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The Top 3 Predictions for Logistics in 2022

Categories: Cyber Security, Trucking.

Another new year, another clean slate – or so we hoped. Looking ahead to 2022, many of us are wondering what the outlook is for logistics and transportation. Last year was marked by the container crisis, disruption caused by the Suez Canal blockage, and lack of warehouse availability just to name a few. Many of the challenges faced were caused or exacerbated by the pandemic, and they are complex ones to solve.

Now that economies are gradually opening up, it begs the question – what will the industry look like in 2022? And will this year be any different from the last? Here are our top three predictions.

Protracted Labor Shortages

Since the start of the pandemic two years ago, transport and logistics have been hard hit by labor shortages with impacts across the supply chain. A frequently quoted report by the American Trucking Association (ATA) estimated the driver shortage would hit 80,000 workers in 2021. It went on to predict if current trends continue, the shortage could surpass 160,000 as of 2030. These figures are a serious concern in isolation, but particularly since they don’t account for shortages in the broader supply chain.

Echoing these concerns is the latest Top Industry Issues report by the American Transportation Research Institute which showed that the primary concern among industry stakeholders, for the fifth year running, is driver shortages. This implies labor shortages are a long-standing problem exacerbated by COVID-19.

We know companies continue to experience mass resignation and increased absenteeism. In other cases, pandemic-spurred redundancy has pushed people into early retirement. These factors combined have diminished available workers and will likely continue to do so in 2022.

This labor imbalance is unlikely to disappear on its own. As the ATA report states, there is no single cause and no single solution to the labor shortage. We’ve even talked about ways to address the problem in the past. But the industry has been called to act with a boost to hiring incentives, new incentive programs, and improved conditions for drivers.

Supply Chains Going Green

Supply chains were blindsided by the pandemic, yet managing the causes of disruption hasn’t been the only concern. Mounting pressure upon carbon-heavy producers, such as the transportation sector, means traditional models and methods need reassessment. Evidently, triple bottom line thinking – a balance of social, environmental, and financial performance – is on the minds of industry players.

Sustainability strategies are shown to produce long-term financial and commercial benefits. By minimizing their environmental impacts, companies can also significantly lift their business performance, whether through cost reduction, greater innovation, or attracting.

What sustainability looks like at each port or warehouse will differ from one to the next. As a recent example, the Port of LA and Long Beach agreed to start collecting the Clean Truck Rate fund fee as part of a net-zero action plan. But smaller-scale, incremental change can also help move the needle. Using localized sourcing and alternative energy sources in long-haul trucking are examples of methods already in play. To considerably reduce emissions, operators will need to adopt a combination of solutions with a focus on the entire supply chain. 

Cybersecurity: A Non-negotiable

Cyberattackers thrive in times of uncertainty and disruption, so it’s no surprise attacks have spiked during the pandemic. When it comes to cybersecurity, most accept it as a modern-day necessity, yet few expect an attacker to knock on their door. COVID-19 has disrupted business already and further interference from unforeseen cyberattacks can have a severe impact. Regular operations, supplier relationships, and financial performance could all be compromised by a data breach.

Victims aren’t necessarily small and medium-sized businesses either – even organizations such as UPS have been under threat. In large companies, there could be thousands of third parties and fourth parties to consider when managing risk. But sometimes it can be difficult to discern those risks and companies in business with foreign entities may have an even harder time picking up on unusual behavior.

Putting protections in place isn’t optional; it’s non-negotiable. In 2022, we anticipate closer attention will be paid to cybersecurity programs to ensure companies are equipped to identify, protect, and respond to threats (should they arise). To learn more about cyberattack prevention, see our recent article here.

Conclusion

There may be no way of knowing what 2022 will hold, but we do know looking back can help us see what lies ahead. With shortages in labor supply likely to continue, the industry may need to brace itself for another challenging year. However, proactive changes to incentivize and retain staff could ease the burden. Though the shortages have previously taken center stage, sustainability and cybersecurity remain important topics. Companies in logistics and transportation should view these as opportunities to reassess and strengthen their position in 2022.

If you’re looking for an experienced transportation and logistics partner, speak to the experts at GlobeCon. Contact us.