How to Deliver Your Land Cargo On-Time Despite Labor Shortages

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The COVID-19 pandemic may seem like it’s over, but it had a lasting effect on the global supply chain. Disruptions from labor shortages and scarce capacity are compounded by rising shipping costs and inflation, creating issues for manufacturers and shippers.

The logistics industry is no stranger to disruptions. The impact of the ongoing challenges can be reduced with strategic planning.

Impact of Labor Shortages

Virtually every industry has been impacted by labor shortages across the country. The latest data shows that there are over 10 million job openings in the US, compared to about 6 million workers. Still, many of the shortages are in the manufacturing sector, creating a ripple effect on global supply chains.

In the face of unprecedented challenges, many companies embraced technology and innovation. The challenge here is still finding workers. With a skills gap related to these jobs, innovation can’t be fully realized.

Some companies are combating the problem by increasing wages and offering competitive benefits or sign-on bonuses, leading to an increase in product prices. The demand is still strong, but if companies lack the staff to fulfill orders, it takes a long time between the customer’s purchase and delivery.

Companies need workers but face fierce competition for the available talent. If they don’t have workers to fulfill orders, they can’t grow. The labor shortage also affects companies’ ability to source products or raw materials, which can cripple supply chains further.

Impact of Capacity

Scarce capacity has been an issue in logistics before, but it’s grown to be a significant problem in the current environment. With the rising demand for materials and products combined with the labor shortage – including a shortage of drivers – there’s a higher demand for cargo capacity.

All of these factors can affect on-time deliveries. Consumers want direct shipments, a problem addressed by less-than-truckload (LTL) carriers and shippers that can adjust the distribution networks to handle order fulfillment from several locations. The goods can also be housed closer to the customers in a distributed warehousing network.

LTL networks struggle with efficiency and costs, however. The network must be overhauled for better efficiency and lower costs without compromising customer service. The competition is fierce, and customers have come to expect fast, free, and accurate shipping. LTL can be used to meet these demands with small freight deliveries.

Fuel prices are high, which impacts the shipping price to maintain healthy margins. This isn’t likely to level out for a long time, so it’s expected that the price of goods will rise alongside fuel costs.

Strategies to Address Challenges in the Supply Chain

The logistics industry always requires agility to adapt to obstacles, no matter the type of business. Because of this, supply chains should be composed of several moving parts.

Shippers and carriers can still improve efficiency, decrease costs, and deliver excellent customer service with the right strategies in place, however.

Consolidate Shipments for Efficiency

LTL has pros and cons, but its greatest advantage is the opportunity for more affordable shipping. A manageable supply chain is more efficient and cost-effective with a network of partner warehouses, suppliers, and shipments. Freight consolidation can be used to store and ship freight.

Consolidating suppliers or vendors reduces the number of suppliers to source and purchase materials or goods. This can be done by either reducing the number of suppliers in the network or keeping them local, which provides better consistency and stronger relationships with less risk.

Another option is to combine LTL and partial truckload (PTL) shipments as needed to offset shipping costs and improve efficiency without delays in shipments. Products are prioritized according to urgency, allowing fewer truckloads to go out.

If full truckloads aren’t practical, PTL and LTL shipments are a cost-effective solution with reduced delivery time. LTL shares space with goods from other businesses while PTL keeps goods on a single trailer.

Warehouse consolidation also helps shippers maintain efficiency across operations. Having shipments arriving and departing from a single location maximizes efficiency and coordination, all while reducing overall warehousing space. This lowers the costs and overhead. Shippers can build strong relationships with partners and provide better quality and consistency with warehouse consolidation.

Plan Routes and Shipping

Over-the-road freight has limitations, including being too complex, time-consuming, or expensive. With consideration for other supply chain issues, shippers can explore other freight options according to the shipment priority. For example, rail freight is a cost-effective shipping solution, but it tends to be slower. Air freight is an ideal choice for urgent or high-value shipments, depending on the quantity and size.

Shippers can employ a tailored combination of LTL, PTL, air, and rail to optimize the route and create a strategy for one-off deliveries with fewer delays and obstacles.

Build Strong Carrier Relationships

Shippers don’t have the competitive advantage they once did. The carriers are limited, so it’s advantageous for shippers to build strong relationships with carriers and support each other’s goals and success. Shippers benefit by exploring new and innovative freight solutions and negotiating according to their budgets.

Having resources and solutions is helpful, but they should be worthwhile in costs or time. Customer service and operational efficiency are still paramount, even with the ongoing challenges, and it’s important for shippers to reconfigure their partner network, warehousing distribution, or shipping process as needed to find the ideal combination of solutions.

Support Your Shipping Needs with a Third-Party Logistics Provider

The supply chain isn’t likely to return to normal in the near future. Shippers and carriers will be continuously challenged and tested but partnering with a third-party logistics provider can provide support. Logistics providers with innovative solutions and an array of technology tools – not to mention a long history of adapting to supply chain challenges – can help you find a tailored combination of shipping options and warehousing across a network of carriers. Consult with a third-party logistics provider to see how a partnership can help your business lower costs, improve efficiency, and support on-time deliveries without sacrificing your commitment to customer service.

 

Author Bio: David L. Buss is CEO of DB Schenker USA, a 150 year old leading global freight forwarder and 3PL provider. David Buss is responsible for all P&L aspects in the United States, which is made up of over 7,000 employees located throughout 39 forwarding locations and 55 logistics centers.