Viewpoint: Prepare for permanent supply chain volatility

Over the past few tumultuous years, economists, editors, and analysts in just about every industry have realized that it doesn’t pay to be in the “prediction” business.

In logistics and transportation management, we’ve seen far too many volatile situations suddenly arise (super storms, regulatory uncertainty, fluctuating fuel prices, labor unrest) that can throw a mode or service sector off track for months forcing even the savviest logistics planners back to the drawing board.

As we roll into this new era of “permanent volatility,” Logistics Management is renewing its pledge to steer clear of predictions and keep our feet firmly planted in the “preparation” business. To do this, we vow to offer shippers the clearest view available of the logistics and transportation markets and share the latest best practices that the savviest organizations are putting to work to overcome these new, ever-shifting hurdles.

Accenture’s Brooks Bentz may have put it best during his session in our 2012 Supply Chain Virtual Conference when he said: “What used to work well for companies in terms of logistics management will not suffice in the future.”

Not only are supply chains more extended, global, complex, and demanding, says Bentz, but transportation costs now exceed 63 percent of total supply chain costs—a number big enough to elevate logistics and transportation preparation to a higher strategic importance for your organization, if it wasn’t there already.

So, we promise to stay clear of any predictions in this end-of-year edition, and instead offer a few editorial nuggets that will help will help readers prepare for 2013. A good way to start is with Contributing Editor John Schulz’ story on what our industry might expect from the second Obama term.

“The one thing that transportation officials and executives throughout the freight transport sector would like most from the president’s second term would be greater spending on the nation’s infrastructure,” writes Schulz. And with the naming of Bill Shuster (R-Pa.), son of legendary transportation champion Bud Shuster, as the new chairman of the House Transportation and Infrastructure Committee, we can be assured that the pressure will be on the Oval Office to make some much needed moves.

As Schulz reports, the younger Shuster stated last month that making the financially strapped Highway Trust Fund solvent in the long term was a “priority.” He also indicated that everything was on the financial table—including raising fuel taxes.

I also recommend revisiting Group News Editor Jeff Berman’s list of the 12 news stories that help shape “the year that was” in logistics and transportation management. The list touches on the impact CSA will make on rates and capacity, how YRC’s comeback is affecting the LTL landscape, and how the DOT’s new Freight Policy Council could help our domestic freight network stay competitive in the global economy.

But maybe the best way to help you prepare for next year would be to take two hours out of a day this month to experience our 2012 Supply Chain Virtual Conference: Best Practices in Global Transportation and Logistics. It’s now available on demand (logisticsmgmt.com/global12). In this event, we’ve gathered some of the market’s top analysts to help shippers better understand and overcome the mounting challenges of moving freight around the globe.

There’s no shortcut to preparing for permanent volatility, but we’ll be sure to keep an eye on the market and help you at every step.