You’re not imagining the extreme weather. Changes in our climate have pushed our temperatures and weather events to record-breaking levels. Years 2010-2019 were recorded as the warmest decade on record and each successive decade has been warmer than each preceding decade since 1850.
These rising temperatures mean more rain. Not only that, but the higher the ocean and air temperatures, the more intense those storms are and the longer they last – leading to more hurricanes and floods. These events cost our economy billions of dollars every year. Natural catastrophes, defined as severe thunderstorms, winter storms and cold waves, floods and flash floods, earthquakes, tropical cyclones, wildfires, heat waves, and droughts, cost the U.S. economy more than $80 billion in 2018. That number is only expected to increase.
What does this mean for the transportation industry? They must adapt to the new norm and make transportation risk management a priority. Manufacturers, 3PLs, and other companies dependent upon on-time deliveries have to work with their shippers to do more to mitigate weather-related events as much as possible.
Traditional risk management strategies aren’t enough
How are you identifying emerging threats? If you’re stuck doing things the way they’ve always been done in the past, you might be relying on manual efforts and multiple, rudimentary “solutions.” If your business depends on on-time, in-full deliveries, can you really trust you are doing enough? Is there a chance you could be missing something or respond too slowly?
Tracking a hurricane or a predicted ice storm from a news report and then looking at a map to see if your shipments might be at risk is hardly a strategy. There’s no way to anticipate the actual timing and most probable threat to each of your shipments at the specific time that freight will be in a particular area. It’s impossible to understand the details of your risk enough ahead of time to implement effective mitigation efforts.
This type of old workflow only gives you a general overview and doesn’t provide the specifics you need to prepare, plan, and prevent disruption to your supply chain. It’s a disconnected method that misses too many threats and over- or under-estimates the impact of threats.
What you and other logistics-dependent companies require is automation, integration, and intelligent, predictive analytics. If you want to be agile, adaptive, and ready for whatever nature has to throw at you, you’re going to need to modernize your transportation risk management capabilities.
Modernizing transportation risk management
With the help of predictive intelligence supported by machine learning, you can instantly enhance your risk management capabilities and do things you’ve never been able to do before. Today’s technology easily integrates into popular ERP and TMS systems, giving you an integrated solution that saves you time and manpower while increasing your ability to identify and mitigate risks.
What makes this technology so useful is the way it operationalizes data, presenting the information you need in a visual way to understand your risks and make decisions with confidence. You can quickly see each shipment and lane, every distribution center and facility, and where your threats lie at any given moment in time – all from an intuitive, customized dashboard. Share reports with team members, executives, and even vendors and customers. All of this data-driven insight enables shippers, 3PLs, brokers, and carriers to take the best mitigation actions well ahead of the threat so there is minimal, if any, impact to the supply chain.
This kind of data is powerful for other reasons beyond the quality of decisions. Those decisions can save your company money, even increasing revenue as you find the most economical ways to meet your commitments. The data is a differentiator, boosting your reputation for OTIF commitments and customer loyalty.
Not all technology is the same
There are plenty of transportation risk management solutions on the market but few provide the level of insight in real-time that you are going to need to keep pace with the constant transportation threats. Be sure you choose a solution that:
- Seamlessly integrates into your existing ERP and TMS systems
- Provides real-time risk detection and analysis
- Includes all types of risks, such as weather, climate, infrastructure, social, and terroristic
- Can be customized and filtered to offer the data each user most wants to see
- Offers mitigation recommendations at least a week in advance of the predicted threat
- Presents data in a visual way to clarify data and speed decisions
The visualization component is important but often the most overlooked. For example, it’s one thing to look at a giant spreadsheet or a lengthy report that you have to self-analyze to determine what to prioritize. It’s quite another to see a color-coded risk score, for instance, that considers your thresholds and then alerts you when particular risks are in the danger zone.
Maybe you don’t care as much about a risk that is scored with a low probability or severity, but you want certain teams to be alerted when that risk score for a particular risk factor reaches a moderate level. You don’t have to dig through data to see your risk or make a decision. You see a graphic that summarizes all of your potential risks, probabilities, and severities, and then can dig into each one for more analysis. You can even configure the system to send mobile alerts to you and anyone on your team with the most pressing risks and the recommendations to mitigate them.
This is just an example of what modern software can do for you, but you can see how technology is providing unprecedented insight into the risks your shipments face. From comprehensive risk detection through mitigation recommendations, automating the risk management process provides greater assurance your company can meet your commitments while increasing profitability.
The Everstream Solution
To speak with an expert about automating the risk management process to gain more insight into risks your shipments may face, contact us now.