What will happen? What will the trends be? Are we back to normal?
Normal? Not really sure what that is. It seems to me that they are just rotating dynamics and obstacles that need to be overcome. Here’s some things to be on the lookout for.
Companies will continue to look to drayage providers to be an integral part of their supply chain rather than an afterthought once cargo arrives. This trend has only just begun and will likely continue to be more prominent. Customers want more certainty and visibility with their delivery schedules. The Dray/Transloading and Trucking option will be the way of the future. Get the cargo into the port, transloaded at our warehouse and loaded out before it even hits the rail.
Chassis on many major inland ramps may still be problematic. Dwell times in the community remain to be too long and the complexities of different pools or depots will still mean chassis could be an issue. Demand for private chassis will remain strong as BCOs & FFs will seek out truckers with private chassis as the pool chassis options will continue to remain undependable and stressed.
What does the west coast look like? I think their volumes will continue to be stunted. There is still no labor agreement with the ILWU, AB5 will start to get policed more heavily, and the implementation of CARB which will eliminate the use of a lot of equipment in CA. I believe the imports to the west coast will be down, but the driver pool will be greatly impacted. So even with less cargo there could be an equipment and driver shortage.
Between AB5, CARB and union volatility, the west coast ports are being punished. From the vessel and charter vessel nightmare of fall 2021 to the union uncertainty, shippers are going to keep their cargo in the east and gulf coast ports. Declining volumes and blank sailings will cut congestion but there are still chassis shortages across all US port/rail locations. Carriers in recent months have been blank sailing at a much higher rate than they initially report four to six weeks out, so the forecasted capacity reductions reported in mid-December for January are likely to increase.
Maybe the craziness of the west coast overflow and winter weather will also push the east coast into the new congestion?
SSLs are going to be stringent on capacity and some lanes more than others. They want to manage capacity so rates don’t go too low. This may mean that even in a down market ocean reliability schedules will remain at all-time lows due to shrinking availability and more blank sailings.
Trade tensions: Ongoing trade tensions and policy changes could impact the demand for and movement of goods by ocean.
Talent shortages: The freight industry continues to face a shortage of skilled workers, which could impact its operations and potentially lead to a rise in wages and benefits to attract and retain talent; consequently increasing the cost of doing business passing onto the end consumer.
Savannah and Houston will continue to grow. The states and the ports are hungry. The automotive sector continues to grow through the southeast and Texas, and these ports will soak up the additional volume.
What are a couple of black swan events that could mess everything up? War what is it good for? Still don’t know what will happen with Ukraine and Europe, so we have to be on the lookout. Could the protests in Iran and the middle east turn into something? We’ve depleted the strategic oil reserve here in the USA, so if there is Middle East disruption and the ongoing Russia situation oil prices could go to all time highs. MONEY! Will tightening interest rates and high retail inventory hamper many of the large retailers?
What else? This is not a prediction, but a possibility. Everything I read points to food and the power grid. What if we have a major issue with our food supply or the grid. Not sure what the exact fall out would be, but it would be BAD.
SSLines have dropped rates and project cargo is starting to come to fruition. Many auto plants are expanding or building to accommodate the growing future of EV battery vehicles. But warehouse space is getting tight and overloaded.
The Truckload market is going to be lower than it has in a few years but there is a driver shortage and fuel will cause spikes. Bid season will be more competitive but fuel prices will escalate. I see summer as having a lot of hardships in the industry, ocean, air and domestic. US dollar value will drop.
As domestic transportation costs continue to rise and consumer spending continues to decrease, the supply chain will need to work as efficiently as ever. Embracing the right technology will be key in order to help reduce expenses, soft costs, and ensure the timely movement of freight.
Supply chain data is even more important than ever as consumer demand is shifting quickly with inflation and increasing prices. Raw materials, production and the transportation needed to deliver goods to the customer is not as predictable as it was in the past. Full supply chain visibility will become an even larger topic.
Supplementing this, we will see a greater focus on sustainability: The push for more sustainable practices in transportation is expected to continue, with a focus on reducing emissions, increasing fuel efficiency, and kick starting the transition to EV transportation.
Technology in the transportation industry will continue to be developed and enhanced, but not at the pace we saw during the pandemic. The investments simply won’t be as forthcoming and/or generous. However, there’s already tech out that does a great job of improving efficiency.
For those wanting to have a successful 2023, while battling the inevitable recession, the right tech, more definite drayage, transloading, and trucking services may be adopted to drive efficiency.
Stop living on a prayer in 2023 and adopt a full supply chain strategy. Need to collaborate on domestic drayage, transloading, and trucking? Here’s my number 716-216-5032, so call me maybe….