There were noticeably fewer toys on the shelves at my favourite department store this Christmas. The staff did their best to hide the lack of stock by spamming shelves with one of the toys they did have in stock, a selection of plastic food items, but it was clear there was less variety on offer this year.
It was the same at the grocery store. Supermarkets filled empty shelves with pictures of the products they normally contain. There was even a full-scale fuel buying panic in the UK, with queues of cars at filling stations. All due to the supply chain crisis we are currently living through.
One of the many causes of the supply chain crisis is a lack of truck capacity. During the pandemic we got used to ordering much more stuff than normal. There aren’t enough trucks and drivers to deliver it all. To make matters worse, many qualified drivers can’t work due to covid.
This being the case, one would assume that every effort is being made to maximize capacity on the trucks that are available. In fact, nothing could be further from the truth. Two thirds of the trucks you see on the road are partially filled or empty. Only one third are carrying a full load.
Trucks are empty because they normally carry the goods needed to fulfil a single order. If the order amount is less than a truckload then the truck goes partially filled. It would be better to aggregate several orders to fill a truck. There is a lot of scope for this because many shipments end up are the same receiving locations, often retail distribution centres. However, there is currently no effective way for shippers to collaborate like this.
We need an efficient market for truck capacity that allows different shippers to combine orders to make full loads. It’s the classic problem of matching supply with demand. The pay-off will be lower shipping costs, reduced CO2 emission and a better selection of toys next Christmas.
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