For nearly two years now, we’ve been eating, sleeping and breathing supply chain challenges. Breakdowns in the global supply chain have become everyday news… You can’t turn on the television, open a newspaper or scroll through an online news source without being inundated by stories detailing supply chain issues in every industry and location around the globe.

Before the COVID-19 pandemic induced bulk-buying of goods like toilet paper and hand sanitizer, the average person didn’t spend much time thinking about how the products they need and use daily made it to the store. But consumers panicked when shelves across the country went bare and there weren’t enough shipments coming in to fill the holes. Many had a hard time understanding why this was happening.

Ask anyone who works in the freight, transportation or logistics industries, and they’ll tell you supply chain issues are not novel. There have always been challenges resulting from labor strikes, policy changes, weather, war and terrorism, but what we’ve been observing over the last two years doesn’t have anything to do with those factors. Instead, current problems stem from the infrastructure of the global supply chain, which is just not equipped to handle the inflated number of products moving through the economy.

In addition to the traditional obstacles that the supply chain has always faced, some of the additional factors contributing to the slow-down include:

• Port space: Ports are built to manage only a certain volume of shipments. Each port has a limited number of cranes and amount of space to store containers, so unloading and processing times have significantly increased due to a growing number of ships arriving at ports each day.
• Chassis, trucks and trailers: From accessing existing equipment to producing new assets, companies can’t get their hands on chassis, trucks and trailers fast enough. There’s also not nearly enough supply to meet the unprecedented market demand.
• Truck drivers: The industry is roughly 80,000 drivers short of what it needs to optimally meet current freight demand. Companies are offering new incentives like large hiring bonuses, higher salaries, and safety bonuses to attract much-needed truck drivers, but the on-the-road lifestyle is not appealing to many.
• Labor: According to the U.S. Bureau of Labor Statistics, the unemployment rate for people 16 and older in the United States was 5.2 percent in August 2021. There are millions of open jobs, but the country continues to experience a labor shortage. This can be attributed to factors like the aging population (baby boomer generation retiring) and unmet demands for better pay and flexible work environments.
• Warehousing: Even though construction of new warehouse space, especially in larger cities, had been increasing long before COVID-19 began, available warehouse space is rapidly declining. The pandemic accelerated the trends in a demand for warehousing. As available space dwindles and costs skyrocket, the pandemic has only exacerbated this already dire situation. In 2021, vacancy rates were near an all-time low with rents increasing north of seven percent.

For all these reasons – and many more – I don’t foresee the supply chain returning to a pre-pandemic state anytime soon. The dramatic rise in e-commerce will only lead to increases in online retail sales, causing further challenges in the reverse logistics space. People are buying more sizes and returning more often with purchases online, which is another added pressure to a supply chain that is already stressed. This has also led to a more thorough reverse logistics process because the items need to be inspected, sorted and determined where they should go next. The products move more slowly, taking up precious warehouse space. It has been noted from several customers that their reverse logistics were so voluminous that it was impacting their ability to perform on forward logistics in their operations. Because of this, the efficient management of returns is more important now than it has ever been.

It’s important for companies to streamline their reverse logistics processes by adding technology and resources to build flexibility wherever possible. Mobile warehousing and storage is an innovative, solution that allows companies to rent or lease trailers to store products, including returned items, to ensure that they are not impeding their forward logistics, or jeopardizing revenue. This will also allow for sorting of product, storage and ultimately shuttling it to its final destination. Some of the benefits of mobile warehousing and storage include:

• Cost-effectiveness: Trailers utilized for mobile warehousing and storage typically cost 50 percent less per square foot than traditional warehouse space. In addition, transloading product from container to trailer can save thousands on demurrage fees.
• Flexibility: Since mobile warehousing and storage is delivered exactly when and where it is needed on-site and does not require long-term lease commitments, it allows companies to pivot quickly and put them in service to meet surges in demand as well as returns. Often the need for space is present before it is recognized.
• Security: Mobile warehousing and storage trailers protect your products from the elements, can be locked and parked at your secure facility, and are equipped with GPS to track their location 24/7.

The supply chain challenges we are facing are expected to continue through most of 2022, so mobile warehousing and storage trailers will be a solution. As we learn about and experience the ever-evolving supply chain, it’s important to keep consumers informed. Now is the time to educate people about supply chain and reverse logistics processes and challenges to foster a better understanding of a world that so many know little to nothing about. I believe the only way to persevere through challenging times is to work together, and our world could always use more togetherness.

 

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Sarah Johnson
Sarah Johnson joined Milestone in 2000 and has served in a variety of key commercial, operational and back-office support roles. In her current position, Sarah partners with other members of the leadership team and Milestone’s branch network to deliver mobile warehousing and storage (MW&S) solutions to manufacturers, retailers and other customers throughout the United States. Additionally, Sarah provides direct oversight for select commercial accounts and manages a variety of special projects.