Santa needs to dig deep down in his toy bag to come up with the tens of thousands of truck drivers needed in North America to sustain the current demand. (He needed to do that at least five years ago but perhaps we have all been very naughty). Several trucking companies are now approaching HRDC (Human Resources Development Canada) in an attempt to bring qualified drivers in to the country from places such as Europe. While this will certainly help, this is a very critical situation that will require a number of years to sort itself out.
Drivers Wanted
While improving economic conditions are partly responsible, not many people today are "aspiring" to be truck drivers. Switch to rail? They are limiting their capacity as well. Where are tomorrow's drivers going to come from? Every trucking company is trying to get a leg up on this challenge. Far too many companies are just walking away from potential business because they don't have the talent available to drive their parked trucks.
More and more long-distance trucking operations are looking at providing shorter runs and more switching of equipment in order to get their drivers home more frequently - an often undesirable aspect of the trucking career at least these days. Even Santa has to have helpers.
Border Crossing
Delays are the order of the day. Customs program initiatives such as C-TPAT will help, but when? Transportation companies are numbering in the hundreds with their CSA/ FAST approvals (http://www. cbsa-asfc.gc.ca/import/csa/approved-e.html) but the shipping public has been slow to join in.
There has been committee after committee complaining about the heavy burden these border delays have on the economy yet little progress is being made. We need to all get on board and embrace any program whose goals are to reduce these delays.
With the uncertainty of continued border delays, manufacturers and distributors are increasing their inventory levels to avoid situations of stock-outs, possible lost sales or the shutting down of expensive production lines. This adds costs to the price of the goods we buy.
Accessorial Fees/Charges
Have you read one of these schedules lately? Wow. There may be more understandable language in the Magna Carta. Fuel, cube rules, waiting time, border fees, processing fees; all of them carry a different set of languages, rules, regulations and charges. Administering these charges must be a nightmare for everyone: the service provider, shipper and receiver of freight. Many accessorial charges will be assessed "in transit" making it difficult to perform automated freight audit processes. Remember to keep focused in isolating these charges as they can offer a good opportunity to manage costs.
Fuel is the largest of these surcharges and has been more widely accepted as a necessary add-on in pricing schedules. Let's all work together to find ways of reducing the impact of fuel. Carriers can monitor idle, speed, braking and maintenance of vehicles. See if your carrier is doing this. Shippers perhaps can look at providing flexibility in their pick-up and delivery times.
Solutions
You can't wait for Santa to bring you any one present that will fix all of the challenges that make up today's transportation landscape. Work with your customers and review your entire supply chain for opportunities to reduce delays and associated fees.
Shipping in truckload quantities when you used to ship LTL might be a solution for some. Customers that used to have 2 and 3 times a week LTL deliveries might assist in taking a truckload. Any solution that will use fewer drivers, and reduce the number of times your have to cross the border, should be considered. Is the trade off for all these delays more warehousing of products? Do the math. It may work for your firm.
While we all must work on making our entire transportation system more efficient, those companies who strategically involve their entire supply chain in the process will be the survivors. If you think these recent issues will bypass you, then think again. If you choose to make your customers responsible for solutions because you do not handle the freight component of your business they might look elsewhere for solutions. Some of these solutions may mean bypassing you or your firm.
Changing your service schedules, warehousing to create value in your supply chain, educating your customers in the process of reducing delays and costs are all a part of the potential solutions. You need to look at this in your business and be creative enough to limit the impact of the current transportation challenges on your business. What are the likely trade-offs? Can you identify them and are you capable of measuring their impact?
Remember to look at the "Bigger Picture"!
Let's help Santa help us!
Happy Holidays everyone!