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Distribution & Fulfillment
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Transportation
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Material Handling Equipment

H2 2021 Transportation Outlook: Where We Are and Where We’re Going

Scarce capacity, rising rate volatility, changing customer requirements, and the need for increased visibility due to supply chain disruptions were all challenges that dominated transportation in 2020. So, how did these challenges play out in the first half of 2021? Where do they stand now? And what can shippers expect in the back-half of the year? We offer our forward-looking insights into the transportation landscape for 2021 and beyond, plus best practices to help shippers manage disruptions and keep their wheels turning.

 

What’s the Current State of Transportation?

Now halfway through 2021, the transportation market is seeing much of the same from the last half of 2020 and feeling the impacts of 12+ months of disruptions:

  • Q2 2020: The bottom fell out as the COVID-19 pandemic brought transportation and the supply chain as a whole to a screeching halt.

  • Q3 2020: Ecommerce largely spurred a huge snap back in the economy, which experienced huge growth despite the ongoing disruptions and restrictions.

  • Q4 2020: Strong demand for capacity continued to outpace supply, causing widespread rate volatility.

Now, as businesses reopen and the economy picks up, we’re seeing continued pressure on capacity. This pressure is being amplified by the ongoing labor shortage as drivers aren’t returning to the market. And similar to 2020, the spot market is seeing rates driven even higher across verticals, thus creating intense competition to secure capacity.

 

A New Year Brings New Risks

With medium and small-sized shippers relying heavily on the spot market to secure capacity, we’re seeing increased risks take shape in the form of fraud. Finding carriers in the spot market can be like playing Russian roulette — it’s difficult to discern if the unknown carriers are legitimate. Additionally, shippers’ heightened urgency to secure capacity for their loads is causing oversights on typical due diligence for vetting carriers. The result is an increase in scams where brokers represent themselves as carriers and an increase in double-brokering.

Kenco has a dedicated team of experts and tools that vet carriers using our robust network of long-standing relationships. Our team’s ability to focus specifically on carrier qualification ensures only legitimate carriers enter the conversation.

 

2H 2021: What to Expect

Entering the second half of the year with over a year’s worth of supply chain disruptions expected to continue rippling through networks, any inefficiencies typically masked in a normal environment will be exposed in the current state of the transportation landscape. Shippers without the technology toolkit to secure capacity and address disruptions with the proper carrier network will continue to struggle. The cost of doing nothing is higher than ever.

This is why visibility is so important in today’s supply chain – if a disruption does occur, like a rare ice storm – having visibility through real-time data and advanced analytics can help you not only efficiently react, but mitigate and even prevent potential losses. Kenco has the data and accompanying predictive analytics to identify issues before they become crises.

 

Positioning for Success

Recovering from challenging times calls for reimagined approaches and strategies. The first step to recovery and preparedness begins with an assessment of where your and your competitors’ operations stand. Some questions to consider are:

  • Do I need to implement or enhance my TMS?
  • Do I need increased visibility across my network?
  • Do I need a capacity procurement partner?
  • Could I benefit from a partner organization like a 3PL?

The right 3PL partner like Kenco can help optimize, implement, and/or execute the right transportation strategy to ensure you have adequate capacity at cost-efficient rates to keep you on the road serving your customers. A proven partner like Kenco immediately gives you more breadth – operations teams, market intelligence, advanced platforms, and a broader carrier network – than any single shipper can provide, increasing your options and capabilities to get the job done right and on time.

To learn more about Kenco’s full range of transportation management, freight brokerage, and dedicated contract carriage services to ensure a strong finish to 2021, visit our transportation page.

 

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Topics: Transportation


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Kenco provides integrated logistics solutions that include distribution and fulfillment, comprehensive transportation management, material handling services, real estate management, and information technology—all engineered for Operational Excellence.