We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2022
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2022
    • Upload Your Video
Home » Don't underestimate the challenges of recovery
big picture

Don't underestimate the challenges of recovery

July 7, 2010
Peter Bradley
No Comments

While the economic recovery has been slower and more modest than hoped, it apparently is real. That's good.

But as we arrive at the peak shipping season, shippers may still have to contend with the recession's aftereffects. During the worst economic downturn in our lifetimes, carriers in all modes made sharp cutbacks in order to survive. As a result, shippers could be looking at a serious shortage of freight capacity just when they need it the most.

Some signs indicate that the nation's freight transportation capacity is already under pressure. In June, trucking officials speaking at a conference in Atlanta warned that the industry could face the most severe driver shortage in its history as a result of increased demand and an aging workforce. That same month, intermodal volume on the nation's railroads reached its highest level since late 2008, while rail carloads posted solid gains.

The picture is much the same on the ocean side. In May and June, import container volumes at the country's top retail container ports showed double-digit gains over year-ago levels, according to the National Retail Federation—a trend the group expects will continue into the fall. At the same time, reports out of Asia suggest that ocean carriers are facing a shortage of containers to move goods to the United States. And when the goods get here, shippers may have a hard time getting them out of port. In a June story, the Journal of Commerce reported that terminal operators at ports around the country expected difficulty in handling the surge in imports.

All this means that shippers have a lot of decisions to make regarding what carriers they use, what they're willing to pay, where to source, whether they should consider redesigning their networks, and more. But one of the toughest quandaries of all may be the inventory/transportation tradeoff: Do you build stocks in what some still consider a wobbly recovery in order to take advantage of transportation economies of scale? Or do you keep inventory lean even though it will mean making smaller, more frequent—and thus more costly—shipments?

The choices are not easy. But while the current experience may be extreme, the dilemmas should not be a surprise to shippers who have paid attention. A post-recession capacity crunch and concomitant rate pressure was almost a certainty.

A recovery of course is a good thing. But it has its challenges. The analogy that springs to mind comes from meteorology: A high-pressure system that brings balmy weather is often preceded by a squall line of dangerous storms. The key is to be ready.

Transportation
  • Related Articles

    don't weight up

    in recovery

    The unsung heroes of end-of-the-line logistics

Peterbradley
Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.

Recent Articles by Peter Bradley

From temp to management: interview with Diane Garforth

Watching over intermodal's interests: interview with Joni Casey

Building resilience into the supply chain: interview with Yossi Sheffi

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • FedEx agrees to buy 10% stake in Berkshire Grey

  • The robots are here. Now what?

  • No vacancy at the warehouse

  • Shippers, battling escalating packaging costs, look for answers

  • Investment group pays $5.2 billion to buy Amazon air freight contractor Atlas Air

Now Playing on DCV-TV

5dd7b388 1f0e 40fc 9e78 2670e0e55fd2

What happens to your supply chain when chaos meets confusion?

DCV-TV 4: Viewer Contributed
Over the last several months, I’ve given many presentations about the events and potential changes impacting supply chains. After one of them, an individual approached me with a very interesting observation: “It’s not just that these things occurred, it's that we were blindsided by them. We never saw it coming.”...

FEATURED WHITE PAPERS

  • Choose the Best Auto ID Technology for Tracking RTIs

  • 8 ways your facility can benefit from Hyster Reaction

  • Why Use RFID to Track RTIs

  • THE NEW WAY TO WAREHOUSE: 4 Innovations in Automation & Robotics to Boost Warehouse Productivity

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2022. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing