Global trade has seen unprecedented levels of disruption, from raising costs to the capacity crisis. While there is not one challenge in freight that influenced the 2021 situation in supply chain and logistics, the pandemic and Brexit’s new rules have compounded the pre-existing issues of driver shortage and capacity crisis, which contributed to the increase in logistics costs. In this article, we round up the aspects that made freight logistics more challenging in 2021.
Challenge factors in freight and logistics in 2021
1. Raising logistics costs
Throughout 2021, costs have fluctuated, and prices are currently increasing. The sharp growth in e-commerce has pushed logistics providers to expand services and offer new solutions. Developing resilience with a focus on innovation and strategic relationships can be vital to continue navigating challenging situations.
2 . High retail demand
If you work in retail, October is the start of the peak season. While expecting strong sales for an upcoming holiday season would make retailers glad, in 2021, the mood might be gloomier. As the pandemic forced many factories to close or slow down their production, the supply chain still faces difficulty restarting. You probably felt that the past two years had more than their fair share of “black swan” events, like the Suez Canal blockage and labour shortages compounded by the cost increase in transportation. These delays and disruptions could leave empty shelves, so it can be crucial to supply products on time. In that sense, the lack of inventory could lead consumers to spend less. The sharp increase in shipping prices has also forced manufacturers to make decisions about the products they transport, limiting the consumers’ options.
3. Driver shortage
In the past weeks, we’ve seen several reports on the fuel shortage in the UK. While other countries have been affected by the driver shortage, the UK has seen a more significant impact. As Brexit imposed new immigration rules and tax conditions, many European drivers decided the work elsewhere or return to their home country. The issue has intensified since the pandemic, which restricted travel and forced many economic sectors to shut down. According to the BBC, the pandemic also created a large backlog in HGV driver tests, making it difficult for new drivers to get started. As the crisis has worsened, the UK government is introducing temporary visas for fuel tankers and food lorry drivers to work in the country until Christmas to lessen the impacts of the shortage.
4. Capacity crisis
As the demand for transport increased, it created an imbalance in the market. Since 2017, this imbalance, which specialists have called a capacity crisis. Back then, the likely culprits were the driver shortage and increased regulations. Now the COVID-19 and Brexit have been considered the main aggravating factors. It’s been difficult for trucking companies to scale their operations due to driver shortage and increased equipment manufacturing demands. As we’ve seen throughout the year, building resilient supply chains can help you manage your operations in critical times.
Make a connection!
To navigate these challenging times, it can be essential to secure your logistics capabilities by building and nurturing long-term relationships with trusted providers. Emons Cargo 2WIN is a family-owned company that values partnerships with clients. 2WIN strives to increase efficiency and capacity to help you manage the capacity crisis. Our double-deck trailers can move up to 54 euro pallets or 40 industrial pallets – that’s 63% more volume per trip. Get in touch with us – the first test load is free!