- Port congestions
There have been the longest waiting times for ships heading to ports across the world throughout the past two years. For example, in Long Beach and Los Angeles, dozens of containers were waiting to unload cargo from China. The gridlocks in ports across the world created bottlenecks at the loading and unloading stations, which affected domestic supply chains. While port congestion is nothing new, the type of congestion experienced at the peak of the pandemic was historical and continues to affect supply chains to date.
- High freight costs
Trucking and transportation costs reached historic highs in 2020 and 2021. The prices for sea freights skyrocketed alongside the airfreight, which followed in the increase of the costs. This sudden increase in costs made it difficult for companies in the supply chain and retail sector to cope, as more funds were required. As supply chain professionals look into the future, they must understand the causes of the rising freight costs and possible solutions to the emerging problems.
- Workforce and labour shortages
The COVID-19 period has been riddled with uncertainties regarding the workforce and shortages of labour. This has complicated the recovery process more as some of them still encounter a problem getting the right number of people to work. There is a shortage of both the white and blue colour workers in terms of their skills and numbers. Apart from the challenges concerning labour, other non-COVID-related factors need to be addressed accordingly. For instance, emerging technologies have changed the way the supply chain operates.
- Commodity pricing
Supply chain professionals are facing the challenge of fluctuating pricing of commodities. They are expected to know the categories more than just being negotiators. However, with the fluctuating commodity pricing, it is not easy to understand where the prices will go next. Furthermore, spending transparency remains poor.
- Restructuring supply chains
While time will heal some problems in global supply chains, it is time to restructure some aspects of it. As we enter the middle of the year, companies must seek more reliable means of procurement. Whether this means reshoring, diversification of suppliers or new agreements with careers, this will largely depend on the nature of the supply chain as well as the intent of the company. Regardless of the route, they decide to choose, leaders must be decisive in recognizing the need for change and be willing to tear down and build new partnerships. As they restructure supply chains, executives need to look broadly at the chain of custody issues and business struggles. Leverage multiple suppliers for different goods and strategically align with partners that have predictable supply chains.
In summary, supply chain companies have another chance to rebuild their supply chains and reassess their budgets and planning. Furthermore, they can now invest in new technology and identify and retain leaders. Supply chain challenges will continue to the end of the year, but the good thing is that they will become more predictable if one tackles them.