Cloud Competing: Small forwarders embrace virtual IT to survive

It’s late afternoon on a Thursday and the weather report keeps getting angrier. Wind speeds are increasing, the rain is pounding the doors of your distribution center and there’s talk of a storm surge to come when the eyewall makes landfall in a few hours.

Just another typical early autumn day for a 3PL in Florida.

Hurricanes are a fact of life along the Atlantic Coast in the U.S., but they can wreak havoc for unprepared logistics companies. This was the scenario faced by Saddle Creek Logistics Services last October as Category 4-intensity Hurricane Matthew began scouring the length of the Florida coast. While the company’s Data Center in Lakeland was not in the direct path of the storm, Steve Congro, director of omni-channel fulfillment technology at Saddle Creek, was concerned about some of the other warehouses the 3PL operates in the state and along the rest of the Atlantic seaboard. Fortunately for Saddle Creek, the forwarder had already switched over most of its inventory management system services to a cloud-based supply IT platform called Softeon.

Talk about good timing.

As it turned out, Hurricane Matthew passed by without doing damage or knocking out power to Saddle Creek’s properties last year, but Congro said he is confident that, even if the main office took a direct hit, the new cloud system would be able to handle the situation. “We have more than 40 buildings now, all over the country,” totaling about 17 million square feet of warehouse space in the continental United States, Congro said.

“But we have our infrastructure in a more centralized place with built-in redundancy and built-in disaster recovery,” he said. “With a cloud, if we had to leave here because of a hurricane, we still are able to run our operation. A hurricane that hits Florida really shouldn’t affect us.”

That peace of mind is a huge asset for any 3PL that must compete with large, multinational forwarders, such as Kuehne + Nagel, Panalpina or C.H. Robinson, which have vast networks of offices to help steer cargo traffic away from trouble spots. By converting IT services to the cloud, small- to medium-sized enterprises (SMEs) like Saddle Creek can operate on a more level playing field.

“I definitely think this is the wave of the future, I think this is where the audience is going,” Congro said. “People are looking for ‘better, faster, cheaper.’ By investing in technology, the cloud can let you compete with the behemoths of the e-commerce industry, like Amazon. This allows us to bring more technology to the operation without having to put out the capital outlay.”