Forecasting the Year Ahead for Supply Chain and Logistics Leaders

The new year began with a new presidency — and while the new administration is hardly a week old, it has already led many in supply chain and logistics to analyze how changing policy priorities could impact their businesses moving through 2021 and beyond.

After Dr. Larry Sabato, professor at the University of Virginia and founder of the UVA Center for Politics, set the stage for the political changes that will unfold in early 2021, day three’s first panel session picked up this same topic and took it one step farther — analyzing many of the policy and legislative initiatives that will define the early days of the new administration.

The panelists, including Randy Mullett, Principal of Mullett Strategies, Tom Jensen, Senior Vice President of Transportation Policy at UPS, and Dan Furth, Consultant at Veedon Fleece Partners, centered their discussion on three key topics: sustainability initiatives, the expiration of the current highway bill on Sept. 30 and how the carrier/contractor relationship will play out through California’s Assembly Bill 5 (AB5).

Despite significant unknowns entering a new administration with new priorities, Jensen remains cautiously optimistic about what the next four years will mean for shippers and carriers.

“I do think there is an opportunity to get things done in infrastructure this year,” Jensen said. “It might look a little different – climate, resiliency, sustainability will all be an element of it. So, I think the concern many motor carriers share is where will surface transportation fit into those infrastructure plans.”

As for forecasting the end of the pandemic in 2021, Dr. Jason Miller, Associate Professor of Logistics at Michigan State and Avery Vise, Vice President of Trucking Research at FTR Transportation Intelligence, agreed the end of the COVID-19’s impact on freight activity is here — or very near.

The new question for 2021 now becomes: How can shippers and carriers address the resulting capacity crunch that is emerging as supply chains pick up speed? Hire drivers and wait it out, says Miller.

“Capacity feels tight because employment has rebounded far less aggressively than demand,” he said. “When the pandemic came, employment dropped as demand dropped. But when the demand returned quickly toward the end part of June, it rose above employment levels.

“My expectation is that the capacity tightness will start to loosen as carriers can rehire drivers—and some data suggests we are already seeing that.”

Even as the pandemic continues to subside and freight activity returns to pre-pandemic levels, the elevated importance of last-mile delivery is likely to remain. In order to improve the final-mile delivery experience for end customers — while increasing efficiency and reducing costs — panelists in the day’s final session pointed to technology improvements as a critical factor moving forward.

“The technology gap. It has gotten a lot better, but where it can improve is scanning,”
said Steve Howard, President and Owner of Esquire Express. “More than 50 percent of my clients, I can’t scan.”

Added Jason Bergman, Chief Customer Officer at YRC and President of HNRY Logistics: “The power of accurate scanning is the data. That data provides you the history of what has worked and what hasn’t. You can’t get into the predictive analytics to reduce your cost per stop, you can’t get into cost reduction through better route optimization, unless you have good data.”

The three-day Jump Start 2021 supply chain conference  facilitates meaningful knowledge transfer and collaboration between logistics and transportation professionals from carrier, shipper, logistics service provider and technology verticals. To learn more about SMC³ supply chain conferences, visit http://www.smc3jumpstart.com/.

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