Logistics Mishaps- Think again if the end consumer is oblivious

Logistic may be one of the most understated roles of retail today. While the focus of most public retailers quarterly updates focuses on AI, tech development and systems enhancements, the reality is that none of it can be executed without a solid foundation beginning with logistics. Sexy terminology simply does not exist for logistics- its dirty, complicated, but absolutely necessary.

After a 20 year career in retailing; holding jobs in replenishment, planning, sourcing, buying, product development, divisional merchandise manager leading a $4.5B portfolio, as well as international import and distribution- my experiences have left me with only takeaway: everyone working in retail is a logistics manager whether they want to be or not. From the fashion apparel buyer to ladies shoe designer to the pricing manager of a dry grocery category, nothing occurs without understanding the ocean freight, import/duty, rail, and LTL network and the number of warehouses necessary to make it all work.

About 9 months ago, my firm was managing an import program where one of our third party contractors moved the LTL freight to intermodal (railway) without our knowledge (and they had done such a good job up until this point it didn't really seem to matter to us as long as the stuff got there in the first place). The railway dereailed, and the supplier lost arounnd $2,000 of goods on that railway derailment in Illinois. Then with a wait period of 9 months for the company to fully assess what goods they lost on thier directly owned container, it was then decided the reimbursement value would occur by "weight" not by product value. How does TWENTY CENTS A POUND sound, and there isn't anything else you can do becuase management said so.

So, while for those of us that work in service oriented industry where having customers matter, it seems hard to believe that you could cause an accident, be the cause a loss, and then decide through some process that the loss is going to be reimbursed by measure that is completely arbitrary.

Which means that customers, who are expecting products in thier stores or fulfilled through online channels and delivered to home- also have a disruption which is the opposite of what every big box retailer is trying to achieve. So how does a disconnect of actual logistics providers who are so critical to the movement of product into customers homes and carts become part of the solution instead of part of the problem? Derailment occurs a lot, so do broken down trucks, and slower than anticipated ocean fright liners. Maybe instead of everyone trying to not pay when they're responsible, maybe being "responsible" is the answer. Retailers not charging suppliers an additional 5% of COGS expenses when the train derails becuase the supplier used their reccomended provider. Maybe the provider who causes the accident just saying "sorry" and reimburse the actual cost of goods lost. Maybe the supplier still continuing to use the provider who "tried hard and made one mistake" instead of switching providers altogether which is where the biggest disruptions occur on shelf too.

Maybe this is an ultruistic way of working in business, but service providers do this all the time. Maybe the logistics industry, as the backbone of the retailing industry, could use a refresh on how important thier work actually is to an industry under such intense change which absolutely could not occur without each provider doing thier part, responsibly, to make it all work.