As families take to the road this summer, they may see less of a familiar sight along the way - trucks. There’s a shortage of truck drivers across the nation, with predictions that it may triple by 2026, according to the American Trucking Association. Various factors are to blame for this problem, including an aging workforce, high turnover and increasing freight demand. But leading among them are stringent new regulations designed to increase driver safety. They include a law that limits the number of hours drivers can stay on the road, and the use of mandatory electronic logging devices to track time spent driving. The direct impact includes a hit on capacity, driver independence and compensation. At the same time, job dissatisfaction is hitting new highs, and high turnover has created an estimated driver shortage of 60,000 or more.
In short, that is fewer drivers who are authorised to drive fewer hours, forcing some trucking companies to turn business away.
This is not good news for retailers looking to stock their shelves in the increasingly competitive retail market, especially during any holiday season. Add to this the fact that retailers are under more pressure than ever to overcome other supply chain-related challenges, many of which directly affect customer experience. Yet they must still meet the incredibly high expectations set by the on-demand industry by retailers like Amazon and Walmart. All the while the fear of failure looms, reinforced by closures of businesses like Sears and Kmart.
But even retail giants like Amazon are feeling the effects of the driver shortage and the tightest U.S. labour market in 50 years. While expanding its own logistics and delivery operations, they recently announced that it will pay its employees to quit and help them start their own local package-delivery businesses.
Complexity in the retail industry has evolved to unprecedented levels, leaving some of our most beloved retail institutions in ruins. While there are a myriad of reasons for their demise, the severe driver shortage is wreaking havoc on traditional supply chain tactics and transportation costs, forcing the industry to adopt new practices - including the application of technology to help reduce the impact of the problem.
Supply chain management & technology
Surging demand and the driver shortage are pushing prices upwards — its impact so significant that retailers like Big Lots and Pepsi cite increasing transportation costs as reasons for missing earnings targets in 2018. And the trickle down effect does not stop there. The lower capacity has forced truckers to push out lead times resulting in missed deliveries.
To compete, retailers must adopt technology like artificial intelligence (AI), machine learning and the Internet of Things (IoT) for planning. Regardless of product, logistics issues within the supply chain are relatively analogous among retailers meaning every company can help reduce the truck driver shortage with supply chain technology.
Turning to technology
In 2018, truck driver turnover rate increased by 10 per cent, its highest rate in three years. Dissatisfied drivers are finding other means of employment proving it’s crucial to keep drivers happy. Additionally, drivers ultimately have control over which load to take, be it your or someone else's. Supply chain technology can help.
If enabled, telematics plays a critical role — as truck drivers can immediately go from servicing a few trucking companies to hundreds. Additionally, mobile apps enable truck drivers to easily navigate to the closest rest points and reschedule late arrivals with voice on a robotic process automation (RPA) platform. Particularly during the holidays, having direct access to a broad network of truckers is imperative to keep up with increased seasonal demand. Finally, automatic and timely proof of delivery (POD) is a must-have when transactions peak during the holiday season.
Predictive analytics has become more and more useful to address common issues in the freight industry. Managing capacity problems stemming from mandated regulations is simplified with data, enabling a more accurate assessment of contributing factors to future performance, such as weather, job type, driver availability and day of the week. Much of this is the same data that is being collected by the newly mandated ELD’s that drivers are not in favour of. But, this information powers schedule optimisation, the tracking of shipments, routing and job prioritisation. The end result is greater efficiency which can have a positive impact on the various challenges and provide relief for industries whose businesses rely on a smooth supply chain, even when facing challenges like weather or lack of drivers.
Smart supply chain management technology enables retailers and freight companies to be more agile by connecting trading partners with truck drivers and other carriers, and optimising return trips. Technology also enables retailers to track their deliveries with real-time shipment visibility that tracks the elusive first - and last - mile pickups, delivery milestones, shipment status, location and verified POD across all modes.
Supply chain solutions
Each year, $2 trillion of freight is transported globally by road. So it stands to reason that automation has been applied to - and transformed the retail supply chain, in addition to most business processes. Yet, amazingly, not all retailers or supply chain providers are on board. Where once it was enough to track business activity using pen and paper, this economy demands that every part of the retail supply chain, not just the more complex transactions, is automated.
Retail’s complexities are only increasing — supply chain technology is the cornerstone for managing complex logistics with a goal of increased revenues. While the retail industry pays close attention to the myriad areas where technology can improve performance and players continue to increase baseline levels of competition, smart retailers are prioritising their freight strategy. At the end of the day, if the product isn’t there, the business isn’t either.
Whether a truck driver is transporting food, electronics, or clothing, the goal is the same - on time delivery in an efficient, cost-effective manner. While the driver may be the one responsible for the first, last and every mile in between, the technology and tools employed by those that hire them, help make it all possible.
Mark Pluta, CTO, Blume Global
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