Knowing what shipping drayage means and its impact on the supply chain is key to maintaining a competitive advantage. Shippers across multiple industries and niche markets are dealing with the still record highs for container prices and freight rates. While this is a dilemma in and of itself, it is an even more significant issue considering current drayage supply chain capacity planning protocols.
According to Drewry Supply Chain Advisors, “The composite index increased marginally by 0.2% this week, and, remains 79% higher than a year ago. The average composite index of the WCI, assessed by Drewry for year-to-date [on February 17, 2022], is $9,455 per 40ft container, which is $6,444 higher than the five-year average of $3,011 per 40ft container.” These record-high rates and shipping prices will inevitably trickle down into higher shipping drayage and driver availability costs. There is a growing demand for strategic value in all aspects of the network to overcome supply chain hurdles. All this drives home the critical question shippers need to know the answer to — where is capacity heading within these networks & in particular in drayage shipping.
What Is Capacity in the Supply Chain and Why Should Shippers Care?
Drayage capacity within the constructs of the modern supply chain refers to the maximum level of output that can be sustained to provide transportation and shipping drayage services. Planning for capacity in the supply chain requires management to acknowledge limitations and work to compensate for the expected limited access and constraints. Shippers face more and more instances of delayed shipping due to issues with supply chain capacity management.
Improving capacity involves looking at past trends to better prepare for capacity crunches and obstacles. Tighter capacity means higher rates, stricter lead times, increased performance scrutiny, and more volatility. Answering the question of what is capacity in the supply chain network relies heavily on shippers keeping up with the latest trends and market ideology concerning issues such as supply chain sustainability and driver pay rates.
The Driver Shortage Will Keep Supply Chain Capacity Tight
Understanding what is capacity in supply chain logistical planning and preparation is vital for proper management of drivers and third-party partners. At the heart of the bulk of drayage transport difficulties is the ongoing driver shortage that plagues the industry far and wide. As highlighted by Transport Topics, “American Trucking Associations estimates that the industry needs 80,000 more drivers. That could be the same or worse next year with those estimates expected to surpass 160,000 by 2030.”
Capacity issues remain crucial for shippers because of continuing high demand, a lack of new drivers, debates over driver pay rates and methods, and an unprecedented number of drivers retiring from the industry. Overcoming these issues requires shippers and carriers to be more collaborative and to have strong short-term and long-term relationships in place. This is a vital aspect of supply chain capacity planning and supply chain management.
Shipping Drayage in 2022 Will Require Vigilance and Clear Supply Chain Capacity Planning Processes
What is capacity in supply chain networks is a question that continues to dominate the industry. Managing drayage services and maintaining reasonable rates and collaborative partnerships requires vigilance and precise planning for supply chain capacity. As drayage services remain in high demand, shippers will need data to help them stay on track, maintain accountability through analytics to meet goals, and automation with technology to streamline processes and improve efficiency. This amounts to better drayage rates and freight management through technology.
Today, Port City Logistics knows that shippers are looking for innovative and tech-based ways to maximize visibility and promote end-to-end transparency. That is why they have implemented innovative tools and platform services to help shippers achieve the goal of better capacity management within the supply chain. Port City Logistics now has the expertise for better drayage in the southeast US and can help shippers connect with drivers and uncover unique cost reduction opportunities.
Prioritize Efficiency and Cost-Savings With Port City Logistics for Shipping Drayage in 2022
High drayage costs and freight rates continue to be an issue across the supply chain network. Answering the question of what is capacity in supply chain logistics and management is easier when you have a dedicated team of industry experts on your team. Shippers in virtually all markets and industries and many carriers and freight drivers are dealing with unprecedented levels of disruption within the supply chain. Improving current drayage supply chain capacity planning processes is easier with the efficient and cost-saving services available. Contact Port City Logistics today to get started and find out how to define what is capacity in supply chain operations for your shipping drayage and short-term storage needs now.