One of the major factors that could cause that uncertainty is the labor market. Railway workers threatened to strike in 2022 and the industry is already talking about potential disruptions at UPS this summer when the company’s contract with the Teamsters expires in July. The Teamsters is one of the largest commercial trucking unions in the U.S and any disruption could impact package deliveries for many households and businesses in the country. Many people are looking to the trucking industry to help solve some of the issues but that industry is also facing a shortage of truck drivers, access to spare parts and high diesel costs (the current national average cost is $4.52), with no quick fix in sight.
We’re all familiar with the long line of cargo ships off the west coast last year. One of the biggest improvements is greater balance between the east and west coast ports to help mitigate those issues. The Port of Los Angeles was the busiest container port for 22 years but that changed towards the end of 2022 when The Port of New York and New Jersey climbed the ranks and became the busiest container port.
During the height of the pandemic, it became very hard to get items and some of those reasons were described earlier. Now, the bigger issue seems to be excess inventory that is resulting in discounts as well as retailers selling to secondary markets. Simply put, overstock takes up space in total inventory and disrupts the general flow of the supply chain.
Is there a way to ease the challenges of the operations process? We can expect to see automation being utilized more in the space to assist with manual tasks normally done by humans, status updates with inventory, and advances in risk management. Manual tasks take time, but that time can be shortened and the quality of work can be improved with automation. Autonomous driving can be used by retailers to save costs and allow businesses to focus more on their sales and drive a better customer experience. As for inventory, consumers and employees could receive live updates on their orders moving through the supply chain. Overseeing that compliance standards are being met can be made easier through automation with technology signaling problems that may occur.
All moving parts of the supply chain crisis place a heavy emphasis on the environment. The shipping industry contributes to the climate crisis as it’s responsible for three percent of global greenhouse gas emissions. In an era of battling both the supply chain and climate crisis, we can expect to see more efforts towards sustainability. A step in the right direction was made in 2022 with the world's first fully autonomous cargo ship.
As labor disruptions, strikes, and industry shortages could contribute to the crisis, we’re looking forward to seeing the continuation of sustainability efforts following the autonomous cargo ship and automation being used to alleviate current stressors.
Chris Lentjes is CEO of US operations for Eurora, the provider of a leading AI/ML backed cross-border trade compliance company. He has more than 20 years of experience in digital and physical ecommerce logistics and has held senior roles at leading industry companies including Pitney Bowes and DHL. He has extensive experience in supply chain, global ecommerce and all facets associated with product and service management.