Upstream Focus is Sourcing Journal’s series of conversations with suppliers, associations and sourcing professionals to get their insights on the state of sourcing, innovations in manufacturing and how to improve operations. In this Q&A, Wagner Covos, global consumer and retail sector lead at Ceva Logistics, discusses how booking has changed due to capacity constraints and how his company is helping customers track their cargo.
Name: Wagner Covos
Title: Global consumer and retail sector lead
Company: Ceva Logistics
What’s the number one question you get from your apparel clients now that was never really a consideration before?
For the first time in recent memory, customers are now actively exploring avenues to “buy early” in order to secure their capacity. With the current market conditions, they have the expectation that the market space will sell out quickly and therefore feel that they must move up their procurement efforts. This is an unprecedented situation in the apparel industry.
As a result, we’re working closely with our customers to plan out their logistics needs, account for their timing requirements and provide them with leading solutions despite the turbulent market conditions. Our global network across air, ocean and ground gives us the ability to provide tailor-made, responsive logistics for our apparel customers.
What are the main thing brands and retailers could do (or stop doing) right now that would immediately improve logistics?
There are reports that large importers have been slow to evacuate their inbound containers from U.S. ocean terminals, which could be a major support in easing the land-side capacity constraints at certain port terminals across the U.S. In fact, Ceva’s parent company, CMA CGM, implemented a 90-day cash incentive program starting Dec. 1 for all the terminals in Los Angeles and Long Beach to encourage importers to pick up containers in the first eight days.
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In addition, retailers could consider working more closely with providers who offer multimodal solutions—land-air, sea-air, land-sea, rail-sea, sea-sea. These types of logistics solutions could help retailers with key sourcing origins in China and Southeast Asia to define and select the best solution, ultimately improving their end-to-end supply chain.
Given the rollercoaster of demand and shipment volumes during the pandemic, how are you adapting your operations to better prepare for and react to uncertainty?
Looking back, the issue was just as much about scarcity as it was about the uncertainty that was creating it. Supply has been continually disrupted while demand has continued on full force in a lot of global markets. The labor, equipment and capacity shortages are certainly challenges, and we have adapted our operations to prioritize the needs of our customers and deliver the solutions that they need. One thing that has been confirmed over the past two years is that partnership and collaboration between customers and logistics providers has been critical to keep product flowing.
Overall, our scale and agile DNA has allowed us to continue serving our customers despite the market challenges. We like to refer to it as responsive logistics, which is our commitment to flexible, agile, customer-centric solutions. Responsive is not reactive. It means that we are attentive to our customers’ industries and related market dynamics. We want to offer our customers peace of mind and the ability to let us worry about those market complexities so they can focus on their business and their end customers.
Which piece of technology or innovation have you found most useful during this time?
Having a common visibility platform in a global network to get end-to-end visibility connecting to all transportation modes is crucial. Customers need to be able to track and trace the shipment, even down to the line-item level and to identify and to prioritize certain items in order to expedite delivery schedules as soon as the cargo arrives at its destination.
The advent of next-generation visibility powered by machine learning has provided transparency to vessel backlogs, for example, which provides information on specific root causes like never before. While it’s still in early stages related to the technology’s analytical capabilities, this type of innovation is rapidly growing in adoption and will be the standard for excellence in supply chain management.
At Ceva Logistics, we are continuing to invest in this type of technology. Data is transforming our industry, and we want to help our customers unlock its value for their logistics operations. One specific example is in our ground services, where we are integrating Project44’s leading visibility solutions into our global ground tracking system. We are convinced that high visibility improves the customer experience at every step of the supply chain, so we offer that visibility at the truck, train and pallet level in our ground offering.
Resiliency has become a buzzword since the disruption caused by the pandemic. What could brands and retailers do right now to immediately start preparing for the next unforeseen event?
Resiliency is not just about options. It’s about the right options and the right partners. Brands and retailers should take the opportunity to find reliable logistics partners with networks throughout the supply chain. This level of diversification in their supply chain will naturally move them away from future bottlenecks.
What should be brands’ and retailers’ top lesson from Covid-19? How can they address this in their operations?
The acceleration of digital channels was astounding. Some retail sales are still being impacted by Covid, and consumers are continuing to spend lots of time online shopping through digital channels. As a result, brands and retailers should be defining a strategic omnichannel distribution approach, including their inventory management and dynamic retail strategies.
What’s one piece of pending legislation that should be on fashion firms’ radar? How can companies proactively prepare for this potential policy?
It’s difficult to pick just one piece of legislation. Globally, there are several sustainability regulations that are currently pending. These sustainability policies should be on fashion firms’ radar if they are not already.
In response, companies should be developing and implementing a carbon footprint reduction plan. A successful plan would consider everything from raw material sourcing and factory manufacturing to supply chain distribution and inventory management factors.