​​For almost a decade, technology has been a primary focus for transportation and logistics companies. It had been an industry that desperately needed to replace years of disjointed and fractured practices. Now fiercely competitive, 3PLs (third-party logistics companies) are racing to streamline the supply chain through greater efficiency and real-time visibility, ditching the old paperwork-heavy processes that cost all parties too much time and money. In the supply chain, innovation is the name of the game.

When COVID-19 turned the world upside down, the way goods moved was suddenly thrust into the spotlight. Unexpected panic-buying behaviors by consumers emerged, with essentials like toilet paper and other frequently purchased staples vanishing off grocery shelves as fast as a puff of smoke on a windy day. The world of logistics could not keep up.

Picture the hustle and bustle of the Christmas holiday, but on STEROIDS. That is what it is like during the Chinese New Year (CNY) in the Eastern half of the world in January and February. It is the largest human migration in the world. For countries like China, Korea, Vietnam, Singapore, Indonesia, Malaysia and the Philippines, the event is celebrated not only for a few days or even a week, but two weeks. 

The dates change from year to year depending on the calendar. This year, CNY is much later than it was in 2020, by 18 days. According to Wikipedia, the criteria used to establish the dates is as follows: “The first day of the Chinese New Year begins on the new moon that appears between 21 January and 20 February. 

In 2021, the first day of the Chinese New Year will be on Friday, February 12, which is the Year of the Ox. The celebration lasts until February 22, but preparations often begin as early as February 4.

Weekly Market Brief 

63,200 individuals in the United States tested positive for COVID-19 in a single day just last Thursday. That is a record. Since the rise in infections are mostly in southern states such as Texas, Georgia, Arizona, and Florida, panic-buying is returning and capacity is tightening in these areas. Adding even more stress to the market is this week's arrival of the annual DOT road inspections. 

Like the famous words of Captain James T. Kirk, we are boldly going “where no man has gone before,” and I am not talking about the outermost regions of space. I am talking about right here on terra firma. Sure, we’ve had plagues and pandemics before, but never with the population, economy, and intricate network of transportation and travel that we have in the 21^st century. It is a brave new world, alright, and we are scrambling to adapt and adopt.

Luckily, adversity is the mother of invention, and it is evident in the way we as humans are adapting to the global pandemic. Shippers who are lucky enough to be manufacturing are facing serious challenges, such as working with reduced staff, dealing with volatility in order patterns, finding a need for alternate sourcing, and navigating around unclear government regulations that differ from state to state. Despite the chaos, freight keeps moving, and shippers are finding new and sometimes better ways to get the job done.

2019 was a Shipper’s Market

Record truck orders and record freight volumes in 2018 served as the backdrop for a significant correction to the market in 2019. The year began with a plethora of trucks and freight volumes underperforming expectations. It is estimated that there are approximately 75,000 more tractors available than there is freight to fill them.¹ Shipments became easier to cover, and as a result, carrier rates were historically low. Even though economic growth continued in an upward trajectory, it was at a much slower pace than the previous year and not enough to compensate for the overabundance of equipment.

Cargo theft is an unfortunate by-product of the holiday season that often gets overlooked during the hustle and bustle of rushed shipments and tight delivery schedules. That is until a trailer disappears, or pallets go missing off the company’s loading dock. With employees taking extra vacation days around Christmas and New Year’s, freight is often unattended or stored in places where prolonged absences provide a greater opportunity for theft.

Offering Customers Something More ... 

“The recent freight recession has affected the freight industry in a number of ways, making it critical for companies to maintain more direct communications, streamline processes and gain greater visibility in order to remain successful. Largely driven by excess capacity in the market, freight recessions signal a time for brokers to step up their offerings and deliver a true competitive advantage to the market to separate themselves from the competition.” - Freightwaves webinar: The Battle of the Broker: How the Freight Recession Has Impacted the Broker Market

Differentiation

There are over 20,000 freight brokers in the United States. Differentiation can be difficult when every 3PL likes to claim excellent pricing, communication, customer service, and the ability to track shipments. If you are a freight broker and don’t provide those key benefits for all your services, chances are you won’t be for long.   

Being a "Broker of Choice"

Choptank Transport recently conducted a carrier survey from which 300 for-hire truckers in the supply chain responded. The survey delved into how carriers perceive the value that 3PLs offer, including their thoughts on pricing, service, courteousness, and clear communication.

Is the Freight Market Recession Improving?

Tracking packages is nothing new. Companies like FedEx and UPS have been doing it for decades. In 1994, UPS first offered customers access to a new bar-coded tracking technology. It was a huge success and enabled the company to grow exponentially.

Commercial freight carriers, on the other hand, have been slow to adopt instant tracking with the burden (and complication) of too many moving parts involved in the supply chain. With so many hands in every freight transaction, it is a miracle the process works as well as it does today.