This year's conference, instead of being held in Knoxville, Tenn., as originally planned, turned into an online event like so many other business gatherings this year.
There once was a time when a supply-and-demand cycle in the trucking business took place over a matter of several years as transportation firms expanded to meet growing needs and then contracted when oversupply resulted. That cycle accelerated over time and this year came at breakneck speed, Angell said during Oct. 19 speech..
This impacts all goods being shipped around the country.
"Whether you are shipping peanut butter or carbon black, we are all fighting for that same capacity," Angell said.
Historically, as transportation capacity tightens in a growing economy, trucking firms raise their prices. This increased profit allows them to invest and expand to restore an equilibrium to the market. But once that capacity supersedes demand, prices fall and contraction occurs, he explained. That's just how the market works.
When Angell joined the business in the late 1990s, this cycle took about seven to eight years to complete. As time went on, the cycle shorted to about three to four years around 2010. And now, thanks to market forces created by COVID-19, it's happening lightning quick.
"We've seen the full cycle take place in less than a year's time—a truly remarkable set of circumstances," he said.
When COVID-19 essentially shut down large portions of the economy early this year, transportation firms quickly acted, laying off workers, selling off vehicles and closing terminals to survive.
When the economy rebounded over the summer, those same companies found themselves being challenged to meet the transportation needs of their customers. In a simple case of supply-and-demand, freight prices jumped dramatically.
"You can see that rates are higher now than they have been previously in the last four years," Angell said. "Rates are at record levels today."
Trucking companies, who were quick to furlough workers as the pandemic hit, are finding it difficult to attract the drivers they now need. Some furloughed workers have seen the advantage of staying off work with this year's enhanced unemployment benefits.
Transportation demands driven by the explosion of electronic commerce also are pushing some over-the-road drivers to local parcel delivery. Those are jobs that allows them to be at home every night instead of making long journeys, Angell said.
Those in the rubber supply chain, however, do have solutions to overcoming challenges.
"No 1," he said, "is strategic partnerships. ... Develop strategic partnerships if you haven't already. Leverage them if they are already in place. Engage with a supply chain management partner if you don't know how to do it or don't have the time to do it. These relationships will be a significant competitive advantage to you and your organization," Angell said.
If supply chains have an arch enemy, it would be bad communication, he said.
"This applies both inside your organization and outside of it. Many of you are working in organizations where you are wearing more hats today than you were at this time last year and it makes it more and more difficult to communicate. But it makes it more and more important that you do," he said.
"Talk to your transportation partners, let them know how your supply chain has changed. Let them know if your lead times, your purchasing strategy and/or your supply base has changed. Reset your mutual expectations with each other given the current market conditions. Meet with them regularly," Angell said.
Having a proactive approach also is a must in these rapidly changing times, he said.
"Stay engaged and be flexible. Our work environment will continue to change rapidly. The transportation industry will as well. Be ready to pivot," he said. "These are challenging times. They require challenging solutions."
