National Connections, Local Ownership
National Connections, Local Ownership

Clark: Key Bridge tragedy shows the supply chain’s vulnerability

Originally appeared in Fleet Owner

Last week’s tragic collapse of the Francis Scott Key Bridge in Baltimore exposes the ongoing vulnerability of our supply chain. According to a CNN Business article, “Overall, Baltimore ranks as the ninth biggest US port for international cargo. It handled a record 52.3 million tons, valued at $80.8 billion in 2023.”

And when transporting goods via trucks, as noted in FleetOwner last week, citing Sean McNally from the American Trucking Associations, “nearly 4,900 trucks travel the bridge each day, with $28 billion in goods crossing every year.”

Necessary detours adding approximately 30 additional miles for trucks that transport hazardous materials (these trucks cannot use the city’s tunnels) will increase costs in fuel, time, and delays for shippers, carriers, and ultimately consumers.

Although the COVID-19 pandemic brought the importance of the supply chain to the public’s attention, many consumers thought that once the pandemic abated and supply chain shortages eased, the problems were over. However, the trucking industry knows that the supply chain and trucking face several long-term problems.

A troubled infrastructure

This collapse is only the latest in a series of infrastructure problems the industry faces. The Interstate 95 road collapse in Philadelphia last year was handled quickly but created problems.

The Bipartisan Infrastructure Law will address many road, highway, and bridge issues, but that will take time to complete. Our industry has been complaining about the state of our infrastructure for decades, and we are happy to see projects will finally be undertaken. That’s the good news. The bad news is that while repairs are ongoing, traffic congestion and detours will increase, challenging fleets to meet delivery deadlines.

Increase in cyberattacks

Today’s logistics rely heavily on technology. Fleets equipped with telematics, including GPS tracking and onboard diagnostic codes, are particularly vulnerable to cyberattacks. These could lead to cases far worse than just a data breach, resulting in a bad actor getting hold of sensitive information. There is a fear that someone with bad intent could gain unauthorized control over the truck itself. To combat this, fleets need to deploy ongoing cybersecurity measures, including regular software updates and continual employee training.

A shortage of qualified drivers

This problem never seems to subside. The ATA estimates a current shortage of truck drivers to be approximately 64,000. That number is expected to more than double by 2031. The shortages impact the fleet, but they also impact the current drivers, requiring them to adhere to longer delivery times while complying with HOS regulations. Fleets need to up their retention programs and improve their recruitment strategies. They also need to invest in training programs.

Volatility in fuel prices

Although diesel prices have subsided since the peak, it still seems like a roller coaster ride, with prices fluctuating daily, negatively impacting trucking companies’ profitability when it’s already challenging to make a profit. It also complicates the ability of fleets to accurately predict cash flow and available working capital since fuel is a significant cost center impacting finances overall, and whether it goes up or down will change a company’s cash situation. EVs and alternative fuels are still more of a future solution, especially for the heavy-duty truck sector, so fleets now need to focus on implementing effective fuel management strategies like reduced idling and better route mapping.

Climate change

For those throughout North America and Europe who are either baking in unrelenting heat, breathing in smoke caused by fires, or losing everything to floods and tornadoes, the changing climate is a clear and present threat. It’s not only the discomfort to people; heat buckles roads, and floods overtake them, which leads to road closures and rerouting challenges. Fleets must have contingency plans and disaster preparedness strategies to mitigate the possible damage.

An uncertain world

From the Gaza Strip to Ukraine, tensions have rarely been higher. Ships are bypassing the Red Sea to avoid attacks by Houthis. This creates detours for ships, resulting in considerable delays and impacting the supply chain again. Putin continues to move aggressively to block Ukraine’s grain exports, which will lead to increased transportation costs for companies and, in the end, customers. One way to mitigate the issue is for procurement to widen their roster of suppliers. Diversifying supply chain sources and having adaptable transportation strategies can help fleets during times of global upheaval.

The Key Bridge collapse is definitely the most newsworthy event currently impacting the supply chain, but unfortunately, it won’t be the last. So, fleets need to prepare for every potential challenge.