Road Ahead is Bumpy, but Outlook is Strong for Transportation Equipment Makers

New cars and trucks, heavy equipment, aircraft, ships and other transportation modes rely on a complex international supply chain that's unpredictable even in the best of times. Despite  uncertainty, the outlook is strong for manufacturing overall, and transportation equipment in particular.

The U.S. economy grew for the 112th consecutive month, according to the most recent Institute for Supply Chain Management Report on Business. In the report, one transportation equipment executive had a positive outlook, saying "Generally high levels of demand continue, and [we are] planning for this elevated rate through the rest of the year.”

For transportation equipment manufacturers, long design and production lead times mean a product designed during a period of economic growth may enter the market in the midst of a downturn. Auto manufacturers ramp up to meet high consumer demand and airplane manufacturers tool up for new products over years or even decades. Shipbuilders seem to be tied to a boom-and-bust cycle of under and over capacity. During those times, manufacturers must deal with pricing variations in raw materials that put pressure on margins and threaten production deliveries.

Even the Class 8 trucks that are the backbone of the freight system face supply chain challenges of their own. Demand for new trucks is so high that manufacturers are struggling to keep up, and supply chain challenges for inbound and outbound products are contributing to the problems.

Changing regulations and increasing performance standards force manufacturers to develop and utilize new materials, driving up manufacturing costs throughout the process.

One critical connector throughout this industry is the supply chain. In many cases, the supply chain is an integral part of the production line as components move from place to place for value-added services and assembly.

Challenges such as tight trucking capacity and lack of network visibility make it difficult for transportation equipment manufacturers to manage their supply chains in-house. An Enterprise Logistics Provider can deliver an array of strategic solutions and tactical tools to control costs and manage supply chain complexity.

Unlike a traditional 3PL, Transportation Insight uses a Co-managed® Logistics model that enables shippers to take advantage of its vast expertise in all major transportation modes while maximizing the value of vital shipper-carrier relationships. Our tools and technology provide full supply chain optimization, delivering access to carrier sourcing, transportation management system (TMS) applications, freight invoice audit and pay, parcel logistics solutions, process improvements, business intelligence and advanced analytics.

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