Most, if not all, of the recent shocks have been impossible to foresee, explains Shaw. Instead of trying to predict disruptions companies should build resilience into their supply chains by maximizing visibility. “The key is not so much to know every event that’s going on around the world,” he explains. “One year ago, nobody would have predicted that the Port of Shanghai would be in lockdown or that there would be a land war in Europe. You can’t predict what the next disruption is going to be.” He recommends instead that companies be familiar enough with their sourcing to know what impact an unforeseen event could have. A food manufacturer, for example, needs to know where their brokers and suppliers source raw materials from and whether a product ships through an impacted area. Even if their sources aren’t directly impacted, shippers need to know how a shortage could reverberate back to them. “Basically, know your supply chain,” Shaw says. In 2022, shippers have had to contend with rising fuel costs while bringing food to grocery shelves. Diesel prices across the United States surged from $3.61 per gallon in January, to a national average of $5.51 at the beginning of May. It’s driving up the cost of other food inputs according to Russia-Ukraine Crisis and Its Impact on Food Prices , Food Industry Association report. As the report explains, gas prices will impact transportation costs in the short term. Further out, the growing cost of fuel could ratchet up the price of feed, fertilizer, and other products, with consumers feeling the impact weeks or months later. “The food industry is very energy intensive in order to bring food to the shelf,” notes Doug Baker, vice president of industry relations at the Food Industry Association in Arlington, Virginia. “When energy becomes more expensive, that will immediately impact food.”
Using materials handling systems such as Orbis Corporation’s beverage can tower to transport and store unitized loads can help speed food distribution product flows.
of drivers spent at least two hours in detention every time they arrived at a facility, while 9.3% reported waiting six hours or more to get loaded or have papers signed. E-bills of lading could cut down on driver dwell time, and the fuel that gets used up in the process. “Think of it like being at an airport,” Baker says. “There’s the TSA Precheck line. There’s the Clear line. Then there’s the line where everybody else goes who’s still doing it the old way, and that takes forever. The Precheck line goes a little faster, and the Clear line goes really fast. “Our goal is to have these express lanes for trucks,” he adds. “We want to minimize the amount of wait time because while drivers wait, they’re burning fuel.” It doesn’t take an industry insider to see that food prices skyrocketed this year. The consumer price index for food accelerated from 7% annual growth in January 2022, to 8.8% expansion in March, finds The Bureau of Labor Statistics. The Department of Agriculture’s Economic Research Service expects the cost of food
The key to navigating high gas prices is to focus on maximizing transportation efficiency. Baker suggests backhauling or even sharing space with competitors and trading partners to ensure that trucks are full when they run. By avoiding deadhead miles and half-empty trailers, shippers can ensure an optimal use of fuel. A second development aimed at improving efficiency is an e-bill of lading. A 2019 American Transportation Research Study showed that 49.5%
90 Inbound Logistics • June 2022
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