Looking back at 2014

While 2014 is not a done deal just yet, it is clearly in the home stretch and will most certainly be there by the time you are reading this column in print.

That said, I thought it would be a good time to review the year was, or, is quickly coming to a close anyhow, by taking a look at some of the major stories or themes that occurred or are still ongoing as of press time. Given this finite space, not every single major story may be included so please accept my apologies in advance if you are looking for something that is not here.

So, without further adieu, here are some of the biggest logistics-related stories of 2014:
-The harsh winter weather wreaked havoc on various fronts in the form of closed-down roads, which resulted in late shipments and safety issues, as well as impaired train tracks and network issues, with rail service suffering to a degree through much of the rest of the year as carriers dealt with clogged networks and myriad service-related disruptions, although things appeared to get better over the second half of the year;
-Not surprisingly, the driver shortage situation continued to be a major problem with no immediate end in sight, even as many major carriers rolled out increased pay package and incentive-based programs. Many industry observers told Newsroom Notes that the current situation is as dire as it has been in decades. Along with low pay and the regulatory drag on the sector, the industry continues to face a fundamental problem in that without a sufficient amount of drivers, assets sit idly and, in turn, help to create a tight capacity environment;
-Over the road capacity has been a major topic through 2014 for many reasons, especially ones having to do with regulations like hours-of-service and CSA, as well as the driver shortage. This tight capacity has seen shippers scrambling for trucks, which has been evidenced by significant gains in 2014 spot market volumes and rates. What’s more with FTR recently noting that current truck utilization levels are within 100 basis points of record levels, it basically translates into any further economic growth and associated freight likely to strain capacity and subsequently increasing rates further, which is not a pretty picture to say the least;
-The future of a new long-term federal transportation bill does not look necessarily rosy, even with the mid-term elections now complete. While funding for the current authorization, MAP-21, is intact through May 2015, it stands to reason that prospects for a future long-term bill are relatively dim, due largely to funding issues, with a significant chasm between what is really needed for future highway and transportation infrastructure investment compared to what is truly available, which is simply not enough. Who knows, maybe one day our elected “leaders” will cumulatively collect the political will needed to increase the federal gas tax once and for all. But the chances of that happening are about as good as mine are for playing center for the New York Rangers at this point;
-The impact of increasing e-commerce activity on supply chains has ostensibly in many ways become the new normal, especially for retail shippers. With many consumers comfortable shopping online, its has resulted in steep gains in e-commerce sales and subsequently supply chains that need to adhere to and recognize increases in ordering activity, customer habits, and supply chain speed. While there were some delivery issues for e-commerce-based gift orders last holiday season, it was not a major amount and it appears that industry players has learned from last year with a sharp eye on planning and forecasting and increased communications to ensure all gifts get to where they need to be this holiday season with time to spare, too; and
-West Coast port congestion continues to impact cargo flows, especially on the import side, with an ongoing dispute (as of press time) over a new labor contract between the Pacific Maritime Association and the International Longshore and Warehouse Union and other issues, too, including increased seasonal demand, a lack of available chassis, clogged transportation networks, and the aforementioned lack of drivers, among others.

To say 2014 has not seen its fair share of interesting developments with direct tie-ins to supply chain and logistics productivity and throughput would be an understatement. As for how these things shake out going forward, remains to be seen. But one thing remains clear: when it comes to major themes and issues in our sector, there is truly never a dull moment.