As another surge of loaded inbound containers are on the way, capacity is still tight.
Stimulus payments are continuing to stimulate consumer spending, all the while inventories still need to be restocked. The combination appears likely to keep the upside of the freight cycle on track even as the year-over-year comparisons become more formidable in the back half of the year.
“Despite the continuing pandemic, most consumers are in good financial health and aren’t hesitating to spend,” said Jonathan Gold, VP for supply chains and customs policy at the NRF, in a statement announcing the improved outlook. “More spending translates into more merchandise arriving at our ports as retailers continue to meet increasing demand. The cargo surge that began last fall doesn’t show any sign of stopping. Unfortunately, disruption and congestion issues are also continuing.”
Some economists have said that a broader economic reopening would favor spending on events and services, drawing down amounts spent on hard goods, thus negatively impacting freight demand. Conversely, there is a growing group of analysts and economists that believe the benefits from a full reopening will boost employment and spending to a level that would overcome any transition in spending to favor services. There are also some that believe the heavy flow of stimulus dollars has built up the economy to a level where the consumer is strong enough to spend on both goods and services.
“Consumers are demonstrating that when they feel safe, they are both willing and able to spend and are driving the economy forward. The CDC’s updated guidance for fully vaccinated individuals will help further open the economy and get more people back to work,” said Matthew Shay, NRF president and CEO.
Another factor that plays into the current high-demand freight environment is the fact that drivers are still in short supply. This could be due to the fact that other income streams such as the stimulus packages and enhanced unemployment benefits are available and comparable labor markets like construction and warehousing have stayed strong. Increased compliance requirements with the Drug & Alcohol Clearinghouse have also limited the driver pool.
“We do not expect a large influx of supply as we continue to see production lines delayed, limited driver capacity, which has been further exacerbated by additional stimulus payments, and the continued closures of driving schools, which we believe, coupled with the strong demand environment, will keep rates elevated and propel the trucking cycle for quarters to come,” Shanker added.
Advances in technology are transforming traditional freight matching processes.
Load board operators, logistics companies, and technology vendors are increasingly using improved data analytics, artificial intelligence, and business-process automation to increasing efficiency in connecting loads with trucks to move them.
Although the continually improving technology is enhancing freight matching capabilities, the core reason for implementing all the new tech boils down to a simple premise… “I think it starts with the customer and really understanding their problems,” said Nadya Duke Boone, vice president of product at DAT Freight & Analytics.
“When they’re looking at that load, they actually have lots of different things in their heads that they’re trying to juggle. What we’re doing is bringing all that together in one streamlined way. I think that’s where the power of automation can really help if you do it right.” Boone added that one approach to solving customer problems is to help carriers and shippers filter out information they don’t need while automating manual processes.
Brett Webb, chief product officer at Truckstop.com noted that figuring out what is working and what isn’t is how the streamlining process starts. Truckstop.com, she said, has worked directly with its customers and invested heavily in its products and technology teams to do just that. “How do we help them be more effective and efficient and how do we get the work-flows correct to provide them answers at the right time so they can make quick decisions?” Webb said.
Because the modern freight-matching process is fundamentally based on technology, technological advancements, like such as automation, machine learning, and AI, are key to the industry becoming more streamlined and effective.