Carrier Capacity Concerns?
Shippers, 3PL’s, supply chain directors & warehouse managers all have been wondering, what will the Carriers do with all of this increased transportation demand?
We look at some developments that are expected to make an impact in transportation and are affecting the notion that Carrier Capacity has been met or will be exceeded in 2017 & beyond.
Regulatory Compliance: Carriers must be Electronic Logging Device (ELD) Compliant. The ELD rule is intended to increase the safety of drivers while improving the accessibility of records to track, manage and share of duty status (RODS) data. This means for some carriers who haven’t already adapted their processes to the newer electronic logging equipment might be burdened while onboarding the new electronic logging devices and refining practices in order to be ELD compliant.
Read more about ELD Compliance at the Federal Motor Carrier Safety Administration website here.
Economic Impact on Shipping: As the US economy trends upward in 2017, many major carriers will have an increased demand to move freight that matches or exceeds their existing fleet capacities. Carriers have already anticipated this and have made moves to address growing global delivery demand.
One such move is FedEx announcing their major merger with TNT, significantly enhancing their services globally and increasing their footprint throughout the European Union.
While some carriers have opted to simply replace equipment rather than expanding their fleets for the time being. Still, other carriers are expanding their services by entering into partnerships to upgrade their current infrastructures to help fill out the demands for deliveries.
And of course there’s always a few new entrants to the market, or it may be better stated in this case, new markets for the entrant in Amazon, with numerous reports that the eCommerce behemoth is building up its’ transportation network and may soon ship and deliver on their own.
Programs like Amazon FLEX are under weigh as Amazon schemes up another shipping option, consolidating its’ orders and in a way, “crowdsourcing” their delivery depending on who is available and may be already nearby, or simply heading in a specific direction.
With demand for transportation providers so far outpacing the supply in 2017, shippers may expect rates to likely increase, especially for more premium shipping services like 2-Day, & Next Day shipping.
Technical Innovation in Transportation Management:
Within the next decade, material handling systems are expected to be heavily integrated with Artificial Intelligence (AI) and robotics. As many material handling system technologies begin introducing shipping software to interface with pilot programs of autonomous vehicles and/or drones, the automation of shipment planning, routing guides, tracking, and execution begins now in 2017 with the traditional transportation management system (TMS)/platform.
Many Shipping solutions now incorporate robust cartonization technologies for more efficient packing of shipments that more accurately calculate shipping rates & significantly lower transportation costs when a dimensional volume divisor or dimensional weight (DIM) is applied.
A forward thinking supply chain strategy, when applied to the implementation of transportation management solutions, is likely to be heavily rewarded in terms of costs savings and also being well positioned for a rising demand surplus for years to come.
What Should Shippers do?:
Shippers can manage for regulatory compliance, carrier capacity, and upcoming technical innovations in supply chains by closely examining their existing transportation management strategy and advancing their company schedules in order to optimize their transportation by getting everyone involved early in their procurement for a robust shipping solution.
Looking to stay ahead of the Carrier Capacity curve? Schedule your no-obligation, 360° free shipping assessment.