If you’ve been paying attention to the news, then you probably already know about the recent global supply chain issues that are happening. The trouble is that while there are items to be sold, a lot of imported stock is sitting at docks or on ships waiting for delivery.
And according to a report by ABC News, the issues might get worse before they get better. So what’s causing these problems? And how will it affect the supply chain of 2022?
This will have a massive effect on stores and holiday shopping this year, and possibly in 2022 as well. Read on to learn exactly what the issue is and what effect it might have in 2022.
There have been some supply chain issues developing since the start of the pandemic. Many factories and businesses had to shut down suddenly. That meant that a lot of goods weren’t being made.
It also means that a lot of raw materials stopped being developed too. Even when these factories reopened, there weren’t necessarily a lot of materials for them to work with. And keep in mind that this affected the whole global supply chain.
Now, factories are working at full strength again. There’s just one small problem: transportation. A lot of truck drivers and dock workers were either laid off or quit during the height of the pandemic.
And now, there are cargo boxes just waiting to be either removed from ships and loaded onto trucks to their destinations. There simply aren’t enough workers to move these materials fast enough. And this could be affecting the supply chain of 2022.
Many stores are expecting that they might have issues around the holidays, not just this year, but in 2022 as well.
So what items are on these ships? And how will this affect stores in the near future?
Almost every industry is going to be affected by these supply chain 2022 issues. Everything from electronics to furniture to silverware is on these ships, just waiting to be unloaded. Some areas aren’t even accepting deliveries right now until they get the staff that they need to keep up with demand.
This means that a lot of stores might have a rough holiday season. Many customers might wander in to try to find the perfect holiday gift, only to find that there isn’t much of anything left on the shelves.
And shortages mean a decreased supply compared to the demand. When this happens, a price increase always follows. So even if you can find that perfect gift, you might get a shock at how much prices have gone up.
The United States is already starting to see this at the gas pumps, as prices are starting to rise again due to the shortage of delivery drivers. Other industries are quickly beginning to follow suit to make up for lost income.
So how will this affect the global supply chain of 2022? Is there anything businesses can do to stay ahead of these problems? What can these businesses expect from their logistics partners?
The first thing that both businesses and store customers will notice is increased prices.
Logistics and transportation companies have two problems. The first is that they don’t have enough workers to move supplies. This includes items like fuel that the trucks need to run in the first place.
This leads to their second problem: higher gas prices. Because it’s harder to get fuel to gas stations, gas prices will go up in an attempt to curb demand. The issue is that this means that truckers will also need to pay the same raised price for this fuel.
In short, it’s more difficult and more expensive to get supplies where they need to go. Logistics and shipping companies will be forced to raise their prices due to how difficult it is to transport large amounts of goods.
And stores will have to account for this increase in shipping prices somehow. In most cases, these stores will raise their prices to afford the new transportation prices. This prevents them from needing budget cuts from somewhere else, such as employee salaries.
Logistics and shipping companies all want to deliver their products quickly and reliably. This can be difficult to do when there’s a staff shortage.
This means that these companies should acquire reliable staff quickly if they want to keep their customers. But working on docks and driving trucks isn’t easy work. It can be dangerous and requires skills and patience that not everyone has.
For this reason, this type of work doesn’t appeal to a lot of people. So the first challenge these companies have to overcome is getting people interested in the work that they do.
One way that they’ll do this is by offering higher wages for employees. This goes beyond their basic pay. These companies are starting to offer better benefits to their employees, as well as bonus pay for signing onto their company.
This will especially appeal to younger people who may be struggling to find work in today’s job market. These people are trying to support themselves and earn some savings. That means that a well-paying job driving a truck or unloading ships might not sound so bad to them after all.
When businesses place an order, they want to know two things. First, they want to know where their order currently is. Second, they want to know how soon it will be arriving at their store.
Being able to predict these timeframes reliably makes customers more likely to trust that logistics and shipping company. It makes the company more transparent about where it is in its process.
Most businesses that provide shipping services offer delivery tracking services of some kind. However, it’s not common for them to be very detailed, and sometimes they’re not the most reliable services. This makes it difficult to have the kind of visibility that customers want.
Most of these customers won’t care as much about when their supplies are arriving, as long as they have a timeframe. This gives them the chance to plan for if they run out of supplies before their shipment arrives. For this reason, many logistics companies will have much better visibility for their customers in 2022 than they have in the past.
In the past, businesses have relied on logistics companies that can deliver large quantities of goods the fastest. This would let them order supplies whenever they were running low, without ever actually worrying about running out of stock. The current supply chain issues have many of these businesses rethinking this strategy.
As the saying goes, desperate times call for desperate measures. Instead of trying to find who can get supplies to these stores the fastest, they’re now trying to find companies that can deliver any supplies at all, no matter how long it will take. The one thing that hasn’t changed is that the more stock a company can deliver, the better it is for the store.
This means many logistics companies will focus on getting larger quantities at one time. This will also allow these stores to keep items in stock for longer periods, so the logistics company has time to get more supplies to deliver.
More companies will probably invest in warehouse space as well. This way they can be sure that they have backup supplies when and if they need them.
Finally, many people and businesses are trying to do their part to protect the planet’s health. Businesses are going to be looking for this sustainability in the shipping industry as well. In 2022, more businesses are going to be looking for that as they look for ways to get their stock.
This means investing in clean energy and emissions reductions. For the shipping industry, this specifically means logistics companies should invest in hybrid or electric vehicles.
The main issue is that the current hybrid technology relies on recharging a battery while braking. Since big trucks tend to drive longer distances on interstate roads, they don’t get a lot of opportunities to charge such a battery. This means there isn’t much benefit for emissions and fuel costs for truckers.
Therefore, instead of buying into actual new hybrid vehicles, logistics companies might do better to invest in research to improve the fuel efficiency of big trucks, and even create usable hybrids. This would also save them money on fuel, as well as helping the planet.
If you want to stay ahead of shortages right now, one of the best things that you can do for yourself is to order ahead. That way no matter what happens to the supply chain in 2022, you can be sure that your store will have everything you need.
And Onsite Global Logistics is here to help your business with all of your supply chain management needs. We’re an international business that is ready to help you keep your items in stock right now. We even have 24/7 customer service to help make sure you’re satisfied.
Contact us today to get a quote and see how we can help your business stay ahead of supply chain issues.
Onsite Global Logistics is a third party logistics provider 3PL helping companies with innovative global logistics and supply chain solutions
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