The SMC3 JumpStart 2023 event kicked off with over 600 attendees. From LTL insights to a look into the global economic challenges plaguing the supply chain industry, the conference covered an array of topics in transportation and lent many predictions for 2023 and beyond.
Renee Krug, CEO at Transflo, started off the speaker segments with analytics and data that answered the most burning questions about navigating the ever-evolving waters of logistics. The peak season of 2022 brought lower demand and built inventory that now continues into 2023. Krug describes anticipation of possible depletion of that inventory and higher demand into the second half of the year. Alternatively, there may be a potential, with looming recession and further disruptions, for 2023 to remain a struggle— with relief and uptick not coming into full scope until 2024. With so many challenges stemming from COVID-19 and further economic impacts effecting the movement of freight, it's hard to cultivate any confidence in an outlook moving forward.
Nailing down an outlook for the year is a guessing game but by utilizing economic analytics we can get a glimpse, and according to Bob Costello, chief economist & senior VP of international trade policy and cross-border operations for the American Trucking Associations, Brent Hutto, chief relationship officer at Truckstop, Todd Polen, VP of pricing services at Old Dominion Freight Line and Jason Bergman, chief commercial officer at Yellow, less-than-truckload is at the hold of the economy. The executives agreed that the market can't withstand any rate increases this year. In years prior, it may have been commonplace for top carriers to raise their tariff rates but after a lull in peak season last year it's not conducive. The economic hurdle of worker shortage— truck driver shortage — was also discussed and the consensus of combatting through understanding the resources drivers have today, the type of freight movement in correlation with what drivers are needed, and where, and maintaining a transparent company culture was resounding.
Compounding on those ideas, Michelle Livingstone, president at M.D. Livingstone Consulting and Jennifer McKeehan, SVP of end-to-end delivery at Walmart, touched on supply chain diversity and how the growth of women in the transportation field can make a change. At Walmart, 36% of officers are women. Since the job woes of COVID-19, there's been steady focus on how utilizing leadership skills in different industries, even when there is a lack of expertise, can revolutionize. Diversity brings new problem-solving skill at a unique time in transportation where supply chain is at the forefront and being talked about in other sectors. "Continue evolving the question of what makes a good candidate," says McKeehan. In addition, recognizing the value in end-to-end delivery and adding the parts of moving freight as a collective, again offers diversity and new ideas. Interconnection in the supply chain, according to McKeehan, could bring major improvements going forward. With 13,000 drivers in their private fleet, McKeehan says safety and security is a top priority, which fueled the launch of a driver academy to teach and promote new truck drivers. Sustainability goals also help Walmart fleets through the use of different technology such as autonomy, EV and drones. Maintaining a customer base emphasis has helped them roll out these types of digitization efforts, to optimize the experience and the decisions that dictate how packages get to the destination, in terms of end-to-end supply. Fun fact: The top drone orders from Walmart currently are ice cream, a 3lb bag of lemons, rotisserie chicken and paper towels— talk about meeting customer needs!
To explain the global economic outlook, Professor of international business and finance at Emory University, Dr. Jeff Rosensweig, shed light on what he's looking toward this year. "Don't expect a crazy recession and don't pay attention to the past for labor force and workforce outlook," says Rosensweig. The data shared shows that, in 2023, immigration takes on a larger importance for growth based on the lower birth rates today. Vietnam is becoming a highlight for supply chain diversity and their economic growth shows why— they are "new" and continuing an upturn at a 6.5% rate.
Rosensweig describes the era as an "unusual time of uncertainty". There was a loss of 15% for jobs in the 2-month depression, March and April, of 2020, but since May of that year, job growth has continued to go up with almost an even growth; Rosensweig expects to see more people working in the U.S. than ever before. Transportation and warehousing growth are at almost 12% more jobs since coming into COVID-19. Since pivot points brought along more nearshoring, growth with Mexico and Canada has proved steady. Additionally, friend-shoring with China remains the highest, but a growth in the trade index is bringing Vietnam close to 3rd in the running. Keith Prather, managing director and partner at Armada Corporate Intelligence, added to the forecasts showing slow industrial production manufacturing through Q4, 3 months from now.
There's no glimpse into the future of freight without talk about tech. Mike Neill, chief technology officer at C.H. Robinson, highlights AI and the future of technology in the industry, describing how the use of data for supply chain visibility from a customer standpoint, comes in the form of updates, ETA's, etc. that lend to relationship and trust. Continued advancement in the future includes refinement of processes to create optimization. Neill predicts the potential use of AI to rise by assisting in finding improvements and spot-checking issues in the trucking segment.
These are just a portion of insightful discussions had at SMC3's event. With so many jumping off points that lead to predictions and investigations into what will transform the next year in freight, it's easy to proclaim JumpStart as a fitting name for this collection of people, minds and ideas. Only time will truly tell what's in store for 2023 but with a little help from industry knowledge and a whole lot of analytics, we might find a thread to what's to come and what to expect next.