Transportation, Ecommerce & Economic Trends Addressed at Shipper Symposium
Transplace, a provider of transportation management services and logistics technology solutions, wrapped up its 16th annual Shipper Symposium in Frisco, Texas. During the three-day event last month, leading supply chain and business visionaries addressed current transportation and economic issues, such as the millennial supply chain, regulations, NAFTA and capacity constraints.
“The continued challenges being created by changing consumer behavior, more stringent service standards, North American capacity constraints and other factors have created an extremely challenging market landscape for shippers to navigate,” said Frank McGuigan, chief executive officer, Transplace. “This makes it more important than ever for shippers to continuously examine the global trends and issues impacting their businesses and identify strategies and best practices that improve customer service levels, reduce transportation costs and drive meaningful operational improvements within their organizations.”
Is your supply chain millennial ready? Leading consumer and shopper behaviorist Ken Hughes examined how the growing demands of the new generation of shoppers is shaping the supply chain of the future. According to Hughes, there is massive disruption happening all over the world, which is being driven by changing consumer behavior. “It’s not technology that is disrupting everything, even though it enables this disruption, it’s the consumers themselves,” he said. “They are the most disruptive force that we’ve ever had before.”
Hughes added that over the last five years consumers have fundamentally changed in terms of what they expect and how they expect it, and “your reaction speed is going to define the success of your business.” As a result, the customer experience and the supply chain are starting to merge. “How and when you deliver a product, which used to be just a function, has become part of the added value of a product – that’s why it’s taking a much more strategic and much more important seat at the boardroom.”
Harnessing innovation. A five-time successful tech entrepreneur and investor in dozens of startups, Josh Linkner examined strategies to harness creativity to drive growth and innovation. Linkner highlighted the importance of continuing to push creative boundaries and “remain the source of disruption rather than have it thrust upon us.” And as a result of today’s unprecedented rate of change, “We cannot simply rely on the models of the past and expect the same results. Today, we need an entirely new and fresh approach in order to meet the challenges of the day.” This includes borrowing innovative ideas from outside your own industry. For example, having manufacturers examine how cruise ships load and unload passengers to identify ways to better load and unload packages in peak periods. He added, “My suggestion is that we embrace the best and hottest technology of all, which is not augmented realty or machine learning or blockchain, it’s human creativity. That’s the technology that can’t be outsourced or automated, and actually becomes our source of sustainable competitive advantage.”
Transportation trends and industry insights. David Ross, CFA, managing director, global transportation & logistics, STIFEL joined Transplace Executive Chairman Tom Sanderson and Transplace Senior Vice President, Engineering & Strategic Carrier Management Ben Cubitt to discuss transportation trends and challenges, particularly around capacity constraints and rate increases.
According to Ross, there continues to be more factors decreasing capacity than increasing it, and “Drivers are the key capacity constraint when it comes to trucking.” The shortage of long-haul drivers will only worsen as the number of drivers retiring significantly outnumbers those entering the industry, and regulations such as the Electronic Logging Device (ELD) mandate, reduce the productivity of active drivers. He added, “Every month, the capacity is going to get a little bit tighter as more carriers implement ELDs and comply with the regulations, that’s just more trucks and more drivers needed to move the same amount of freight.”
Ross estimated rates that ongoing capacity constraints will result in rate increases for shippers between five and 15 percent (depending on transportation mode) for the year. The panel stressed that instead of simply accepting that they must pay more to move their loads, shippers should examine their supply chains in order to identify opportunities to reduce costs in other areas. For example, converting truckload shipments to intermodal, consolidate less-than-truckload shipments to full truckloads, or redesigning their networks to have more regional freight and less long-haul freight. Sanderson added, “All of these [strategies] will decrease the demand for the long-haul truck driver, which will be more effective than trying to find the supply of the driver.”
The next Shipper Symposium will be held in Dallas, Texas, May 6 to 8, 2019.
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