Getting Out of the Supply Chain Traffic Jam

Companies are under increasing pressure to develop digital-powered manufacturing and supply chain strategies. But what's happening on the roads and railways? Products and deliveries constantly get snarled in traffic jams or move along inefficient routes. Innovation is clearly needed to address these snags, which are hamper supply chain and logistics performance.

The U.S. Department of Transportation seems to think so, too.  Its recently released white paper titled Beyond Traffic: Trends and Choices 2045 examines current transportation and lifestyle trends, looks at issues facing the system's performance levels and forecasts how the US transportation system will fare in 30 years.

Source: U.S. Department of Transportation Beyond Traffic: Trends and Choices 2045report

Source: U.S. Department of Transportation Beyond Traffic: Trends and Choices 2045report

Though not an action plan providing clear-cut solutions, the report presents issues about the state of US transportation system that should get any supply chain or logistics professionals' wheels spinning. Having once been ahead of the game for creating a comprehensive transcontinental railway and highway system and setting a gold standard for freight transportation and aviation, the country's lead is diminishing, and the consequences are significant.

“Our lead has slipped away. We are behind. Way behind. The quality of our roads, for example, is no longer rated No. 1. We're No. 16,” according to the DOT report. “And it is not just that our infrastructure is showing its age—our country, in many ways, has outgrown it. If you drive a car, you now spend, on average, the equivalent of five vacation days every year sitting in traffic. If you drive a truck, highway congestion has made you an expert at navigating bumpy side roads—and you are not alone. Every year, trucks are losing $27 billion on wasted time and fuel.”

Other stats mentioned in the report will make logistics planners shudder:

  • In 2012, approximately 10 million trucks moved more than 13 billion tons of freight across America's highways.
  • By 2045, freight volume will increase 45%.
  • Sixty-five percent of US roads are rated in less than good condition; a quarter of US bridges need significant repair.
  • International trade balances, due in part to low U.S. energy costs, could shift from imports toward exports, but overall globalization will increase both, straining ports and border crossings.
  • The federal gas tax is no longer enough to address our transportation needs.
  • Overall financing uncertainty, shortfalls in the Highway Trust Fund, and the absence of reliable federal funding for rail, marine highways, and ports have created a need for new financing mechanisms.

Short of overhauling the whole system and relying on various government agencies to address these gigantic issues, a way to reduce some of the immediate pain is to apply some of the same logic we see in the high-tech design and engineering space: Encourage and invite individuals and start-up companies to develop cutting-edge solutions around specific transportation problems.

The Six Minute Pitch: A Transportation Startup Challenge is such an example. Held this past January, the contest was part of a Young Member Council (YMC) session at the Transportation Research Board (TRB) 94th Annual Meeting. And, like similar events we see on the tech side, a handful of presenters pitch their innovative, research-based concept for a transportation product- or service-based business to a panel of transportation industry investors and entrepreneurs.

This year's winner was Transfix, a start-up logistics company that uses an automated matching system to pairs drivers and loads and help reduce wasted miles truckers typically log between pickup and dropoff sites, as noted in this article.

How are you thinking about your future logistics strategy and addressing these issues?

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