The logistics industry is used to throwing muscle at problems until they subside. Drivers are already committed to a dispatch request and can’t pick up a shipment? Offer them more money than the competition. Have a massive number of shipments going out in a short period of time, causing warehouse congestion? Pay more people to come in for overtime. Throwing money and manpower at problems does solve them, but it also creates new issues. It becomes a game of whack-a-mole—the moment you solve one issue with brute force, another two issues pop up.
Nowhere in logistics is this more evident than with the driver shortage. The American Trucking Associations estimates that the industry will need to hire around 898,000 new drivers over the next decade to keep up with current demand trends. The problem is, there aren’t enough people seeking these jobs. What if the driver shortage problem could be solved, or at least mitigated, by something else? Afterall, the main issue facing the modern supply chain isn’t a lack of manpower…
The Real Problem is Inefficiency
Inefficiency caused by legacy technology. For example, EDI sends out a dispatch request, and multiple carriers respond and send drivers. These drivers all show up because the EDI hasn’t updated its status to reflect that the dispatch has been accepted, meaning there’s no need to send additional drivers to pick up the load.
Legacy technology forces the supply chain to operate using stale, inaccurate data. Pickup and delivery times are often out of date, delays caused by anything from weather to mechanical failure aren’t factored in, and massive gaps in visibility make it difficult to plan ahead. The result is that carriers need to employ more drivers than should be necessary just to keep up.
The modern supply chain is also simply more demanding. eCommerce is booming, and retailers are struggling to keep up with the customer experience provided by companies like Amazon. That means a dramatic increase in shipments, tighter delivery windows with harsher penalties, a heavier focus on final-mile, and a more complex supply chain in general.
One way to deal with these problems is to throw money and manpower at them, but that’s expensive and inefficient—and if there’s a driver shortage, it’s not always possible. The better way to attack this issue is by leveraging modern automation and digitization technologies to create efficiencies across your supply chain.
Visibility, Automation, and Digitization are the Real Solution
The logistics industry’s recent push towards technology is mostly based on creating new efficiencies across the board. Digitization allows for the transfer of real-time information between supply chain partners. That means carriers are aware the moment shippers need their capacity, and they can be updated whenever something unexpected happens in the supply chain. Better exception management means that you ultimately need fewer drivers, as you’re able to plan further in advance.
Digitization allows for better tracking capabilities, which means we can eliminate gaps in supply chain visibility. With better visibility, carriers know where their drivers are at all time, and they have more advanced notice of their supply chain partners’ needs. All of these planning tools allow for carriers to better allocate their drivers, and plan a more efficient schedule. The end result is that they don’t need to keep as many drivers on staff.
The driver shortage is a major concern across the industry right now, but leveraging the modern technology that is already catching on, we can mitigate the effects. Once all is said and done, we’ll end up with a more efficient supply chain.