As the shipping industry grapples with the changes when shipping with USPS and more UPS fees, there's another problem coming to light. The worker shortage from the Omicron surge appears to be worsening. Earlier in January 2022, CNN reported how an average of 700,000 Omicron cases per day led to a limited supply of available workers. By the end of January, The Washington Post explained, "Between Dec. 29 and Jan. 10, approximately 8.8 million workers reported not working because they were sick with the coronavirus or caring for someone who was, according to new data from the Census Bureau.
Those numbers are nearly triple the levels from the first two weeks of December before cases had started to peak around the country. They were also the highest numbers since the agency started taking the survey in April 2020 — well over last January's peak of 6.6 million workers out." And now, FedEx has taken the step of suspending a core service due to the shortage. Let's take a closer look at what's happening, what services are affected, and why it reiterates the need for high-quality freight bill auditing services.
The labor shortage is not isolated to any industry, becoming a nationwide problem in a matter of weeks. While many believed the shortage had reached its worst in January 2021, the trend of fewer workers appears to be a new standard. And this comes in tandem with the growth of e-commerce. Considering the record-setting demands from retailers, again marred by stock-outs on store shelves, FedEx decided to suspend Economy Domestic FedEx Express Freight. Remember that this includes FedEx 2Day Freight and FedEx 3Day Freight. However, this is not the first suspension for the company. Until January 31, 2022, FedEx had suspended FedEx International Economy Freight.
The suspension might not be a stop-the-presses news story, but it's only the beginning of a bigger problem. As major carriers experience the effects of the labor shortage, shippers will see fewer available pickups and less available capacity. This will occur across all shipping service levels, putting added pressure to establish new carrier relationships.
It's well-known that a diverse carrier base helps keep costs in check, but with so many variables leading to confusion and a lack of capacity, there will come a greater risk for errors throughout invoices and payments. As a result, shippers will need deeper insight into their costs and which carriers will be best suited to make up for lost capacity following the suspension.
Of course, there's a host of other criteria affecting overall service levels, including Winter Storm Landon. Coming nearly one year after the devastation of Winter Storm Uri in the south, this latest storm reveals how volatile the market can become. The storm's effect on the Memphis and Indianapolis hubs created hazardous operating conditions, according to FedEx. In turn, those behemoth sites will lead to delays in delivery across the entire U.S. Furthermore, additional delays may be experienced in areas still in the grip of the storm.
For example, freezing rain between San Antonio and Austin has led to closures along the I-35 corridor, which might lead to additional stock-outs of produce that comes from Mexico over the coming weeks. Amid this powder-keg of uncertainty lies a few absolutes: Shippers must radically diversify their carrier networks, start tracking their costs more closely with freight bill auditing services, and have a partner to ensure their strategies yield the best results.
Such improvements may also include:
Everyone in the industry is searching for the light at the end of the tunnel of disruption. Still, there remains a grim reality: Disruption is here to stay. Even if the pandemic was to vanish and the climate stabilizes miraculously, the industry would feel the effects of these disruptions for years to come. Thus, shippers need to stay keen on what's happening and recognize the value of high-quality freight bill auditing services, including embedded account management. That's going to be the best way to approach these events. Get started by connecting with an expert at Intelligent Audit today.
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