Five Formidable Transportation Challenges Facing Shippers

Supply chain disruption is gradually easing as demand weakens, offering shippers a chance to clear backlogs. But inland labor and equipment shortages – mainly trucks and drivers – are still causing gridlock at warehouses and store loading docks. While ocean, air, rail and long-haul trucking rates have come down to keep assets utilized, last-mile parcel freight, LTL and other costs associated with e-commerce growth keep rising, and carriers are maintaining pricing power.

A range of external, global geopolitical and economic trends outside shippers’ control – the war in Ukraine and Russia sanctions, new COVID-19 outbreaks again closing ports in China, potential longshore work stoppages on the West Coast, severe weather, recession – could easily bring back levels of supply chain chaos seen during COVID peaks. 

Finally, pressure is building from customers, shareholders and regulators for companies to meet environmental, social and governance (ESG goals). That translates down the supply chain into pressure on carriers and service providers to reduce fuel consumption, emissions, packaging waste and more, creating savings over time but adding considerable upfront cost.

Shippers are struggling to manage this uncertainty as they simply try to move goods from point A to point B on time. Relationships with asset-based carriers controlling the physical move are crucial, but easier said than done – especially for smaller, less frequent accounts. Strategic shifts to add resiliency, such as diversifying modes, gateways or suppliers, or substituting product inputs, involves risk and careful planning. Options to add capacity by leasing planes and trucks are costly and complex, outside the core competencies of even large shippers. 

Global 3PL GEODIS surveys the current transportation landscape and weighs both the challenges and possible options for managing disruption.

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• Source: https://www.supplychainbrain.com/articles/36271-five-formidable-transportation-challenges-facing-shippers