The trending topics that kicked off SMC³ Jump Start 2022

Jump Start 2022 kicked off day one discussing what’s happened in the supply chain over the past 24 months, the current “normal”, what to expect from here and what will shape the industry in 2022 and beyond. Here’s a rundown of what you need to know from day one.

The COVID-19 pandemic: disruptor or accelerator?

Shippers and service providers have spent decades optimizing their supply chains to efficiently accommodate specific freight volumes during peak seasons and across specific modes. Now, after nearly 24 months of rapid supply chain disruptions, the ecosystem is overtaxed, over capacity and adaptive solutions are mandatory.

Depending on who you ask, the pandemic was either the spark of change or an accelerant. But no matter what their viewpoint, shippers, carriers and 3PLs agree: things won’t be the same again.

Speaking in a Monday morning panel on Understanding America’s Supply Chain Woes, Barbara Melvin, President and CEO of South Carolina Ports Authority, said she felt the industry shakeups of the past two years were more of an accelerator of change, highlighting problems the supply chain had downplayed or ignored for years. (The solutions to those problems, she said, are themselves presenting challenges – a game of “whack-a-mole” where an action that benefits one stakeholder creates a negative reaction in another area of the supply chain.)

On the shipping side, Linda Fonkoue, global supply base manager of logistics at John Deere, noted that while the pandemic has shone new light on old bottlenecks, it also brought all-new challenges to every supply chain stakeholder – including the liability of a brand-new transmissible illness creating uncertainty at every level of operations and planning.

Charlie Prickett, President and COO of AAA Cooper Transportation, bridged the many problems facing logistics and transport today, and the many interpretations of those many problems: “What we call the supply chain is really millions of supply chains underneath.”

Labor challenges

The much-debated apprenticeship program that would put drivers as young as 18 behind the wheel was met by Jump Start guests with a mix of optimism and concern.

When the topic came up in his opening keynote presentation, Greg Gantt, President and CEO of Old Dominion Freight Line (ODFL), told host Bill Cassidy, senior editor of trucking & domestic transportation at JOC, that ODFL “[doesn’t] need to leave anything on the table” when it comes to finding new CDL drivers. With in-house training, he indicated he sees potential in the program to help mitigate the long-standing staffing challenges facing the carrier side.

How safe is it to plan around consumer trends?

Consumer spending was up 15% YOY in Q4 2021, despite a 7.1% surge in the Consumer Price Index – the highest since 1981. E-commerce spending was up 11% YOY during the same time – and up 60% over 2019 – and it’s not expected to slow down much as demand for goods continues. But in his presentation, Keith Prather, managing director at Armada Corporate Intelligence, noted inflationary pressure could weigh heavier on consumer demand in the first half of 2022.

Melvin postulated more concretely that supply chain tensions could ease once consumer demand for import drops below $2 million TUEs – the norm has been hovering around $2.5 million, driven by U.S. consumers. With the consumer savings rate back to pre-pandemic levels, some carriers are planning from the assumption that the present demand for goods is likely to stick around; Gantt said his company is plotting a “bullish” 2022 after an “extremely strong” 2021.

Creating “Red Shoes moments”

Motivational speaker Lonnie Mayne, Founder and CEO of Red Shoes Living, focused on his approach to humanizing business. Inspired by his own experience wearing a pair of red tennis shoes that stood out during a work meeting, his philosophy hinges on what he calls “Red Shoes moments”: Everyday opportunities for professionals to turn down the negative volume and amplify the good through simple acts of humanity.

From simple empathy to standout acts of kindness Mayne said there’s a central question defining a Red Shoes moment: “Will it stand out for the positive in how you work and live your life?”

The recently passed $1.2 trillion U.S. infrastructure bill

Prickett called the “broad nature” of November’s infrastructure bill “impressive,” noting that it takes a holistic view of the supply chain and what it needs to increase efficiency. Panelists agreed that perspective is important – that many of the changes included may be years from fruition – but the conversation consistently turned back to optimism and hope for the positive impact of its $550 billion in incremental spending.

The economic environment and its impact on freight

Retail and consumer spending are expected to remain strong in 2022, though inflation pressure may start to weigh on demand by mid-year. With strong pent-up demand and a race to get ahead of rising interest rates, U.S. corporate spending reached an all-time high of $78.8 billion in 2021. That’s primarily driving manufacturing, construction, wholesale trade and imports – and a strong freight environment.

On the other hand, the upswing in U.S. construction, up 16.3 percent year-over-year from 2019 to 2021, stands to compound labor challenges, Prather noted. While demand means more business, construction is LTL’s top competitor for hiring CDL drivers – a double-edged sword.

Putting supply chain at the dinner table

Jump Start was a great forum for discussing the way the world talks about the supply chain itself – how its many rippling challenges impact daily life – and how the supply chain is making its way outside the industry. In some ways, the growing mainstream awareness of industry challenges underpinned many of the day’s more pointed topics – even if it took a pandemic to get it there.

Melvin said she hopes the conversation around the supply chain will grow in the C-suite, reiterating a hope held by many of the day’s speakers that the heightened awareness of the supply chain conversation can lead to greater diversity in the industry.

“Supply chain is not something that can be ignored anymore,” Cassidy added during the day’s opening keynote.

The three-day SMC³ Jump Start 2022 supply chain conference facilitates meaningful knowledge transfer and collaboration between logistics and transportation professionals from carriers, shippers, logistics service providers and technology verticals. To learn more about SMC³ supply chain conferences, visit http://www.smc3.com/supply-chain-education.htm.