Navigating the Red Sea Shipping Crisis: Implications and Insights

5 Challenges Facing the Supply Chain
The logistics and supply chain market is transforming at a rapid pace and managing multiple partners, high customer expectations, siloed IT systems and dynamic conditions is a challenge.
At Blume Global, we have identified the following five major pain points in the supply chain as top priorities for companies to solve in 2020 to reach their business goals, maximize success, and make the entire logistics ecosystem more efficient and effective.
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#1. Shipment journeys are complex and fragmented
The average number of companies involved in a shipment from manufacturer to distribution center is
14
(World Shipping Council)
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#2. Transportation capacity constraints lead to inflated prices and significant waste
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The average number of companies involved in a shipment from manufacturer to distribution center is
$50 Million
to
$100 Million
in discrepancies
(JOC)
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Fuel costs will rise by an estimated
25%
(approximately $24 billion) in 2020
(CAI)
Sea-Intelligence expects about
200,000 TEU of capacity
will be taken out of service for scrubber installation in 2020
(JOC)
#3. Increasing customer demands and faster delivery expectations

This leads to companies’ transportation spend skyrocketing and leaves opportunity to optimize and reduce costs.

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    69%

    of consumers wouldn’t purchase from a retailer again if their delivery was late

    (Supply & Demand Chain Executive)
  • 28%

    of miles driven are empty with 36% of non-empty miles underutilized

    (National Private Truck Council)
How many hours of time do you think are wasted per year in procurement, supplier management and freight-administration functions?
  • 1
    Million
    nope! try again
  • 10
    Million
    nope! try again
  • 100
    Million
    Yes!
    100 million hours of time are wasted per year in procurement, supplier management and freight-administration functions equaling nearly $2 billion
    (Zencargo)
(Zencargo)
#4. The weakest link carries the most tonnage
U.S. motor carriers represented
  • 70
  • .2
  • %
of tonnage carried by all modes of domestic freight transportation
with
91.3%
of motor carriers operating 6 or fewer trucks
(American Trucking Associations)
To meet 2025 rising demand of motor carrier movements, there will be a need for
890,000
new drivers
(Deloitte)
#5. Resistance in adopting new technology

High costs and ROI time-to-value requirements create barriers for tech players for entry to ‘old-fashioned’ supply chain/freight forwarding companies

The average time for a motor carrier to be paid is
36.9 Days
and can go up to
120 Days
(Transport Topic)
investors poured
$19.3 Billion
into freight technology for the freight industry in 2018,
and another
$11.7 Billion
through the first three quarters of 2019.
Find out how Blume Global is solving these challenges by downloading
The Digital Imperative in Freight Forwarding Today
Download here