITY CONCERNS
The quick delivery of goods has led to more data to manage, and 80% of supply chain professionals said they have increased the amount of data they manage and store on customers.
More than one-third of customers said the security of their data should be a company’s top priority in an economic downturn. And 29% of customers said they’re more concerned about data security than a downturn or sustainability. Nearly half of customers feel as if they have no control over the security of their data when making purchases, but 62% trust that companies have the appropriate security measures in place to keep their data secure.
Following are ways companies are trying to protect customer data: 47% require partners and providers to comply with widely-recognized security standards, 34% require partners and providers to allow an audit of their security program, and 30% require partners to complete a security questionnaire before making purchases from them or working with them.