In the aftermath of the pandemic, various regions are enjoying a reprieve from the urgent trucking capacity shortages that dominated headlines, delayed revenue, and sparked shipper headaches. However, the trucking industry still shows some signs of further turmoil. Recent years have shown a marked increase in the volatility of trucking capacity changes—compared with gradual shifts of the past—boosting the likelihood that shippers will get caught off guard by future shortages.
As shippers head into 2024 and brace for new supply chain challenges, implementing a transportation management system (TMS) can lend crucial speed and safeguards amid fast-changing trucking capacity and rates.
Understand the current trucking capacity dynamic
Unexpected pandemic shocks left shippers around the world struggling to fill transportation gaps and navigate fluctuating inventory needs. Even when goods made it through port bottlenecks onto land, shippers had to grapple with gaping truck driver shortages, further delaying goods and damaging customer relationships.
The current state of truck driver shortages is by no means uniform across the globe. In some regions, shortages are still present, with 12% of driver positions unfilled in China, 14% in Russia, and 11% in Argentina—and gaps projected to increase by 2028. However, in Europe, where only 7% of positions are unfilled, and the United States, shortages have decreased in the shadow of falling demand. Because of these regional differences, a shipper’s target geography will play a large role in determining how they adapt.
Lean on agile carrier management to ride out a trucking bubble
For shippers operating in regions with driver shortages and soaring ground carrier rates, survival will depend on the ability to shift quickly from one carrier to the next—ensuring a continuous flow of goods and revenue. TMSs are ideally suited to provide this agility, smoothing carrier interactions and selections. This technology provides the unparalleled speed and analysis needed to prioritize quality carriers and make last-minute switches.
A TMS will automate carrier selections based on routing efficiencies, costs, and custom criteria. For example, CTSI-Global’s Honeybee TMS can help shippers prioritize carriers with a strong record of on-time deliveries or a positive company culture that supports driver retention. If one carrier faces delays due to driver shortages, the platform can quickly substitute another carrier or transportation mode—as well as help negotiate competitive pricing at a time of heightened rates.
For more hands-on support, shippers can turn to outsourced logistics management. In addition to CTSI-Global’s leading TMS, this service taps into the insights of logistics experts. These providers act as extensions of a shipper’s internal team, taking on detailed supply chain tasks so shippers can spend more time on strategy—without devoting precious hours to logistics.
Optimize an approach based on industry and geography
Another strategy that can help companies reduce their vulnerability to future bottlenecks and shortages is localizing supply chains, or moving supply lines closer to designated markets. While global supply chains can provide lower labor and manufacturing costs, the transition to regional supply chains often brings long-term savings.
By reducing the distance between customers and orders, shippers can reduce transportation costs and increase resilience to shocks that close borders and slow ports. What’s more, for shippers in areas with plentiful trucking capacity, leaning on regional supply chains and ground freight can provide lower rates.
When it comes to localizing, a shipper’s production specialty is an important consideration, with specific industries showing special suitability for regional supply chains. For example, an analysis from McKinsey shows that the following industries have high potential for regionalization in North America:
- Semiconductors and other electrical components
- Medical devices
- Computers and other electronics
Navigate future fluctuations without a hitch
While shippers can’t predict exactly how trucking capacity will evolve, they can be certain that agile logistics, strong carrier relationships, and advanced technology will prove essential—lending real-time visibility and cost savings. Using the best-in-class Honeybee TMS, shippers can see into ground freight activity like never before, gain access to thousands of reliable carriers, and keep shipments moving in good times and bad.
Contact CTSI-Global to start crafting a carrier strategy that adapts with the times.
