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Rates for trucking, ocean shipping and other transportation
tumbled after U.S. consumers shifted spending from big-ticket
items like furniture, BBQ grills and big-screen TVs to travel
and other entertainment, offering a reprieve to beleaguered
shippers.
However, "there's still a pretty big mess out there," said Ryan
Patel, senior fellow at Claremont Graduate University's Drucker
School of Management.
The labor market remains tight, fueling costs. Elsewhere,
machine parts shortages persist and cement has become difficult
to find as automakers and other manufacturers catch up with
demand and the U.S. ramps up infrastructure projects.
U.S. supply chains are suffering from a "long-term hangover,"
said Dean Croke, principal analyst at DAT Freight & Analytics, a
transportation data provider.
Speakers from Walmart, Colgate-Palmolive, Toyota and other
companies will discuss their supply-chain strategies at the
Reuters Events supply chain conference in Chicago on Wednesday
and Thursday, as inflation and interest rate hikes threaten to
tip the economy into recession.
"We've still got certain sectors that are up and some that are
down, which was a feature of the pandemic," Croke said.
That's even true within sectors, Croke added, pointing to recent
manufacturing data, which remained depressed even as segments
like motor vehicles reported gains. Manufacturing accounts for
the majority of U.S. truckload ton miles, he said.
After spending whatever it took to keep store shelves stocked
during the early days of the pandemic, supply chain executives
now are wringing out costs to shelter profits from eroding
demand, said Alan Amling, distinguished fellow at the University
of Tennessee's Global Supply Chain Institute.
For example, Target aims to cut ship-from-store costs by setting
up local consolidation centers that pull inventory from local
stores and pack them on-site, reducing fulfillment costs and the
number of orders that ship in separate boxes. It also groups
deliveries by area to reduce delivery miles.
"We're moving into a new stage, from just trying to keep our
head above water to going back to an efficiency mindset," Amling
said. "That's a really good thing for the supply chain."
(Reporting by Lisa Baertlein in Los Angeles; Editing by Bill
Berkrot)
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