Apparel Logistics & the Impact of America's Trucking Shortage

fashion-logistics-trucking.jpgFor apparel manufacturers, there's a new challenge undermining the all-important speed-to-market and posing new fashion logistics obstacles.

According to USA Today:

A worsening shortage of truck drivers is pushing up freight rates and delaying some deliveries, defying the weak economy, high unemployment and falling gasoline prices.

"It's getting harder to get drivers," says Mike Card, president of Combined Transport of Central Point, Ore., and incoming chairman of the American Trucking Associations. "I could hire 50 guys right now." He now employs 393 drivers. [...]

Driver shortages are effectively limiting truck capacity and helping push up freight rates by 2% to 5% this year, despite the sluggish economy, says analyst Benjamin Hartford of research firm R.W. Baird. Also driving up rates are rising wages and truck prices that have increased as much as 40% the past few years because of modernized engines that must meet tougher emissions rules. Card of Combined Transport says 10% of his deliveries are one or two days late because he doesn't have enough drivers.

This -- despite the stubborn 8.2 percent unemployment nationwide unemployment rate in America. But, perhaps counterintuitively, unemployment is actually one of the problems. A six-week driver-training course costs approximately $4,000 to $6,000 — a steep investment for, say, an unemployed construction worker or factory worker.

According to the American Trucking Association, it's not really a shortage of willing drivers, per se, but rather a lack of high-quality drivers who can get the job reliably and safely. Indeed, the association's chief economist, Bob Costello, says the shortage is "qualitative," not "quantitative."

Apparel companies are left with few alternatives in this sort of situation. Air freight is prohibitively expensive in the majority of situations, but rising trucking freight rates can quickly eat away slim profit margins as well. Moreover, the delays caused by the shortage can alone be staggeringly costly. Speed-to-market is everything in the apparel business, and market windows of opportunity seem shorter than ever. Miss one, and an entire otherwise well-designed and well-executed product line can quickly turn into a failure.

Here at The Apparel Logistics Group, our apparel supply chain management solutions can help mitigate the effects of the shortage. Simply put, this environment leaves absolutely no room for supply chain inefficiencies. A well-run supply chain can give you the wiggle room you need to deal with these sorts of delays, and the cost-savings that we can help you maximize can make up for increases in shipping rates.

Our apparel third party logistics services (3PL) specialists can cut costs and cut delays in international shipping, customs clearance, warehousing and apparel distribution. We can also help you consolidate and deconsolidate international shipments (without mistakes) and take advantage of domestic LTL shipping possibilities.

Posted: 12/28/2012 12:36:10 PM by Global Administrator | with 0 comments

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