With most everyone back in the (home or actual) office after what can truly be viewed as a year for the ages, for more reasons than were even remotely conceivable a year ago at this time, it is time to buckle up for what should be an incredibly interesting 2021 in the logistics, freight transportation, and supply chain sectors.
But with a blank canvas of the New Year in front of us, we need to look at the myriad “paints” that will color what is ahead of us.
It seems like the optimal place to kick things off is the ongoing COVID-19 pandemic. To be clear, the pandemic represented what is, was, and will continue to be a seismic shift not only in our logistics, freight, and supply chain spheres, but also in our day-to-day lives, given that not a whole lot can truly be viewed as “normal,” going back to the onset of the pandemic in mid-March 2020.
At that time, we all saw supply chain take a larger seat at the table, or, in keeping with the paining theme, at the easel, if you will. That was evident in supply shortages for myriad products and items, ranging from protein products to toilet paper and cleaning supplies, as well as a whole host of other things, as we all know.
But the bigger game changer was how the pandemic’s social distancing measures and protocols and temporary or permanent closing of retail stores cranked up e-commerce activity to levels never seen before. And, as we all saw, the impact of that on parcel integrators, especially the parcel duopoly of FedEx and UPS, and the United States Postal Service, DHL, and many regional carriers, was truly unprecedented. That does not look like it will be changing anytime soon, as many people whom previously never shopped online before ostensibly became adept at shopping online.
The ongoing push towards e-commerce could very likely be a permanent shift, to be clear, as could the related warehousing and distribution shifts that come with it, in the form of tight vacancies and limited availability for e-commerce-related real estate, which is part of an ongoing push to get products closer to the end customer i.e. consumer. Again, much of the impact of COVID-19 goes directly back to consumer-, or e-commerce-, focused logistics.
Another thing to keep a close eye on in 2020 is what the new Biden Administration will look like on different fronts, along the lines of trade, specifically as it relates to China and tariffs, and, of course, what may be in store for infrastructure. Both of themes look to be front and center for supply chain stakeholders, with many questions looking for answers, to be sure.
And on the trade front, a lot a legwork needs to be covered on the ongoing sagging state of U.S. exports, coupled with the prospects of bringing production back home, or nearshoring. While there has been intermittent movement on this front, much more needs to be done in order for it to truly gain traction.
On the surface transportation front, continued inroads for truckload, less-than-truckload, and rail carload look to see decent volume gains—on paper—given how dismal market conditions were from mid-March through the better part of the third quarter a year ago, due to the pandemic.
Intermodal volumes, on the other hand, improved as the year went on, with 2020 looking like it could be a record setter, when the final tallies are issued by the AAR and IANA. And on the water U.S.-bound import levels saw major growth over the second half of 2020, too, with so many people shopping online, and inventories needing to be rapidly restocked. Seasonal norms suggest that will taper off closer to the end of January, but that will require a watchful eye.
There are many more trends and themes to monitor, as we look back on 2020 and ahead to 2021. With so many “colors,” or themes, to follow, let’s hope that 2021 paints a more scenic logistics painting all around.
About the Author
Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman