Challenges Freight Brokers Might Face in 2022

The year 2021 was filled with uncertainty for everyone worldwide, but those uncertainties had a particularly negative impact on supply chains. Supply chain resilience is more important now than it has ever been. Because of the subsequent shifts in technology and customer expectations, concerns such as lowering transportation costs, increasing fuel price, and driver shortages during a global pandemic have unquestionably launched us into an entirely new era of logistical complexity.

What risks are essential to consider for Freight Brokers?

A new era in logistics has emerged due to the epidemic, which has undoubtedly compelled many firms to reduce shipping costs.

Businesses have been forced to either rely on fewer carriers or ask for lower charges due to this decision. However, this was not a truly realistic option because combining shipments negatively influences a company’s customer satisfaction scores because deliveries may be late or never arrive.

Customers ordering same-day delivery services through Amazon Delivery, for example, raise the pressure on all other firms to follow suit (which might not be realistic). It is done at the expense of client happiness once more.

Since the beginning of Covid-19’s first wave, developing a backup plan and learning from previous mistakes has been critical. Recognizing the past mistakes and the dangers that lie ahead are critical first steps in charting a course forward.

Despite the new obstacles we’ve encountered, it’s critical to embrace them as a learning opportunity so that we can stay adaptable and develop agile logistics systems in the years ahead.

So, let’s take further detail at the top 5 challenges that freight brokers might face in 2022.

The Difficulty of Cutting Transportation Costs

Expenses associated with shipping and transportation are the most expensive costs associated with logistics. For the first time in 2018, businesses in the United States spent over $1.45 trillion on transportation. As it is the most significant overhead for most firms (including remote ones), this issue will not be resolved anytime soon.

To be optimistic, we can begin to make some headway in this area by improving shipping routes based on data analysis. It is feasible to reduce expenses by more easily organizing incoming orders, meeting dock hours, and forecasting traffic conditions – not to mention the fact that the brands with which logistics businesses collaborate will have satisfied customers as a result.

Fuel Costs

The rising cost of fuel has a significant impact on the shipping industry. Optimizing travel and transport in drainage shipping procedures helps manage and minimize fuel costs, yet fuel accounts for a substantial amount of the industry’s total cost of operation. One of the industry’s most difficult tasks is to develop new ways to speed this process, improve travel routes, and minimize fuel costs while maintaining quality.

In addition, alternative fuels are being investigated to provide more optimal solutions in the future. Vehicles powered by electricity or hydrogen are among those on the list. On the other hand, these alternatives will be highly reliant on developing an electric truck infrastructure, which may be many years ahead of us.

Driver Shortages

When moving cargo between intermodal drayage locations, freight forwarders rely significantly on the trucking industry. While short-haul and drayage transportation lessens the need for long-haul truck drivers, there is still a significant shortage of truck drivers in the industry overall.

The majority of drivers have been in the profession for many years and are either retiring or will not be in the position for long periods. Trucking companies have made their jobs more appealing to younger people, women, and former military service members and veterans. The trucking labor force plays a significant role in the operation of the shipping industry.

Technology Implementation

The usage of technology in the shipping sector is changing rapidly to accommodate the issues listed above. The rapid pace of change, on the other hand, makes it more difficult to integrate into a standardized process fully.

Freight forwarders use cutting-edge communication, optimization, and tracking solutions to manage and transfer freight across international boundaries. Technology is currently tackling a few difficulties: electric vehicles, improved tracking systems, and supply chain visibility.

Government Regulation

When transporting cargo across nations, shipments are subject to the destination country’s laws, rules, fees, and regulations. However, depending on where the load is being handled, these laws may not be the same or as simple to grasp as they appear on the surface. In addition, they might change daily; therefore, freight forwarders must keep up to date on the latest shipping trends.

Conclusion

Despite the problems faced by the forwarding business, positive indicators suggest sustained growth, particularly for forwarders who have the resources, capability, and culture to adapt to changing circumstances. Most shippers have grasped the need to re-evaluate their supply chains and work out issues with their freight forwarders. Many forwarders have taken advantage of growth benefits and have become even more useful partners.