The supply chain disruption is gradually easing as demand eases, giving shippers an opportunity to clear backlogs. But inland shortages of labor and equipment — mostly trucks and drivers — still cause congestion at warehouses and loading docks. While sea, air, rail, and long-haul trucking rates have fallen to maintain resource utilization, parcel freight, LTL, and other last-mile costs associated with e-commerce growth continue to rise, and carriers retain their pricing power.
A range of external, global geopolitical and economic trends beyond shippers’ control – the war in Ukraine and Russia sanctions, new COVID-19 outbreaks closing ports in China again, potential work stoppages on the west coast, severe weather, Recession – could easily happen Bring back the supply chain chaos seen during the COVID spikes.
Finally, there is increasing pressure from customers, shareholders and regulators on companies to meet environmental, social and governance (ESG) goals. This creates pressure on shippers and service providers along the supply chain to reduce fuel consumption, emissions, packaging waste and more, resulting in savings over time but incurring significant upfront costs.
Shippers struggle with this uncertainty as they simply try to get goods from point A to point B on time. Relationships with asset-based carriers who control the physical move are crucial, but easier said than done – especially for smaller, less frequent customers. Strategic changes to increase resilience, such as diversifying modes, gateways, or suppliers, or substituting product inputs, involve risk and careful planning. Adding capacity by leasing aircraft and trucks is costly, complex and outside the core competencies of even large shippers.
Global 3PL GEODIS examines the current traffic landscape and weighs both the challenges and possible options for managing disruptions.
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