Slap a gauge on just about any logistics pipeline today and you're likely to see the needle hovering around the red zone. Supply networks are under pressure like never before and some are bound to spring a leak.
Shippers have fewer in-house resources to monitor and manage a supply pipeline that has gotten longer, more complex and more subject to the cumulative effects of small changes. Looking at the results of a recent study conducted by Transport Intelligence asking shippers to quantify their experience with freight forwarders, a familiar theme emerged. I dug out an eight-year-old, in-depth study we conducted, and there it was again.
Then as now, the most important issue for shippers is, "Where's my freight?" If there has been a subtle shift since that 1997 study, it is that shippers have fewer resources to do the track and trace themselves and now they expect their carriers or agents to notify them of problems. That was extremely apparent in the Transport Intelligence finding that the area of greatest concern (and second worst in performance) was proactive notification of problems.
Increasingly, that means shippers must be aware of and monitor developments in the various modes used along their logistics pipeline. There's no room for "modal indifference," and no supply chain is "mode neutral." This was a way of life when motor carriers routinely "interlined" freight and when we had over a dozen railroads serving the U.S. We may not have exercised those muscles for a while, but it's time to get back in shape.
We've hammered out lines of responsibility in the courts and in contracts, but I'm not sure the one-stop shop or sole-source solution is working for many shippers. (Let me know how it works for you.) Instead, we're looking across a transportation landscape of interlocking modes that must perform flawlessly to deliver on our promises to customers. Establishing metrics and penalties for poor performance is like cleaning up after the pipe has burst. Shippers are asking for preventive steps, but for that, you'll have to be an active participant.
Today's multi-modal transportation system epitomizes Newton's third law — for every action, there is an equal and opposite reaction. But the reactions aren't always equal.
West Coast ports are congested, but routing around them is no simple matter because ships are larger and can't fit through the Suez or Panama Canals, limiting options. When they arrive and attempt to disgorge their cargo of containers, they face a series of issues with port labor, space, environmental concerns, chassis availability, dray capacity, over-theroad truck capacity (which has more to do with drivers than equipment), rail capacity and performance, and many more issues.
Tight truckload capacity shifts more domestic freight to rail/intermodal, but those high volumes of import containers clogging the ports are vying for that same limited capacity as more shippers try to move from rail to truckload. Drayage companies face idling limits and higher fuel costs ocean carriers won't pay and begin to exit the business, leaving fewer carriers to move containers off the ports, adding to space problems and congestion — and the ships get bigger and want to ground more containers when they dock.
I say get "mode active" or get a mop — you'll need it when your pipeline starts blowing gaskets.
