So far, the transportation industry has weathered the challenges of 2018 well, but shippers who don’t begin embracing technology will continue to face increasing pressure in the coming months because of the changing supply chain environment.
New regulations, a lack of drivers and the needs of digital-age consumers will cut into shippers’ bottom lines if not addressed. In order to combat these challenges, shippers must leverage technology to streamline their logistics operations. The Electronic Logging Device (ELD) Mandate went live in April of this year and is serving to enforce the new hours of service (HoS) rules by automatically documenting true hours driven. Any form of unexpected delay can put a driver over their HoS. This forces the driver to stop for the night in order to stay within the daily 14-hour work day, of which only 11 hours can be used for driving, or else face strict penalties. Many truck drivers have left the business because of this mandate, but the new rule requiring tracking software appears to be here to stay.
By embracing the mandate, shippers can turn the constraint into an opportunity to leverage technology to track their delays and put fixes in place to combat them. A transportation management system can reduce the number of trucks on the road and improve unloading and loading times by consolidating and optimizing loads. With the help of dock scheduling and yard management software, driver throughput can also be sped up, reducing delays and helping to keep drivers within their HoS.
Other issues that will continue to affect the transportation industry in 2018:
- Tariffs : The 25% tariff imposed on imported steel from the EU, Mexico and Canada, and the 10% tariff on aluminum continue to be a trend. Many are predicting that the import duties will drive product prices up for the consumer. The day before the tariffs kicked-in, the stock market fell 250 points as people questioned the stability of the economy, foreseeing retaliation from countries affected by the tariffs.
- Diesel prices : Diesel prices have already jumped seven cents in the most recent weeks. To keep costs contained, businesses need to reduce mileage to help lower fuel usage.
- Higher rates : Shippers are concerned with increasing transport rates from carriers. One method to keep rates level is to help make carriers more efficient with technology for shipment consolidation and yard management that maximizes carrier capacity and minimizes time wasted in the yard.
- Capacity crunch : The continuing capacity crunch is getting worse, with some carriers saying they have more than 20 loads to move per truck. By using a collaborative network of carriers, suppliers, and fleet owners, shippers can have visibility to the best truck to move their product from original to destination.
- Customer experience : E-commerce now makes up a total of 17% of all retail sales in the US. Those consumers are demanding customer experiences to rival that of brick-and-mortar stores. To keep customers from purchasing from the competition, shippers must provide tracking statuses, shipping flexibility and improved delivery speed. Emphasis on the final mile is increasingly important for customer retention.
- Next-generation technologies : Machine Learning (ML) and Artificial Intelligence (AI) are growing in popularity within the industry by integrating with predictive analytics to fuel better decision making. Supply chains will only become smarter and more valuable as these technologies are integrated into applications. By adopting new technologies early, shippers can position themselves to compete in our increasingly digital industry.
What trends are you eyeing as we enter the next half of the year? Let us know in the comments section below.