As 2021 draws to a close, companies across the logistics industry are beginning to wonder what next year will look like. Shippers are eager for a break from sky-high rates and severely constrained capacity. That break, however, may not be coming anytime soon.
“I think we’re going to see slow improvements. There are several factors that are just driving this to be a sustainable problem,” said Jim Monkmeyer, President of Transportation & LLP, DHL Supply Chain North America.
Many of the challenges facing the supply chain today — including labor shortages and changing consumer habits — have either been directly or indirectly caused or exacerbated by the COVID-19 pandemic. These issues are complex, and there isn’t a quick solve.
“The economy is on fire. We are spending on products instead of services, which drives freight up. Plus, we have a labor shortage,” Monkmeyer said. “We used to say we had a driver shortage … now, it’s across the board in supply chain and all other sectors.”
With unemployment claims at their lowest level in 50 years and the unemployment rate down to 4.2%, companies are unable to fully staff operations. Looking ahead, a supply of talent is a critical part of returning to normal and keeping inflation down.
But there is hope.
Monkmeyer urges companies across the industry to stay focused on talent and prioritize their workforces in the new year. This may mean upping hiring incentives, strengthening the focus on health and safety protocols, and ensuring a positive and inclusive working environment.
“Keep the good people you have. Good pay and incentives are important, and you also need a safe work environment, a positive work environment,” Monkmeyer said. DHL Supply Chain is also very focused on diversity and inclusion, and has earned a number of awards recognizing it as a great place to work and top employer.
Beyond labor, Monkmeyer expects digitalization and sustainability to become increasingly hot topics in 2022.
Adopting cutting-edge, high-tech solutions will prove critical as companies continue to face cost and capacity challenges in the coming months. Monkmeyer’s team utilizes technology to identify transportation capacity and move up and down the chain from core contracted carriers to core spot carriers to digital freight marketplaces in a matter of minutes. Technology tools also provide the visibility to locate bottlenecks and the analytics to address them in real time, as well as solutions that optimize freight, identify trends, drive down costs and increase supply chain performance over time.
“Companies have also doubled down on sustainability. Decisions are being made and goals are being set at the C level,” said Monkmeyer. While this is a gradual process, he shares the importance of an industry-wide focus on incorporating electric aircraft and vehicles, and helping shippers reduce carbon footprints. As fueling infrastructure expands, the next generation of electric vehicles should come into use this coming year.
During this unprecedented time, shippers are advised to seek counsel from 3PLs. In addition to providing specific solutions, leading 3PLs can offer high-level insights shippers may not have access to including best practice sharing and learnings from other global operations. “We help customers find alternatives to their traditional routing, set up temporary storage, get help at the ports for congestion issues and expedite delayed shipments. We also provide strong visibility across the supply chain,” Monkmeyer said.
Hear more from DHL Supply Chain and its customers about how they’re tackling today’s challenges and opportunities at www.dhl.com/allbusinessnoboundaries.