It doesn't take long from the news headline "Oil Prices Top $50 Per Barrel" until you're the latest contestant in your company's version of a survivor reality show. Before your CEO's frenzied shout of "Get me the transportation manager!" has stopped reverberating in the hallway, you're headed upstairs wondering what you're going to say.
As you study the bulging veins in your boss' forehead, you think, "Why is it logistics issues don't hit the mainstream until they've reached crisis proportions?" I'm sure you have a personal list of those moments, whether it's the price of oil, the West Coast port closure or undercharges.
Another problem with logistics issues is they are never simple.
In the past, carriers overbuilt capacity when they could, which limited their ability to get their full rate increase, thereby squeezing their margins. A variety of factors started driving operating costs up as the economy took a dive. The resulting moratorium on new tractors and trailers led to reductions in manufacturing capacity.
With continued excess capacity in the market, those drivers who were still on the road saw their pay wasn't keeping pace with average industrial wage increases.
They started to leave the field for other jobs that paid better and got them home at night.
As we see the economic turnaround starting, the transportation industry is less agile and we see a huge lag in its response to demand.
Tractor and trailer manufacturers sell out capacity for months in advance as they restart plants and production lines to meet demand created by increased freight volumes, as well as clean air regulations mandating lower emission engines.
Port congestion, which is partly the result of increased offshore sourcing, hits the wall due to physical constraints, labor and the driver/ capacity shortage evolving on the land side. Increasing use of rail/intermodal chokes those networks. The list goes on and on, and as you stare at the angry faces in the boardroom, you realize nobody wants to hear excuses.
Where can you turn for help? You needed someone to identify and integrate these issues two years ago when you and other companies could identify an action plan that would solve these problems before they got out of hand, or at least influence early action. That's when you realize how fragmented and siloed the logistics field remains.
Education, advocacy, intervention — all of the response mechanisms are mired in structures suited to a transportation industry that existed more than two decades ago. The issues are no longer limited to trucking or rail or ocean or air — everything is integrated, and everything is global. It's time to demand that your trade and professional associations look like the profession and actively satisfy your needs.
The logistics profession has issued its challenge to the Council of Supply Chain Management Professionals, National Industrial Transportation League, NASSTRAC, American Society of Transportation and Logistics and anyone else who will listen. Logistics professionals need organizations that directly address the issues that are relevant to you in logistics today and will help prepare you for tomorrow's challenges. It's time for the trade groups to respond — loudly and clearly.
Perry A. Trunick