The year 2022 presented more than its fair share of supply chain trends and challenges for transportation managers.
Port congestion, supply shortages, and rising transportation costs are just a few of the alarming trends that have persisted over the year. With peak season dawning, these challenges are placing even more pressure on organizations to optimize their supply chains for cost-effectiveness and efficiency.
In MercuryGate’s Logistics Landscape webinar, Phil Melton and Steve Blough discussed some of the most impactful logistics trends to watch, as well as solutions to the challenges that some of these trends present. We’ll explore some of their insights in this blog post. For an in-depth analysis of current transportation trends and solutions, be sure to watch the webinar.
Trend #1: Diminished Revenue and Swelling Inventory Continue to Present Challenges
CSCMP’s 33rd Annual State of Logistics report summarizes the ongoing supply chain climate by stating, “… the logistics sector must simultaneously contend with the hangover of red-hot demand and worries of a revenue-diminishing and inventory-swelling downturn.” The report further noted that “relative stability” may not ever return.
As consumer demand has begun to dwindle, many retailers found themselves with bloated inventories. The solution to preventing this issue is supply chain visibility. Creating an optimized inventory management strategy becomes much easier with visibility into your inventory levels, product locations, and how they move throughout your supply chain. As a result, you can confidently order enough inventory to meet demand without overstocking.
Trend #2: Ongoing Rail and Port Congestion Issues
There were signs of relief in June when an expansion in trucking capacity seemed poised to temporarily alleviate the high costs and lengthy delays created by transportation shortages. However, port congestion has now expanded into rail transport. In a July interview with CNBC, Gene Seroka, executive director of the Port of Los Angeles, said that “60% of our long dwelling containers are scheduled to go on the rail. Our land capacity is at 90%.”
As demand for transportation services remains at an all-time high, there is no clear end to these congestion issues. To ensure capacity for their cargo, shippers must attain the supply chain visibility required for improved agility and adaptability.
Trend #3: Fuel Price Volatility
Steve Blough predicts that fuel prices will continue to drop in the coming months. However, high fuel prices are still poised to significantly impact the cost of final mile delivery and accessorial charges.
Shippers seeking to control these charges must optimize their supply chain for maximum efficiency. They can start by reducing the impact of high fuel costs on their transportation expenses by taking advantage of backhaul opportunities and zone skipping.
How MercuryGate’s Cutting-Edge Technology Can Help
It seems almost all of the supply chain trends in 2022 are challenges to overcome rather than positive developments. In light of these ongoing challenges, it is more important than ever for shippers to leverage the right technology.
With MercuryGate’s industry-leading TMS, shippers can use a wide range of solutions to develop a supply chain optimized for maximum cost-effectiveness and efficiency. To learn more about the current supply chain trends and challenges in the second half of 2022 and how MercuryGate can help shippers overcome these challenges, be sure to watch MercuryGate’s “Q3 Transportation Trends And Smart Solutions” webinar today.