Hurdling Supply Chain Pain: How To Answer Common Questions About Today’s Market
Managing shipping operations has never been easy. There is never a dull moment with ever-present problems like the potential for weather delays and a changing regulatory landscape. However, 2021 has brought the number of obstacles facing the logistics marketplace to new heights. The past year has left many industry professionals stuck juggling sustained rate hikes, record-low schedule reliability, capacity limitations, and labor shortages among other supply chain disruptions stemming from COVID-19 restrictions and rising consumer demand.
Together, these hurdles are making it almost impossible to get products to market on time without breaking the bank. If you participate in any part of the supply chain process or manage a team that does, there’s a good chance you’re fielding questions about what’s going on and why things are so difficult right now. It’s important for companies and their employees in every functional area to understand what’s happening and what they can expect to see moving forward. Surviving the current situation will take organization-wide effort, as well as patience.
Here’s how to answer the question: “Why are supply chains broken?”
Yes, it started with the pandemic, but it’s been a long and winding road since. Stimulus-driven demand for consumer goods and the resulting influx of U.S. imports at ports ill-equipped to manage such massive volumes are largely to blame for the issues we’re seeing currently. As soon as manufacturers were able to get their operations going again following the shutdown of global production, they faced a huge backlog of orders that has since wiped out their inventory levels. With manufacturing racing to restore product flow, ocean carriers had to step up their game and maximize capacity to keep up with demand as well as they could.
Then, ports began to fall behind amid these overwhelming cargo surges, which then led to escalating labor, trucking, and warehousing shortages. Now there’s little ocean vessel and container capacity to be found across the board, and the ongoing equipment imbalance is only increasing, alongside transit delays.
A visual that’s gone mainstream is the site of dozens of ocean vessels sitting and waiting off the coast of California. The number of vessels waiting has ranged from forty to over a hundred for months. Considering it’s ‘normal’ for there to be one or less, those figures show how extreme the situation really is.
Unfortunately, the chaos doesn’t stop once goods finally get into the country. On land, supply constraints surrounding trucks, trailers, and chassis equipment paired with a significant lack of dockworkers and drivers complicate matters further. The domestic industrial sector is having a tough time getting the materials it needs to produce the equipment carriers require to manage over-the-road demand.
At the same time, despite the efforts trucking companies are making to attract as well as retain drivers and keep products moving freely, the industry is still short 80,000 workers, according to the ATA’s latest data.
Where does all this leave shipping departments?
So, that’s the story of how we got here. For any business hoping to see improvement soon, there’s not much to be optimistic about just yet. Unfortunately, there’s little any one company can do to speed up work at the ports. The focus for individual shippers needs to be on what they can control, which is improving its access to domestic capacity and managing costs through a better freight procurement process.
To learn more about how Loadsmart’s cutting-edge technology, deep industry expertise, and innovative vision can help you move more with less and improve the parts of your supply chain you can control, visit our website.
Transforming the future of freight, Loadsmart leverages technology to build efficiency around how freight is priced, booked and shipped. Pairing advanced technologies with deep-seated industry expertise, Loadsmart fuels growth, simplifies operational complexity and bolsters efficiency for carriers and shippers alike. For more information, please visit: https://loadsmart.com.
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