4 Indicators Suggesting Now’s the Time to Upgrade Your Logistics IT

Never mind what solution providers may tell you about why you should implement a new (or upgrade an aging) TMS solution. Here are four indicators from top tier, impartial sources that, together, represent a compelling case for why you should tackle supply chain logistics automation challenges in the next two quarters.

A US Recession Just Got a Little More Likely – Bloomberg
According to Bloomberg News, “The probability that the world’s biggest economy will enter a recession in the next 12 months jumped to 15%, its highest level since October 2013, according to economists surveyed Oct. 2-7 by Bloomberg News. The median had held at 10% for 13 consecutive months.” While it may be difficult to endure an implementation during today’s healthy volume of economic activity, it’s next to impossible to gain acceptance for new capital expenses once a downturn occurs. Plus, you’ll be better situated to ride out a downturn with better control over transportation spending.

Driver Shortage Projected to Grow More Acute – Transport Topics
Transport Topics reports that fleet driver turnover is decreasing (meaning more drivers are staying put with their current employers) and that the American Trucking Association is telling its members to brace for a worse shortage in 2016. According to TTNews, “Next year, the shortage could rise 55% to 73,500, driven by factors such as aging. The average linehaul driver age of 49 is seven years older than the U.S. working population.”

Global Growth Projected to Be Tepid in 2016 – Wall Street Journal
The International Monetary Fund is predicting that the global outlook for growth in 2016 is weak. Between the dramatic slowdown in China and the widely anticipated raising of US interest rates by the Fed, IMF analysts are saying there will be a correlated slowdown in the commodities markets. This directly impacts supply chain planning for US producers of commodities. IMF director Christine Lagarde in quoted in the Journal as saying advanced economies “should fully incorporate spillover risks in their decision-making process and, in addition, ensure that their communications are very clear in this regard.”

Diesel Prices at Six Year Lows – US Department of Energy
As of the writing of this post, the average price of a gallon of diesel fuel in the US is $2.43; the lowest price for fuel since June 2009. With the Congressional majority dead set against adding any new fuel taxes to support infrastructure spending and futures pointing to continued weakness in the price of crude, shippers are catching a significant break on fuel spend. For a fraction of the dollars saved by low fuel costs, a shipper could implement a new IT platform for more effective and efficient supply chain logistics and still have margin left over for profits.

Take the opportunity to act preemptively. Read the writing on the wall and take steps now to prepare and be ahead of the game with tighter, more transparent and efficient supply chains.

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