Today’s supply chains are so complex that even the summer doesn’t offer a break from risk and uncertainty.
As we enter the summer months, professionals all over the globe start to prepare for one of the slowest times of year. Some people take extended, multi-week vacations or sabbaticals while others work shorter days or leave early on Fridays. This personal downshift might make it easy to assume that our supply chains are also ready to take it easy.
“The summer is actually one of the busiest times of the year for freight.”
And yet – the summer is actually one of the busiest times of the year for freight.
Freight is considered a leading indicator for the economy and for good reason: Goods have to be in place (or at least in distribution centers) before they can travel the final mile and be sold or delivered. This means that while many of us are ramping down for a few months, logistics activity is heating up along with the weather.
Depending on where you are reading about freight seasons, they may or may not be broken down in alignment with the traditional quarterly schedule that keeps the summer months of June, July and August together in Q3.
According to one freight broker, April through July is a “ramping-up” time when shippers are frequently looking for additional capacity. August through October is the peak season for freight because of the push to get retail stores ready for the holiday shopping season.
Here are some other common misconceptions about the factors that may shape the cost and availability of freight in the summertime:
Gas prices always skyrocket in the summer because everyone is going on vacation.
It seems like news reports about higher gas prices are as much a part of summer as ice cream and baseball. In most cases, however, these fluctuations are in the prices of retail gas, whether diesel or regular.
[Photo: Paul Swansen/Flickr CC 2.0]
Fleet fuel costs are a huge expense, and whether the fleet is owned by a company or is a 3PL, there is usually significant strategy behind the management of this spend. Although rates may change – and often do over time and by region – this is expected.
Fleet managers are certainly not at the mercy of the prices at the pump. They buy fuel wholesale or put fuel card programs in place. Freight contracts are carefully structured to include escalation clauses should fuel go outside of a pre-defined range. While there may be changes to monitor and handle, they certainly shouldn’t come as a surprise to anyone – either carriers or shippers.
Demand for cold logistics is only a constraint during the summer because that’s when perishables need to go from farm to table.
While this may have been the case at one time, consumers now expect most types of produce to be available in stores year round. Because of this, the challenge isn’t which products ship at which time because of their natural growing season, it is which geographies have which products in season at what time.
As Kenny Lund, VP of Operations for a national firm specializing in seasonal produce explained, “Now you have prepacked, cooling, hi-tech systems. The handling is much better. People literally see the fruit of these improvements in logistics technology.”
More sophisticated supply chain management and improved temperature controlled trucks and vans make it possible to take produce farther in less time while still meeting consumers’ quality expectations – all year long.
Although the highways are crowded with summer travelers, at least the weather is good, improving driving conditions and ensuring on-time delivery.
Many major highways run through the Midwest’s tornado alley, the part of the U.S. most susceptible to these violent, unpredictable storms. Tornado alley stretches from northern Texas and Oklahoma up to Nebraska and Iowa and extends from Kansas as far east as Kentucky.
Many freight companies train their drivers to recognize the early warning signs of tornadoes so they can get to safety. Even without loss of life or damage to cargo, the disruptions due to downtime and impassable roads can be just as disruptive as the worst winter storm.
Today’s supply chains are so complex that even the summer doesn’t offer a break from risk and uncertainty. Fortunately, we have the technology and connectivity to keep our fleets running – with the help of well-trained professionals that know what their operation needs by season.
This article originally appeared on All Things Supply Chain and was republished with permission.
[Top Image: Giphy]
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