If the United Parcel Service (UPS) strike goes ahead on Aug. 1, supply chains will see significant disruptions. But even if the strike is averted, experts say it’s still a good idea for shippers to be prepared in the event of such disruptions.
How? By diversifying your carrier mix to mitigate exposure to single-carrier disruptions and capacity restraints.
The most vulnerable UPS shippers are those without alternative carriers in place to handle diverted packages, experts say. It gets even harder if they don’t have enough volume and financial muscle to compel other carriers to make extra room in their networks at the last minute.
“If I’m in a logistics professional’s shoes right now that’s sourced with UPS, I’m doing everything I can for the next couple of weeks to get something in place to ensure I’ve got a way to deliver packages to my customers,” Trevor Outman, founder of Shipware, told Supply Chain Dive.
Diverting packages to other carriers will ensure your goods still get to their destination on time in the event of a service disruption – that is, if the other carriers still have capacity.
According to Supply Chain Dive, carriers generally have capacity to spare as delivery demand has cooled from its pandemic-driven heights. However, Michael Foy, director of business development at Inmar Intelligence, said FedEx and other carriers will limit how much diversion activity they’re willing to accept. Volume shifts will be easier for shippers that have existing business with UPS competitors.
“You can’t just all of a sudden start getting contracts in place in the next three weeks — it’s nearly impossible,” Foy said. “But, if you’re a retailer and you’ve got 70% of your business with UPS, maybe 10% with a regional carrier and 10% with the Postal Service, then you have a little bit more leverage.”
“If you’re 99% UPS [deliveries] and it’s the week before the strike, you don’t have a lot of options.”
US parcel delivery volume in 2022
Source Max Garland / Supply Chain Dive
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