Without a doubt, 2021 was the year of economic reactivation, after the blow that was the most critical time of the pandemic, however, the health emergency is not over and adds to the issues that motor transport already had on its agenda.
The 2020 crisis caused by the COVID-19 pandemic caused more damage than that of 2009, affecting not only the operations and income of transport companies, but also hindering the work of the agricultural sector.
With almost 60% of the population with a complete vaccination schedule against COVID-19 and despite the fact that the 32 states decided to increase their risk level with the green epidemiological traffic light, the outlook regarding the pandemic looks better for the companies in general and carriers today begin to improve their growth expectations for 2022.
Next, we detail the panorama of the latent challenges of the sector:
The deficit of operators; Although it is an issue that has affected motor transport since before the pandemic, it is not an exclusive challenge for Mexico, for example the shortage of operators leads to a new record in rates in Europe, according to data from the International Road Transport Union ( IRU) the benchmark European road freight rate index recorded new all-time highs, standing at 108.3 points in the 4th quarter of last year, which meant 3.2 points more than the last quarter of 2020; but it is in the national territory that it is combined with other challenges such as insecurity on the roads, in the delay of driver’s license procedures and their requirements (certificates of training and comprehensive psychophysical exams). That is why we must make it an aspirational profession and generate professional operators, since the flight of talent to the US is a sign of carelessness in the working conditions that are granted to them, so it is necessary to focus on the development of the resource and provide them with better services that allow them to carry out their work with greater safety.
It is a reality that, in the United States, a trader earns much more and with less risk. He has better highways, works fewer hours, has more facilities, more rest and recreation areas, something that here in Mexico still needs to be developed.
The constant malaise, the insecurity; insecurity is always a pending issue that we cannot leave out. There may be signs of improvement, but it is not enough, there are roads that are still very unsafe. According to data from the Secretary of Security and Citizen Protection (SSPC), the states of Michoacán, Puebla, and Edo de México particularly present higher incidences, in this sense, thefts in transit represent 89% of the cases, according to data from the Sensitech Supply Chain Intelligence Center. That is why situations of violence and theft in the sector affect the workforce of drivers, who prefer to change lanes with fewer risks.
Inflationary pressures and increase in fuels; Both in the country and in the world, problems in supply chains and high price levels have begun to slow down economic growth, which turns on the alert lights of the productive sector due to shortages and high costs in the acquisition of supplies. In the case of Mexico, the inflationary pressures after the increase of the current rate by the Bank of Mexico to 7.8% and these persist affecting both the consumer and the producer. For the latter, the main challenges are obtaining raw materials, which for the carrier translates into a lack of units and auto parts and, later, that their value does not affect their prices.
Today the logistics sector in the United States and Mexico is at a crossroads due to the rise in fuel costs and they expect the price of gasoline and diesel to drop, because otherwise freight transport costs will continue to suffer. significant increases that directly affect the supply chain.
However, there is not much hope that energy prices will fall in the short term, one factor that will keep them high is the climate of the war in Ukraine, and the ups and downs that this causes in energy prices worldwide.
The increase in the price of oil was not a surprise. In the US, when the administration of President Joe Biden took office, it reduced oil and gas production, most dramatically by canceling the permit for the expansion of the Keystone XL pipeline from Alberta, Canada. .
In less than a year the cost of Diesel has increased more than 110% of its value and the last three months represented 45%, the conflict between Russia and Ukraine accelerated the rise.
Fuel is the second largest expense for a fleet, after drivers’ wages. Fuel costs about 24% of the cost of a truck, so carriers are forced to add fuel surcharges, but not everyone does it correctly, which can result in less profitability for the company or excessive increase in fixing the new freight price.
Tax regulations; Before the entry into force on January 1, 2022 of the obligation of digital tax receipts online (CFDI) with Carta Porte complement, the concerns and concerns of carriers, load generators, continue to be valid.
And the opportunities? In this line, the company FreightWaves partnered with Echo Global Logistics to evaluate opinions and expectations of the industry about what is emerging as a period where complex challenges are glimpsed. 88.37% of the managers surveyed believe that cargo volumes will remain the same as in 2021, while a little more than 10% believe that they will increase this year.
According to Doug Waggoner, CEO of the logistics company, “in 2022, companies will need to stay up to date on a variety of factors that impact the industry, including consumer spending trends, extreme weather events, geopolitical situations, which put pressure on the market or cause supply chain disruption.
The growth of electronic commerce; In 2020, with the start of the pandemic, eCommerce accelerated its development by 5 years and although it is not expected to report growth like last year, the trend will no longer be reversed and will continue to represent a business opportunity for transport companies.
As data, last year, the GDP of courier and parcel services increased 21.4% annually, a growth that contrasts with the 8.2% drop in national GDP, due to the effects of the health crisis.
In international trade, despite the challenges in the supply chain, the outlook looks positive as the most recent figures from the US Government’s Bureau of Transportation Statistics (BTS) show the value of cargo moved for motor transport between Mexico and the US reached 41,134 million dollars (mdd), the highest figure in the records, which date from January 2006.
Author: Jose Maria Gaxiola
José María Gaxiola is Director of El Trocadero – CAADES
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