Acing the supply chain challenges in 2022

Be it trade or transportation, logistics or capitalization, the past 2 years have had an adverse effect on the whole economic system globally. However, when there came the hope of hopping back on the front foot in 2022, the new Omicron variant came up, again putting a stop to the progress measures. The freight and logistics industry has been exposed to several challenges in the pandemic years including, limited consumer demands and production, difficulty with driver availability, making the whole situation even more volatile in nature.

And, even this year, issues such as shortages, supply-demand, and increased freight rates are expected to created hindrances in the same. Thus, in order to be a successful freight broker in the upcoming year and have the best for companies, it is very important to understand the upcoming trends and expectations and work accordingly. So, with all these issues and more, what does 2022 have in-stores? Let us, deep-dive, into a few of the ongoing and expected issues within this domain.

1. Peak Season Activity

With mass vaccination, things are shifting towards normalization, and shippers and forwarders are expected to witness more activity during the peak season this year. A common trend seen in the recent past indicates an exponential rise in online shopping during the holiday season and hence, if the companies are well-equipped to fulfil the demand influx, profits could be reaped generously.

2. Limited Capacity

Driver capacity is one of the main issues that has remained persistent throughout the pandemic. This, in many cases, has proved to be disruptive as it added to the issues along with that of delivery and capacity. If companies fail to make the necessary arrangements this year, there are high chances that they would be limited to smaller shipments in order to leverage available capacity. This would not only lead to slowing down of the entire delivery chain but also cap the profits, especially during the peak seasons.

3. Uncertain Policies

The past 2 to 3 years have seen uncertainties in policies – it economic, political, or state, resulting in looming financial pressure.

Even in the upcoming days, the companies can expect to witness product shortages and price surges, especially due to a lack of immediate and all-encompassing solutions with regard to the underlying imbalances in supply and demand within the e-commerce chain.

4. Global Container Shortages

The markets have witnessed drastic inflation in shipping and container prices which have created a hindrance in the business chain. This has intern intensified the global container shortage problem, leading to several other issues, especially for freight forwarders.

5. Rise in Trucking Tonnage

In the recent past, trucking has grown into being an important aspect. According to Road Scholar, “The primary insight in this report predicts that the U.S. will see a 24 percent increase in freight tonnage in 2022, producing a 66 percent increase in revenue for the industry. The bulk of that increase for next year, and the next decade, is occurring in the trucking segment.”

As the true importance of trucking and shipping services gains visibility, its impact on the demand for proper infrastructures like roads and bridges is foreseen. In the upcoming year, too, it would be a major contributor to the freight tonnage.

6. Clearing Backlogs

Road Scholar mentions again, “While sea transport is projected at a more modest growth rate of 7 percent, the overall intermodal market is expected to reach more than $30 billion in 2022, up from $11 billion in 2016. This also drives the demand for more reliance on commercial trucking for the final distribution-to-the-end-user solution.” With more and more companies becoming technologically aware and with the advancements in equipment, techniques, and applications, this year is expected to see the freighters return to their normal loads and capacity.

Conclusion

Thus, even though there are recurring problems in the system creating hindrances in the business chain, the success for this year is proper vigilance, monitored collaborations, increased cooperation, and improved visibility of the undertaken activities.