The COVID-19 pandemic has profoundly affected our lives in countless ways that no one could have foreseen. From a supply chain perspective, these impacts are being felt at origin factories in Asia and at US ports, as well as on highways and at distribution centers, through the last mile to store shelves.
The supply chain has been pressured by significant volume increases of more than 30 percent, mostly from imports, an indicator of fundamental strength in US consumer demand, which is great for the economy.
The knock-on effects of these imports include stressed physical capacity at the ports as well as in the middle and final miles of the supply chain. Most acute have been COVID-19’s impacts on the ability to fill jobs at warehouses and to source drayage drivers. Although a combination of mass vaccinations and the rollout of therapeutics will help get a handle on the pandemic, supply chain fluidity boils down to placing people in jobs to increase throughput capacity.
Almost as important are visibility and transparency across business partners, working with a technology platform that will allow all stakeholders to see each other’s key performance indicators (KPIs) and other important data. Many supply chain participants want to protect that information for competitive reasons. But when operating shared assets used by a broad segment of the economy, such as a railroad, refusing to divulge that information really handicaps the network.
Freight transportation providers will be working through these issues into next year, and supply and demand won’t even out until more trucking industry and warehouse jobs are filled, which I suspect will be sometime in mid-2022. That’s the beautiful thing about a free-market system. When there’s a stressor in the supply chain, everyone in the transportation industry is hyper-motivated to address it, solve it, and countermeasure it as quickly as possible.