Chain Reaction is Sourcing Journal’s discussion series with industry executives to get their take on today’s logistics challenges and learn about ways their company is working to keep the flow of goods moving. Here, Caleb Nelson, chief growth officer at Sifted, discusses how shippers can have better visibility by working strategically with their carriers.
Name: Caleb Nelson
Title: Chief Growth Officer
What does Sifted do, and which industries do you primarily serve?
Sifted is a decision-making software. We absorb shipper invoice data from FedEx and UPS and provide insights on ways they can make better decisions, reduce costs and improve their client experience. However, we serve all industries—anybody who ships with FedEx or UPS—but our core market is manufacturers shipping components (both B2B and B2C) and retailers on the e-commerce side.
What are the main things brands and retailers could do (or stop doing) right now that would immediately improve logistics?
They should look at transit times and find creative ways to reduce the mileage their shipments are traveling.
If you’re a New York-based company with a large clientele in California, that extra distance makes for a higher cost, time in transit and worse client experience. Customers expect 2 to 3 day delivery, and in those situations, you’re at 5 to 7 days. Expanding your distribution network will improve that and allow you to achieve the same transit times with cheaper ground service.
Shippers should also work to optimize their box sizes to reduce both costs and material waste. Finally, if they’ve considered renegotiating their agreement with FedEx or UPS, now is the time.
When it comes to supply chain logistics challenges, there are things companies can fix, and things that are beyond their control. How can the former help the latter?
Understanding what you can and cannot control is huge for improvement. FedEx and UPS’ fuel surcharge rates have rapidly increased. That’s not something you can control as a shipper. So how do you combat that? Instead of arguing with your carrier about something you cannot change, look at your business, data and other areas that you can control and make changes to offset the rising costs from factors.
Additionally, peak season surcharges and FedEx’s general rate increases were just announced, and UPS’ will be released soon. Those are non-controllable costs, but you have opportunities to offset them. All you need is to understand your data and have a software model that helps you understand what changes you can make.
Which areas of logistics aren’t receiving the industry attention they deserve?
Sustainability is huge. Many organizations want to be more sustainable—and their customers are demanding it—but many have a tough time knowing how to be more sustainable. Reducing your average package mileage, reducing your box sizes and selecting a proper service from your carrier (ground vs. air) are all significant efforts companies can take to reduce their carbon footprints.
What is your company doing to make the movement of goods more sustainable?
We help shippers determine what SKUs should fit in and what box sizes. The model then re-rates all the packages they’ve sent from an old box size with what it’d cost with the new size to show the net impact of that change. It allows shippers to talk within their organization about real, sustainable changes that can help them become a greener and more cost-efficient organization.
When it comes to creating efficiencies, there are quick wins and longer plays. What are a few things your company is doing to help its partners succeed on both fronts?
The long-term focus needs to be on scaling business, reaching customers faster (and for less money), shipping from the optimal locations in the U.S. and ensuring they have market-appropriate shipping rates. These all have specific turnkey models that Sifted has built, allowing a shipper to take care of the “here and now” and the “what’s next?” of the future.
What is the one thing brands and retailers could be doing to make better use of technology to improve logistics?
Technology can help them understand the data in their carrier invoices. It’s the language of logistics. I’ll pitch Sifted a bit by saying this: You can understand that data language with a software like Excel, but it takes a lot of manipulation and work to get to a point where it can inform decisions. Why do that when Sifted has a turnkey, professionally built model that can quickly load your data in and run these analyses for you? It helps make effective decisions to reduce costs, improve customer experience and become more sustainable.
What about the all-important holiday season? What is your forecast for getting the right amount of goods to the right places on time?
FedEx and UPS are moving more volume than ever before. Shippers need to work with their partner carriers to ensure they understand the volume they’re going to be sending out during their busy seasons. Last year—and we anticipate seeing it again this year—carriers stopped picking up from clients that exceeded the number of shipments. They need to get in front of it early, have a projection and have those conversations with their FedEx or UPS reps.
Making sure enough goods are in inventory means knowing what they’ve historically sold in previous years—from a data perspective—which parts of the country they’re selling the most products in and the ability to forecast that out for this year.
Are you optimistic about the state of supply chains in the next few years?
I am! We’ve gone through a time that’s shown how fragile supply chains are. Anytime companies experience pain, smart organizations come through with strong solutions, ensuring it doesn’t happen again. This creates a bulletproof supply chain.