The first quarter of 2022 brought further turbulence to transportation as we experienced the far-reaching effects of Omicron. Impacts on labor were felt at every level of the supply chain from drivers to dock workers, and were amplified by increasing volumes in every mode across the globe during January and February. Volumes have diminished somewhat from the previous record highs, but global supply chain challenges are expected to persist throughout the year.
These issues are not unique to our industry, but BSG is committed to standing alongside our customers and collaborating on solutions. We have a dedicated and highly experienced Logistics Team invested in anticipating and minimizing disruptions to your supply chain. In the last quarter we have added multiple new carriers to our network and will continue to source additional freight capacity and establish relationships with new carriers.
Relationships in business matter – now more than ever. Because of our relationships with suppliers and high-volume distribution, BSG can provide the best shipping outcomes possible in the current market.
Ways to minimize delays and freight cost:
- Allow extra lead time. When possible, allow for 72 hours lead time when placing an order. Building in longer lead times is the number one way you can help us keep your freight costs down!
- Let us know your plans. Providing a forecast on major changes to your current order quantities will help us secure additional capacity in advance. Also consider increasing safety stock on your staple ingredients.
- Anticipate extra time for special delivery requests. Plan in additional time for any special delivery requests such as liftgate, call-ahead, or straight truck delivery.
BSG would love to leverage our supply chain and logistics experience to help your business with the current challenges all sectors of industry are facing. If you have any questions regarding receiving freight, carrier selection, consistent delivery times, or similar – we are here to assist!
Please let our team know how we can best solution plan and serve you!
Contact our Logistics team directly at BSGLogisticsGroup@bsgcraft.com.
LTL: Fuel Prices Affecting Carrier Rates
Fuel prices rose for 11 consecutive weeks; supply chain volumes remain elevated
- Throughout February and March, diesel fuel rose at the fastest rate on record. On average fuel is now 72% more expensive than two years ago. Fuel is a leading contributor to a carrier cost of operations.
- Small fleet owners operate off slimmer margins and do not have the fuel purchasing power that larger fleets have, so are therefore more adversely affected by rising fuel prices. Fuel now represents around 45% of small fleet operating costs and could lead to reduced capacity as smaller fleets are no longer profitable.
- Most LTL carriers are taking this time to establish rate increases in the mid-to-high single digits. While these increases are helping them reinvest in drivers and equipment, they are double to triple what shippers normally see in an annual GRI.
FTL: 2022 Volume Forecasts At 3-4% Growth, Even with Headwinds
Inflation and other global events have not slowed predicted FTL growth, but a slowdown may be coming
- At the end of March FTL load posted volumes jumped 32% out of the West Coast as import volumes climbed again following Lunar New Year.
- Many companies have halted or slowed production and supply chain operations in Ukraine and Russia. These disruptions will stress an already tight market with added volumes on new lanes and shipping routes.
- These long-term impacts are unknown, but FTL demand remains elevated for the time being, although not at the peak highs we saw this past February and January.
Import Ocean Containers: Headwinds Continue – Return to Normal in 2024?
Rising fuel costs, sanctions, and COVID continue to impact capacity and transit times, but some cause for optimism on the horizon
In just the first four months of 2022 we have seen continued COVID outbreaks and lockdowns and a war in eastern Europe. We at BSG are following the news closely and keeping those affected by these tragic situations in our thoughts.
Beyond the human tragedy, the global supply chain is not immune to the effects of these and other events from early 2022, including a rail strike, suspension of services at some ports, and continued steamship line surcharges.
We cannot set the expectation that we are out of the woods yet, but there are signs of improvement: importers are planning better, news outlets are educating the public, the administration is pushing to expand the authority of the Federal Maritime Commission, and large maritime ports are investing in infrastructure.
BSG forecasts significant headwinds to continue in the immediate future but believes that service will begin to return to normality and costs to plateau in 2024. The BSG logistics team continues to work for our customers by:
- Aggressively mitigating costs where we can
- Partnering with the right forwarders using the right steamship line prioritizing service first
- Constantly monitoring internal and external pressures on our specific supply chain
- Building in market level lead times to our procurement process ensuring ample inventory on hand
- In house container tracking team proactively reporting out to internal and external stakeholders
- Creatively and proactively implementing alternate routes for our import business ensuring contingency plans
- Investing in new technologies to better our visibility to a complex supply chain
Thank you for your patience and understanding as we continue to navigate the logistics issues that are affecting the global economy.