PRINCETON, NJ. The balance between available freight and truck capacity is so close to equilibrium that a natural disaster or other “even slightly meaningful disruption will put us in a state of flux,” according to Tommy Barnes, president of Con-way Multimodal, a provider of third-party carrier services. “Hang on to your hat,” he warned during a transportation and logistics executive panel at the 2013 ALK Technical Summit.
With the normal Spring shipping cycle delayed by unusually cool weather around the country, Werner Transportation is already beginning to see the impact on its network as that volume backs up into freight increases tied to Memorial Day, according to panelist Derek Leathers, Werner president and COO.
“If you watch the news over the next four weeks, you’ll start to see some of the pinching we’re talking about,” he said. “If a slightly cold spring causes freight to be pinched and shipments to be missed, that just proves how close we are to equilibrium and a hold-on-to-your-hat environment.”
Calling it “the relief valve for the capacity crunch,” Leathers credited recent improvements in load and packaging optimization with offsetting capacity issues up to this point in the recovery. While capacity was off 17% last year, the number of loads was off 18% due largely to those optimization gains, he said. “We really miss the age of the boom box being replaced by the iPod Nano.”
One good example of that change is Caterpillar’s parts group, which created a new packaging group just last year, according to Scott Jackson, transportation project manager for Caterpillar Logistics Services. “We’ve recognized the importance of packaging and the company is focusing on not shipping air,” he said during the panel discussion. “There’s a lot going on now that may help loosen some of those capacity concerns.”
With the Internet also changing consumer buying habits, fleets need to collaborate with 3PLs and other partners who have access to good data about those customers. Only then can they understand those changes so they can optimize their networks to accommodate them, said Terry Gilbert, CEO of New Century Transportation. “We talk a lot about driver shortages, but we have a whole talent shortage,” he said. “We need to get really smart people into this industry to help.”