After COVID, companies can't just cut costs without breaking their supply chains. Service reliability and backup plans now matter more than saving pennies, especially when you can't see where your containers are moving.
However, what has changed post-COVID is everyone's talking about economic justification, right? All right.
Cost versus service is no longer theoretical. Where are you actually drawing the line today and what has changed in the past 2 or 3 years?
The problem is, if you see today, if you go for a cost, there may be the cost service partners or there may be logistics partners. We don't have networks. They will not even be able to give you where exactly the containers are moving, what is happening to the containers. When you talk of service, you talk of a service, and the service can only be understood at a time when a calamity has happened or exigencies are happening, and then where it is. For a normal world, it is a classical automation or digitization that's giving the data to them, and they are passing the data. The third thing At this point of time is how much that organization is bent on long customer service relationships to make sure that they go a bit backward at this point of time when the adversity happens, and to make sure that they also have a Plan B which is aligned to your Plan B. Now, business continuity, which I was talking about, the service takes a priority because I need to run my business even I have a lesser habitat. It's okay. But if business closes down or something happens, that has got far more reaching effects compared to I have saved few pennies in that. But I'm not saying we should not save pennies, but at the same time, we need to have a bigger understanding of the partner as to does he has the plan B and a plan C maybe compared to what is my alignment inside the organization in terms of risk mitigations.
Pre-COVID, it has always been about winning at any cost, right? There was ample capital around the world, everyone was funding, so we were trying to win at any cost. However, what has changed post-COVID is everyone's talking about economic justification, right? And why this has happened is there are 3 things that, in my opinion, have changed over the last 2 to 3 years post-COVID. The capital has become more disciplined. There's no abundance of capital for everyone that wants to raise funds. Second, customer tolerance. Or customer acceptability has changed, meaning the instant delivery models that have surfaced changed expectations, and the scrutiny on the unit economics has become really tight. So for me, where I draw the line is only invest in a service where either it is impacting conversion or improving your retention. Otherwise, you don't push for it.
