Keeping supply on pace with demand is a never-ending game for logistics providers. The game, however, is becoming increasingly difficult.
Supply chains are facing a major problem: Demand is surging, but supply is shrinking. The squeeze on resources has left many doing more with less, making trailer management an even harder task — one that calls for greater trailer visibility, but most importantly, expertise.
“The best in the game are running at about 80% [trailer] utilization,” Francis Roy, vice president of vHub, told FreightWaves previously, noting a significant portion of the North American trailer fleet sits unused at any given time. “At least 20% of their fleet is not being utilized. The reason trailers are not being used is that sometimes [carriers] build their fleet based on peak season.”
Business is booming, thanks largely to the rise of e-commerce, but labor shortages along with ever-present capacity tightness have created an atypical crunch felt by companies small and large.
What’s worse, new trailers are becoming increasingly scarce, and rental and lease options aren’t faring any better. “Historically fleets have reckoned, ‘We’ll just add a trailer or another body,’ but it’s not so easy right now,” said Glenn Williams, Spireon divisional vice president of product management and sales engineering.
Labor shortages have also complicated things; bottlenecks are occurring in warehouses and distribution centers, as forklift operators, customer service representatives and other employees are harder to come by.
A survey by executive search firm Korn Ferry of more than 80 big-box, grocery, drug store and apparel chains last month found that 52% of retailers said they were experiencing “significant challenges” in hiring warehouse employees, according to CNN Business. The report also said 33% of retailers surveyed noted having such challenges hiring employees to staff stores.
Even Walmart and Amazon aren’t immune to such shortages. In fact, the workforce giants are resorting to wage increases, signing bonuses and improved tuition reimbursement packages to ensure their shelves are stocked. In May, Amazon announced that it would be hiring 75,000 across its logistics network, in addition to ramping up pay to an average of $17, $2 above its minimum rate.
Walmart is gearing up for the holiday season rush by offering warehouse workers additional pay, too. Based on their facility’s location and workers’ role and shift, some full-time workers could make up to $200 more per week with the chance to make more with overtime. The incentives, which began last month, will continue through the fiscal year at the majority of its facilities.
In addition, short-staffed operations are finding trouble utilizing trailer telematics data productively. But even an influx of new labor won’t solve these problems entirely. Williams noted that inexperienced workers aren’t likely to gain an understanding of warehouse and trailer data right away, especially at the rate that’s currently needed.
As peak season begins to escalate, trailer fleets nationwide are turning to telematics solutions leader Spireon for Managed Services. Though various technology platforms provide invaluable data, interpretation has proved to be an even greater asset.
Spireon’s Managed Services provides one-on-one guidance with industry experts to optimize trailer utilization and maximize return on investment. The service reduces costs and decreases idle trailers while maximizing fleets’ trailer tracking return on investment, in some cases by as much as 200% per year on average.
“Spireon’s Managed Services is designed to flexibly meet the demands of our customers regardless of trailer count,” Williams said. “We’re a third-party extension of your team that will take your company to the next level as it relates to trailer telematics and return on investment.”
Williams said the Managed Services process begins by bringing the customer and analyst together to outline problems, and then develop a long-term plan to overcome each challenge. After setting goals and objectives, analysts provide weekly updates on a variety of performance metrics, such as idle trailer data, maintenance and yard checks.
Spireon’s dedicated operations analysts also help optimize various trailer management tasks and provide global data comparisons and analysis through quarterly benchmark reports.
“Throughout a company’s journey, at any point in time, its needs are going to change and business is going to grow; they may acquire another organization or be looking at different sorts of business [to enter],” Williams said. “Our dedicated operations analyst is the person that says, ‘Here’s how we’re going to work internally to make sure we grow your business.’”
“We want to make sure your company focuses on its drivers, tractors and customers; let us focus on your return on investment,” Williams said.
Click for more FreightWaves content by Jack Glenn.
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