Transportation Now & Adaptations To Move Forward in 2021


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Even before the pandemic, 2020 was scheduled to be difficult for many industries. An article posted by CCJ in late 2019 was titled “2020 Projected to be a ‘Tough Year’ for trucking.” According to ACT Research President Kenny Vieth, as a result of tariffs, the trade war, and an industrial recession, he said “The evidence overwhelmingly suggests 2020 is going to be a very, very tough year.”

The pandemic has caused quite a few changes to the overall dynamic of supply chain management, as well as the way consumers are behaving. The good news is, limitations often spark innovations! According to a survey done by Mckinsey & Company of 473 professionals, 91% of respondents said their monthly reviews need to look different for 2021.

The trends are changing and the return to “normal” may take longer than expected. At the moment, furniture is up 42% according to Georgia Port Authority CEO Geoff Lynch. There is also a spike in demand for refrigerators, freezers, other appliances, bedding and linens. Artificial Christmas trees are seeing a spike this season as well due to the pandemic.

It seems that Americans specifically are substituting vacations for spending on other home-improvement items. As the population for middle-class consumers is set to reach 5.5 billion (60% of the population) by 2030, the flow of freight management will need to change to accommodate such a large group of consumers. What this change may look like is uncertain at the moment, considering how vastly different the state of the world is compared to just a year ago. Logistics and trucking companies in late 2019 were advising that contract pricing be sought, and spot market pricing be avoided. This is good advice, but flexibility and adaptability is sometimes necessary as well.

According to DAT, dry van contract volumes have been down compared to the previous year by 10% in recent months, while spot market volumes are up 107%. Reefers are down 21% in contract volume, whereas spot market volumes rose an unbelievable 116%! For most shippers, total volumes are down. But for some, total volumes have skyrocketed. As holiday shopping and pandemic related purchases are upon us, one Los Angeles port in particular saw the busiest month in its 114-year history.

Overall, according to the World Economic Outlook, 2021 GDP is expected to be 6.5% lower than what was originally predicted before the pandemic.

With all the uncertainty, now more than ever it is essential for businesses to set up a plan for monitoring growth in the coming year.

-There will be trade-offs if the company is building a recovery plan

-Targets need to be evaluated and shifted based on the recovery plan, instead of outcomes that are typically consistent

-More regular reviews and communications need to be in place than in prior years

-Relationships with carriers (or brokers) need to be stronger than ever

-Be positive. Most aspirations for growth within the first year of recovery are too high. But these aspirations also end up being too low within the lifetime of a company