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RYDER SYSTEM, INC.

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Ryder System : Strategies for a Resilient Supply Chain

10/01/2021 | 01:02pm EST

If there's one thing all companies take away from the COVID-19 pandemic, it's that the world's supply chains are tightly intertwined and interdependent, and they only run smoothly when all links in the chain are operating at their best. In order to respond quickly and efficiently to customer expectations, organizations need resilient, flexible and reliable supply chain providers that can help them turn strategies on a dime, mitigate risk, and maintain profitability.

The labor shortage, which was in force pre-COVID and exacerbated when the pandemic emerged, is a particu­larly sore spot for many shippers right now. With truck driv­ers in short supply and commercial driver schools produc­ing fewer graduates, for example, the logistics and cost of getting goods shipped from point A to point B have become enormous headaches for companies of all sizes.

Using a holistic approach that encompasses all aspects of the logistics process, a third party logistics provider like Ryder serves as a trusted transporta­tion and supply chain solutions partner for organizations across all industries. For example, through its real-time solutions, Ryder helps companies solve immediate challenges while also help­ing organizations avoid future disruptions.

OPERATING IN A "NEW NORMAL" ENVIRONMENT

Entering 2020, few could have predicted the impact a global pandemic would have on the world's transportation mar­kets. One year later, ocean containers were hard to come by, ships were stacked up outside of U.S. ports, the truck driver shortage was hitting a new high-water mark, and freight rates were rising as much as 20% (year over year) across most modes.

It's a carrier's market, with both contract and spot rates at historically high levels. The high number of unseated trac­tors (i.e., trucks without qualified drivers to operate them) and limited throughput from commercial driver schools aren't helping the situation.

Concurrently, strong consumer spending and a booming e-commerce focused market were pushing both shippers and carriers to their limits. Goods that used to flow from warehouses to brick-and-mortar stores are now being delivered directly to consumers using small order sizes. Forced to adjust to this shift, the carrier networks wound up a bit out of balance, as it moved quickly to accommodate the new volume of consumer orders, add new lanes, and make up for the deficit in the industrial side (which receded during the early stages of the pandemic).

SOLVING REAL-WORLD PROBLEMS

To overcome these challenges, all shippers should conduct cross-functional risk assessments and adopt a cadenced, disciplined rhythm of supply chain assessments. These reviews should be per­formed on a quarterly basis, and with a particular emphasis on freight volume forecasting. Include internal, functional subject matter experts (SMEs) and outside trading partners in these conversations, and focus on the potential constraints or failure points within your product and mate­rial flows.

These collaborations should be a strong component of your supply chain, and they should impact how you're working with your partners, both at a tactical and a strategic level. Using RyderShare™, a collaborative logistics platform, for example, companies have tactical visibility of their products and materials flowing through the supply chain. RyderShare™ gives shippers the ability collaborate with trading partners, identify problems, and solve issues quickly.

RyderShare™ also includes strong exception manage­ment logic, which means all trading partners can focus on solving problems versus looking for problems. This, in turn, helps companies address imme­diate end-to-end supply chain challenges while also en­suring they are ready to take on future risk as it emerges. As a result, RyderShare™, eliminates costly delays, im­proves analytics, and improves operational productivity.

FILLING THE LABOR GAP

With traditional labor sources depleted, companies are turning to their transportation management partners for help. For example, Ryder has been called upon to help even out the "peaks and valleys" of the current shipping environment on both the transportation and labor side of the equation.

The company is able to flex labor in and out, so companies aren't necessarily carrying the overhead of more labor than they need. That's just one of the values that a 3PL such as Ryder brings to the relationship. By offering performance bonuses, safety bonuses, and other incentives, the logistics provider helps reduce em­ployee turnover and improve worker satisfaction. One of Ryder's strong suits is being able to recruit talent where our customers need it most, and then be able to flex extra capacity in as those shippers require it.

Moreover, Ryder's internal risk assessment and management plans extend right out to its customer network, which benefits directly from the transportation management provider's own efforts in these areas. Everything it does for itself naturally extends to its customers' businesses. Professional logisticians work side-by-side with customers-to the point where you can't discern who works for whom, since they're all supporting the customer's supply chain.

This cohesiveness is invaluable not only during extreme events like global pandemics, but also on an everyday basis as companies strive to create more resilient, agile global supply chains.

"In order to respond quickly and efficiently to customer expectations, organizations need a resilient, flexible and reliable supply chain."
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Disclaimer

Ryder System Inc. published this content on 01 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 October 2021 17:01:03 UTC.


© Publicnow 2021
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Financials (USD)
Sales 2021 9 544 M - -
Net income 2021 468 M - -
Net Debt 2021 5 387 M - -
P/E ratio 2021 9,26x
Yield 2021 2,82%
Capitalization 4 350 M 4 350 M -
EV / Sales 2021 1,02x
EV / Sales 2022 1,00x
Nbr of Employees 39 000
Free-Float 99,3%
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Number of Analysts 9
Last Close Price 81,01 $
Average target price 93,57 $
Spread / Average Target 15,5%
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Managers and Directors
Robert E. Sanchez Chairman & Chief Executive Officer
John J. Diez Chief Financial Officer & Executive Vice President
Rajeev Ravindran Chief Information Officer & Senior Vice President
Norman Brouillette VP, General Manager-Technology & Healthcare
Kendra Phillips Chief Technology Officer
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