How to Overcome Freight Capacity Challenges
The distribution landscape has shifted dramatically in recent years, and freight capacity challenges have become a major issue for retailers and supply chain managers. The effects of these challenges can be felt throughout the supply chain, from production all the way to the customer. In order to overcome these issues, it is important to understand the root causes and develop a plan to address them.
Cause of the Freight Capacity Issues in 2022
While improving, the primary cause of freight capacity issues remains the increased demand for goods and services. This increase is due to a number of factors, including population growth, economic expansion, and the rise of online shopping. This increased demand has placed a strain on the existing transportation infrastructure, resulting in capacity issues.
Regulation changes, such as the ELD mandate, have also contributed to the freight capacity issues. These regulations have resulted in a reduction of available drivers and trucks, as well as an increase in transportation costs.
Lastly, driver shortages continue to contribute to the freight capacity issues. The trucking industry is facing a driver shortage of around 50,000 drivers, and this number is expected to grow to over 100,000 by 2028. This shortage is due to a number of factors, including an aging workforce, lifestyle choices, and the lack of appeal of the trucking industry to millennials.
Effects of Freight Capacity Issues on Distribution
The effects of freight capacity issues can be felt throughout the entire distribution system. One of the most common effects is delays in shipments. This can cause a domino effect throughout the supply chain, as production schedules are thrown off and customers are left waiting for their orders. In addition, retailers may be forced to pay premium prices for transportation in order to get their products to market on time.
How to Overcome Freight Capacity Challenges
One way to overcome freight capacity issues is to consolidate shipments. This can be done by reconfiguring shipping schedules to allow for larger, less frequent shipments. By consolidating shipments, retailers can make more efficient use of the limited available transportation resources.
There are a number of technology solutions that can help retailers optimize their transportation operations. These solutions include shipment tracking, route optimization, and load consolidation. By using these technologies, retailers can improve the efficiency of their transportation operations and make better use of available capacity.
Expand Your Transportation Network
Expanding your transportation network reduces freight capacity issues by introducing more options. By working with additional carriers, using different modes of transportation, and developing relationships with local trucking companies retailers are able to access capacity that might otherwise be unavailable.
Bid More Often
Bidding more often can also help overcome freight capacity issues. By bidding on shipments on a regular basis, retailers are able to secure contracts that are more representative of the market conditions. This also provides an opportunity to strengthen relationships with core carriers.
Develop a Long-Term Strategy
Finally, it is important to develop a long-term strategy for managing freight capacity. This strategy should include a mix of the solutions discussed above. By taking a proactive approach, retailers can ensure that they are able to overcome capacity challenges and keep their distribution operations running smoothly.
Work with Paystar
Paystar Logistics is a third-party logistics provider that can help retailers overcome freight capacity issues. For more tips on how to overcome freight capacity issues, contact us today. Our team of logistics experts can help you develop a transportation strategy that is optimized for your unique needs.
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