Rapidly Shifting Demand Has Executives Seeking Solutions

Unexpected spikes in demand can cause far-reaching supply chain disruptions that affect everything from production lines to grocery store shelves, but challenges can also bring opportunities. Visibility and agility can help those shippers within the supply chain to respond to changing market conditions and flex up to meet evolving customer needs.

Adding Transportation Capacity

When transportation demand spikes, shippers have several tools for ramping up their trucking capacity depending on the expected duration of the increase. Rental trucks can provide immediate supplemental equipment for a short-term or seasonal peak. They can also be a useful resource for companies that want to test a market before making a longer-term commitment.

Leases are another option for companies looking to add to their private fleets, or they may even purchase used vehicles. Penske offers a comparative value analysis, which compares the cost of leasing with that of buying so fleet operators can make the best financial decision for the business.

Shippers may also partner with a third-party logistics provider to expand their reach and capabilities. In addition to having its own dedicated fleet of trucks and drivers, Penske Logistics has an extensive freight brokerage operation with an expansive network of preferred DOT-authorized for-hire carriers to provide additional nationwide trucking coverage. Even if companies are unsure of how much capacity they're going to need in specific markets, they can get agreements in place early so they can react when opportunities arise.

Optimizing Your Transportation and Distribution Network

Transportation providers can increase capacity by becoming more efficient in the lanes they serve. Companies can improve their efficiency through network optimization and analysis, freight management and backhaul opportunities.

Companies can find optimization opportunities through an in-depth view of the full supply chain rather than its individual parts. Penske uses network modeling to help its customers identify which channels should be served by which locations, their ideal supplier base locations, and the optimal positioning for brick-and-mortar warehouses.

Securing Critical Warehousing and Distribution Center Space

Recent supply chain disruptions due to COVID-19 have brought renewed focus to inventories and the value of having product readily available, said Michael Zimmerman, a partner with the global strategic management consulting firm A.T. Kearney and lead author of the 31st Annual State of Logistics Report, which was presented by Penske on June 23.

"For at least the next year and maybe the next 18 months, the memory of lost sales and insufficient inventory is going to haunt the producers and retailers that felt they lost sales. Therefore, they are going to be increasing inventory," Zimmerman said.

This safety stock will need to sit in a warehouse, and forecasts from CBRE Research indicate that a 5% increase in business inventories would require an additional 700 million to 1 billion of occupied square feet, Zimmerman said. Penske offers strategically located multi-client warehouse facilities and provides flexible space to accommodate seasonal and temporary needs.

How Penske Can Help

Penske has a team of experts ready to help you find the best solutions for your needs, including commercial rental trucks, truck leases (including some short-term options), logistics services and used trucks.