Mainstream media outlets and the biggest players in the shipping and logistics space are reporting that the unprecedented supply chain disruptions that occurred in 2021 will persist well into 2022. Though the number of container ships waiting at sea to unload at Los Angeles-based ports is down from the 2021 peak holiday season backlog, the number of ships currently waiting offshore or ‘slow steaming’ en route remain well above historical norms. Wait times have also increased to eastern seaboard ports.
To take a quick look back, as of November 17, 2021, there were 179 container ships waiting at sea to unload at Los Angeles based ports, according to Business Insider. Even when the containers offload, it takes up to 18 days for them to leave the shipyard!
The root causes of the crisis are complex. First, overseas manufacturers had a sudden stop and then had to restart when the Covid-19 Pandemic began. Since then, consumer demand has skyrocketed in the best economic environment we’ve seen in 30 years. For decades, though, global supply chains have grown longer and companies have capitalized on cost savings from razor-thin inventory levels — often smoothed out by mastering ‘just-in-time’ supply chain practices. Adding to the complexity is the 10+ year driver shortage trend; the American Trucking Association reports we have a deficit of 80,000 drivers in the US, and that number is expected to double by 2030.
A Closer Look at the Real Impact of Supply Chain Disruptions
Taking these unprecedented supply chain circumstances in their totality, one is left wondering when and how things will work themselves out. The most obvious impact is this: when demand outpaces supply, prices rise. In fact, we’ve seen the highest inflation growth since 1990 with price inflation now exceeding 7%, according to TradingEconomics.com. But what does that really mean for the logistics industry? Labor wages are skyrocketing, drivers are calling off loads as they job hop to take higher paying loads elsewhere, TL and LTL rates are going up by the day, and employees are more pressured than ever from the port to warehouses to job sites to make up the difference.
Immediate and Practical Tips to Survive and Thrive
Unprecedented times call for unprecedented measures; and that means you can’t just keep doing the same things you’ve done for the last 30 years to create a successful supply chain. Momentum’s team of logistics experts share these tips for getting ahead amidst the current supply chain environment:
- Diversify your supplier base. This includes expanding your carrier base – for example using carriers that have both asset-and-non-asset based solutions. Also, establish forecasting and shipping schedules for your carriers, and treat them as partners; after all, a strong relationship is a hotbed for creative solutions and flexibility no matter the business environment. Finally, put more emphasis on service and performance with your carriers, and less on cost.
- Abandon “JIT” methods and instead, consider using risk mitigation as your main strategy. This means you will likely need to increase lead times, and also allow for more flexibility in scheduling windows for pick-ups and deliveries.
- Attract more and better workers with incentive-based pay and other expanded benefit offerings.
- Be driver-friendly! This requires out-of-the-box thinking – for example, thinking less about your shipment needs and more about how you make that shipment attractive for the driver. For example, can drivers stage on site? Or, arrive the night before and stay on site? Could they load early?
- Visibility and transparency are critical. For years, transportation providers and shippers have been heralding the benefits of visibility; knowing where shipments are at and managing exceptions when necessary. Nowadays, this isn’t just a nice-to-have bonus; it’s mission-critical to manage through disruptions.
Momentum Transportation, a Landstar agent, Mitigates Risk of Supply Chain Disruptions
The Momentum team collaborates with the shippers and shares practical advice — like what you’ve read here — to improve and better manage your supply chain under all types of dynamic conditions and circumstances. Landstar’s daily focus on service and safety put us in a great position to mitigate your supply chain disruptions and other challenges — especially considering the record cargo thefts reported in 2021. What’s more, Landstar’s industry leading safe drivers have helped our clients navigate through the capacity crunch. Our drivers are committed and dedicated (and we compensate them accordingly!) which means your freight gets priority; plus we have the power of Landstar’s vast network of vetted partner carriers at our fingertips to seamlessly blend with Landstar capacity..
We offer a ton of value-adds to our clients, including:
- Project management. We communicate with site, shipper, general contractors, manufacturers, etc. and do whatever it takes to make sure loads move smoothly.
- Open book policy. We provide immediate visibility to all accessorials, ETAs, truck locations, etc. to make sure your load moves on time with no surprises.
- Dedicated drivers. We have mission critical drivers that run dedicated lanes or move seamlessly from project to project. The density and efficiency of our mission critical transportation network allows us to attract and retain the best drivers in the industry. .
- An optimized blend of Landstar trucks, dedicated capacity, and core 3rd party carriers.
- 24 x 7 onsite staffing and online tools for instantaneous responsiveness.
Ready to mitigate the disruptions happening in your supply chain? We’ll help! Contact Us today
About the Authors:
This team of Momentum transportation and logistics experts contributed to today’s blog post:
BECKY SCOTT, Director of Key Accounts
Becky came to Momentum Transportation 13 years ago with a background in sales and marketing. She has a bachelor’s degree in Business from the University of North Florida. Becky has held various positions within the company, allowing her to grow her expertise in domestic (truckload, LTL, heavy and specialized) and international (ocean and air) logistics. She is currently focused on further developing our mission critical business segment.
ERIC MORTON, Key Account Manager
Eric has over 17 years of Transportation experience including 12 years with Momentum Transportation. Eric has vast sales and operational experience with small, medium, and large global enterprise accounts. He helped create and implement Safety, Security, and Best practice procedures with several accounts. Eric holds a bachelor’s degree in Business Management from the University of Florida.