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Here’s How to Turn the Trials of Commodity Shortages into Positives for your 3PL


Here’s How to Turn the Trials of Commodity Shortages into Positives for your 3PL

As I’m sure you’re aware, there’s a global shortage of a small, yet vital component in so many of the goods we use and buy today — so-called semiconductor chips. These tiny processors are used by manufacturers to produce everything from cars and Class 8 trucks to TVs, laptops, smartphones, medical devices, and even appliances like refrigerators and toasters.

These types of commodity shortages have become a defining factor of the post-COVID economic recovery and the 2021 economy as a whole.

Remember the gasoline shortage after the recent Colonial Pipeline shutdown? How about the lingering chicken wing shortage, as bars and restaurants re-open and try to stock up? Builders have been reporting lumber shortages for months, and prices on 2×4 studs and sheets of plywood have hit all-time highs. The list goes on: diapers, chlorine, furniture, toilet paper (in the early days of the pandemic). And, obviously, a “shortage” of hirees, which our industry is all too familiar with, in its persistent shortage of available truck drivers.


While most of our relationships with shippers remained hearty over the past year, our Michigan-based operation relied heavily on the automakers, both inbound loads of parts for new vehicles and, of course, trailers loaded with finished cars outbound for dealers.

But amidst the microprocessor shortage, new car production, at times, came to a complete standstill as the need for semiconductor chips blocked American automakers like GM, Dodge, and Ford from building new vehicles. With those production stops, our Michigan operation, likewise, came to a standstill; leaving our trucks parked and our staff searching for answers.

Unfortunately, the outlook for that business returning is cloudy, at best. One analyst might say chip capacity will return to normal by the end of the year. Others say this drags on until 2024.

Trying to plan around this uncertainty has been a challenge. But there are a couple key lessons that can be taken from all of this:

First, logistics providers need to diversify. If you rely on one steady stream of business either at large or for one branch of your operation, you’re a sitting duck. A shortage that popped up seemingly overnight derailed that segment of our business and left us suddenly searching for answers. We had been so busy managing our automotive business here in Michigan, we didn’t take the time and effort to find new customers and forge new relationships. In the end, that lapse caught up with us.

Secondly, remember to treat negative events as opportunities to learn and grow, and possibly emerge from them better and stronger than you were before.

When it became clear the auto production setbacks would be long-term, I encouraged our team not to simply sit around and wait for things to change. Instead, we gathered team members and taught them new skills — ones they could use in their own careers and ones that could benefit the company, too.

For example, we looped in members of our team who weren’t hired to do sales, such as those in dispatch and other back-office functions, and we taught them the basics of making sales calls and reaching out to potential new customers. They were all on board to do it.

We flipped around roles and tried to think outside the box. We had dispatchers finding industries and businesses that wouldn’t be impacted by the semiconductor shortage and then making cold calls to try to drum up new lines of business.

If it worked, fantastic — we made something out of nothing. If not, at least we tried, and our employees had opportunities to continue working and to learn new skills.

Ultimately, that could be the biggest takeaway: When things are turned upside down and the world suddenly changes, go back to the basics. Start at the beginning again and figure out how to find business.

These are lessons that can apply broadly across the third-party logistics landscape and ones I would encourage shippers, brokers, and carriers to make sure they heed, too. Do what you can to diversify your lines of business, because you never know when they might suddenly be toppled. And never underestimate your team’s ability to pivot and learn new skills, as that could be the key to pushing through when you find yourself in a rut.

What are the lessons you’ve learned over the past 15 months in your logistics operation? I’d love to hear about them, to learn from your experience, and to share your insights with our team, too:


Ryan Kramar is a Vice President of Operations at Circle LogisticsFounded in Fort Wayne in 2011, Circle is one of the fastest-growing transportation companies in the nation, servicing over $250 million in freight spend. Circle combines the dedication of a privately owned asset-based 3PL with the coverage of a public large-scale provider to create a superior modern freight experience. Circle is committed to delivering on three core promises to our customers: No Fail Service, Personalized Communication, and Innovative Solutions, and provides coverage across all modes of transportation in the continental United States and Mexico, including Dry Van, Flatbed, Reefer, LTL, Expedite, Oversize and Air.

