Here are five air and trucking strategies that all shippers should be using right now to offset the capacity crunch and driver shortage.
We’re in an era where changing customer demands, frequent market fluctuations, and new governmental regulations are all taking their toll on the world’s transportation networks. Shippers that rely on air and truck to transport their goods are especially impacted, but the good news is that they’re also in the position to make decisions that increase efficiencies, reduce transportation costs, improve relations with providers, and optimize their supply chains.
Consider this: In markets across the Americas right now—and particularly in the U.S.—are experiencing an unprecedented truck driver shortage. “The shortage is so severe that it threatens to derail economic growth,” JOC reports in How to fix the US truck capacity crunch.
The problem isn’t limited to trucking either. In nearly all markets right now, shippers are grappling with a lack of truck, air, and intermodal capacity right at a time when drivers are getting harder to find and the costs of doing business are going up. Here are five strategies that all shippers should be using now to deal with these and other transportation challenges:
- Develop accurate forecasts and lead times. Good forecasting goes a long way in capacity-constrained transportation environments. Look carefully at your firm’s overall sales projections while also factoring in the more unpredictable “spikes” that could come smack in the middle of your busiest season. Use historical data, for example, and then factor in 2018’s numbers to come up with the most accurate possible forecasting projections. Then, share those numbers with your logistics providers. The more these valued partners know about your business and the potential sales numbers, the better. Good transparency in this area allows your logistics partner to manage carriers to their capacity commitments and then tweak forecasts based on actual results (not just guesswork).
- Become a shipper of choice. There was a time when “shipper performance” wasn’t measured or shared; carriers weren’t overly particular about whose cargo they were transporting; and shippers could make drivers remain out in the yard for hours, waiting for an open dock door. Those days are long gone. Between the hours of service (HOS) rules that limit the number of hours a driver can spend behind the wheel during any given period, the electronic logging device (ELD) mandate, and the fact that business is robust (and, as such, providers can afford to be pickier about who they work with), shippers are now being graded, scored, and assessed according to their track records. Add the driver shortage and tight capacity to the equation and the result is a transportation market where shippers either have to prove themselves to be good customers, or do last-minute scrambles to get their loads covered.
- Drive the waste out of your supply chain. Eliminate processes that hold up the free movement of freight, wasting valuable time, such as driver detention at loading docks. “That could also mean tendering freight further in advance and avoiding panicky last-minute calls for pickups,” Cassidy writes. “This may cause inconvenience in one area but save time and money overall by making it easier for carriers to assign drivers and trucks to customers and shipments. For example, many less than truckload (LTL) carriers are pressing customers to send electronic bills of lading to speed transactions.
- Talk to your transportation providers. Whether you’re using over-the-road trucks, air freight, or another transportation mode, try to focus less on price and more on improving processes and doing business better together. “This is a two-way street, or better yet, an interchange where several parties can find ways to move freight efficiently and save money across an enterprise,” Cassidy writes, “including logistics providers, freight brokers, and technology firms.”
- Leverage technology to streamline the supply chain. Right now, all shippers are striving for higher levels of supply chain visibility and lower transportation costs, both of which can be enabled by a good transportation management system (TMS) and other tech-enabled solutions. Use these tools to improve efficiencies, save money, and provide higher levels of service to your own customers regardless of the current air, truck, or intermodal environment. “While the capacity crunch is not going away anytime soon, using a transportation management system will help shippers better navigate the current rough waters so they can ship their orders to the right location, at the right time, for the right price,” TMS provider Kuebix points out.