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A-List Insights: Felecia Stratton (Part 2)

Welcome to A-List Insights!

A-List Insights is an interview series where we talk with industry thought leaders and experts about different topics surrounding logistics and supply chain – gathering their insights and experience firsthand.

Thought Leader: Felecia Stratton

Part 2 of 5

In this segment we feature Felecia Stratton, Editor of Inbound Logistics magazine. Felecia has been with the company for over 30 years and is responsible for content across all print and digital channels. She shares with us her high-level and unbiased view of the industry

I love talking about the business, I love logistics, I love supply chain, I love my magazine.

This is the second of a 5-part series interview with Felecia. To provide context to the current climate, the entire interview was conducted at the end of October 2020, during the worldwide COVID-19 pandemic.

Part 2: Industry Changes

What are the biggest and most impactful changes you have seen in logistics and supply chain?

Technology is number one. From the start with the introduction of the internet and email, it changed how freight was booked, which was usually done by making a phone call. You never knew where your shipment was, and the carrier really didn’t know either, unless they called from a pay phone. When you think back…how crazy that must have been to deliver freight and try to give an ETA.

And there are so many offshoots of technology…it really is the core driver of all the changes over the years. The introduction of the cloud [cloud computing] and the ability to work in the cloud has transformed logistics, supply chain, transportation…across every area of the business. Hence, the digital supply chain.

The other thing about technology is that it leveled the playing field. It’s a force equalizer. I could have the same software Walmart is using. Technology changed the game.

Another big change has been the growth in outsourcing to third-party logistics providers. That was a sea change in this industry. At one time, there was no such thing as a 3PL. Everyone had logistics in-house. Then came the 3PL and companies said ‘oh, I can give my logistics to the experts and I can focus on my core business.’ The growth here has been phenomenal. We dedicate an entire issue to it in our magazine.

Ecommerce and the consumer mindset of ‘fast-is-not-fast-enough’ has also driven big changes, forcing companies to deliver those expectations to their customers. This requires speed and a re-tooling of retail and ecommerce supply chains to meet customer demand. Globalization too has been significant. It used to be very difficult to do business across borders and countries, but now it doesn’t matter where you are in the world. Transportation goes everywhere and the world is your warehouse.

Lastly, I would say demand-driven logistics, which is what my magazine focuses on. In the old days, it was a push market. If you were a swimsuit manufacturer, you would manufacture the ones you thought would sell and send them out. Did they sell? Maybe, maybe not. If they didn’t, you’d be stuck with leftover merchandise. Over the years, technology has enabled us to become demand-driven. So now, we’re matching supply to customer demand. And that creates supply chain efficiencies – no leftover product, no storing tons of extra inventory in a warehouse and paying for it…it’s almost just-in-time and you’re serving your market that way. That’s been a big change.

Another change is what we’re seeing now, with more manufacturers going direct-to-consumer.

Yes, for sure. And that does change the transportation game as well because BNSF Railway is not pulling up to your door.

So direct-to-consumer has brought more changes, and the start of a lot of new courier businesses. And with Covid-19, direct-to-consumer is even more important.

Sustainability is a key trend within logistics and supply chains. MIT Center for Transportation & Logistics just came out with a sustainability study and it is planned as an annual publication. From their research, sustainability is important to shippers out there, but we have to ask, how will shippers weigh the cost of implementing sustainability efforts against their bottom line?

Sustainability has been important…we go back about 20 years on our magazine’s G75, which is the 75 Green Supply Chain Partners. We started that because readers were asking and saying they only wanted to do business with green companies, so we started asking ‘who is green?’ We started with the G25, then 50, and now we’re at 75.

Companies want to do business with companies that are sustainable. That said, your point is valid: what’s the business case? Everyone wants to do their part, but if it puts them out of business, it’s not going to happen. So, our content on sustainability is wrapped around the business case for sustainability – doing what you can, if it makes good business sense. I interviewed a mid-size company recently, and we were talking about sustainability. I asked them if they had any plans for converting to electric vehicles, and the response was ‘we’d like to, but we can’t afford it.’ I think every company is going to have to make similar determinations.

Shippers also want to do business with companies that can help them be more sustainable. When we choose our G75, we ask companies to submit a questionnaire detailing why they should be on this list, and we gravitate to choosing the ones that are helping their customers, shippers, be more sustainable. It’s going to continue in importance, and I also think it’s a branding issue.

From a consumer perspective, people want to buy products that are sustainably sourced and responsibly made. When it becomes a branding issue, companies that maybe weren’t focused on it, will now have to be. It’s a balancing act between being responsible for the environment and making sure it doesn’t hurt your bottom line.

I think it’s difficult for carriers. For shippers looking for sustainable transportation, the carriers are there to meet the demands of the shipper, but at the end of the day, somebody has to pay for that. For carriers to operate more sustainably…be it a different fuel type, hybrid vehicles, electric vehicles, whatever…those costs need to come out of someplace. So the shippers have to pay for that. If they want more sustainable transportation, they’re going to have to the higher price for it.

And that’s the trade-off. Some will be willing to do that if that’s what their corporate culture is. Look what the carriers are doing in terms of sustainability….it’s amazing. Besides LNG [Liquified Natural Gas] and electric vehicles, there are speed limiters on the trucks, and anti-idling technology. They’ve invested a lot of money in sustainable technologies and abilities because it’s important to them. And they’ll continue to do so.

Look for Part 3 of our “A-List Insights” Series interview with Felecia Stratton where we discuss logistics software technology providers and 3PLs.

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