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Home » Watch: A Rough Year Ahead for Transportation and Logistics
VIDEO

Watch: A Rough Year Ahead for Transportation and Logistics

February 21, 2022
Robert J. Bowman, SupplyChainBrain

Juan Cazorla, head of the Transportation and Logistics Specialized Industry Group of Regions Bank, offers both a short-term and long-term outlook for the transportation and logistics industry.

“Human capital” is among the biggest challenges confronting ports, transportation and logistics providers in 2022, Cazorla says. Thanks in large part to COVID-19, there aren’t enough truck drivers and port workers to handle the surge of cargo that continues to clog the system. “What used to be a normalized synchronized delivery pattern has gone by the wayside,” he says, adding that the virus and its variants “look like they’re going to be a permanent part of the landscape.”

Making the crisis worse is inadequate infrastructure. The boom in e-commerce has strained the entire system, both in terms of freight-handling facilities and equipment. The lead time for acquiring new Class 8 trucks is growing, and containers, trailers and chassis are at a premium. Leasing companies, meanwhile, “are in the catbird seat, charging record rates,” Cazorla says.

When it comes to equipment, the problem isn’t necessarily one of too few units in service. It’s a matter of their being in the wrong place. Huge numbers of containers and chassis are stuck in parking lots and yards and aren’t available for use. Cazorla describes the situation as an “asynchronous” supply chain, exacerbated by a lack of labor to keep freight moving.

Cazorla isn’t optimistic about the crisis easing in the short term. Data indicates that “we’re going to be in this period for another 12 months — at least through 2022 and perhaps into 2023.”

The good news, he says, “is that 2021 provided a lot of lessons.” E-commerce merchants and logistics providers are working to make changes in the system in order to avoid a repeat of the crisis in the years ahead.

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