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Challenges to Freight Capacity Expected to Continue throughout 2021

The challenges to freight capacity brought on by the Coronavirus pandemic are expected to continue throughout 2021 and will likely be compounded by the end of the year due to accelerated demand during the holiday season. These challenges will require shipping companies and fulfilment businesses to reevaluate their logistics strategies and focus on planning for the rest of the year and preparing for next year’s obstacles. The solution to these freight capacity challenges may lie in working with a 3PL provider that champions strategic partnerships and cost-effective advantages.

Increased Demand Faces a Shortage of Drivers

Several factors have led to freight capacity issues over the past few years. According to Bloomberg News, 2019 saw a nationwide shortage of 60,000 truck drivers. That number is projected to reach 100,000 by the year 2023.

The shortage of drivers was compounded by the COVID-19 pandemic, as fewer prospective drivers had the opportunity to obtain their licenses. Lockdowns and other effects of the virus resulted in an unusually low number of new drivers over the last year. A lack of drivers combined with the growing popularity of e-commerce led to a dramatic increase in the demand for freight capacity in the past year.

Without enough drivers, packages remain waiting in warehouses, and shipping times grow exponentially. Prices go up as companies spend more to compete for available drivers. The result is a slower, more costly experience for the consumer. As demand for shipping grows, the cost increases as well. Even rising shipping prices are not enough to persuade most companies to shut their doors, which has led to the shortage of freight capacity the industry is currently dealing with.

Addressing Future Challenges for Freight Capacity

Transportation Insight reported that freight sales increase nearly 200% each year, meaning the supply chain industry’s freight capacity will only increase once those vehicles come online. While additional freight does expand shipping capacity, it does not address the shortage of drivers.

Some companies are reaching outside of the boundaries of the United States to hire truck drivers from overseas to bolster their shipping fleets in the US.

Of course, future growth is never guaranteed. The pandemic is likely to continue throughout the rest of this year and into the next. As the face of the pandemic changes, its impact on supply chains could also shift. New waves of the virus could apply additional strain to the supply chain, while falling infection rates could reduce these pressures. While transportation has always been considered an essential business, additional lockdowns or regulations could further complicate freight capacity issues in the supply chain industry.

Use Third Party Logistics to Address Your Freight Capacity Challenges

Freight capacity is only one of the potential hazards that your supply chain could be facing in 2021. Given the issues that logistics professionals are facing, now is the time to put your supply chain in the hands of experts.

A 3PL provider like Brown West Logistics could help you meet your needs and keep your customers happy. Contact us right away to learn about how we could customize solutions for your business.

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