The State of the Supply Chain Industry: Mid-Year Predictions
It’s June and the half-way point of the year. Kuebix made predictions about the industry at the first of the year. We still believe that this year will be an enormous change in the supply chain industry due to the issues around the ELD mandate, rising diesel prices, the capacity crunch, increased customer expectations, tariffs and more.
To meet these challenges, businesses are using technology to transform their logistics operations, leading to improved customer service, sustained profits and greater efficiencies. Utilization of transportation management systems is at an all-time high, proven by Kuebix with the adoption of our technology by over 11,000 companies.
For the remainder of the year, this is what Kuebix believes will happen in our industry:
- • The ELD Mandate is here to stay and shippers need to embrace the rules while turning the constraint into an opportunity to leverage technology to track their delays and put fixes in place to combat them. TMS can also reduce the number of trucks on the road and improve unloading and loading times by consolidating and optimizing loads.
- • Tariffs – The 25 percent tariff imposed on imported steel from the EU, Mexico and Canada, and the 10 percent tariff on aluminum continue to be a trend. Many are predicting that the import duties will drive product prices up for the consumer. The day before the tariffs kicked-in, the stock market fell 250 points as people questioned the stability of the economy, foreseeing retaliation from countries affected by the tariffs.
- • Diesel prices – Diesel prices have already jumped 7 cents in the most recent weeks. To keep costs contained, businesses need to reduce mileage to help lower fuel usage.
- • Cloud–based TMSs continue to grow in popularity as they can be up and running in a manner of minutes or days, depending on the complexity of your supply chain. They are also easier to maintain and have a lower cost of ownership.
- • Higher rates – Shippers are concerned with increasing transport rates from carriers. One method to keep rates level is to help make carriers more efficient with technology for shipment consolidation and yard management that maximizes carrier capacity and minimizes time wasted in the yard.
- • Capacity Crunch – The continuing capacity crunch is getting worse, with some carriers saying they have 20+ loads to move per truck. By using a collaborative network of carriers, suppliers and fleet owners, shippers can have visibility to the best truck to move their product from original to destination.
- • Customer Experience – E-commerce now makes up a total of 17% of all retail sales in the US. Those consumers are demanding customer experiences to rival that of brick-and-mortar stores. To keep customers from purchasing from the competition, shippers must provide tracking statuses, shipping flexibility and improved delivery speed. Emphasis on the final mile is increasingly important for customer retention.
- • Next-generation technologies like Machine Learning (ML) and Artificial Intelligence (AI) are growing in popularity within the industry by integrating with predictive analytics to fuel better decision making.
- • As the driver shortage worsens as more truckers retire and leave the industry, carriers need to take more aggressive actions to recruit new drivers while retaining existing drivers. These actions can include pay increases, using technology to let carriers schedule their own activities, and improving turnaround times for loading/unloading so that truckers can keep their wheels moving as soon as possible.
Supply chains will only become smarter and more valuable as shippers adopt new technologies that help them better compete within our digital supply chain ecosystem. Kuebix TMS enables companies to capitalize on supply chain opportunities through visibility, control and the use of predictive analytics.