Transportation Industry Braces for a Looming Transportation Capacity Crunch Crisis in 2017

transportation capacity 2017

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 fact, according to a released, in-depth analysis of the State of Logistics report from the Council of Supply Chain Management Professionals , (CSCMP), the United States expects that by 2017, supply chain organizers will be less concerned with paying higher trucking rates than being able to find trucking container space available to haul their freight.  We have heard so much over the years about a coming capacity crunch crisis, many argue if crisis is the proper terminology.

Among the most discussed catalysts for the next approaching transportation capacity crunch, we have to look at collaboration between all the players in the myriad of logistics layers.

3pl vs 4pl

If the many components of logistics and supply chain management do not engage effectively with the transport workforce and manufacturing skills gap of the U.S., crisis may be an understatement rather than an over statement. One of the essential pieces to working this out smoothly will be active listening. An example would be hearing out reasons behind the needs each side wants to address.

What we (Transportation Workers) Need is Not Personal, It’s Economical & Common Sense…It’s Way More than “Complaining”

When asked, “What We Need,” many manufacturers will understand the reasons why logistics and freight haulers say they require attention to road and freeway conditions. On the short list of upgrades and improvements:

  • Smooth pavements
  • Wide shoulders
  • Advanced warning lights at intersections, with working traffic signals

Now of course, this continues to strengthen the need for a hard look at how we handle the Highway Trust Fund and how we deal with aging infrastructure.

We anticipated the snickering, indeed. Are smooth pavements to accommodate truckers with delicate behinds? Why are they clamoring for smooth sailing routes with no stops and continuous speeds while the rest of us sit in frustrating traffic and bottlenecksnthat hold us up day after day? Well, basically, because getting freight in a smooth matter is clearly important to helping combat the capacity crunch as it is and of course, moving forward.

Economically, these requests make financial sense, considering the changes in freight regulations that has occurred in recent years. There would be less breakage and loss of the delicate, high-tech equipment being hauled cross-country these days if the road and freeway surfaces were resurfaced and smoother to reduce vibration. Keeping certain routes open and free flowing also has nothing to do with the tender undersides of haulers. Rigs regularly relied on to transport livestock animals need to ensure they have consistent and proper airflow and circulation to keep their cargo healthy and in excellent shape for market.

Some additional immediate needs should be self-explanatory:

  • Highway safety innovations
  • Training for maneuvering over-sized vehicles through roundabouts
  • Improved National communications for real-time road conditions, approaching storms, detours, other hazards

4 Drivers of the Looming Transportation Capacity Crisis of 2017

transportation capacityIt is not hard not to understand why all disciplines in these logistics and transportation industries need to shave off any costs possible; some critical facts ahead put additional burdens on a stressed alliance.

  1. Governmental Regulations – Currently there are no less than 20 laws threatening deep impact on transport costs. From the impending “Driver Coercion Law“, CSA Compliance, Hours of Service, and e-Logs, to name a few, some changes in these laws affect various businesses in different and unique ways. In some instances, a broken law will carry hefty financial penalties on shippers, motor carriers, as well as logistics operator. These regulation infractions possibly could add cost by revoking operating authority of the freight brokers, forwarders, and carriers. The trucking company, trucker transport shortage is already being felt with an already critical loss of 5,000+ trucking companies and 400,000 trucks now off the route.
  2. Loss of Truckers with Commercial Drivers Licenses, (CDL’s) – This is the time retirees are leaving in droves, and there is a shortage of trained and licensed truckers willing to replace them. Trucking schools are actively recruiting and the going is tough. The most likely candidates are singles with no young children or families, which offers the freedom to live on the road, hauling across the country. One resource for a new workforce that is being tapped is single African American women seeking good incomes, and independence that comes with a promise of a new future ahead.
  3. Deterioration of Existing Fleets  – In the aftermath of our economic issues since 2009, corporations in the U.S. sought to keep their businesses by down scaling, and could not afford to pour money into upgrading and repairing their equipment, trailers, and rigs. Many vehicles have been reassigned to less rigorous work.
  4. Lack of Cross-communication and Proper Cost Analysis – Profit management is intertwined with proper benchmarking and transportation cost analysis. So much more now than ever it is required that shipper’s direct transportation costs and each carrier’s operating costs must be effectively calculated and reductions applied. Per mileage costs for LDL, for FTL & LTL Carriers, benchmarks like setting fuel costs at 39 percent of total carrier costs, driver wages at 26% and payments and loans at 11 percent, shippers, manufacturers, and haulers, can no longer look at past simple matrix calculations to completely understand costs and profits.

One significant asset to improving the predictable outcomes for transportation and logistics operations will be the overall use of Transportation Management Systems that use constantly available data to manage every aspect of variables in freight costs and transport rates, optimal use of logistics, and continual monitoring of industry compliance everywhere in the U.S.A.

What do you think will happen by 2017 in this transportation capacity issue? Let us know in the comments below.

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