The freight capacity crunch has dominated supply chain and logistics since 2014, and many shippers fear it will arrive sooner than many experts believe. However, the capacity crunch may be less severe than anticipated, and it could easily reflect growing pains in the industry.
The shipping industry saw growth and expansion in 2014 when compared to the state of the industry since 2008. The economy was on the road to recovery, and more technology was being developed and deployed to increase the productivity and efficiency of fleets.
Transportation capacity problems have been a volatile issue over the past twenty years or so. A thorough analysis provided by the Council of Supply Chain Management Professionals , (CSCMP) in its “State of Logistics” report, indicates that by 2017, shippers in the U.S.
Expected Transportation Capacity Issues
The concern and dialog about the transportation capacity issues for our country have bridged the past two decades and beyond.
In October of last year we first wrote about the transportation capacity crunch. In that first post of the ongoing series, we did what we do with all firsts in the series: we defined it. We then went on to state what are the 4 contributing factors, at the time, fueling the capacity crunch.
For the thousands of companies that rely on the nation’s trucking network to get their goods to market, perhaps no issue in the past few years has become more critical than the capacity crunch in trucking. And this year, on top of the already tight capacity, the weather (and soon the flooding from thaw out) will only increase the tightness we are seeing in full truckload capacity.
Who doesn’t like saving money on freight? And we are not talking about saving to prosperity or beating up carriers or 3PLs until you find the lowest quote of the day. In today’s marketplace no matter where, what or how you do your shipping, logistics professionals are under pressure to reduce transportation costs.
If you work in the world of supply chain or logistics management, you understand the volatility of both fuel and restraints on rising freight capacity. Whether driven by reducing costs or by new business strategies, rethinking your distribution network optimization has become more important than ever.
The squeeze is on. Higher fuel prices, a driver shortage, a major wave of government regulations and an improving economy are all playing their part in creating a problematic logistical environment – a nationwide truck capacity crunch and rapidly rising costs. We have been here before.
A couple of weeks ago I wrote about the trucking capacity crunch and what were the 4 major contributing factors such as less trucking companies, a lack of drivers replacing retiring workers, a decrease in equipment investment, and the adverse government regulations such as the new hours of service rules, creating unintended consequences.