By Mark Pluta, Blume Global
There’s a shortage of truck drivers across
the nation, and the crisis hit an all-time high in October, according to the
American Trucking Association. Various factors are to blame for this problem, chief
among them 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 and forecasts of a number 3X that size by 2026. In short, that is fewer drivers who are authorized to drive
fewer hours.
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This is not good news for retailers looking to
stock their shelves for the lucrative holiday shopping season, which is
expected to break records with consumers
spending 4.1% more than in 2017.
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 and by retailers
like Amazon and Walmart. All the while the fear of failure looms, reinforced by
closures of businesses like Sears and Kmart.
Complexity in the retail industry has evolved
to unprecedented levels, leaving some of our most beloved retail institutions in
ruins. While there are myriad 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 And 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
So far this year, truck driver turnover rate
has increased by 10%, 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 yours 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 useful for addressing 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 favor of. But this information powers
schedule optimization, the tracking of shipments, routing and job
prioritization. The end result is greater efficiency, which can have a positive
impact on the various challenges and provide relief for industries that 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 optimizing 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. 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 prioritizing their freight strategy. At the end of the day, if the product
isn’t there, the business isn’t either.
So
this holiday season, don’t just wish for supply chain technology. Invest in the
tools to make it happen.
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Mark Pluta joined Blume Global with
20+ years of development, architecture and product management experience in
highly competitive technology companies offering both enterprise and consumer
software products and services. Pluta has a strong technical background coupled
with the ability to drive solutions for customers, both building software
products and within IT across multiple business domains.
