Stifling supply chain bottlenecks are likely to remain — and possibly worsen — in the months ahead as consumers follow back-to-school purchases with end-of-year holiday shopping, according to experts who spoke with Transport Topics.
“It seems like every time we find a path out of the disruption, we find another disruption,” Association of Supply Chain Management Executive Vice President Douglas Kent told TT. “It’s a multitude of problems. I wouldn’t put the pandemic as the main disrupter, but it certainly has highlighted some of the vulnerabilities in the supply chain. Some are operational and some are strategic, and the strategic ones are going to be hardest to fix and a much longer cycle time.”
The trucking industry’s ongoing driver shortage also is contributing, said American Trucking Associations Chief Economist Bob Costello, with fleets parking trucks due to an inability to fill seats behind the wheel. That’s causing freight to back up.
“For-hire truckload carriers are operating fewer trucks than a year earlier,” he said. “It is difficult to haul significantly more freight with fewer trucks and drivers.”
Meantime, demand for warehouse space is skyrocketing. According to the July Logistics Managers’ Index, the national warehouse vacancy rate is a very tight 4.8%, and drops dramatically in areas near ports to as low as 1.7%. The report said metropolitan areas suffer from a lack of capacity as firms fight to position their goods close enough to consumers to allow for next- or same-day delivery.
“You have a tightening of warehouse capacity, but the big question is do those warehouses have the right items in them?” Kent asked. “With the starts and the stops, it causes one release of a problem but it creates another.”
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