Global shipping issues remind us of the importance of supply chain visibility

Months after the disruption that occurred on the Suez Canal and the fallout from the pandemic, the supply chain and global shipping channels are feeling the heat of knock-on consequences. The shortage of drivers, containers, and rising costs associated with these issues from day to day has left the industry facing challenges on multiple fronts and docks full of delayed cargo.

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What does this mean for the coming weeks?

For businesses to obtain greater resilience in dealing with these challenges, better availability of real-time data and predictive insight is essential. The data accumulated requires a cross-check in real-time against previously collected data. This can be in the form of route mapping, expected delivery dates, and potential disruptions to truly determine an estimated time of arrival (ETA). From there, stakeholders can be alerted to issues and anticipate them with solutions in mind.

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With the holiday season around the corner, each link of the supply chain would benefit from visibility. Many retailers are advising shoppers to order early to anticipate the delays around this time of year. An expected rise in consumer spending online will also lead to increased pressure on freight and shipping links. Add to this the delays in product manufacturing due to worker shortages and slower than normal component production, productivity in areas of docking and delivery have never been more vital to make up for lost time.

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What is the cost of such issues?

Unfortunately, organizations have a long way to go when it comes to closing the visibility gap across their end to end supply chains. Invesp states that 57% of businesses have poor visibility across their supply chain and that nearly two-thirds (63%) of companies do not use any technology to monitor their supply chain performance.

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Failure to embrace and accelerate digital transformation initiatives, in particular around visibility, has proved costly in the short term for many, with a need to be rectified in the long term. Spiralling costs have been passed from seller, shipper, to shopper and are rising at a rate that goes hand in hand with delays or issues with perishable items.

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For supply chains, a report by Deloitte found that 44% of CFOs said shortages or delays have increased their companies’ costs by 5% or more. Meanwhile, The Economist reports that the average cost of shipping a standard large container (a 40-foot-equivalent unit) has exceeded $10,000, almost four times higher than a year ago. Sending one from Shanghai to New York, which two years ago would have been around $2,500, is now closer to $15,000.

With more touchpoints than normal due to the issues mentioned above, it has become more complex to achieve end-to-end visibility at a tactical or operational level. Ideally, the capability to link your tracking and automation tools, or with those of carriers, can save time and cut costs. More importantly, you know where your cargo is and when it will arrive.

What is the solution?

Companies strive to achieve greater benefits when they develop comprehensive foresight for the future of their supply chains, which can be done by carrying out assessments of performance and forming long-term objectives and KPIs. 

The visibility gap highlights the need for organizations to invest in solutions that offer a solid foundational transparency layer throughout their operations,  with real-time, end-to-end supply chain visibility remaining a top investment priority for companies. 

To achieve this, consider the benefits of technology that is not only predictive, but that provides insight into your business’ performance. A provider of this kind of innovation should be able to fulfil the demands set by your company regionally or globally while being able to adapt to the growing needs of your operations to become a key partner in your success. 

Conclusion

Going forward, companies need to further develop the digital transformation of their supply chains. A focus on a solution that can streamline processes, lessen the need for maintaining additional inventories and reducing bottlenecks, such as stoppages while unloading when consignments arrive at their destination.

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Shippeo can assist you in demonstrating the value of such technology by accurately assessing the projected return on investment. Get in touch with one of our specialists today.