LOGISTICS INDUSTRY UPDATE in 3 MINUTES. We give you a quick recap on key transportation news.
April 6, 2022
The impact of inflation on supply chain and logistics…
Inflation has thwarted our sector with equipment price surges, labor cost increases, and fuel prices hikes. Prices continue to rise even more since the increases we saw in 2021. In February, the Consumer Price Index for All Urban Consumers rose another 0.8 percent, seasonally adjusted, and rose 7.9 percent over the last 12 months.
In 3 weeks, from February 21 to March 14 of this year, the average U.S. on-highway retail diesel fuel price increased 29% from $4.06/gal to $5.25/gal.
To understand the inflationary impact on supply chain, A Logistics Management reader survey of 100 freight transportation, supply chain, and logistics stakeholders found that 92% of respondents are affected by the current situation.
Survey participants emphasized things like capacity constraints across multiple modes, rate and price increases, rising fuel prices, supply chain unreliability, surcharges, accessorial increases, raw material price increases, delayed orders, longer lead times, and shipping container imbalances as some of the main areas where supply chain and logistics operations have been affected.
The COVID-19 pandemic has been the first supply chain disruption of this extent. At every stage of the supply chain, the impact of the disruption has been felt in some way or another – from original equipment manufacturers to suppliers to distributors to service providers. “70% of supply chain decision-makers said that COVID-19 is creating the biggest impact on the supply chain currently,” according to Jabil’s Special Report: Supply Chain Resilience in a Post-Pandemic World.
A Department of Transportation assessment of U.S. supply chain disruptions, made public in February, calls for new policies and ideas to ease these disruptions.
The implementation of new policies in expanding truck parking and improving warehouse capabilities could ease some of the supply chain disruptions and allow e-commerce freight to continue to rise to meet demands. Many industry experts also believe that automation and real-time data technology will allow the entire supply chain to run more efficiently and help reduce the risk of cybersecurity threats. In the future, there may even be a need for expanding the ports at which freight is imported to prevent the kinds of bottlenecks that have been causing major supply chain disruptions. There are also suggestions on how to leverage the experience of military veterans to fill civilian logistics jobs and plans to rebuild America’s roads, bridges, and rails.
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