As headlines have well pointed out, there's a shrinking demand for general goods amid a global economic downturn. Additionally, import freight volumes are shifting east from California amid a volatile few months between AB5 and fears of a west coast labor strike. Shipping rates have also plummeted since their pandemic highs. Every business across the supply chain is reeling from these changes, but is also trying to adjust & pivot in real time. These pivots could be volume oriented, a re-incorporation, a move to brokerage, the purchase of clean trucks, etc. The short of it is that this could be a bout of challenging times for logistics providers moving into 2023; but resiliency will persist and not only will logistics providers survive - they will likely thrive as they look towards process improvement. Naturally, supply chains and the businesses and individuals that keep them running are tenacious and like countless times before this, these businesses will adjust to meet the challenge.
The focus of this post is not pessimism, thankfully, but something more akin to a positive shift in priorities. As we just mentioned, supply chain operators aren’t going anywhere. BCO’s, brokers, trucking companies, and drayage providers of all sizes should remain profitable and continue to deliver the goods and services that average Americans (and everyone else on the planet for that matter) rely on. The difference now, opposed to a year ago, let's say, is that these businesses are going to start focusing on process improvement, cost savings, and a general streamline of their back office efforts. Every strategist on the planet is now pivoting to the development of short and long term plans that help shrink costs and improve efficiency. And - this isn’t just true for supply chain operators, it’s true across the board from investment banking to restaurants to farming.
For those in the drayage space specifically, however, these process improvements include software that underpin the entire operations group - and for that we would point you to the plethora of products & services that enable increases in productivity, capacity (should you end up needing it), and most importantly throughput & efficiency. The short of it is that PortPro enables you to do more with less OR free up your staff from cumbersome tasks through our automated processes.
I digress. The purpose of this post (and more generally, the blog) is not to sell you products, but to articulate how and why efficiency improvements are so important. From the top down, automated reports and analytics enable a business to see where it's falling short and how it can improve its modus operandi. For example, driver & delivery efficiency reports enable a business to see where its most profitable and perhaps with new information it could pivot to focusing more of its business on the loads and work with the highest return on investment. Additionally, in economic downturns or general slowdowns, staff are often asked to do more with less to keep costs down. Automated & custom reports, single-pane-of-glass solutions, and integrated products allow for staff to reduce their back office efforts and take on more work without feeling overwhelmed.
Throughput is another place where business owners will often look to derive efficiency. With freight volumes plummeting, drayage carriers will be in competition for more limited work - especially in California where volumes are especially & comparatively low. With enhancements and automation in customer service, better dispatching and communication tools, and real time tracking of assets and containers - back office staff can - you guessed it - do more with less. So much can and should be automated and with faster deliveries, better customer service & communication, and analytics for a modern carrier; drayage truckers can become their customers carrier of choice while improving their top - and bottom - lines. This is - again - especially poignant here in California where older trucks (and some drivers with them) are being pulled off the road due to over-regulation. There will be fewer containers and a fewer number of assets and people to move them and thus the priority will shift to process improvement to remain competitive.
Volumes will come back - like the economic cyclicality it generally moves with. However, it remains imperative that while volumes are down, carriers - and all businesses in or out of the supply chain - should look to improve and derive efficiencies. While there's time, make the most of it. Check out how we can help or explore other parts of this blog to see how PortPro is reading the current freight market shifts.
Sources:
https://www.cnbc.com/2022/10/27/new-york-is-no-1-port-in-us-again-signaling-a-permanent-trade-shift.html
https://www.wsj.com/articles/freight-operators-peak-shipping-season-is-crumbling-11666118281
