September 27, 2021
Anyone that has been around supply chains knows that there have always been issues and challenges. Weather, economic cycles, capacity, pricing fluctuations, labor strikes, war, terrorism, policy changes, etc. -– have been with us since trade first began and those issues (and others) have always been a part of managing cargo flows. But 2021 is something much bigger entirely. Why is that?
The simple answer is there is a sudden and massive surge of demand that far outweighs the market’s capacity. Simply stated, production was shut down while the U.S. economy went into demand overdrive. As production came back online, the manufacturing sector responded by fulfilling an unprecedented backlog of orders.
And this is not just an issue in the United States. This issue also exists in China. In fact, as I write this, the coastal cities of China have four times as many ships sitting off the coast as the Pacific ports in the United States do.
The oceans are also just one part of the story. To get freight to American consumers, it must go through an intricate system – shifting from port to other modes of transportation. This may include dozens of touchpoints in the domestic freight network, all of which are vulnerable to their own choke points.
Trucking has the most challenging labor picture of all; it simply is a job of last resort for many people. When construction, retail, food service, gig economy, and warehousing are all competing with the trucking industry for labor, it is often the trucking industry that loses.
Will the supply chain issues end soon? Very unlikely.
Going forward, business survival will require a highly functioning supply chain run by professionals with the experience and instincts to respond.
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Douglas Stein | PPE Advantage
WhatsApp: +1 (773) 814-0215
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