The general volatility of the global market is currently having and will continue to have the biggest impact on the logistics industry throughout 2019.
The international tariffs will continue to be a concern and a drain for the entire logistics industry. Trade shifts near-sourcing and re-sourcing — meaning that the industry, for example, is turning to other countries instead of China, will have an impact although it may be too soon to tell to what degree. We have already seen the ASEAN countries becoming resources for China, which earlier on became a resource for Taiwan, and before that a resource for Japan.
One particularly pervasive issue is the ongoing reduced trucking capacity and driver shortage, which will certainly continue to plague the industry. A primary factor contributing to this issue is that the current truck driver is more than 50 years old, and aging out without a young talent pool. And while a college degree has become the hallmark of success, few schools are turning out professional truck drivers.
Of course, the ever-changing ocean freight rates make planning, budgeting, and allocating resources difficult. In 2019, we should expect additional costs associated with the IMO “Sulfur 2020” regulation that will also impact pricing on long-term contracts. The new regulation demands limits on the amount of sulfur content in bunker fuel used by ships on the open seas commencing on Jan. 1, 2020.
Our response to the volatility is to stay on the course, determine ways to budget and conserve resources, and continue with our growth strategy in the US — from both a geographic and personnel standpoint. Our goal is to further integrate with our customer’s supply chain to provide increased support with a complex value chain to compensate for the market volatility, through offering quality, reliability, and predictability.