Logistics for Cargo Truck in 2021

Since the pandemic begins, the freight advancing industry has been seriously affected by restriction...

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Posted by Dave Food on Nov 1, 2021 6:34:43 PM
Dave Food

Since the pandemic begins, the freight advancing industry has been seriously affected by restrictions on its operations and services. The behaviour and evolution of the cargo truck market in 2021 is uncertain, packed with risks, and continues to evolve, making Logistics Management a significant challenge.  

It is necessary to consider the main factors affecting the freight transport market, their implications on supply chains that drive changes within the industry. Thus, the demands for last-mile transport services to meet cargo transport needs and the vehicle fleet lacking renewal are some of the challenges presented in the coming months this year and next.

Given this scenario, redirecting freight processes must prioritise the diversification of service types and segments. Logistics for this industry must understand the need for innovation of its operations, as is the case of performance and fixed cost, for greater productivity of cargo vehicles, and assure that it does not significantly impact the business profitability.

Several companies have already tested their Supply Chain, especially inventory and supply inputs, and are already working on more accurate demand forecasts. High cargo volumes across all industries in the truck market are expected to continue throughout the following year, 2022. 

Additional resource pressure is considered to be on track to force high cargo volumes to continue over 2022. That will overlap with the peak season of returns after the holidays and the economic recovery from the pandemic as vaccination rates grow.

Transportation capacity limitations will continue under rigorous analysis as shippers seek a better understanding of the state of the market. There are fewer labour resources available to meet the growing demand in the warehouse and transportation. A shortage of talent, mainly experienced drivers, will exacerbate the capacity crisis, likely leading to deficiencies in storage and transport. 

Capacity limitations within truck and parcel loading have led to an overflow within the global market. Confined customers who demand solid predictions for another above-average peak season have put a unique burden on freight truck transportation.

Additional demand links to a greater need for balance among demands and predictions, resulting in an overflow in the local and international markets as carriers try to keep fares under control, maintaining high profitability in movements.

An example of this current situation is presented in the significant increase in electronic commerce (E-commerce,) both in business-to-business and direct-to-consumer compliance. According to recent research, E-commerce will grow by 17.9 in 2021, but total retail sales will grow by 7.9%; that means billions are spent on E-commerce. As demands grow, there will be an inevitable significant increase in business-to-business E-commerce.

Port activity, including closures, delays and embargoes in the transit of empty containers, will lead to additional congestion. Such congestion naturally leads to bottlenecks in trucking cargo transportation. Eventually, it increases total cost, not to mention a further strain on truck transportation, imitation cargo on container ships, delays at ports, and the lack of available equipment and personnel from port facilities.

Another fundamental aspect to consider in Logistics for the cargo truck market for 2021 and years to come is the increase in fuel,  which plays a primary role in the problems of road transportation costs.  According to the USA Energy Information Agency, diesel fuel prices on USA highways have increased by $0.898 since the end of August 2020 to date. There are variations between regions; for example, California is at the top ($4,291) on August 30, 2021, while the Gulf Coast was at the lower end of the spectrum at ($3,038.)

CONCLUSIONS: the state of trucking continues to challenge supply chains with capacity, driver and labour shortages, rising fuel prices, and unpredictable purchasing patterns related to weather and the pandemic.

Is your enterprise prioritising the diversification of services and the need for innovation?

 

 

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