Sizing up the logistics and supply chain marketplace

With the first quarter of 2015 officially beginning the homestretch, it seems like a good time to take a look at some of the key themes impacting the freight transportation and logistics market.

Given all that is going on in the markets we cover and that you do business in, it stands to reason a few things will be left out so please accept my apologies in advances.

Perhaps the biggest story, or theme, early into the New Year is the one relating to lower energy costs i.e. cheap fuel. No matter how you look at it, the pros will always outweigh the cons (if there are really any, that is) here. This ranges from the most-welcomed byproduct of lower operating expenses and transportation budgets.

It also makes a welcome change for motor carriers in lowering backhaul and “empty miles” costs or at least make things somewhat “less worse.” But as is the case with most things, it really is unlikely to last forever. For anyone needing further proof of that, all one needs to do is notice that the average price per gallon of diesel gasoline has increased in each of the last four weeks, rising roughly ten cents during that time. This is something that needs to be watched by shippers and carriers alike in the coming weeks.

Also on the immediate radar is the current, or never ending, state of U.S. transportation infrastructure.

With the clock ticking down on the most recent extension for federal surface transportation funding, coupled with an ongoing decline in Highway Trust Fund revenues, there are a litany of challenges in regards to what happens next as the calendar moves on to late May, which might be viewed as d-day in transportation and logistics circles to the extent that nearly all industry stakeholders area remain fully aware that this current situation, when it comes to how projects are funded and a long-term concern of viable funding sources, is essentially untenable and long overdue for a major re-do.

And the recently announced tentative five-year deal reached between the Pacific Maritime Association and the International Longshore Union should be viewed as good news for shippers and carriers alike, as it will eventually equate into a more harmonious supply chain. But things are not there yet due to the backlog and congestion that this labor disruption caused along with other things too such as larger vessels calling on ports and problems stemming from chassis location and availability at affected ports, too.

Other things to keep an eye out for:
-the impact of dimensional pricing in the parcel shipping sector this year…and LTL sooner than we may think;
-the ongoing changes of the e-commerce supply chain and what that means for shippers and consumers and providers;
-a still tight over the road capacity environment, coupled with what can be called a massive dearth of available drivers at this point; and
-the regulatory environment and what effect “government intervention” will have on the U.S. supply chain

To be sure, this can viewed as the tip of the iceberg but that fact remains that there is more than a lot going on these days. That has never really changed, but it remains especially true at this point in time.

Please be sure to drop us a line to weigh in on any of the things mentioned above or something else as it relates to logistics and supply chain matters.