Supply chain amid changing times
By John Ferguson, President and CEO, Purolator
A lot has changed in the last four years.
The last time I spoke at the Canadian Club was in 2019; our topic was “leading through disruption.”?Little did we know, the most disruptive event ever in the supply chain industry – was right around the corner. COVID-19 was an unprecedented challenge for everyone, but for our sector, it also represented a watershed moment. How we responded, changed Purolator, and our entire industry, forever.
Some of these changes are for the better. For one, I see an increased appreciation about the vital role the supply chain sector plays in supporting not only Canadian businesses but also the Canadian health care sector. With this increased appreciation comes a renewed focus on resiliency.??
It was during the pandemic that Purolator was deemed an essential service. During a time of great uncertainty, our employees rose to the occasion for their colleagues, their communities and their country. They delivered crucial supplies of PPE, COVID tests, and eventually vaccines; I could not be more proud of them.?
We also kept the economy functioning by moving the goods people needed or wanted in an unprecedented time when so many were ill, anxious or isolating at home. The numbers say it all: retail e-commerce sales ballooned by 120 per cent and home deliveries by 75 per cent by the end of 2020.
The lessons from this chapter of unprecedented change are enormous. Even as the pandemic recedes into the rearview mirror, a new set of challenges has emerged to test our resiliency and ability to adapt: constricted supply chains, increased geopolitical challenges, and labour shortages to name a few. And perhaps most significant, is rapidly changing consumer expectations, as more people demand flexible shipping options, enhanced digital experiences and sustainable operations. Each of these present challenges, but they also drive how we grow and innovate day to day.
While e-commerce has slowed as people spend on travel and entertainment, online shopping is here to stay. B2B segments, such as industrial and health care, have accelerated post pandemic and these shifts continue to create pressure across the industry. Shippers are diversifying their supply chains to protect themselves from the inevitable next disruption, while other mission-critical industries are pivoting toward nearshoring versus traditional trade lanes (e.g., choosing Mexico over China).
Contingency planning, crisis management and Enterprise Risk Management are being called upon more than ever. We only have to look at the significant number of disruptions the industry has faced in recent years: BC floods, port disruptions, ice storms and wildfires to name a few. ?One example that tested our resolve at Purolator was when the BC floods cut off the province from the rest of Canada in 2021. Our team was able to mobilize our U.S. network to deliver a cross-border solution to get much needed shipments to customers. ??
Supply chains however are not immune to labour challenges. An increasing concern for the entire shipping industry is a shortage of truck drivers and in some cases, pilots, which impacts middle-mile delivery that connects distribution hubs to fulfilment centres and causes carrier prices to rise. This makes it harder than ever for companies that lack their own robust networks to move their inventory to customers. They rely on shipping partners like us that can maintain large-scale networks, despite ongoing challenges.
There is no quick fix to labour challenges. It requires investments in training, people-focused initiatives and, most importantly, culture. When you invest in making your company a place where people want to work, you are also investing in labour market resiliency.?This is how we’ve maintained the work force necessary to continue moving goods, while supporting our customers with a long-term dependable network.
Sustainability is another area that is more important than ever. As a business operator in a sector that requires many traditionally carbon-intensive transportation assets like trucks and planes, we recognize every carrier has a responsibility to lead in sustainability. You don’t get there without making real investments. Purolator has introduced many solutions to help affect change in recent years, and we are now charging ahead with a $1 billion investment to electrify our Canadian network by 2030 and pursue net-zero by 2050.
Making an investment of this scale is not without its challenges as manufacturing and technology are not always completely developed to support the effort. We see this already in the availability and access to electric vehicles but beyond that, we also need the required infrastructure, such as grids and power panels to sustain these efforts.
COVID laid bare the deep interconnectedness of supply chains, the fragility of economies and the need for innovation and flexibility. As we emerge into exciting yet undetermined times, no matter where one sits along the supply chain, it’s important to remain true to our values, our culture – and to embrace the lessons learned along the way. Rest assured, Purolator will be at the forefront, leading by example to meet the evolving needs of businesses and consumers today and for years to come.
John-well written and right on and we're also committed to Resiliency, Digital supply chain and sustainability to support Purolator, #realtimevisibility