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Top 4 Transportation Challenges in Supply Chains in 2022

The Covid-19 pandemic laid bare the weaknesses of global supply chains for all to see. A supply shock that started in China in February of 2020, had ripple effects just about everywhere resulting in product shortages, delivery delays and facility closures. At the same time, demand for consumer goods skyrocketed as stay-at-home orders prompted more people to shop online. These pressures from the pandemic stretched transportation and logistics companies to their limits; yet, somehow, shippers and carriers persevered and continued to deliver as fast as they could.

EMERGING CHALLENGES AND OPPORTUNITIES IN TRANSPORTATION MANAGEMENT

The existing vulnerabilities of supply chains are being compounded by new challenges, digital transformations, and changing market conditions. Let’s look at the 4 most pertinent challenges facing the transportation industry and what your business can do to address them.

1. RISING TRANSPORTATION COSTS

Operating a transportation company is already a costly affair even with meticulous route planning and optimization. Rising fuel costs don’t help the situation. Shipping and transportation are by far the most expensive functions in logistics. Higher shipping costs are likely here to stay, yet customers are increasingly demanding fast and low-cost shipping.

Now, this is a serious issue for shipping companies and logistics providers. How can you possibly offer low-cost shipping and guarantee customer satisfaction when transportation overheads are so high? On the bright side, there are various enterprise solutions that can help you chip away at your transportation costs. With DATASCOPE WMS, you can utilize data to optimize shipping routes and coordinate outbound transportation with incoming orders and traffic conditions.

2. LABOR SHORTAGES

Labor shortages go beyond workers at ports. One of the most complex problems facing the transportation industry is an aging workforce. Truck drivers are retiring at extraordinary rates and the trucking industry is having issues recruiting and retaining drivers. Because there is no single cause of the driver shortage, there is no single solution. It’s a complex problem that will undoubtedly require regulatory changes, improved working conditions, and modifications to shippers’ business practices.

But transport companies can’t afford to wait for market and regulatory conditions to change to deal with this issue. One way for businesses to work out these kinks is to invest in automation technology. Even though getting the latest technology in place is an expensive endeavor, it’s absolutely necessary if you’re to improve efficiency and productivity. Automation will free up time for your team and route optimization will help you maximize the effectiveness of your existing fleet.

Moreover, route planning reduces on-the-job stress for drivers as they can keep their delivery schedules without having to deal with traffic or road closures. In turn, this contributes to driver satisfaction and long-term retention.

3. CAPACITY SHORTAGES

Controlling freight costs is an age-old issue in the logistics industry and capacity shortages for container shipping are nothing new. Apart from increasing haulage costs, companies have to deal with port congestion and a considerable lack of shipping containers. As a result, freight shipped by sea is likely to experience significant delays. One strategy is to diversify sourcing and your transportation routes.

However, if you’re struggling to fine tune carrier capacity, you need a purpose-built tool that provides visibility into your supply chains. Capacity shortage is typically a result of an imbalance between supply and demand of transport capacity. As such, there needs to be a stronger focus on data analytics and AI-supported transport planning.

4. EVOLVING DIGITAL REQUIREMENTS

Closely related to the challenge of rising transportation costs is rising network complexity. With last-mile delivery becoming commonplace, lack of visibility into your supply chain means costs will continue to grow. The solution to this starts with digitization.

Digital transformation goes beyond installing applications, GPS-powered tracking systems and investing in Internet of Things (IoT)-partnered robots. While these digital systems will enable companies to simplify their warehouse and transportation processes, companies have to solve their traditional tribulations before jumping on to the next digital bandwagon.

You want your transportation and logistics networks to function as an ecosystem. Only then can you gain the visibility you need to optimize your routes and shipping processes.

MITIGATING RISKS IN AN UNPREDICTABLE WORLD

Transportation management involves identifying the fastest routes and most efficient modes of transportation to provide cost-effective shipping rates. Before the coronavirus pandemic, few supply chain managers had given much thought to wide-scale transportation disruptions. After all, local events such as extreme weather, wildfires and infrastructure breakdowns have always had an impact on supply chains – but even if they bent supply chains, they never led to widespread breakdowns.

Get prepared for the future challenges of transport and logistics management with DATASCOPE WMS. From cutting transportation costs, to improving fuel efficiency and optimizing transportation routes, DATASCOPE can help make your business more resilient and capable of adapting to major disruptions. Schedule a demo today.

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