Less-than-truckload (LTL) carriers are holding their breath as the stage has been set for a challenging conclusion to 2020. A perfect storm of macro-level factors is expected to rock the final two months of the year, which may impact business continuity for both domestic and internationally focused carriers.
Donna Kintop, senior vice president of client experience in North America at DDC FPO, urges LTL carriers to plan wisely and prepare for anything. For starters, she recommends solidifying a smart workforce strategy for the peak season, which she suggests may last longer this year than previously expected.
SONAR’s U.S. Outbound Tender Reject Index (OTRI.USA) measures market capacity and moves closely with spot rates to provide a good representation of the state of the market. Heading into peak season, 2020 volumes (highlighted in blue) are already well above levels recorded at this time in 2018 (orange) or 2019 (green). With expectations of soaring e-commerce sales among other contributing factors, FreightWaves expects volumes to remain lofty heading into the new year.
“This industry has done a phenomenal job of being very adaptable to the changing situations and ensuring that service is always delivered to customers,” Kintop said.
Kintop advises carriers to continue data crunching to manage rising volumes and remember that reviewing forecasting data is key. She said carriers also need to rely on their operational partners to make sure that they put plans in place to manage volatile events should they occur. This includes volume surges, disruptions that may follow the presidential election and a possible resurgence of COVID-19 cases.
“For example, many carriers do the majority of their billing during the evening hours between 5 p.m. to midnight. Those are difficult hours to staff with existing team members,” Kintop said. For DDC’s partners, Kintop explained, the company expands and contracts staff quickly to cover the prime hours without adding a great deal of overtime to the carriers’ payroll.
Reverberations may also be felt following Dec. 31, as Brexit will mark the start of a new relationship between the United Kingdom and the European Union, one that is predicted to severely disrupt the movement of goods throughout the European continent.
Kintop suggests that Brexit will have an impact on global suppliers as 400 million additional customs documents are expected to be processed next year due to the U.K.’s withdrawal from the EU. She added that the cost of processing these documents is estimated to be $17 billion.
“There are a lot of unknowns at this time, but I think that it will have some level of impact here in the U.S.,” Kintop said. “For 2019, the U.S. was the U.K.’s No. 1 trading partner in terms of export sales (apart from the EU combined) as well as the country’s No. 2 partner in terms of imports.”
Operational optimization must be a top objective as carriers do their best to prepare for market uncertainties. Kintop urges logistics providers to review forecasting data with a trusted partner like DDC that can additionally manage staffing levels in preparation for peak volume season.