For more information, please visit

commodity risk management

Five Surprising Facts About Commodity Risk Management

Between a major global pandemic, intercontinental freight capacity shortages, and events that have ground supply chains to a complete halt, it’s been an active 18 months for those managing commodity risk.

We’ve learned a lot of valuable lessons during this period – many of which have helped us compile and create our new white paper exploring commodity risk management maturity. Inside, we explore what it takes to enable a mature approach to commodity risk management that helps commodity managers make proactive decisions and create value even when facing the most severe supply chain crisis events.

The paper looks in detail at the different stages organizations find themselves at along a maturity curve, exploring the characteristics of teams at each stage, and what those teams need to do if they want to push ahead along their journey to maturity. But, it also includes many other insights about the state of commodity risk management maturity today – several of which you may find surprising.

Here’s a quick look at five of the more unexpected takeaways from the paper:

#1: There is such a thing as too much commodity risk data

When organizations recognize the value of investing in their commodity risk management capabilities and start taking steps towards empowering commodity and category managers with greater insights, one of the most common mistakes they make is overwhelming their experts with an excess of charts and data.

Too much data can muddy the waters and make it harder for managers to identify valuable trends and translate data into actionable insights that drive value. For organizations at the earlier stages of the commodity risk management maturity curve, it’s often far more valuable to start small and work with more focused datasets.

#2: Mature CRM isn’t just about data and insights – it’s about culture too

While data, insight quality, insight delivery, and the processes that surround them are all very important factors in commodity risk management maturity, they aren’t the only factors that influence it.

Culture is also extremely important if an organization wants to reach the highest stage of maturity. In the most mature organizations, there’s a culture of respect and acknowledgment of the value that procurement teams can deliver through the strategic management and optimization of commodity risk.

In these teams, stakeholders from across the business take an active interest in the insights generated by and acted on by procurement teams. They understand that commodity risks are fundamentally business risks and can even represent the greatest commercial opportunities available at any given time – and that understanding is reflected in their operations.

#3: A huge number of organizations haven’t aligned intelligence and strategy

Commodity risk management maturity isn’t just about having the right data, insights, or culture either. To have the right impact on the organization, the insights generated, gathered, and used by these teams need to be tightly aligned to their strategic objectives.

No matter how strong, recent, or reliable insights are, if they don’t help the team move towards achieving their goals, or support the overall strategic goals of the business, they’re not going to deliver value.

That’s a huge stumbling point for a lot of teams. They’re actively gathering and using insights, but they’re not seeing the results they need. That’s a big indicator of a strategy that appears mature, but it actually still in the earlier stages of the maturity curve.

#4: Sophisticated AI and data science capabilities aren’t for everyone

Like any other data-driven area of modern business, AI and data science have incredibly powerful applications in commodity risk management. The right capabilities can help teams make the critical leap from reactive decision-making to proactive operations that keep the organization ahead of developing commodity market trends.

However, they’re not for everyone. These capabilities demand significant volumes of clean, structured, and actionable data, and some teams don’t have access to data of that quality. For many organizations, simple forecasting and traditional manual approaches to data analysis can be just as effective for what they’re trying to achieve at their current stage of maturity.

#5: There is no ‘one size fits all’ way to optimize commodity risk management

When you look at the latter stages of maturity, it’s easy to conclude that every organization should be striving to reach that point, using all the technology and intelligence available to enable proactive, value-driving commodity risk management.

In practice, however, that’s not really the case. The level of capabilities required to optimize commodity risk management is proportional to an organization’s risk exposure.

For example, pharmaceuticals companies – where the global supply of active ingredients is relatively isolated against major fluctuations and ingredient costs have little impact on the final market price of drugs – may only need fundamental commodity risk insights to see strong results.

On the other hand, in food processing or oil and gas, where margins are much slimmer, companies need deeper intelligence and stronger insight capabilities to see significant value from their efforts.

Master post-pandemic commodity risk management

Want to learn more about what it takes to manage commodity risk effectively and transform emerging threats into powerful opportunities for value creation?

Download your copy of our new white paper to discover which stage of maturity your organization is at today and get practical advice to advance your journey towards proactive, crisis-ready commodity risk management.