Another Catch-22: What does all this mean for the supply chain manager?

Another Catch-22: What does all this mean for the supply chain manager?

by Cliff Lynch
27. July 2012 16:52

It seems as if, economically speaking, we take one step forward and two steps backward on a regular basis. I attended a conference last week at which many of the speakers were upbeat about the remainder of the year. I hope they are right, although most of the indicators seem to be concerning, at best, for those of us in the supply chain industry.

Polar-Streamlined Bulk Trailer

  • 6.9% general rate increases are in place for most of the LTL carriers, and capacity remains tight. As long as these conditions persist, the pricing balance of power will be with the carriers.
  • Driver turnover is up again and stands at 90% for the larger motor carriers. CSA 2010 and driver hours of service rules will continue to negatively affect driver supply.
  • Finally, both UPS and FedEx are predicting weakening economies. Both firms have lowered their earnings estimates. This is coming from companies that arguably, have the best economists in our industry.

What does all this mean for the supply chain manager? I believe we must behave as if we still are in a recession and continue to exercise caution, watch our costs and collaborate with our supply chain partners. We can weather this storm just as we have others, but it would be a serious mistake to assume we are back to business as before. Those days are past -- I believe forever.


Image by Stephen Petit


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