As the holidays approached and supply chains remain strained, businesses and consumers were eager for a return to normalcy in time for end-of-year surges. But with shipping containers stalled at ports and labor shortages reducing available workers, supply chain managers are seeing little improvement as 2021 comes to a close.
While “Christmas Is Canceled” headlines mighty sound hyperbolic, they highlight an unfortunate truth for businesses and consumers alike: Widespread delays and price increases are here to stay — at least for now — and will certainly have repercussions this holiday season. Experts believe many supply chain challenges will even get worse before they get better. Most pressing among these challenges are capacity constraints, driver shortages and the practice of double loading by carriers.
On a single day in mid-October, a record 200,000 shipping containers sat on stalled ships off the coast of Los Angeles. Even now, the ports of Los Angeles and Long Beach are still trying to make room by announcing fines of $100 per container per day against shipping companies if containers stay in port for more than nine days. While the fines might help reduce some of the buildup, they’re not a long-term solution, especially when trains, trucks and infrastructure are all similarly strained.
In fact, one of the biggest issues to blame for capacity constraints, both in the U.S. and abroad, is a lack of drivers. Unlike short-term issues like capacity and demand, the driver shortage might not have a clear solution in sight. The numbers in the U.S. are alarming: More than half of all truckers today are over the age of 45, and nearly a quarter are over 55 — meaning they’ll hit retirement age in the next 10 years.
Without enough drivers to transport high-demand goods, carriers will sometimes cut corners and double up on freight without the permission of its shippers. They can bypass the seals on trailers and add cargo to an existing shipment, often without third-party logistics providers or shippers ever knowing. This practice represents a major breach of integrity and security, but is likely to continue as long as shippers lack visibility of their product.
Despite the supply chain risks companies continue to face, new progress on infrastructure and technology adoption offer hope. Some developments can deliver relief right now, while others will take years. Overall, the past couple of years has yielded promising new solutions to the challenges at hand.
According to the White House, some 20%, or 173,000 miles, of the nation's highways and major roads are in poor condition, as well as 45,000 bridges.
Public roadways are no better, with the American Society of Civil Engineers giving American infrastructure a C-minus grade in a 2021 report card. The report said 43% of America’s public roadways were in poor or mediocre condition, a number that has remained stagnant over the past several years.
Fortunately, lawmakers in Washington have come to an agreement on a $550 billion infrastructure bill, which includes $66 billion in investment for passenger and freight rail and $110 billion to make improvements to America’s roads and bridges. These infrastructure investments, while not necessarily quick fixes, have the opportunity to do wonders for the efficiency and speed at which shippers and 3PLs can move cargo.
With capacity issues and driver shortages remaining for the foreseeable future, visibility offers immediate solutions. With shippers, 3PLs and carriers pushed to their limits, increased visibility allows companies to maximize their assets and drivers by identifying the most efficient routes. Real-time analysis of driving behavior can also protect the drivers themselves by avoiding road hazards, red zones and other risks. Though not an exhaustive solution to capacity and driver shortages, route and product visibility allows managers to mitigate risk and reduce transportation costs.
At the same time, shippers and 3PLs can use visibility to hold carriers accountable. The 3PLs and shippers with visibility of the location and status of their products can better enforce standard operating procedures.
While there are many substantial issues to resolve to relieve the pressure on supply chains, technology and infrastructure breakthroughs offer opportunities in the coming years to address some of the biggest risks we face today.
Barry Conlon is chief executive officer and founder of Overhaul.
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