URBN [NASDAQ: URBN]

Over the last few years, supply chain operations have made their way to the forefront of focus for all verticals of company leadership. Prior to Q1 2020, supply chains had been established, but their importance had not yet been recognized. Most retail companies followed the same transportation principles: import via major ocean carriers, expedite imports via major bulk air freight providers, and deliver to customers via national carriers. As new challenges presented themselves between 2020 and 2023, companies pushed supply chains to get creative and set consumer expectations at a higher level.

The supply chain vertical was to be turned from a “spend only” function into a “cost optimization” function. A few major mindset changes below led to major advancements in the retail transportation industry:

• Consumers may not always want the quickest delivery option. If a consumer is given an estimated delivery date, they want that date to be met. This mindset shift opened the door for slightly longer (but more consistent) transits, reduced costs to both the retailer and end consumer, and presented regional and niche carrier competition to the Nationals.

• Relationships matter! Capacity volatility lives within all silos of transportation, and price volatility is tightly related. Gaining the edge through the willingness to creatively negotiate and create long-term relationships will provide a competitive edge when capacity tightens.

A successful supply chain had to be composed of building a transportation network that was consistent, reliable, creative, and diverse

• Consumers want options, so get creative. As market disruptors enter the market, companies often avoid trying something new. Piloting services such as sea/air, same-day delivery, collection points, etc., can lead to competitive advantages and move the needle as consumers peruse buying options. You won’t know if you don’t try!

As the focus on the above grew, the industry saw a shift in transportation mindsets. A successful supply chain had to be composed of building a transportation network that was consistent, reliable, creative, and diverse. Although there are uncontrollable factors in this industry, the aforementioned topics can provide risk mitigation tactics and give control back to the retailer. We’ve long followed the principle of “consumer expectation” but have entered the era of driving consumer expectation through consistent, transparent service and communication. We’re still in the early stages of mastering supply chains, so early adoption of market disruptors will be at the forefront of supply chain success stories.