Global Supply Chain Issues Impacting The Trucking Industry
Global Supply Chain Issues Impacting The Trucking Industry. Shortages have plagued the economy since the early days of COVID-19 when stores were emptied of lockdown essentials like toilet paper, personal protective equipment, hand sanitizer and cleaning supplies. It’s been more than a year since the pandemic’s abrupt arrival and we’ve traded in shortages in hand sanitizer for simultaneous global supply chain problems and growing demand in the wake of a rebounding economy. Let’s examine three key supply chain issues impacting the trucking industry:
1. Semiconductor Shortages
The computer chip and semiconductor shortages that started in the automotive industry have trickled down to commercial truck manufacturing and could last well into August as many OEMs are only able to partially assemble trucks. The trucking industry has struggled to source chips as semiconductor manufacturers allocated much of their stock to makers of consumer electronics who, not surprisingly, saw a massive influx in demand for mobile phones, tablets, laptops and computers.
Class 8 truck production has slowed down significantly due to constricted semiconductor supply and shortages in wood flooring has slowed down trailer production as well. And, let’s not forget that there are other industries vying for the same materials in these times of shortages.
The economy is clearly bouncing back from the pandemic, which is fantastic news for truckers and fleets — except OEM’s can’t build equipment fast enough to meet this demand.
2. Cyberattacks on the Supply Chain
Our global supply chain is home to massive amounts of information that flow together seamlessly to allow a shipment of, say, aircraft materials from France to travel to Washington via containers and trucks. However, this digital system also presents opportunities for hackers to stage ransomware attacks.
Ransomware groups aim to disrupt an organization’s operations by encrypting and stealing critical data. These groups then demand massive sums of money that can run into the tens of millions in exchange for restoring the stolen data and promising not to leak it. Even if you’re able to avoid operational disruptions, data theft is still a very real scenario. Leading to sensitive information like employee and customer records being exposed. In December 2020, trucking and logistics giant Forward Air Corporation publicly announced a ransomware attack. This impacted their customers and also cost them $7.5M in Q4. The ripple effect of this attack also included ruined shipping schedules. Trucks simply sitting idle waiting for cargo to be released to them for delivery.
Attacks by these types of groups are particularly brutal to the trucking industry. Which is already reeling from manufacturing shortages amid the growing demand of a recovering COVID-19 economy. Add in bad weather, container congestion, and the blockage of the Suez Canal and you have the perfect storm for supply chain challenges in trucking.
3. Suez Canal Blockage
Again, while we should be celebrating the country’s economic recovery from the pandemic, we are instead dealing with global supply chain issues. Compounded by the Suez Canal backups. Analysts believe that bottlenecks will continue to persist at West Coast ports like Los Angeles and Long Beach. Already being hit with longer wait times even before Evergreen Line Corp.’s “Ever Given” ship ran into a sandbank on March 23.
Additionally to cargo routes being impacted, there is also a container shortage. With now-empty containers having no way of getting back to their port of origin for use again.
Grocery stores, medical equipment suppliers, and furniture and home improvement stores are among the hardest hit industries. With many failing to meet Q1 sales targets simply because they couldn’t get their goods to market on time. With so much cargo trapped on vessels and unable to move through the Suez Canal, trucks and fleets are also in a bind.
Supply chains that were already groaning under the stress of the country’s revived retail and manufacturing industries. Now, they must bear the additional weight of the Suez Canal backup. The shipping container and semiconductor shortage, and the real threat of cyberattacks. Shipments are delayed and fleets are sitting idle. Even though current demand is more than enough to keep trucks rolling consistently. The trucking industry is essentially stuck in an odd pattern of “hurry up and wait.”
What do you think are the most challenging supply chain issues the trucking industry is facing right now? Tell us in the comments below!
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