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"10 Disruptions That Threaten To Spark
Chaos On Supply Chains In 2023"
By Epic Economist
"Disruptions to supply chain operations are set to accelerate in 2023, and they are likely to affect businesses’ and consumers’ access to goods, create port holdups, reduce container and freight availability, and push prices to even higher levels in the months ahead. To say that the vast majority of the global population has felt the impact of the supply chain crisis over the past three years is quite an understatement. It’s hard to see how someone – living in any part of the planet – would not have faced the reality of surging consumer prices, delivery delays, and uncertain outlooks.
Industry executives say that 2023 will be a hungover year for supply chains, with lingering headaches from more than two years of shipping congestion, freight problems, and shortages of commodities and raw materials all around the world. “There’s a reliability hangover,” Bill Seward, the new president of supply-chain solutions at United Parcel Service, said in an interview. “Many, many companies still feel chagrined and burned by what happened with regard to accessibility last year,” he said.
There’s still plenty of angst in most sectors. “A lot of senior execs feel very battered by the last two years and there’s a heavy emphasis on risks and the ability to adapt in different ways,” Seward added. At the same time, labor remains the biggest challenge across all modes of logistics and transportation right now. Finding and maintaining enough employees to effectively move products along the distribution network is a major concern as carriers do not have the manpower to ensure schedule reliability. Consequently, this compromises shippers’ ability to deliver supplies and finished goods on time. In the US, particularly in the service sector, 65% of employers reported difficulties in recruitment. Many experts explain that the record logjams witnessed over the past couple of years have contributed to prompting workers to seek alternative employment. On top of that, the current tension in the labor market is leading to higher turnover as workers ask for better pay and working conditions.
Even though consumers are curbing their spending to cope with hot inflation, and demand is expected to sink as a new downturn begins, transportation challenges and product shortages are already occurring, and many factors are combining to make these problems even more acute throughout the year. And it’s safe to say, new bottlenecks may emerge along the way, putting even more pressure on companies and the already struggling shipping industry.
Xeneta’s Peter Sand says that 2023 is poised to be another challenging year for the global supply chain, with global shipping container volumes expected to fall precipituously. The outlook remains bleak, with no signs of a reprieve from the current market moderation. The ING’s Trade Outlook 2023 states, “There are simply not enough silver linings to keep global goods trade robustly flowing.” In fact, global trade growth is expected to slow to just 1.1% during the worldwide industrial recession, according to HSBC. This forecast paints a picture of an industry grappling with a perfect storm of economic and regulatory challenges. The shipping and freight market are facing a turbulent future, and the ramifications of this turbulence will be felt by businesses and consumers alike. It is a time of great uncertainty, and the industry must brace itself for a long and difficult road ahead.
That’s why today, we decided to list some of the major issues that are likely to wreak havoc on supply chains in 2023."
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