Peek inside a logistics facility at the end of the holiday supply chain
Pallets of sodas, jewelry boxes and baby car seats competed for attention with 75-inch TVs, snow blowers, and crates of bolts for bridges — all at a delivery warehouse on Monday. Each was destined for one of about 75 XPO Logistics trailers waiting to be loaded and moved, in freezing conditions.
Why it matters: The mix of consumer goods that a company like XPO has to transport is at its highest since the onset of the pandemic, which instigated a host of supply chain snarls.
- That shift in cargo need has added to the demand for workers, who have plenty of other options up and down Moonachie Avenue in Carlstadt, NJ — at places like UPS Freight or CDL Last Mile.
“Multiple small orders are harder to deal with than fewer large orders … Each unit needs handling,” says Rudi Leuschner, director for the online Master of Science in Supply Chain Management program at Rutgers Business School.
The big picture: The build-up in supply chain constraints has pushed retailers to a less traditional shipping pattern — spreading out what they need delivered, and when, to avoid the inventory problems that could arise from concentration, according to supply chain researchers behind the Logistics Managers' Index.
- Sellers have also piled on the pressure by warehousing less of their goods themselves, relying instead on logistics centers like the one Axios visited.
The impact: “It feels like there’s more tonnage [this year],” says Paul Emmert, senior service center manager, less-than-truckload, at XPO. But the reality is that the frequency and number of smaller orders have increased, he adds.
State of play: “The hardest part about this job right now … is to stay staffed,” says Emmert.
- The warehouse has also been beset by equipment breakdowns, which were hard to fix because of — you guessed it — supply chain issues, says Tavio Headley, vice president of XPO investor relations.
The bottom line: “We’re as close to maximum capacity, highest prices, highest utilization that we've ever seen in [transportation and warehousing],” says Leuschner.