Tag: SupplyChain

Empty Store Shelves

The Coronavirus and Empty Shelves

The Coronavirus and Empty Shelves
Why a centralized freight network is needed now more than ever
Empty Store Shelves

In the midst of the Coronavirus (COVID-19) outbreak, several fundamental but oft-forgotten truths have come roaring back into the spotlight:

  • Unexpected and widespread emergencies – like pandemics or natural disasters – will always send large numbers of people (including healthy survivors) into a panic.
  • Panic buying will always exist. Uncertainty, fear, and a perceived loss of control pushes many into “survival mode” – leading to overstocking and hoarding of supplies that may not be needed or warranted.
  • When you add panic buying to the inherent challenges specific to any particular crisis, you end up with supply chain disruptions – sometimes with life-and-death consequences.

While health experts scramble to contain the COVID-19 virus, supply chain experts are scrambling to keep products moving, and stores stocked. Apocalyptic images showing supermarket shelves stripped bare of essentials like toilet paper and canned food clearly illustrate the challenges they’re facing. Decades-old supply chain inefficiencies are once again being exposed.

Business and political leaders are reassuring citizens that there is no shortage of food or supplies. So why are so many shelves empty?

“The supplies are actually there, there’s just no visibility into the network,” says LaneAxis Founder and CEO Rick Burnett. “The truckers are out there, and the carriers are out there, and the products are there. It’s just, there’s no visibility to be able to move those products on a timely fashion to be replenished on a day-to-day basis, so that people now realize that there’s plenty of supply. They don’t have to go buy what they feel like is a 2 or 3 month supply.”

Burnett says the time is now to develop a centralized, data-backed, on-demand freight network – stressing that many people don’t realize 90% of trucking companies are small and independent, owning 10 trucks or less. Some trucking “companies” consist of exactly one truck, also known as owner-operators. A centralized, data-backed freight network would give these legitimate, hard-working small carriers the same equal access to freight as the big guys.

Once the COVID-19 crisis abates and overseas import restrictions are lifted, a flood of goods will pour onto U.S. shores – especially from China. American ports will be overwhelmed, pallets will pile up, and trucking will again be put to the test. It will be a chaotic scene.

The LaneAxis platform is designed to handle and manage these capacity spikes – be it during the holidays or supply chain emergencies like COVID-19.

“Providing visibility into a network, and building a single network, is going to help with the flux of supply and demand caused by the Coronavirus [outbreak] today,” adds Burnett. “But in the future, when the next pandemic happens, or there’s a state-of-emergency within the United States, we can immediately dispatch and provide visibility into products that need to move into a particular area because we know where all the drivers are, we know where the drivers have been, and we also have visibility into their hours of service. What LaneAxis is focused on is building that globalized communication – that network perspective that could unify the entire freight transportation industry, particularly in times of crisis..”

Burnett stresses LaneAxis is not out to “exploit” a serious emergency – they want to fix the serious supply-chain problems the emergency has exposed. The present crisis is a real-time case study illustrating the importance of having a modern, streamlined, and data-backed transportation network – the kind of network that could drastically lessen the potential of future emergencies bringing the supply chain to its knees. The system we are building will do just that.

LaneAxis is currently holding an equity crowdfund on StartEngine to accelerate development and growth of this transportation network. We are offering the average citizen a chance to own a piece of transportation’s future.

To learn more, visit startengine.com/laneaxis-inc

Freight brokers, by nature, are exceptional salespeople. It’s their job.

But when the sales pitch frequently changes, or is based on shaky assertions (or both), their credibility rightfully takes a big hit.

So it goes in the ongoing battle royale between brokers and owner-operators/small carriers. As LaneAxis reported during the height of the Covid crisis this past Spring, Carriers finally erupted in anger over their belief that brokers have been fleecing them for years. Low rates and a lack of pricing transparency sparked nationwide trucker protests stretching from SoCal to the White House.

Original Argument: Too Much Capacity

At the time, the broker coalition angrily refuted accusations of “price gouging” and a lack of transparency, claiming low demand was to blame for low rates.

“Brokers and 3PLs are not price-gouging – there is simply not enough freight to support all of the carriers,” said Robert Voltmann, CEO of the Transportation Intermediaries Association (TIA), a lobbying group representing brokers and third party logistics. “There are too many trucks chasing too little freight,” added Voltman, who made the comments in May, 2020.

Fast forward a few months, and the freight market is bouncing back strong, particularly in the spot market. Now that capacity has tightened up, especially with the upcoming holidays, brokers are taking a new tack in their fight against broker reform: stoking fear of higher costs for truckers and consumers if trucking advocates get their way.

New Argument: Too Much Cost

ArcBest, a self-described “multi billion dollar” 3PL, recently warned government regulators that if proposed broker reforms are enacted, every broker will incur at least $500,000 in additional costs every year – costs that will inevitably be passed down to Carriers and consumers.

“Essentially, any benefits received from carriers in modifying [regulations] will result in a substantial detriment to shippers, consignees and consumers and most likely to carriers as well,” wrote Barney Long in a mid-September letter to the Federal Motor Carrier Safety Administration (FMCSA).

Long claims revisions being sought to the brokerage industry will increase equipment, software programming and personnel costs to the tune of at least half a million dollars per year.

Long was responding directly to a petition filed by the Owner-Operator Independent Drivers Association (OOIDA), which seeks to improve broker transparency by:

  • Requiring brokers to automatically provide an electronic copy of each transaction record within 48 hours after the contractual service has been completed.
  • Explicitly prohibiting brokers from including any provision in their contracts that requires a carrier to waive their rights to access the transaction records as required by existing law.

A separate proposal seeks to require broker contracts exclude any stipulations or clauses that exempt brokers from having to comply with transparency requirements.

“If it wasn’t already clear before, it’s clear now: The freight brokerage industry is doing everything it can to maintain its iron grip over freight transportation,” says Rick Burnett, LaneAxis CEO and Founder. “No matter the season or circumstances, they need to maintain control and will always manufacture excuses for preventing broker reform and transparency. They have no incentive to drive cost savings into the transportation network. By nature, their model is margin driven with price masking baked in. LaneAxis has been fighting this uphill battle for years, knowing full well that independent truckers have had enough of the deception and excuse-making. We have been building a Shipper-direct network specifically for those truckers – so they no longer have to put up with this abusive and deceptive behavior.”

The LaneAxis Direct Freight Network is the first BROKERLESS network in trucking history. LaneAxis is empowering Shippers and Carriers to connect and do business directly with each other on the basis of total transparency and trust, backed by the patented technology LaneAxis provides.

To learn more, visit LaneAxis.com.