Blog Post #4 – The Rapidly Changing Supply Chain Market

Introduction 

The freight market has experienced unprecedented changes in recent years, driven by a host of factors, including fluctuating fuel prices, technological advancements, and the ongoing impact of global events. As a freight brokerage company, it’s crucial to stay updated with the latest trends and insights to better serve our clients and partners. In this blog post, we will explore the current state of the freight market and discuss the challenges and opportunities facing the industry. 

Capacity Crunch and Driver Shortage:  A significant issue plaguing the freight market today is capacity crunch. This refers to the imbalance between freight demand and available carriers, often resulting in higher transportation costs and longer transit times. Ongoing driver shortages are a huge contributor to this issue. A rapidly aging driver population, coupled with a lack of new talent entering the profession, has left the industry scrambling to find qualified truck drivers. To overcome this challenge, some companies are adapting by offering much more competitive wages and incentives, while others are investing in autonomous vehicles and other technological solutions.  Track and tracing software has taken hold throughout the industry, and throughout the decade there are sure to be more technological advancements that could both cause and alleviate issues. 

Rising Fuel Prices:  Due to many economic factors, fuel prices have been on the rise, creating additional pressure on the freight market. Higher fuel costs can often lead to increased shipping rates, which in turn can impact supply chains and consumer prices. To mitigate this issue, freight brokerages and carriers must focus on fuel efficiency and explore alternative fuel options, such as electric and hydrogen-powered trucks.  Throughout the entire world, non-traditional gas options are being explored by top minds (no, not Elon), and these ideas have been in the mindshare of the general public for years as well, so it makes perfect sense for the logistics and supply chain industries to be taking great notice of this due to the impact it will assuredly have throughout them. 

The E-commerce Boom:  The rapid growth of e-commerce has had a significant impact on the freight market. The demand for faster, more reliable deliveries has skyrocketed, especially throughout the pandemic, putting immense strain on carriers and logistics providers. To adapt to this new landscape, freight brokerages must invest in digital solutions that improve the customer experience, enhance operational efficiency, and facilitate real-time communication with carriers.  An example of one of these programs is TextLocate, which pings a driver’s location (once they agree to it, of course), and sends a text to the logistics provider they are working with to let them know where they are.  These kinds of software are going to become more and more common place as time progresses. 

Technological Advancements:  Technology continues to reshape the freight market, as it does with the entire world, offering innovative solutions to streamline operations and improve efficiency, such as the aforementioned TextLocate.  For instance, the adoption of artificial intelligence (AI) and machine learning has affected this industry immensely.  In the coming years, it is almost certain that most WMS (Warehouse Management Systems) and CRM tools (customer relationship management) will become heavily – or even solely – reliant on artificial intelligence tools.  Of course, the actual result of these implementations remain to be seen.  There is always reason to be cautious when the human element of something gets replaced, even somewhat. 

However, there is also reason to believe that this tech will have promising positive results on the industry.  The automation of things such as tracking of carriers or sorting of clients in a CRM are sure to save time (and therefore money) for people throughout the 3PL industry.  Optimization is always key. 

In conclusion, there are a large number of factors, both ones that can be mitigated and ones that cannot be, affecting the supply chain and 3PL industries in the current time period.  Over the next few years, drastic changes will continue to happen.  Businesses will have to adapt to these changes as it is a time of “sink or swim” within these fields.  We all must be careful about not losing sight of the importance of providing excellent service, while being mindful of the benefits and detriments of these rapid changes. 

—Jack