The supply chain situation is unlikely to be resolved before the first half of 2022, thus the strategy going forward will be to keep implementing remedies and improving resilience.
The going has been tough, and the future appears to be grim. On the wharf, cranes could be seen idling. The vessels couldn’t dump the import containers because there wasn’t enough room in the yard. Almost every link in the global supply chain has become tangled in a logistical knot in the last two years, causing various trade bottlenecks along major routes. There have been massive port closures, both in terms of time and number. The interruption has been significant, and the ramifications have been disastrous.
The manufacturing units were the first to succumb as the pandemic extended its tentacles. In the early days of the pandemic in 2020, a labour shortage caused manufacturing to be disrupted. An exponential drop in output statistics impacted major manufacturing areas in China, South Korea, and Taiwan, as well as huge industrial cities in Europe.
The impact on output was manifested in a variety of ways. Due to a lack of chips manufactured in Taiwan and Malaysia, computer production in China has dropped substantially. Vehicle production has slowed as well. All of this had a global influence. In the United States, commonplace commodities like toilet paper and straws, as well as crucial items like protective gear for doctors and pharmaceuticals, were in limited supply.
What is a resilient supply chain?
The ability for resistance and recovery defines a resilient supply chain. That implies being able to withstand, if not completely prevent, the effects of a supply chain disruption, as well as quickly recover from one. Multiple sections of the supply chain are vulnerable to operational risk and disruption. As we saw with COVID-19, worldwide disasters can have a far-reaching, global impact on supply chain logistics, suppliers, and workforces. Unexpected competition, unanticipated market movements, or even rapid changes in customer’s shopping behaviour can all cause supply chain disruptions.
Problems in Current Supply Chain
From product shortages to facility closures and beyond, the COVID-19 epidemic wreaked havoc on every local, national, and global supply chain.
Shippers and carriers all across the world have persevered, and they continue to transport and deliver goods on a daily basis.
Challenges that shippers are facing in the current supply chain –
- Keeping the transportation costs down
- Keeping up with the customer/industry demands
- Sourcing consistent, reliable carrier capacity
- Keeping up with the latest technology solutions and demands
- On-time pickup and delivery performance
It’s All About The Money
Controlling freight costs is an age-old concern in the transportation sector, and it has become even more so in recent years for shippers.
Shippers had been facing escalating costs owing to our location in the truckload market rate cycle even before the pandemic, and the COVID-19 volatility made it significantly more difficult.
Most shippers were having financial difficulties, whether sales had slowed or increased, and freight prices were not helping.
Another important aspect was the shortage of truck drivers, which occurred as a result of drivers’ inability or unwillingness to work during the pandemic.
Fast & Free Shipping is Pressuring Everybody in the Supply Chain
Customer demands for faster, cheaper service — so called the “Amazon effect” after the e-commerce behemoth’s expanding dominance — have amplified pricing difficulties and put a pressure on an already stressed carrier supply.
Even in business-to-business transactions, the two-day free shipping that has become the standard in ecommerce has set expectations for everyone.
Keeping Up in the Technology Arms Race
Concerns among shippers about keeping up with the latest technological solutions and demands might be observed as a result of ongoing competitive pressures.
When a new tool for analytics, forecasting, or any other area of logistics is brought to the market, it’s normal to be concerned that your competitors will invest in it.
Are your competitors already reaping the benefits of new technology and prepared to overtake you?
Challenges that carriers are facing in the current supply chain –
- Keeping the maintenance and the operational costs down
- Keeping up with customers/ industry demands (better, faster, cheaper)
- The unexpected delay in time
- Keeping up with the latest government regulations
- Access to a person when we have transportation/ logistics issues
Another difficulty we can see in last year that strained carriers were:
- Maintenance costs rose – Tools and parts were entangled in the same insecure supply chains that carriers do.
- Unplanned delay become more common – Trucks were stranded more frequently than usual during the pandemic due to facility closures and understaffing.