BotThoughts: How Long Will the Supply Chain Disruptions Continue?
Supply chain disruptions throughout the world continue to create significant challenges in many industries. Trying to get shipments on time is nearly impossible for shippers, carriers, and third-party logistic providers.
Supply chain issues aren't expected to be resolved anytime soon, as these disruptions will likely continue through the first half of the year and maybe into 2023.
Despite these problems, consumer demand remains high. Several major retailers continue to report record growth and profits, as Amazon experienced a 22% increase in net sales last year. Additionally, Walmart and Kroger also announced strong sales throughout 2021.
Many of these retailers are looking to ease supply chain problems by investing in more warehouses, rerouting deliveries to less busy ports, and increasing overnight hours at some ports in the United States.
Supply chain disruptions began to occur nearly 18 months before the pandemic due to the United States increasing tariffs on Chinese products in 2018. Many of the suppliers stopped sourcing from China to avoid these tariffs, as they began to work more in Indonesia, Vietnam, South Korea, and the Philippines.
Unfortunately, these suppliers began to experience numerous problems due to infrastructure challenges and trade compliance issues. Trying to navigate all of the legal processes involved in shipping was also a major hurdle that led to numerous delays in shipping.
The COVID-19 pandemic only further complicated these challenges on the supply chain. Just-in-time production and inventory management were nearly impossible to manage due to the impact of the pandemic.
These disruptions in the supply chain caused significant changes in the relations between suppliers and carriers. Many of these companies signed long-term agreements to navigate these challenges better.
The use of technology continues to expand to improve freight management. Cloud-based applications make it possible to create more efficient routes while streamlining the entire process. Using the cloud helps decrease the amount of work involved with freight movements while also lowering driver turnover by making it easier to manage trucking capacity.
Cloud-based transportation systems will continue to help overcome logistical complexities while improving driver engagement.
Focusing on a more collaborative approach between carriers and shippers is also helpful in overcoming supply chain disruptions. Shippers that focus on building stronger relations with their carriers are crucial to easing tensions while making everyone's job easier.
It is helpful for shippers to be more flexible with appointments and allow them to submit new rates each quarter without going through a tense negotiation process.
Shippers will need to continue to decrease the capacity crunch for their carriers. Looking at ways to reduce detention times is incredibly effective, as dealing with constant delays during the loading and unloading process is always a frustrating experience.
Modifying shipping hours or going from a live load to a drop-and-hook approach are just a couple of ways to improve the driver's experience. Making these changes helps to limit costs while also improving driver retention.
Cargobot is one of the leading digital platforms connecting shippers and carriers throughout the United States. We pride ourselves on making it easier for shippers and carriers to manage the supply chain.
Our innovative system allows you to track shipments in real-time and a dedicated customer service representative is always available if you have questions. Our paperless invoicing also make the entire shipping process more manageable.
Contact Cargobot today to keep up with the latest news involving the inland shipping industry!