The Trucker Shortage & Importance of Managing On-Time Delivery Execution
According to industry experts, there is a significant shortage of truck drivers in America right now that is impacting the economy in a big way. In recent reports, there are more than 60,000 openings, and that number is expected to double in the coming years.
Companies in the trucking industry are attempting to address this issue by doing things such as expanding their hiring criteria in hopes of filling those positions. They are begging trucking schools for candidates, even those with no experience, increasing their pay and offering hefty sign-on bonuses, trying to entice more people to change professions. They are even looking into different industries for candidates who would once have been ineligible.
Still, the nature of the profession deters most from being swayed. Unwilling to leave their families for months on end or risk their lives and their health for more money, the majority of the workforce is seeking work closer to home in different fields.
Why the Trucker Shortage Matters
Trucks are still the most economical way to transport goods and therefore the most common. Almost everything sold in the U.S. is in a truck at some point. They are a much-needed factor in getting items from one place to another. Therefore, this shortage affects almost every industry in some way.
The shortage will cause delivery delays to grow increasingly more common every day because there are fewer truckers to deliver the goods. This will also further increase shipping costs. Companies are increasing their prices to compensate for higher transportation costs. The cost of the trucker shortage trickles all the way from the manufacturer down to the consumer.
How This Issue Relates to the Importance of On-Time Delivery Execution Management
A large part of managing indirect spend is ensuring that the On-Time Delivery execution plan is created at the beginning of the procurement process. This ensures the right goods are scheduled at the right time so that they are delivered to the right location exactly when they are needed. If On-Time Delivery is not achieved, and any part of the needed GNFR (goods not for resale) is delayed, project deadlines will be missed and budgets destroyed.
Additional delays as a result of the trucker shortage are becoming more common. Initial orders delayed by the carrier labor shortage can have a significant impact on the critical path, which can lead to project delays and missed deadlines. The trucker shortage can result in project deadlines getting pushed even further back, which then leads to lost revenue from facilities not being able to open at the planned time.
Further, if add-on orders become necessary, they often have to be shipped LTL. LTL orders can already be quite costly, and with increasing shipping rates, add-on order shipments will only increase in price. The optimization of all shipments is of increasing importance; companies will want to make sure they’re fitting as much as possible in each full truckload being shipped.
How to Manage On-Time Delivery Execution in an Efficient Manner
For all of these reasons, the trucker shortage poses quite a challenge for companies attempting to manage their On-Time Delivery execution. To combat this problem, it is important to put systems in place to effectively manage every part of the procurement process. There are some strategies that will help companies improve their efforts in each area, but they must be implemented fully and consistently in order to make a difference.
An accurate On-Time Delivery execution plan becomes increasingly more important with higher shipping costs. To fight rising costs, there must be a process in place for overseeing GNFR carrier lead times from the beginning. The importance of order accuracy increases.
The suppliers also have to ensure that everything is continuing to ship FTL according to the purchase orders. Managing which suppliers are struggling therefore gains importance. Companies must have a way to scorecard their suppliers to determine which suppliers are performing and which may need replacing.
Every company must have a real-time On-Time Delivery visibility system. Every step of the process needs to be transparent from order placement to final shipping so that problems can be addressed quickly.
Though enterprises are not able to change the labor shortage currently experienced in the trucking industry, they can manage their On-Time Delivery execution plan in order to avoid losing additional resources. They can ensure that they have the proper systems in place to track their orders and effectively address issues. Although the trucker shortage poses barriers to getting products shipped as quickly or completely as they once were, planning for this ahead of time will prevent unwelcome surprises.
Lumatrak provides a full range of real-time On-Time Delivery visibility tools to help better manage supplier and delivery performance from order to the final mile of your indirect goods supply chain. Provided in the cloud through its Software-as-a-Service (SaaS) offering and already connected to vast numbers of manufacturers and contractors, Lumatrak’s solution can be quickly implemented to complement and enhance any ERP, Strategic Sourcing and Procure-to-Pay systems.
To learn more about how a better GNFR-delivery management solution could save your company both time and money, contact the team at Lumatrak today.