As organizations continue to work through a litany of pandemic-driven supply chain challenges, many of them are using technology to navigate the current complexities and plan for future success.
Companies that were expecting at least some relief from the supply chain snarls, transportation chaos and labor issues of 2021 have been dealing not only with these problems, but also a new spate of issues, thus far in 2022. And while it doesn’t take a global pandemic to turn a supply chain on end, the accumulation of factors is making life pretty difficult for supply chain and logistics professionals right now.
Trucking and ocean delays have risen to the top of the “problem list” this year, with a spate of US winter storms and the ongoing container shortage/port congestion continuing to take a toll on supply chains. On the West Coast, for example, delays around the neighboring gateways of Los Angeles and Long Beach were “longer than ever” in February, Bloomberg reported.
The publication says that the upcoming labor contract talks with the West Coast longshoremen’s union, new environmental rules in 2023 that will force ships to slow down to reduce emissions, and companies that are “over ordering” due to poor supply chain visibility could all escalate the ongoing disruptions.
“With the havoc at ports showing no signs of abating and prices for a vast array of goods still rising, the world is absorbing a troubling realization,” the New York Times points out. “Time alone will not solve the Great Supply Chain Disruption.”
Adapting to the New Normal
For anyone that’s keeping tabs on the global supply chain, the publication says that the very concept of a “return to normalcy” has given way to a begrudging acceptance that a “new normal” may be unfolding. For example, it says that cheap and reliable shipping may no longer be taken as a given, forcing manufacturers to move production closer to customers.
“After decades of reliance on lean warehouses and online systems that monitor inventory and summon goods as needed — a boon to shareholders — manufacturers may revert to a more prudent focus on extra capacity,” the New York Times states. For example, Whirlpool recently warned the buyers of its washing machines, refrigerators and other household appliances that they would continue to experience delays as the company contended with supply chain problems.
“Even as Tesla last week announced record profits amid overwhelming demand for its electric cars,” the publication adds, “the company said sales would be hurt by difficulties in the supply chain — not least due to continued shortages of computer chips.”
Gaining an Information Advantage
Knowing that the current situation may not go back to normal anytime soon—but that the show must also go on, so to speak—Supply & Demand Chain Executive suggests supply chain professionals seek out creative solutions to their most pressing issues. Consider the different modes, trade lanes or inland transportation strategies that you might be able to integrate into your supply chain.
With demand and rates likely continuing to remain elevated through much of the year, some companies are using less-than-container load (LCL) as a way to offset the capacity constraints in the truckload (TL) market. “Keep in mind, LCL shipments are not going to bypass congestion at the ports, so inland strategies need to be considered,” the publication cautions. “Currently, many ocean carriers are looking to move more interior point intermodal (IPI) cargo vs. focusing on port-to-port.”
Supply & Demand Chain Executive also advises using technology to gain an “information advantage” and make smarter decisions for your supply chain. The right technology tools can give you the visibility and predictability needed to be able to adjust to issues like ongoing port congestion and delays. “Having visibility to changes in real-time gives teams and customers a chance to react and adjust other tactics down the road.”