The past three years have tested the strength of intermodal transport. The supply chain has experienced major ups and downs, from problems with fuel prices to the effects of recession. Up to now, the chain has not recovered from the difficulties, and is currently still crawling its way back to its original shape.
A look back to the challenges faced by the supply chain in 2011 will pretty much give us the current state of today’s industry. Some of these major obstacles were:
Driver Issues – The changes in the hours of service trucking regulations directly affected the operations. A shortage of drivers was experienced because of industry consolidation and requirement. Although the CSA certifications made the trucking component more secure, some driver capacities were eliminated.
E-commerce – The continued and rapid growth of online retail has also slowed down the supply chain. This changed a lot in the system flow of goods because it puts no geographical boundaries so one competitor can easily capture its market given the access to the worldwide web. While many parts of the supply chain are eager to upgrade technology to accommodate the growth of social media marketing, other parts are still unable to rise to the challenge.
Recession – Low dollar rates, threats of bankruptcy, and fuel prices drove the industry to lesser ups and more downs. Higher cost of commodities resulted to reductions in transport schedules. It has also stemmed to difficulties in capacity in all modes and the rise in load factor to match the cost expenditures.
With all these in mind, the intermodal transport system is gearing up for more lean processes and tightening of global supply chains to answer to the challenges. This seems like the picture of what’s ahead of us:
Refining Enterprise Systems – Many companies are now cutting unproductive parts of their supply chains. Others are looking into the diversity of their chain bases, either manufacturing closer to home to cut cost in transport or moving to higher levels of sourcing. The attitude of the company towards hiring flexible and high-quality workforce has also intensified. They are now more aggressive in adopting lean processes.
Better IT Economics – Mobile devices are now a huge part of the supply chain. In 2011, companies started the use of a cloud technology. This technology provides easier supply chain management, and since a lot of software providers are opening up to this type of technology, 2012 will see more options at reasonable costs. With new compliant mandates, 2012 will see the adoption of mobile applications and devices such as smartphones and PC tablets.
Integrated Partnerships – It is also expected that this year, the industry will see a rise in partner integration. More companies are opening up to collaborations and the presence of mobile devices makes it easier. This collaboration focuses on one company’s on the partners focusing on their strengths and as a result, shares the costs of the chain.
This year started very promising for the global supply chain, and from the looks of it, we will see more innovations in the industry as it adapts to the changes not just in the market but also to the uncontrollable disasters brought by nature. These interesting times for the global supply chain saw a lot of instabilities but as always, the industry is making itself better through leaner and cost-effective ways.
This post was penned by Maria Dublin, a guest blogging assistant for the PFQ Companies. Visit PFQCompanies.com to post your loads and trucks today.