With additional train strikes planned for the first week of November, Mark Lumley, business consultant at the Freeths law firm, reveals to Drapers what retailers can do to manage the ‘unforeseen’ impact of such a disruption, from pre-planning their own staff to the review of suppliers. ‘Staffing plans.
Much of the volume clothing retailing is based on comparatively low cost LOLO (Lift On, Lift Off) shipments, ordered months before the Christmas period and often out at sea for 30 or 40 days. In that context, the previous eight-day strike in Felixstowe [which took place on 27 September to 5 October after port workers rejected a pay offer] though disruptive it may have seemed relatively manageable, but additional strikes [including train and postal, such as Royal Mail workers striking over Black Friday and Cyber Monday] are just around the corner and a broader disruption of industrial action in rail and delivery services will inflict further damage on retailers.
The holder’s strike period is not the same as the delay period it causes. The Felixstowe strike, for example, would have had far longer repercussions than its official eight-day period, as shipments may have been diverted to alternative ports, unloading at Felixstowe will have been delayed when work resumes after the strike, and there would be more delays. they have been caused by the reorganization of forward transport.
But there are steps retailers can take to combat such repercussions. They may preplan their own staffing and vendor staffing plans, for example, which may include reviewing annual leave, ensuring there are enough agency staff to cover annual leave, and try to liquidate salary reviews now.
When the strike has caused delays, it is the customer who will most often have to bear the additional costs and losses involved; shipping contracts generally make that position clear. However, it is worthwhile for retailers to check their shipping contracts and insurance policies in relation to transportation to ensure a clear understanding of who bears the consequences of such delay and what losses or risks are not insured.
If not kept in-house, shipping agents and insurers/brokers should have copies of these policy documents. Carriers should also be able to provide details on transport insurance. Knowing what risks and losses are insured in advance of events allows the retailer to ensure that they will benefit from coverage, if available. Additionally, retailers will better understand what coverage they would like to have ready to discuss with their insurance brokers and carriers.
However, the ongoing consequences of delays, interruptions and additional costs can perhaps be best positively influenced by engaging with logistics and warehousing providers.
Managing and arranging the right volume of products, at the right price, in the right location, or reasonably available on demand for delivery to consumers requires consistent management of suppliers, shipping, logistics, and internal resources. Current circumstances with pending strikes and supplier disruption add complexity and further uncertainty to supply, future availability and delivery to end customers.
Marginal gains along the chain of custody [meaning in this context each step from goods being created to arriving with the retailer or the retailers’ customer] in time or in increased predictability of availability can make a significant difference.
Here are some things to consider:
- Is your problem – ultimately the products are yours as a retailer and it is your money. Proactive interaction with suppliers protects your business.
- Dig up the contracts – understand the strength of your existing chain of custody provider contracts and make them the center of your legal spend, ask a few questions:
– Is there a current contract (experience shows that a surprising number have expired or are still under negotiation)? Is the document so old that it is now obsolete? If the retailer does not have current or outdated contracts with its providers, it may not address how providers can provide human resources to support the delivery of their services or may have a limited obligation to maintain services. A good contract will identify what they are required to do in circumstances where the provider is pressured by the outage.
– Does it give you the security of service that you would like?
– What cooperation and information are you entitled to? - Review service levels and staff obligations – review your own and your suppliers’ plans for staffing requirements (particularly in the run-up to the busy Christmas period) to understand and manage staff availability and manage salary pressures now in the event of more strikes and disruptions.
- think ahead – providers will appreciate increased notification of potential changes to enable their own resource planning. They will have their own concerns about personnel and salary issues, more unpleasant surprises should be avoided, check the financial strength of your supplier.
- Increase the benefits of cooperation – While companies naturally want to keep their own issues or anxieties quiet, encourage issue sharing and problem solving.
- Ensuring contracts are flexible and fit for purpose – Does your warehousing or transportation contract have enough flexibility to allow you to request information and service changes to support your business?
- Understand what labor resources can be implemented – it is not so easy to recruit skilled people when they are needed. Recent legal changes in some cases allowing the use of temporary or agency workers when a labor dispute arises may have made it potentially easier to manage. Contingency planning around human resources in all organizations in the chain of custody should be based on what is possible and appropriate in terms of delivery and in terms of ongoing relationships between employees and workers. A balancing act that benefits from the professional contribution of labor law. This is particularly the case because agency and temporary worker contracts have a complicated legal background and can have unforeseen costs and risks attributable to them.
- Understand the changing technical capabilities of the provider – Have the capabilities of your suppliers increased since you contracted with them? Are they obligated to offer you the latest and greatest technology and service? Poor or poorly implemented warehousing, fulfillment and transportation logistics systems can mean more forwarding trips, higher returns, more costs and delays.
It is far better to be aware of a staffing issue and discuss managing future shifts to enable quicker response when goods arrive than to react to goods being trapped in an inflexible system where participants hide potential problems for fear of the consequences. volunteering potential risks of failure.
Do the detail, understand the chain of custody, think about the participants [shipping agents, hauliers, warehouse/distribution and fulfilment providers] likely issues and ensure contracts give you the knowledge and flexibility as a retailer/customer to influence the management of the situation.
This could be a great opportunity to create better supply chain arrangements to deal with current issues and handle the unforeseen on the horizon.
