We’re all painfully aware that the last 18 months have been devastating to the U.S. economy. But things are looking up. We have several vaccines, hospitalizations are trending down as are Covid deaths. The new threat is the Covid variant. Several states are experiencing significant infection rates. We need to start planning for possible new restrictions. Already grappling with truck driver shortages, rising freight rates, and intermittent capacity issues, the domestic transportation sector experienced major shifts when the global pandemic disrupted supply chains around the world and shippers were sent scrambling for solutions. Another shutdown is unlikely, but any new level of restrictions will be problematic. Industry experts are forecasting significant supply chain issues on the horizon. A contingency plan will be critical to manage your supply chain in the coming quarters.
Efficiency Will Be King
Everyone is trying to figure out how to be more efficient and cost-effective with their transportation budget. Capacity constraints and rates will demand a more streamlined approach to LTL shipping in particular. Truckload shippers may want to look at intermodal options. The 1-2 skid shipments may not make financial sense anymore. The e-commerce demand will continue. Imports from Asia and Europe are expected to be problematic for the foreseeable future.
Domestic carriers are in a good place in terms of demand, and they can afford to be picky about who they want to deal with, what freight they want to accept and so on. “Preferred Shipper” status will be important moving forward. Every carrier, large and small, has their "sweet spot" lanes; those lanes that achieve a well balanced mix of freight to and from their core customers and terminals. Achieving this balance and minimizing empty miles are the most critical aspects of running a profitable trucking company. This along with “ease of doing business” with a particular customer and prompt payment schedules will help you become a preferred shipper. Refer to our recent blog for more details https://www.land-link.com/blog/how-to-become-a-preferred-shipper
Historically, most companies had purchased a set amount of freight transportation via an annual bid process, and then modified that contract as needed as their freight demands increased or decreased. That changed in 2018, when capacity crunches and driver shortages took hold of the industry. Fast-forward to 2021, and the annual bid is once again proving useless as companies scramble to secure capacity at the right price and with the best possible terms. Both shippers and providers have come to realize that all freight isn’t the same, and that it shouldn’t be treated as such.
By assessing different characteristics across carriers, networks, and even individual lanes, shippers can come up with a more dynamic freight management approach. Identifying lane and weight preferences along with other client features that carriers find attractive is the job of a 3PL. In 2021 and beyond a 3PL may be your best business partner. Experienced 3PLs offer the tools and expertise to optimize and restructure the supply chain. Outsourcing your 3PL services to a trusted partner like Land Link Traffic Systems ensures continuous improvements are implemented, helps maximize profits, minimize wait times and ultimately improves customer service.
As a trusted 3PL partner, Land Link manages warehousing, shipping and servicing a diverse range of manufacturing and retail companies. We deliver your logistics needs with transparency, traceability, and dependability. By partnering with a 3PL like Land Link, companies can also scale as needed to accommodate current business demand.
Looking ahead, automation of freight management will certainly continue over the coming years, but shippers can’t assume that there is one “silver bullet” solution that will solve all of their transportation woes. Artificial intelligence (AI), machine learning (ML), and the Internet of Things (IoT) will play bigger roles in this evolution by providing shipment visibility, exceptions management, and risk management tools that address issues like weather and traffic.
Your logistics staff must either learn and understand all of these trends and new technology or align themselves with Logistics professionals like Land Link Traffic Systems to be successful. We're here to help. Contact us today for a complimentary supply chain review.
Stay Safe Everyone.
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