Hyperlink Logistics’s VP, Business Development & Managing partner spoke to CHPTA about the current state of supply chain and the future world of logistics. Check it out below.
The CHPTA has been conducting online information sessions with our valuable member program partners over recent months to highlight key issues impacting companies in the industry and offer insights and solutions to help members better understand and deal with these every day business factors.
The latest session took place on December 2nd with an excellent presentation by Daniele Ponzi, Founder & VP, Business Development of Hyperlink Logistics and Illuminex Technologies Inc., who discussed the state of the supply chain and his views on the future world of logistics.
Daniele’s outlook is that it will take 12 to 18 months before the global supply chain will normalize and capacity requirements will be met for ground and air freight, while it will take 18 to 24 months for ocean capacity. It is important to understand that COVID is not the reason we have these global supply chain disruptions today. It is merely a large contributor which has also brought to light and accelerated other underlying fundamental factors, which were reviewed during the presentation.
The biggest hurdle for ground transportation is lack of experienced drivers for LTL and Full Truckload shipments. Courier capacity should rebound quicker as it is easier to add drivers and there are lots of start-ups competing regionally which are going to put pressure on the big parcel couriers to add capacity and decrease rates, or increase service in the mid-term.
Ocean freight costs will never fully recover. Daniele expects shipping companies will not give up all the gains received through the surge in demand. Unless there is a massive drop in demand to force them to compete (which is unlikely) they will want to pocket some of the extra billions (estimated over 100) the industry as a whole has pocketed in the last year. The cost of fuel will continue to rise, and carbon taxes will be here to stay until we have pivoted away from non-renewables.
Trucking freight costs will likewise remain higher and creep up as fuel and taxes increase. Meanwhile, parcel freight costs could stabilize or even come back down as emerging small courier companies erode at the business of UPS/Purolator/Canada Post/Fedex in urban centres.
Talking to carriers these days, especially ocean carriers, is like talking to economists or currency traders. Everything is very speculative. Daniele provided his forecast for ocean freight/container costs for 2022 and some recommendations on negotiating contracts as well as advice on handling your trucking and courier requirements in the short run. His conclusion is that 2022 will be very much a repeat of 2021.
Daniele also concluded with some views on larger economic, globalization and changing consumer demand factors and some thoughts on what product suppliers can do to better manage their supply chain logistics.
Please feel free to reach out to Daniele if you would like to discuss any of these issues further or would like some advice on your supply chain set-up.