Heavy Duty Trucking spoke with Transflo’s Doug Schrier and several fleet and broker executives about the “digitization of freight” and what the term really means to supply chain managers and truck fleets. Among the answers, reports David Cullen: productivity, profitability and a better work environment for drivers.
Digital tools can scale up or down: Digitized freight services like ELDs and electronic workflows have well-established track records at large carriers, 3PLs and brokers. Today these technologies are more affordable and scaled for smaller fleets, which helps level the playing field for organizations of all sizes.
Digital connections make it easier to do business: Fleets that work with customers and brokers to digitize their workflows will be more competitive and connected. “The supply chain and all of the parties within it are building integrated connections and reducing friction between various parties,” Doug says. “Carriers, shippers and freight brokers in business today will soon no longer have manual processes and paperwork.”
Amazon’s Prime Day event on June 21 and 22 was the biggest two-day shopping period ever for the company’s third-party retailers, with shoppers spending more than $1.9 billion on nearly 70 million products. Prime Days are expected to rank just below Black Friday and Cyber Monday in terms of retail revenue this year.
Robust sales create fulfilment challenges: The National Retail Federation (NRF) sent a letter to President Biden to explain how supply chain disruptions and especially congestion at key maritime ports are hurting businesses and consumer confidence. “The congestion issues have not only added days and weeks to our supply chains but have led to inventory shortages impacting our ability to serve our customers,” said NRF President and CEO Matthew Shay.
Five big supply chain concerns: The NRF called out five major concerns based on a survey of more than 16,000 members:
Retail sales are breaking records: Retail sales saw solid growth during June, increasing in most categories monthly and across the board on a yearly basis as the recovery from the coronavirus pandemic continued, NRF said. For the first six months of the year, sales were up 16.4 percent over the same period in 2020. NRF recently revised its annual forecast from a projection of 6.5% growth in retail sales in 2021 to between 10.5% and 13.5%. At that rate, retail sales would top $4.44 trillion this year.
The East Coast-West Coast port rivalry continues to heat up as imports pour into the country. Given the backlog of containers at West Coast ports, companies are using other entry points, leading to an increase of truckload freight volumes and rates in port markets.
Containers are stuck out west: At last count, 18 ships were queued up off the coast of Los Angeles with an average wait for berth space of almost five days. Containers were stuck at the L.A.-Long Beach terminal for an average of 4.76 days in June, up from the wait time of 3.96 days the previous month, according to the Pacific Merchant Shipping Association.
Shippers are shifting east: “We’re now shipping most of our product into the U.S. through the East Coast, only about 20% of our U.S. freight is coming through the West Coast right now,” Harmit Singh, executive vice president and chief financial officer at Levi Strauss & Co., said on a conference call earlier this month.
East coast ports use uncertainty as an advantage: “Definitely we see us growing on the backs of some West Coast land shortages and supply-chain issues—that’s a fact,” Griff Lynch, executive director of the Georgia Ports Authority, told Bloomberg. Georgia port officials are “getting lots of calls from different, smaller companies” asking to ship through Savannah “and we have the space to do that so we’re going to.” The expiration of the West Coast dockworkers union contract in mid-2022 is another uncertainty to monitor.