Capacity And Cost Outlook For 2021

Posted by Land Link Traffic Systems on Jun 2, 2021 9:20:10 AM

The global impact of Covid-19 continues to impact the Logistics industry. Increasing demand and a looming labor shortage is forcing freight rates up and capacity down. Persistent labor shortage, particularly for warehousing and distribution, is slowing supply chain and logistics activities. Regardless of specific mode, the warehousing and distribution environment appears to be a common issue for many freight operators right now. 

Over The Road

The freight markets have been gaining strength as the manufacturing industry roars back. This has naturally created a supply-and-demand structure that favors carriers and finds shippers paying higher rates with no guarantee of capacity. The trucking industry has essentially recovered fully in the goods sector of the economy, but that’s because there’s been so much pressure to replenish inventories. The spot market may be a dangerous thing to rely upon in the near future. Carriers clearly prefer contract rates to commit their assets. If you intend to use the spot market expect unreliable capacity. In fact, this over-reliance could easily force you into the expedited market. Capacity is expected to improve slowly as new truck orders are filled and the labor shortage improves.

Ocean And Air Transportation

The disruptions caused by the pandemic will have a lasting impact on the ocean shipping industry, where shipping delays and container shortages are becoming more common. These issues have led to port congestion right at a time when the world’s major manufacturing hubs have started gearing back up for business in 2021. To offset these and other challenges shippers should be assessing their logistics processes and adding capabilities that allow them to better track their cargo, optimize their inventory, reduce human errors, and scale up and down as needed. These steps can help companies get a better picture of their current and future transportation needs, and also help manage transportation costs.

Both the Ocean and Air markets face the same labor challenges as most other industries. Capacity constraints will be tougher to ease since planes and ships are not as quickly added to the fleets as are trucks. Shippers need to collaborate with shipping lines, airfreight companies and 3PLs for blocking space with committed volumes. They must be able to perform more accurate transportation forecasting utilizing technology and predictive analysis.

Staying flexible and agile during these uncertain times not only helps companies respond quickly to changes in their transportation plans, but it also helps to shield them from the impacts of surprise events they may not have been ready for. An agile supply chain can also help you navigate scarcity and disruption. Supply chain managers can predict and identify potential problems and solutions and respond to disruptions in production, supply, and delivery more swiftly.

Finally, if there’s one thing all companies learned in 2020, it’s that you can’t do it all, and that experienced logistics providers can help organizations navigate the complexities and interruptions of the current freight market. The right partner can also help alleviate the stress of having to manage multifaceted supply chains and allow you focus on what you do best: running your successful business. Contact us @ to explore options for your organization.

Stay Safe Everyone.

To stay up to date on these and other Logistics topics subscribe to our blog @

Michael Gaughan
Technology Officer
Land Link Traffic Systems

Topics: Supply Chain Management, Intermodal Freight, Transportation News, Reducing Freight Rates, Maximizing Routing Efficiencies, 3D Printing, Logistics News, Industry Trends, Technology