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.
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.
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.
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.
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.
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.