Commentary: Paying the Freight in 2005

Five tips for tackling logistics challenges in the New Year

  • The trucking shortage that manifested itself during the second half of 2004 has not eased. Even the delay in the implementation of new hours of service rules for drivers will not free up enough drivers or trucks to meet the demand. There will continue to be a squeeze on full-truckload equipment, which will, in turn, affect the less-than-truckload (LTL) sector resulting in limited capacity.

  • America's railroads experienced a banner year in 2004 but were unprepared for the business. Track and rolling stock were not up to the task, resulting in delays and soaring rates. No quick fix is in sight for 2005.

  • Security on both the domestic and international fronts will continue to present a formidable barrier to the movement of freight, playing havoc with both shipping costs and schedules.

  • Although somewhat stabilized at the end of 2004, fuel costs remain high. Any change in the geopolitical situation in the Middle East could cause another fuel price spike affecting trucking, rail, ocean and air freight. The costs will be passed on to you.

  • Warehouse costs have risen with the red-hot real estate market, making it more expensive to keep goods in storage. It is vital that materials and merchandise be kept moving through the supply chain as quickly and efficiently as possible.

Tom Dromey and Mark Wyman are the principals of PMC Logistics Services, a third-party logistics management provider in Plymouth, Mass. PMC provides logistics management services to companies of all sizes across the country.