Mercado Labs | CEO supply chain quotes from the boardroom

First Things First: The Fastest Five Recap – March 2022 Edition

First Things First

The Fastest Five Recap - March Edition

March 10th, 2022   ·   By Callum Berry

What does the future look like for the global supply chain?

You might have watched the recent second episode of our “First Things First” live show, where Mercado CEO Rob Garrison covered some of the top supply chain news stories from the past month in a segment called the “Fastest Five.”

If you missed out on the show, don’t worry – you can catch up here.

Let’s delve into the headlines Rob covered in a little more depth. So take a seat and let us give you the lowdown on “Logistics-as-a-Service.”

Wayfair’s new ways

If like us, you enjoy scrolling online for soft furnishings or a little something to complete your new maximalist living room, you’ve no doubt come across online “darling” Wayfair on your search engine travels. More often than not, they’re the first item to pop up when you search “office desk” or “avant garde dog bowel.” However, the retailer has shown itself to offer more than just a pretty front-end in recent weeks. To better handle the current unpredictability of the pandemic-disrupted supply chain, the brand has created an in-house third-party logistics provider and is leaning more heavily into its ocean carrier partnerships.

CEO and cofounder Nirah Shah told attendees at JOC’s TPM22: “Six years ago, we made a concerted effort to build our own end-to-end logistics because in our category, if you don’t control logistics, you can’t control the customer experience.”

This knowledge has resulted in the creation of CastleGate Logistics, which enables Wayfair’s 16,000+ suppliers to get their goods to consumers quickly and in a cost-efficient manner.

“I think one of the big advantages we’ve had versus our competition is, in fact, how we have been able to control our supply chain — not perfectly, by any stretch — just better than our competition,” Shah also said.

The move echoes similar shifts we’re seeing across the industry as more established importing brands recognize the importance of being able to control the proverbial levers across the entirety of the global supply chain – not just the final mile. Through the implementation of tools and processes to automate each link in the supply chain, forward-thinking enterprises can truly gain greater competitive advantages over industry laggards. Something we expect to see more of throughout 2022.

Target is hitting targets

Big-box retailer Target is expanding its logistics footprint across the U.S. in an effort to build up its ability to handle growing cross-channel sales.

The retailer recently saw annual sales surge to more than $100 billion and has said that it plans to build a further four regional distribution centers in addition to the two it opened last summer.

Target also has plans to add a network of sortation sites in order to speedily move goods through its supply chain. In total, the retail giant has roughly 45 million square feet of distribution space, and is now reconfiguring this network with specific fulfillment centers so that when an order is placed online, fulfillment occurs automatically from the best location. The company expects to invest roughly $4-5 billion per year on this initiative over the next five years.

When times are good, investment trends tend to follow sales. As some vestige of balance is restored across the international supply chain, companies are looking to capitalize on the net gains from increased consumer spending, and implement greater controls over their importing agenda. The question remains as to whether bloated final mile spend will start to out-weigh that in the first mile – its distant (and often overlooked) cousin, resulting in a new round of issues that will impede sales when the next supply chain shock rocks the boat.

Expeditor’s cyber attack

Expeditor, one of the largest players in the supply chain and logistics management industry, was forced to shut down most of its operating system in the wake of an ongoing cybersecurity incident, speculated (but not confirmed) to be a ransomware attack. Staff moved out of the corporate office in Seattle on February 20th and were told not to log into their computer. Eight days later…there seems to have been little change.

An update on March 3rd from the company said that it was “incurring significant expenses to incorporate business continuity systems and to investigate, remediate and recover from this cyber-attack.”

Many established, stable and recognized companies have fallen prey to cyber-crime, and the general sentiment is that businesses need to change their mindset from thinking about cyber security, to thinking about cyber resilience.

The recent provocation also sparked a discussion on the ethics of poaching business or staff from a company experiencing a situation like this.

Bill Paul, founder of Logitalent – a specialist freight forwarding recruiter – released a statement on LinkedIn saying, “Expeditors is not a client company of ours, but today I issued an instruction to the team at Logitalent, Inc. not to recruit their people while they are going through the issues created by them being cyber attacked. I hope that the Freight Forwarding Industry will take a similar stance and not go after their business or people since this could happen to any of us. I was not raised to kick a man when he’s down.”

We hope that Expeditor is able to solve and recover from this cyber attack in good time, however this situation does highlight a number of issues with the ways in which companies are adapting to the modern world. Resilience is a word that we often use to discuss ESG goals and the supply chain in general, but as the industry moves online, the tech security industry will need to increasingly become part of the conversation.

Catch-up on the live show

To watch the full episode of First Things First, head over here.
To subscribe to the podcast (available wherever you listen to yours), click here.

We’ll be back for the next installment of the Fastest Five on Episode 2 of “First Things First-light” on Tuesday 12th April 2022. Sign up today over at The Lab.
Mercado | Bring Order to your Imports
© Mercado Labs Inc.
Designed by Studio Nine
From us to you...

Thank you for using Mercado. Our goal is to empower businesses to better navigate the complex world of importing. We know data security is of paramount importance, so we place high standards on ensuring it is safely and respectfully secured. We are committed to following and continuously evolving best practices to support this principle. Your data is yours, and we guard it closely. We do not sell any of your information, and we will always be fully transparent on how we collect and use your data. That's a promise.