Transportation capacity constraints are a long-term systemic issue and not likely to turn around quickly. We are currently experiencing a mix of constraints—from a lack of labor to infrastructure constraints needed to keep the growing volume of freight owing. Original equipment manufacturers (OEMs) have delayed delivery of much-needed new trucking assets. Carriers struggle as drivers opt out because competing jobs continue to pay higher wages. Government grant programs targeted at building new driver training facilities and programs will only provide relief if the industry can attract new drivers. Rising fuel costs and inationary pressures will only add to this challenging outlook. Carriers now reject more than 1 out of every 5 loads tendered under contract. Trucking will see a growing gap between supply and demand. However, these transportation constraints also offer tremendous opportunities. Rail has an opportunity to recapture lost market share and signicantly ease trucking capacity constraints if they can gure out how to make rail easier to use with greater transparency. Private transportation eets could be the biggest gainers. There has never been a more compelling time for those operators to provide their eets to spot markets. They can increase eet utilization by reducing empty miles and capture signicant revenue. Resolving transportation capacity constraints requires everyone in the transportation ecosystem to rethink how they offer their services and how they utilize their assets most effectively.
Changes in consumer buying behavior continue to drive tight transportation capacity in 2022.
Transportation capacity will be severely limited in 2022. Equipment markets continue to fall behind schedule in delivering replacement tractors and trailers, led by OEMs with few options to navigate parts and production labor decits. Even if shortages improve, and equipment markets correct themselves, transportation providers may still be unable to hire enough drivers to meet demand in 2022.
Shippers and logistics service providers (LSPs) can expect a tight transportation market and delays across all modes. Maritime shipping volumes are running at record rates, and ocean carriers are booked well through 2022. What’s driving the increased demand are relatively strong economies and a fundamental shift in consumer behavior to purchasing more goods and fewer services such as travel and entertainment. Shippers and LSPs need to adjust trade flows to less congested lanes and to new technologies that unlock trapped transportation capacity due to inefficiencies that still exist in the transportation market.
Evan Pohaski Founder and CEO, JLE Industries
Chris Jones EVP of Industry and Services, Descartes
Several factors led to high truck freight rates in 2021, including faster-than-anticipated economic recovery, increase in e-commerce, equipment shortages, and labor issues. These factors are expected to continue, keeping rates high in 2022, though the pace of increasing rates should ease.
With economic recovery expected to continue through 2022, trucking services will be in demand as retailers attempt to keep shelves stocked. Additionally, as the chip shortage subsides, we can expect auto manufacturing and deliveries to increase, putting further pressure on trucking services. E-commerce will continue playing a larger role in retail sales. Consumers can be expected to shift some of their spending to travel and experiences. While we expect to see continued growth in 2022, it will be at a more measured pace, which will help ease some stress on truckers. Equipment shortages will continue to play a role in truck freight rates through at least the first half of 2022. Supply chain constraints will hamper production of heavy- and medium-duty trucks through the first half of 2022, while increasing chassis production will not have a meaningful impact until Q3. Driver retention issues will continue to be a challenge. Several programs have led to an increase in commercial driver’s licenses (CDLs) issued. Even with an abundance of licensed drivers available, keeping drivers in the industry will be a challenge.
Umar Sheikh AVP, Credit Analyst, Industry Manager Euler Hermes
Sylvie Thompson Supply Chain Transformation Practice Lead, NTT DATA Services
140 Inbound Logistics • January 2022
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