What Factors Contribute to the Lack of Freight Capacity?

Lack of Freight Capacity

With the demand for order fulfillment steadily increasing in today’s modern logistic world, many factors contribute to the lack of freight capacity.

Even after the dust has settled, many organizations face challenges on the road to recovery from the 2020 pandemic.

As the transportation sector saw rapid growth throughout this unpredictable occurrence, meeting the demand of the market requires businesses to overcome these pressing obstacles.

Not Enough Drivers

One of the main dilemmas contributing to the lack of freight capacity is the need for more drivers.

As the demand for order fulfillment significantly increased during the momentous incident of COVID-19, the availability of drivers subsequently decreased.

Many reasons contribute to this shortage, such as emerging regulations that removed thousands of drivers from work, unemployment benefits that couched many operators, and the closure of CDL training schools.

This puts a temporary halt to new truckers entering the workforce and makes it a waiting game for many returning workers, all hindering capacity.

Changes Within Regulations

As of January 2020, the Federal Motor Carrier Safety Administration (FMCSA) established the Drug and Alcohol Clearinghouse - an electronic database that tracks CDL holders who tested positive for drug and alcohol use. This also includes those who refused required drug tests and other drug/alcohol violations.

Although this new ruling has good intentions (such as improving highway safety), it also contributes to the lack of freight capacity that many companies can handle. But there are other changes that may be on the horizon as Congress looks into the passage of an infrastructure bill in late summer 2021.

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E-Commerce Expansion

As e-commerce has become one of the fastest-growing sales channels in recent times, it’s only expected to grow exponentially in the upcoming future. As noted by Forbes, e-commerce will surge to more than $1 trillion annually by 2025.

Meanwhile, customers have quickly realized the benefits of speed and accessibility that online ordering has to offer. With the influx of online shopping comes a greater shipment volume surge.

If logistic organizations can’t adapt to the needs of the consumers, this could pose a factor resulting in a lack of freight capacity.

Manufacturing Growth

The option to order anything online at any given moment has caused tremendous growth for manufacturers. As the demand steadily increases, shippers must find agile methods to compensate. Explosive manufacturing growth comes with challenging factors that bottleneck capacity for certain businesses that don’t have the ability to scale rapidly and who don’t have clear freight visibility.

Economic Instability

Recent events have undoubtedly changed the landscape of the market. Although many companies have experienced losses or supply chain deficiency, many have also gained advantages through insight. As business and demand have increased, the need for scaling freight capacity is paramount. The challenge lies in fulfilling the customers’ needs while finding ways to optimize capacity with the resources currently at hand.

Changing Driver Behaviors

Another factor that contributes to low freight capacity is drivers having specifics wants and needs. For instance, more and more truckers are seeking out short-hauls as opposed to long-hauls. As the demand and need for drivers leave little room for negotiations, businesses must find a way to adapt and meet in the middle without sacrificing too much.

Underperforming on these requests or other dock operations such as long dwell times and lengthy unloading/loading times contributes to a lack in freight capacity.

Overcome the Barriers to Freight Capacity Challenges With the Right Tech Stack

Knowing what factors cause a lack of freight capacity brings companies the awareness they need to overcome the many obstacles. Using the proper tools and technology creates opportunities that enhance and amplify your business.

Request a C3 Solutions demo to improve your driver experiences and effectively increase your access to capacity today.

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