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HUB-Supply Chain Supply Chain Industry Updates

Let’s Get This Show on the Road


“Fasten your seatbelts. It’s going to be a bumpy [next several years].”

That’s not quite the line Bette Davis famously delivered in “All About Eve.” But, substitute America’s freight and logistics industry for a Manhattan apartment full of tipsy Broadway types, and Davis’ jaded character could be describing the recovery from the COVID-19 pandemic.

A report released this week from McKinsey & Company forecasts “A Bumpy Road to the Next Normal” for the freight industry — and a recovery that could take up to half-a-decade to play out.

McKinsey said its recent “research produced two insights for freight and logistics companies. First, full recovery will take about three to five years, a rough patch in which companies will be severely tested. Second, the recovery will differ by transportation mode and commodity.” The firm conjectured that LTL and FTL shipping “are likely to recover faster than other modes [such as air and rail] due to their commodity-mix profiles.”

There are several things freight and transportation companies can do to prepare themselves for this long recovery period, according to McKinsey:

  • “Make bold moves on discretionary and non-people-related costs.”
  • Reorient business models to take advantage of potential growth areas in coming years.
  • Invest in new digital capabilities.

The next several years also represent an opportunity. In keeping with the show business theme we began this article with, McKinsey noted that “U.S. freight and logistics companies are set for a moment in the spotlight.”

“Most have long felt overly managed by procurement departments,” the firm summarized. “But the crisis has made logistics and transportation very much a C-suite issue, especially as shippers seek greater resiliency in their supply chains. Freight and logistics companies need to make the most of the opportunity. Transport is in for a difficult stretch, with subdued demand for the next three to five years. But the companies that can innovate and outperform their peers will have a chance to shine.”