Supply Chain Blog
Hi Friends,
Inflation, gas shortages, semiconductor shortages, labor shortages – oh my!
The economy is heating up at a time when the nation slowly recovers from its lock down causing many challenges to the nation. Shortages across the board are harming production whether it be in a plant, warehouse, restaurant, or trucks.
The number of containers flowing into the U.S. coupled with the high freight demand have overwhelmed the nations supply chain and the result is delays and high costs.
Let’s look at the numbers.
Hi Friends,
After some quality family time in Florida, I am back to looking at where the economy is headed, and it’s influence on the logistics marketplace. All signs are positive for the economy as the pandemic comes under control in the U.S. and consumers feel better about their collective future.
On the other hand, if you are a shipper budgeting your freight costs you are likely suffering considerable angst at where trucking and intermodal rates are. No relief is in sight.
Drivers? Still hard to come by even though pay continues to grow.
Equipment? Delays in production due to parts shortages, same goes for tractor maintenance.
Warehouses? Even though they are building them as fast as possible, materials and labor are constrained = high lease rates.
Labor? Why take a warehouse job when you can stay at home and collect higher unemployment checks?
The logistics sector is playing catch up, but the road is long and hard. Let’s look at the numbers.
Hi Friends,
It’s April and the leaves are popping, the economy continues to improve, and the Masters tourney is underway. I love this time of year for its sense of renewal.
Meanwhile, freight volumes are surging throughout the country with many sectors of the economy in recovery mode, and the spring produce season has not yet begun.
Transportation rates are near all-time highs and capacity is difficult to secure with the Outbound Tender Reject Index above 25 percent according to DAT Solution’s Sonar. Likewise, driver wages continue to rise.
Let’s look at the numbers.
Hi Friends,
Flowers are blooming, the grass is green, the vaccine roll-out continues, people are returning to work, and the economy outlook is bright. The U.S. GDP is expected to jump 6+ percent throughout the year. The influx of dollars to consumers through government payments, the U.S. economy, which is largely consumer driven, should explode as herd immunity takes place this summer.
If you rely on service providers for transportation and distribution/fulfillment centers, be prepared for the associated rising costs that come with such a robust recovery.
Freight rates in truckload and LTL will continue their march upward. Likewise, the fast absorption in warehousing is translating to higher lease rates. Labor costs continue their climb as does material handling equipment. In fact, manufacturers are booked months in advance before they can deliver.
Let’s look at the numbers.
Hi Friends,
Wow, a year ago at this time I attended the International Warehouse Logistics Association (IWLA) board meeting in San Diego. The trip was surreal as the Covid pandemic had just begun and a smattering of people in the airport were wearing masks and I did my best to separate myself from others. The annual conference was canceled, and the result of the lock down began to manifest itself.
Fast forward a year and the country has come a long way to dig itself out its self-imposed recession. Jobs are coming back as well as manufacturing. The service sector is showing signs of life as the country slowly lowers restrictions.
If there is any beneficiary from the lockdown it must be those involved in e-commerce as consumers ordered at historic levels from retailers with a strong online presence. This created historic volumes for parcel carriers and in turn drove trucking into overdrive.
With freight rates continuing to grow shippers are asking what happened, where is the carrier capacity? To start, there isn’t a truck fleet anywhere without idle trucks sitting along the fence line. Drivers are retiring as these boomers age out of the profession and the Drug & Alcohol Clearinghouse takes over 50,000 drivers off the streets at a time when freight volumes rose due to restocking and constrained inventories. Add in the polar vortex and one has a perfect storm.
Likewise, warehousing and fulfillment costs rose due to a severe shortage of labor as people were afraid to work and received boosted unemployment benefits to stay home. Everything involved in operating a distribution center rose in cost from real estate to material handling equipment and insurance.
Signs of a recovery? Let’s look at the numbers.