We have some good news and some not so good news.
On the good news front, there are a ton of issues that are creating uncertainty affecting freight and supply chain areas. Some shippers are taking advantage of these events and uncertainty by having a plan and strategy for working with their carriers, suppliers and customers to realize significant savings.
On the not so good news front, other shippers - shippers who likely do not want any written strategic supply chain or a transportation spend management plan - are missing the chance to take advantage of significant savings opportunities.
Some of you may be asking: “How can savings opportunities exist with all the ‘stuff’ going on?” For example, recently we’ve been seeing transportation and logistics issues like we’ve never seen before. Last week shippers were watching with trepidation as the contract negotiations stretched far past their deadline first with the railroads and then with the ILWU at the West Coast ports. While the railroads seem to have come to an agreement for their contract that expired in 2019, and the new contract which is effective retroactively to 2020 will cover the next 5 years, lots of shippers were scrambling to come up with options because they had no written plans for addressing contingencies like a rail strike. Even with no strike, it could take weeks for the railroad service levels to recover.
Looking forward, at the West Coast ports, there are still a lot of question marks about the negotiations between the ILWU and PMA. Thankfully, Peter Tirschwell from the Journal of Commerce recently gave us a better understanding of what to expect in the ocean sector from his decades of experience in our recent interview.
And in the parcel sector, the negotiations between UPS and their union for the contract that expires July 31, 2023 and covers 340,000 teamsters is already making headlines. We’ll be watching closely and keep you posted.
Having said all that, there are in fact savings out there in the ocean and truckload markets. But realizing those savings will be much easier for shippers who have a defined plan and strategy that encompasses their carriers, suppliers and customers.
If you are wondering, "How or where do we get started?" or if you could use help finding savings and solutions for any of the logistics issues you’re dealing with, we encourage you to get in touch.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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