Volume increases in shipping can drive up rates and create challenging conditions in freight capacity. Under normal conditions, the strain on CPG shippers occurs tidally. Produce season causes disruptions, but occurs with a fair degree of regularity. Even if a carrier does not transport agricultural goods, the influx of produce to shipping can affect operations, capacity and costs. COVID-19 is a new factor in shipping volume. Therefore it is challenging to prepare already tight margins for additional freight volume.
Driver Shortages
LTL is estimated to be experiencing a shortage near 20,000 drivers. A lack of qualified drivers is one theory. Prospective employees deciding their pay is inadequate for the working conditions is another. HOS regulations, meant to keep drivers safe, have also eaten up revenue opportunities for the young and ambitious.
arriers, shippers and 3PLs will all have to work together to entice drivers back towards the industry.
Due to COVID-related closures, supply chain disruptions have increased driver detention, which costs both drivers and shareholders significant amounts of both time and money. The threat of infection has slowed enrollment for in-person training programs and made travel less appealing. Older workers may decide to retire rather than risk exposure as high-risk individuals. Currently, there is no standardized hazard pay for drivers working through the pandemic. Carriers, shippers and 3PLs will all have to work together to entice drivers back towards the industry.
Social Distancing And E-Commerce Sales
According to Zipline Logistics, “when carriers devote trucks to moving high crop volumes, the available capacity diminishes. This yearly phenomenon drives up rates and can affect your ability to book shipments in or out of affected and nearby states.” LTL freight has already entered 2021 with significantly higher demands. Quarantine has driven consumers to fill their carts online. Amazon remained ideally situated to support consumers during the pandemic with an efficient last-mile shipping model and obsession with customer service. Unfortunately, most other major carriers got caught in a capacity crunch. Border closures resulted in a bottle-neck of supply chains and forced some on-the-fly spot rate decisions. The shift from retail stores to individual homes for house-hold purchases put added emphasis on timeliness.
To stay ahead of the many challenges this produce season, freighters will avoid unnecessary losses by turning to 3PL providers for capacity foresight.
Carriers found themselves choosing between paying FTL rates for trailers that were not full and waiting on further LTL shipments. Companies that remain competitive with Amazon will have to change their operations to meet customer expectations amid the rising demands of e-commerce. Shoppers unable to go to a retail shop cannot absorb lengthy delays the same way as a box store can, and with Amazon offering same-day shipping in much of the country, they don’t have to. COVID-19 has exponentially accelerated a generational industry change that was already on its way. Amendments to a business model while running operations are a tall order for any company. To stay ahead of the many challenges this produce season, freighters will avoid unnecessary losses by turning to 3PL providers for capacity foresight.
COVID-19 Vaccine Distribution
We’ve seen that COVID has put pressure on carriers due to its effect on e-commerce trends. Labeled “Operation Warp Speed” by the United States Government, vaccine distribution adds another layer of urgency to shipping logistics. Vials from all approved sources currently require handling without any breaks in the cold chain. Vaccines are a part of the solution to COVID-related slowdowns in the flow of goods, but they also compete for refrigerated capacity. Security concerns and the unstable nature of the COVID vaccine require constant monitoring, which means two-driver teams. Doubling drivers puts further strain on staffing shortages coming into produce season.
High demand means high value. Carriers who lose or damage shipments will forfeit contracts, profits and industry standing.
The shipment of fragile medical supplies also requires additional training for all who will handle them. COVID-19 is a matter of life and death, so the vaccine has a high demand. High demand means high value. Carriers who lose or damage shipments will forfeit contracts, profits and industry standing. According to information gathered by Heavy Duty Trucking, “WHO estimates nearly 20% of temperature-sensitive healthcare products get damaged during transport, and 25% reach their destination in a degraded state because of breaks in the cold chain”. Refrigerated freight specialists will need impeccable capacity logistics, highly trained drivers, well-maintained fleets and smooth transitions at both load-in and load-out to compete in Operation Warp Speed.
Carriers who possess both the experience and equipment needed to handle the vaccine roll-out is a small percentage of trucking. These companies will find themselves highly sought after as a part of the solution to a virus projected to have claimed 1 million Americans by May 2021.
Investing In Support
Factors such as driver shortages and a massive overhaul in e-commerce are sure to confound already challenging conditions. Investing in 3PL support is the profitable choice for fleets distributing any kind of temperature controlled freight this produce season. BlueGrace is connected to both national and regional carriers with refrigerated capabilities ready to handle your next load. Contact one of our experts today to learn more.
