Addressing the Transportation Capacity Crunch
The supply chain crisis has become dinner table conversation in every home in America. At the start of the COVID-19 pandemic, consumers began to see cracks from a strained supply chain. Further pressures from the omicron variant and now the crisis in Ukraine have pushed the supply chain to its limit.
Protecting the accessibility, availability and affordability of essential products is part of the CPG industry’s mission — but it is a mission that is being met with new and increasing headwinds at every turn. Three of the biggest contributing factors to our supply chain challenges are:
- The record-setting cost to make and ship goods. Commodity costs continue to increase, creating a ripple effect across the supply chain. Diesel fuel has increased 58% over the last year while truck transportation of freight rose 19%. The demand is there, however there are still gaps to fill.
- Growing workforce needs. The CPG industry has 112,000 jobs open right now. Industries in our supply chains are also in need of new workers. Trucking, specifically, needs 80,000 new drivers to meet demand — and counting. We need solutions to add to our ranks and solve for gaps.
- Limited trucking capacity. Nearly 35% of all trucks you see on the road today are completely empty. Drivers spend around six hours behind the wheel every day all while the federal government allows them to drive for 11 hours. Talk about lost potential.
With mounting consequences, action must be taken by government and by the private sector. For the latter, industry leaders must come together to identify and solve for weak points in the supply chain that are within their control.
Consumers Brands has begun that process. Partnering with Coyote Logistics, Consumer Brands created the Transportation Capacity Task Force. The first of its kind, the task force unites CPG companies, retailers and freight carriers and uses innovative technology to optimize transportation resources, promote efficiencies and better utilize trucking capacity.
In the coming months, the task force will create an industry action playbook of best approaches to fixing the supply chain. This playbook will feature multiple chapters and topics including:
- Simulation testing: Coyote will lead a network and route optimization initiative, running simulations of hypothetical environments, testing anything related to load timings and their subsequent impact on carrier capacity and utilization.
- Asset utilization: Accenture will lead a workstream around asset utilization, focusing on adjusted order shaping algorithms, with the intent of driving more inventory in stores, releasing capacity back into the system and maximizing labor utilization.
- Data sharing: The playbook will offer insights on reconceptualizing transportation through data sharing from trucks to create a dashboard that becomes the foundation of a national freight data portal.
Consumer Brands is actively recruiting partners to join this effort. There are 31 CPG companies and 7 retailers on the task force to date and they have hit the ground running. While the private sector cannot solve the supply chain crisis alone, we are confident this initiative will bring partners across industries together and align them on practical solutions to ease supply chain pressure.
Published on April 12, 2022
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