Throughout history, people in the field of logistics have always faced challenges that they had to overcome in order to stay successful. In modern times, there is a plethora of supply chain efficiency challenges that must be dealt with so that organizations can maintain a steady flow of revenue that supports the economy as a whole. In 2014, the transportation industry is expected to face a few key supply chain efficiency challenges that must be navigated in order for commerce to be conducted effectively.
An Increase In Regulations
Since the terrorist attacks on September 11, 2001, supply chain professionals have been faced with several kinds of supply chain efficiency challenges that relate to tightened security and workplace regulations that often slow down the supply chain process. For example, new Hours of Service guidelines that went into effect last July limit the amount of driving to 11 hours in a single day and 70 hours in a single week for truck drivers. To deal with these new regulations, transportation companies will have to plan their routes more effectively and find ways they can consolidate shipments to avoid cost increases.
A Sluggish Economy
The Bureau of Transportation Statistics reports that in 2002, transportation-related services and goods accounted for more than $1 trillion of the GDP of the United States. After the Great Recession of 2007 – 2009, economic growth has been slow to recover in the United States: the GDP growth rate has not been over 5% since December 31, 2006. To combat this obstacle, transportation companies will have to target new markets and explore options for opening new revenue streams and expanding existing ones.
Heightened Customer Demands
More than ever before, consumers demand fast service and prompt delivery of their goods. With Amazon already requesting permission from the FAA to begin testing airborne drones that can deliver shipments to customers in less than half an hour, logistics organizations are feeling the demand for quick delivery to both end customers and retailers. To overcome these kinds of supply chain efficiency challenges, companies will need to develop their shipping technologies and make sure they are maximizing the transportation methods of their current equipment.
These three supply chain efficiency challenges will provide plenty of work for professionals in logistics, whether they are working within a large company or a dedicated transportation firm. It is important that supply chain companies and the individuals that operate them take steps to remain agile in the face of this year’s top supply chain obstacles.
About Michael Wilson
Michael Wilson is AFFLINK'S Vice President of Marketing and Communications. He has been with the organization since 2005 and provides strategic leadership for the entire supply chain team. In his free time, Michael enjoys working with the Wounded Warrior Project, fishing, and improving his cooking skills.