The logistics industry is filled with problem solvers. From LTL freight consolidation to route planning and other fulfillment solutions, everything supply chain leaders do revolves around solving the multifaceted problems shippers face. Using new technology and a variety of strategies, the logistics industry is capable of adapting to almost any challenge it comes across, and each year the industry is presented with new puzzles to solve.
The American Transportation Research Institute (ATRI) conducts an ANNUAL study of the challenges affecting the logistics industry, particularly those affecting trucking companies and carriers. These challenges cascade down to virtually any business that moves freight, and it’s up to 3PLs to help solve them or at least mitigate the effects they have on shippers.
According to the ATRI report, these are some of the most pressing challenges affecting the logistics industry:
Driver shortage challenge
A rise in shipments has presented a need for more carriers to be on the road, but the American Trucking Association is predicting a shortage of about 50,000 truck drivers to continue throughout the year. This has a created a capacity crunch that is driving up rates at a time where shippers are moving more product. It’s no wonder that the ATRI reports driver shortages as both the top issue facing shippers, as well as the number one concern for trucking companies.
How to stand tall in a driver shortage
With more freight going out and fewer carriers to haul it, LTL and PTL consolidation are now more important than ever. The ability to consolidate loads and make them easier for carriers to pick them up/drop them off while in route to other locations can be the saving grace for an industry facing ever-tightening capacity. Some 3PLs also partner with the USPS to give shippers access to a large network of carriers.
Driver retention challenge
Somewhat related to driver shortages is driver retention, a major concern for trucking companies and another challenge the industry must confront. Fewer people are going into the trucking profession, and many drivers are hitting retirement age. With more job openings than prospects, carriers have an abundance of options when it comes to employment, and they are often leaving companies in favor of those they view as “greener pastures.”
How to keep good drivers driving for you
Trucking companies are making changes to their compensation systems to incorporate bonus structures and other incentives to both attract and retain drivers. For 3PLs and other shippers, the most important course of action when it comes to carrier turnover is to have a reliable screening process in place. Before new carriers begin to haul freight for a company, that company should ensure that the carrier has a great track record of reliability, safety, and success.
Regulatory compliance challenge
Compliance is at the top of most companies concerns, regardless of the industry. For logistics companies, their concern over compliance depends on the regulatory changes made in any given year. Most recently, new Electronic Logging Device (ELD) mandates are a top concern because failure to comply can result in big penalties, which can include fines and removal of trucks from the road.
Additionally, trucking companies are concerned over Hours of Service (HOS) regulations that are recorded by ELDs. With the capacity crunch pushing carriers to the limit, many companies are concerned that carrier efficiency may decrease if they are forced off the road for given periods of time.
What you can do to keep pace with compliance
Much like driver shortages, shippers and 3PLs are combating this with the efficiency provided by optimized LTL and PTL consolidation.
New issues on the horizon
Research by the ATRI also reveals several emerging issues that logistics providers and carriers are concerned about moving forward. Three of the main concerns the ATRI found are:
- Changes in the economy
- The impact of autonomous vehicles
- The looming shortage of diesel technicians.
To discover more about these issues, read the full ATRI report here. As always, King Solutions is working hard to mitigate their effects on the shipping industry. To find out how we can help your company optimize fulfillment and shipping, contact our team.