 JOC Shipping Review & Outlook - 2007
Raymond Wisniewski
President
National Retail Systems, Inc.
We read a lot last year about the slow build up to the holiday shopping season. The peak season never really peaked. Some of that may be due to weaker sales. But looking ahead, I believe it says more about the changing pattern of retail logistics and the challenges we face serving the U.S. distribution needs of the world's major brands.
There isn't just a peak season anymore - but a series of peaks throughout the year around significant retail events. Retailers are leveraging more effectively the assets of third-party distribution companies to streamline the flow of goods through ports, through cross-docks to distribution centers and warehouses. They have access to technology to integrate with their partners and to gain visibility of inventory from coast to coast. They expect their partners to deliver on time all the time.
To continue to deliver the level of service required, third-party distribution companies face several challenges. A critical one that will get worse before it gets better is the driver shortage - especially around U.S. ports. As the demand from retailers for automated cross-docks and transload facilities continues to grow on both coasts, it is increasingly difficult for port truckers feeding these facilities to earn a living due to congestion and the distances they must drive to turn containers. Many current owner-operators are reaching the end of their careers. There is no large pool of younger drivers ready to fill the void.
A small step forward in solving the driver problem is to keep DCs near the ports. Companies that operate DCs close to ports and offer year-round work can attract drivers looking for steady income and quick turns. Keeping transload and cross-docking close to ports also reduces the environmental impacts from congestion and emissions. This will help to encourage more owner-operators to enter the business.
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