Whether you’re a business that depends on shipping products for your ROI or a consumer hoping to get specific items before the holidays, you’ve likely felt (or at least heard about) the stress on the shipping supply chain.
The backup has been here since the beginning of 2020, when COVID-related shutdowns, health worries, and labor shortages became the norm. So, why is the supply chain still struggling at the end of 2022?
Today (Nov 2022) we’ll delve into the supply chain backup and what the future holds for businesses and eCommerce that rely on shipping.
Who’s Involved with the Shipping Supply Chain?
To better understand why we have a global supply chain backup, you should know the players who make it up.
- Cargo owners- referred to as BCOs, or beneficial cargo owners, are the owners of the goods inside a container
- Carriers- the companies that own and operate the ocean liners shipping the containers overseas
- Ports- the places the vessels drop and unload the containers
- Railroads- the companies that provide national shipping for containers
- Truck drivers- referred to as drayage carriers, are those who move the containers to and from ports, to and from railroad facilities and handle deliveries
- Warehouses, distribution centers, and other facilities- where containers are delivered after the shipment is complete
Others involved may be machinery and equipment companies, chassis companies, container and steel companies, and more.
When just one of these parties is backed up, the entire chain can be thrown off balance, creating the bottleneck situation we have now. Because the supply chain is worldwide, a slowdown in production or stopped production in one area of the world can have major impacts on other countries.
What’s Affecting the Current Shipping Supply Chain?
There’s been a significant demand put on the supply chain over the last couple of years. When the world reopened, many global companies pushed out goods to support economic growth; however, the influx caused some issues.
Here’s why:
Labor shortages- from warehouse workers to drivers to customer service, without people to ensure a streamlined, efficient process, containers go unmanned and unloaded, and the chain slows down.- eCommerce has been steadily growing- meaning the movement of goods– domestically and internationally– has increased. With this continued growth, catchup has been difficult.
Lack of logistics and organization- logistic systems are struggling to keep up due to the high volume of goods being shipped, and standard guidelines for organizing goods removed from containers are unable to be adhered to due to space constraints and a lack of employees. - Warehouse backups- if there’s no room at the warehouse, the container is left on a ramp until space is available, creating further disruption to a steadily moving chain.
- Delays across the board- whether traveling by sea or land, vessels and trains have seen an uptick in delays.
The pandemic was the instigator of the global economy production shutdown, but now the increased need for inventory has further complicated the supply chain.
How the Backup is Affecting Crating & Shipping in Nashville
As a shipping industry leader working with several kinds of industries, we’ve seen firsthand how the supply chain affects businesses and the economy.
Costs have been a growing concern. Although demand is now slowing, it has pushed pricing higher than usual and higher than expected. Consumers who consider themselves uninvolved with the shipping crisis have certainly noticed higher prices when buying anything from food to clothes to toys.
Costs are passed down the line, so when we have to pay more for one part of the shipping process, those costs trickle down to customers who may decide not to move forward with their project.
We’ve also seen many delays in the shipping process. We’ve been fortunate to have the capacity to get products prepared and ready; however, we’ll often have to store the items until delivery is available due to backups at other links in the chain. This disrupts both our process and our customers.
Best Advice to Survive the Current Supply Chain Crisis
Planning ahead is an absolute must if you want to make it through the current unpredictable global shipping chain crisis. Give yourself time, make a schedule, and get all dates planned and orders placed as soon as possible. Even doing so may cause the process to run less smoothly than you hoped, but it will likely minimize some issues.
Two things to help you through the process: flexibility and communication.
Flexibility
The more flexible you can be, the better. That’s why making plans as far in advance as possible is ideal. If dates fluctuate, you won’t be letting people down.
Remember that there are many working parts to this; you can’t make promises based on the system’s wavering timeframes and glitches.
Communication
Communicate with those depending on you and your goods, with those involved in your shipping process and supply chain, and within your team. Everyone is dependent on each other in many of these cases, so be sure to keep everyone in the loop throughout the process. Doing so invites trust and eases stress for all involved.
What’s Next for the Shipping Supply Chain?
The challenges in the supply chain will likely not be corrected any time soon. A demand reduction could ease the strain on the system and allow a dramatic catch-up that helps eliminate the constant delays and shortages, but without the demand, we may find ourselves in a recession.
An increase in workers would help lead to improved movement in the chain, so gaining traction with the labor force is a great place to start normalizing again.
Both consumers and businesses have things that need to be shipped, and this requires meticulous coordination between all involved in the chain; with the proper support, the crisis will work itself out eventually.
If you have any questions about a shipping project or the supply chain process, we’re here to help. Contact us, and let’s minimize your stress and frustration.