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Leverage technology and services to reduce supply chain disruptions and high costs caused by the driver shortage and supply chain talent gaps
Everywhere you look, news outlets are discussing new challenges the supply chain faces. One challenge that is increasingly on the minds of executives at companies shipping physical goods is the talent shortage. There simply aren’t enough qualified candidates to provide the excellent logistics service your customers are demanding.
The driver shortage is here to stay, and experienced supply chain professionals are hard to find. Shippers are paying top dollar to execute their logistics and hit minimum service thresholds. This is eating into bottom lines, increasing consumer costs, and risking market share as customers look to your competitors for better reliability. Small issues can easily ripple through the entire supply chain when there is a talent gap at the home office.
Companies can use many strategies to combat the lack of talent on the road and behind the computer. Sometimes, however, the path of least resistance is the best option. Instead of jumping through hoops to attract and train new talent, take a path that will allow your existing teams to focus on their strengths while supplementing their capabilities.
The driver shortage
We’ve been experiencing a driver shortage for many years, especially in times of growth and prosperity. In 2023, the American Trucking Association's Chief Economist, Bob Costello, reported that we were short approximately 60,000 drivers.
Capacity, and therefore the need for drivers, hit peak constraints during the worst of the pandemic. Many drivers chose to leave the profession for health reasons, increased safety regulations, or simply because they reached retirement age. American consumer spending skyrocketed during this period, exacerbating the constraints.
Demand for capacity has relaxed over the last year, but there is still a shortage of qualified drivers. In fact, freight rates are projected to trend upward again as issues like driver shortages, fuel prices, and consumer habits compound.
As seasoned drivers leave the workforce, they aren’t being replaced at the same rate with Millennial and Gen-Z talent. In the past, the military acted as a pipeline for drivers. If a veteran had driven a truck in the army, it was a simple and natural transition into a civilian truck-driving career. The younger generations no longer consider truck driving a viable or attractive career option, despite the fact that salaries for OTR drivers often reach the six figures.
Driver shortage risk management strategies
It’s mostly up to carriers to figure out how to attract net new talent. Unless you plan to manage your own private fleet, each individual shipper should consider creative methods to manage their logistics. You need to manage the symptoms of the driver shortage. Here are a few ideas:
- Become a ‘preferred shipper’ - You want to establish an excellent reputation with your carriers so they want to give you coverage. To get into this club, you need to prove that you’re easy to work with and won’t waste your carrier’s time. Leveraging 3rd Party resources and technology to quote and tender loads eliminates the hassle of calling and emailing and will help ensure loads are covered without error. A dock scheduling tool can reduce idle times at the consignee, as well, helping to get the driver onto their next stop fast. Anything you can do to make your carrier’s life easier will help encourage them to award you better coverage and lanes.
- Get comfortable on the spot market - Sometimes, you have a last-minute load that needs to be covered. Your carriers won’t always be able to cover these loads through a traditionally negotiated rate, their drivers’ HOS are most likely already spoken for. Before you have an emergency, make sure you have a plan to get the best spot quotes so you can save money and meet your OTD agreements.
- Join a vast carrier network - Even though there aren’t enough drivers, there are still 3.5 million individual truck drivers in the USA. Sometimes, you just need to know where to go to find them.
- Optimize your operations - The best method for always having access to enough drivers is simply to need fewer of them! Of course, that seems to run counter to any business’ growth plan. However, optimizing your network, finding backhaul opportunities, consolidating shipments into more accessible modes, and routing more efficiently will help reduce the total number of drivers you need. Leverage your own internal talent or get help from a managed transportation provider to find areas for optimization.
The supply chain talent shortage
The last strategy above epitomizes the challenge of finding, training, and retaining supply chain talent. Supply chain teams must complete many complex processes to optimize a logistics network successfully. However, according to a 2020 survey by the Council of Supply Chain Management Professionals (CSCMP), 64% of supply chain professionals reported a talent shortage in their organizations.
The number of colleges or universities that offer programs that prepare students for careers in supply chain management has dwindled over the last several years. Advancements in technology, including AI, make it harder to upskill the existing workforce and serve to widen the gap between students and entry-level supply chain jobs.
Many companies aren’t fully taking advantage of the technology they’ve purchased because they lack the talent to use it correctly. Often, a supply chain software application is implemented, but the super-users and trainers move on to another role or leave the company with the sought after skill set. Teams can waste what they have without the right person who knows how to use the new tool.
So, should supply chain teams stop investing in technology? Of course not! However, a two-pronged approach to technology and talent can set teams up for success.
Leveraging technology and services to fill supply chain talent gaps
Shippers can employ two main strategies to make their existing teams world-class without much effort. It involves a combination of technology and managed services that will supplement skillsets without long or risky implementations. By choosing both at once, shippers can address the areas of their operation that need improvement without disrupting their teams' regular flow.
- Give existing teams easy-to-use technology - We can all agree that technology has opened up a new world for logistics. Manual processes and slow paper trails have been replaced with automatic data and expedient collaboration portals. It’s especially important to give younger professionals, who were born into the digital age and are used to consumer-grade experiences with software at home, the same first-rate experience with software at work. After only short periods of training, non-technical teams can leverage the main functionalities of a transportation management system like ShipperGuide TMS.
- Quickly insert skilled labor with the help of Managed Transportation Services - Many teams find it challenging to execute complex processes that often involve data from multiple systems, including a TMS, ERP, data lakes, and BI tools. Advanced knowledge of Salesforce, SQL, and reporting languages may be needed. Teams can supplement their team’s capabilities with the help of managed transportation services.
Loadsmart, for example, attracts top talent with experience in a myriad of supply chain functions. When a customer has a unique need, the individual with the specialized knowledge can be tapped to give advice or complete a project. Ongoing efforts like freight rate auditing, route optimization, and load consolidation can also be easily handled by a managed transportation team. This saves the shipper from needing to hire and retain employees with specialized skill sets, saving money and increasing efficiency.
Survive the logistics and supply chain talent shortage with Loadsmart
Shippers can alleviate the pressures of the driver shortage and supply chain talent gap in multiple ways. Whether you’re looking for expert help with managed transportation, technology to supercharge your existing teams, or access to a wide array of carriers and spot rates, Loadsmart has you covered. We’ll work with you to understand the areas of your business that need improvement and leave you confident in your ability to maintain newly established processes.
