The last couple of years have been a wild ride, haven’t they? Just like everything else, the freight shipping industry has been disrupted in nearly every conceivable way, making it a tough time to be a small or mid-sized business (SMB) shipper.
As we head into 2022, it’s a great time to survey the state of the trucking industry and look at the challenges and opportunities out there for SMB shippers. Get ready to be agile, adaptable and ahead of the game as you navigate everything 2022 has to throw at you. Let’s dive in!
The capacity crunch continues
If you thought the capacity woes of recent years are finally behind us, we’ve got some bad news for you. Freight carriers are continuing to feel the squeeze brought on by increased shipping volumes and ongoing driver and equipment shortages (more on that below).
Navigating the freight capacity crunch isn’t easy, but it’s definitely possible. We recommend building extra cushions into your shipping timelines, considering alternative freight carriers and routes as a backup and keeping your carrier accounts in good standing so you aren’t denied service at critical times. Working with a third-party logistics (3PL) company like Unishippers enables your business to offer stability and consistency to your customers during this challenging year. Unishippers maintains long-standing relationships with top carriers to ensure your freight gets on the road even when capacity is tight.
The driver shortage is worsening
The driver shortage we’ve seen in recent years is still a concern in 2022. With nearly 23% of truck drivers over the age of 55, many are set to retire within the year. Vaccine mandates are also affecting driver availability, putting further strain on capacity. Effective January 15, 2022, Canadian federal law requires all U.S. truck drivers entering Canada to show proof of full COVID-19 vaccination. With the new vaccine mandate, the industry is expected to lose 12,000 to 16,000 (10-15%) cross-border drivers. Similar mandates coming to the U.S. would likely continue this trend with domestic shipments.
Without proper intervention, the driver shortage will continue to exacerbate the capacity crunch. Several regulatory efforts have been posed for 2022 in an attempt to bring new drivers into the industry — some of which include a push to lower the required age for commercial drivers, incentivizing outreach to female drivers and employing military service members and veterans with certified trucking experience. While we’ll have to wait and see how these measures play out throughout the year, you can give yourself the best chance of getting your freight on the road by working with a 3PL like Unishippers who carefully vets their carriers, paying special attention to driver turnover and retention.
E-commerce is exploding
The shift toward online consumer spending that was prompted by the start of the COVID-19 pandemic has continued to snowball — and shows no signs of slowing. This is impacting the entire supply chain process for less-than-truckload (LTL) and truckload freight shipping by driving up volumes, increasing intra-regional truck trips for last-mile deliveries and increasing reverse logistics demands due to the higher return rates of online purchases.
Luckily, proactive SMBs are able to ride the e-commerce wave instead of drowning in it. You can join their ranks by doing a top-to-bottom audit of your entire e-commerce strategy and fulfillment process (Unishippers is happy to help!). Reviewing your strategy can help you uncover weak spots in your supply chain and prepare ahead of time to avoid future disruptions — especially regarding inventory management. As we know, capacity issues in 2021 left shelves empty in stores and warehouses across the country. If your business experienced similar supply chain disruptions last year, it may be time to consider adjusting your inventory management strategy for 2022 — ensuring you have enough product stored to immediately fulfill unanticipated orders.
Costs are climbing
As shipping volumes continue to increase — and as the driver shortage and larger capacity crunch lingers on — carrier costs will increase as well (and are passed on to customers). On top of that, expect fuel costs and resulting surcharges (which increased in 2021) to remain high in the new year. Everything from labor to warehousing to vehicles will continue to get more expensive this year, which can translate into higher freight shipping rates and fees for your business — especially if you primarily utilize LTL services.
With LTL freight shipping being more labor-intensive than full truckload, carriers are dealing with the growing issues of staffing and fulfillment. As a result, not only will base LTL shipping rates increase, but accessorial fees and surcharges (while not new) will be more strictly enforced by carriers.
While it’s not possible to mitigate every aspect of increasing costs, you can help minimize their effects on your business by leveraging the relationships of a 3PL like Unishippers. Our large network of carefully vetted carriers and enormous aggregated customer shipping volume mean we’re able to obtain attractive truckload and LTL shipping rates for our customers. Request a freight shipping quote to see how we can help you save.
Buckle up and partner up
In summary: 2022 is going to be another challenging year filled with uncertainty and upheaval in the freight shipping industry. The good news is that all these challenges bring with them opportunities for SMBs with the right mindset, information and shipping partners. From growing LTL shipping rates to staffing uncertainty, it’s more important than ever to work with a dependable 3PL partner for your business logistics. Reach out to Unishippers today and learn how we can be in your corner through 2022 and beyond!
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