Year in Review: Top Logistics and Supply Chain Stories of 2017
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Estimated reading time: 2 minutes
2017 was another transformative year for freight transportation, logistics, and the food supply chain. Here’s a look back at six things that shaped our year in a big way.
ELD Readiness. The controversial electronic logging device (ELD) mandate has been one of the biggest compliance issues we’ve seen in the trucking industry. The rule requires carriers to install ELDs in their vehicles as a way to enforce accurate hours of service (HOS) recording. From selecting the right device to minimizing dwell time, much of 2017 was spent preparing for the changes ahead. Though the mandate went into effect this week, the overall impact on the industry remains to be seen—especially since many states won’t be issuing tickets or citations until April 1. As enforcement intensifies over the coming months, we will continue to hear about ELD impacts.
Rising Rates. The supply chain industry experienced higher freight volumes, tighter capacity, and steeper carrier rates than in 2016. In fact, the national load-to-truck ratio for dry shipments reached a seven-year high in September, up 120 percent from last year. Hurricanes Harvey and Irma contributed to this shift, but other factors were in play as well. Increased port volumes back in July led to more truckload demand in September, the economy continued to show signs of improvement in Q3, and growers experienced a strong harvest season. Because the freight market is in the midst of an inflationary period, shippers must plan carefully to avoid disruption as they head into the 2018 RFP season.
Amazon vs. Walmart. Both Amazon and Walmart made big, strategic moves in 2017 to meet rising consumer demand for online shopping, product variety, and fast shipping; and the rivalry between the two retail giants intensified in 2017. Walmart increased its online presence through the acquisitions of Jet.com, Bonobos, Moosejaw, and Modcloth. In turn, Amazon announced its acquisition of Whole Foods in July—a move that gave them a major boost within the grocery industry, as well as expanded distribution capabilities.
Retail Delivery Pressures. Speaking of Walmart, the retailer took aggressive measures to streamline their supply chain in 2017 with a new “On-Time, In-Full” (OTIF) initiative. OTIF takes Walmart’s Must-Arrive-By-Date (MABD) requirements to the next level by not only compressing delivery windows, but also enforcing order accuracy. Under OTIF, any shipments deemed late, early, or improperly packed may trigger a hefty fine. Other retailers, like Target and Kroger, have implemented similar initiatives as a way to keep customers satisfied and better compete with online retailers like Amazon.
FSMA Sanitary Transportation Rule. The Food Safety Modernization Act has been a hot topic among food shippers for several years now, but the Rule on Sanitary Transportation of Human and Animal Food was especially relevant this year. Starting in April, nearly everyone with a role in transporting food was required to be compliant, including shippers, loaders, carriers, brokers, and receivers. For a list of requirements, check out this blog post.
Blockchain Buzz. There has been a lot of buzz around blockchain this year, particularly about how it could bring greater efficiency and transparency to the supply chain. Blockchain is a distributed database that allows users to track and trade virtually anything of value. Originally developed for use with Bitcoin digital currency transactions, blockchain technology allows users from any location to add records to a system, contributing to a shared information trail. While anyone can add a record to the blockchain, no one can change or delete existing information—making it permanent and more reliable. From conducting payment and audits, to tracking inventory and assets, to improving food safety, we’re excited about the potential applications of blockchain in logistics.
It’s hard to believe we’ll be heading into a new year in just a few weeks. How has 2017 impacted your business? Share your perspectives by leaving a comment below.