‘Using Managed Transportation To Avoid Disruption’ – Article Preview

Efficiently moving product from point A to point B has become much more expensive, complex, and time consuming over the last two years. The ongoing supply chain disruptions, labour crunch, equipment shortages, and rising fuel costs are just some of the everyday problems that the dry bulk industry is dealing with right now. Add port congestion, geopolitical issues, and the need to ‘do more with less’ to that list and you wind up with a perfect storm of obstacles that the logistics, transportation, or supply chain manager has to figure out – or at least work around.

Many of these challenges were born during the early phases of the global COVID-19 pandemic, and they have not let up yet. In fact, many of them have compounded upon themselves to create an even higher level of uncertainty and volatility for shippers. For example, US national unemployment rates were already low, and the American Trucking Associations (ATA) was reporting annual truck driver shortages of approximately 60 000 – a record high at the time. At last count, that number had hit 80 000 and was on track to reach 160 000 by 2030.

Of course, the national truck driver shortage is just one of many roadblocks that the US dry bulk industry is grappling with right now, as its moves coal, steel, industrial minerals, fertilizer, building materials, pulp, and paper from origin to destination. Achieving this goal in a cost-effective, efficient manner – and in light of the current market pressures – is more difficult than ever.

Managing cost pressures

Reliant on ocean, rail and over the road transportation, dry bulk shippers are under a lot of cost pressure right now. The cost of rail is increasing, for example, yet service levels are decreasing. Combined with the driver shortage and specialty equipment required to transport these products, modal conversion to alleviate constraints is more difficult than ever. This is a bad combination for any shipper, with dry bulk transporters among those most impacted by these realities. Labour costs are rising, inflation has taken a firm grip on the US economy, and fuel costs are fluctuating. These, and other trends, are having a profound effect on the industry’s ability to efficiently transport its goods.

Competition for truck drivers has been one of the main reasons for cost increases; including higher wages for these operators. The cost of recruiting, hiring and retention has also increased, particularly when the drivers in question have to be hired away from their current positions.

This is a preview of an article that was originally published in the Winter 2022 issue of Dry Bulk Magazine. The full version can be read here.

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Read the article online at: https://www.drybulkmagazine.com/dry-bulk/30122022/using-managed-transportation-to-avoid-disruption-article-preview/