This time of year, it is a familiar refrain to reflect upon many of the key supply chain happenings of 2021 within our unique logistics industry space. In-kind, this is also a season to make some prognostications for the new year.
In keeping with the theme of ‘constant change,’ we would like to review the year differently this time around. Below, we will present a reflection of observed positive outcomes to challenging situations.
Our hope in doing this is to help us all search for the silver lining among what remains an ongoing global supply chain crisis.
Port Congestion
The problems faced by shippers who are importing goods through the maritime gateways have become front-page supply chain news from coast-to-coast.
Even as we head into the second month of 2022, delays remain for shippers to get possession of their import cargoes out of port complexes. However, the adaptability of shippers and logistics providers has been a true bright spot. The creation of innovative solutions outside the ports (to facilitate inland distribution) has become a shining star of progress.
Some of the innovative, unconventional solutions are import transloading 1:1 into domestic trailers, DC bypassing for direct-to-store deliveries, and utilizing private fleets within non-dedicated routes. These new supply chain solutions to common capacity challenges could last well beyond the restoration of port congestion issues.
Shifting Freight Economics
In 2021, we experienced a drop-off in the COVID-19 threat, followed by a surge. Supply chain demand against a mostly flat truckload capacity situation precipitated cost changes.
We’ve seen some of the most significant swings in spot (and then) contract pricing of the last 20 years this past year.
It was initially painful for shippers, but the transition to higher baseload pricing has become a positive. This shift has created a truckload marketplace ripe for reinvestment. This means that fleet owners have a significant opportunity. They can finally address the long-standing compensation gap between commercial and independents/fleet drivers.
Commercial Truck Driver Shortage
Demand for truck services is estimated to continue to outpace the rate with which capacity is refreshed by new drivers entering the industry.
The outlook for available drivers in the next ten years and beyond is alarming. However, entrepreneurial technology may provide a helping hand. The latest innovations in industry technology would enable faster use of pooled/shared-use capacity and vehicle platooning.
It’s also possible that the use of semi or fully autonomous trucks could support some portion of over-the-road (OTR) movements.
Capacity Challenges
Gaining access to scalable and callable truckload capacity became more difficult in 2021. The first generation of digital brokerage providers’ technology was put to the real test. It appears to have failed.
Out of these problems, shippers have embraced more collaboration with 3PLs. The goal is to build accessible capacity networks predicated on functional economics and the application of proper technology (APIs, etc.). Ideally, that technology would work with carriers and fleets in a mutually beneficial relationship.
Certainly, while 2021 did present a great number of unpreceded challenges, also encouraging was the unpreceded number of effective solutions. As we jump into 2022, remember that significant roadblocks and delays may be just the opportunity this industry needs to innovate and evolve.
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The England Logistics Full Truckload division offers services for companies of all sizes. Dedicated team members are available day and night to offer solutions and assistance with all logistical needs. Regardless of the transportation mode, our market and seasonal specialists provide flexible shipping solutions and are committed to helping every step of the way.