Supply chain challenges in 2023 that need your immediate attention
The pandemic and other disruptions have been nothing short of chaos for supply chain professionals worldwide. In the last two years, manufacturers and suppliers around the world encountered several supply chain challenges — container shortage, port congestion, labour scarcity, trade tension, and more. And now, 2023 doesn’t look like a year for respite either. Many supply chain experts have opined that supply chain challenges will persist in 2023, and a lot will depend on how organizations respond to these challenges.
Let’s look at major supply chain challenges in 2023 and how your organisation could respond to these challenges.
Freight rates to remain elevated
Contrary to popular forecasts, container shipping increased substantially during the pandemic. As the pandemic induced lock-down became a norm globally, there was a sharp surge in online buying. The increased buying led to an increase in raw material import and finished consumer goods, a significant percentage of both usually moved in shipping containers.
The increased demand affected all areas of the supply chain, especially container shipping. In 2021, freight costs increased across all modes; in many cases, the increase was as high as 20%. Since around 80% of the world’s goods are transported by sea, ocean freight skyrocketed, and air freight was close behind it.
As the global disruptions continues, the global supply chains expect this trend to continue in 2023. With an increasing demand for ocean freight from Asia to the US and a lack of capacity, ocean rates continue to remain elevated. Several trends show that global freight rates are already 140% higher than this time last year.
Start with your freight procurement process to address this challenge. Choosing comprehensive freight management software should be your first step. By automating your freight procurement, you can create dynamic deadlines for negotiation with forwarders and get reduced quotes on the platform. Through this, you will get the best possible end-end rate for shipments and have the highest level of transparency in freight quotes. In addition, these solutions can provide deeper insight into cost and service parameters and update you with the market rates trend between ports across the world, helping you get the best deal for your shipment.
Longer lead times continue to bother
Consumer behaviours changed big time during the pandemic. To cope with the accelerated demand and give their customers a positive experience, organisations lowered their delivery times. But with so many stakeholders in the ecosystem and large distances for goods to cover, global supply chains felt burdened to keep up with this trend. Most organisations were oblivious to the whereabouts of their shipments. This led to increased lead times and exposed shipments to longer delays.
With unreliable transportation schedules and a lack of precise ETAs, many organisations are still operating in the dark. While leading organisations have started leveraging real-time visibility solutions, a lack of visibility across their supply chain continues to concern supply chain managers around the world. According to a Forbes survey, 90% of supply chain executives said visibility into their supply chain is vital to success, but less than a third have achieved accurate visibility. Optimising lead times and minimising shipment delays will be a challenge this year too.
You need an efficient real-time shipment tracking software that gives you an all-encompassing view of all of your shipments in transit and provides end-to-end supply chain visibility. Knowing in advance when your shipments are likely to fall behind schedules helps you take appropriate corrective action to minimise the impact of the delays. Real-time visibility software is no longer a “nice to have”; it is an essential part of your supply chain.
In addition to real-time visibility, shipment tracking platforms also automate workflow processes and provide deeper shipping insights. Over a period of time, you can use this valuable gold mine of data to improve your supply chain efficiency and make cost-effective business decisions. Gartner predicts that by 2023, 50% of global product-centric enterprises will have invested in real-time visibility supply chain solutions, AI-driven, and other advanced analytics capabilities.
Data management woes
By now, you may be well aware that every action in your supply chain generates data. Having such a vast amount of data flow through the supply chain could be overwhelming for many supply chain managers. An even bigger challenge is getting the right data at the right time and interpreting it in a meaningful way to make supply chains more profitable. With so many stakeholders in a global supply chain and so many data points generated, managing and making sense of the data itself has become a huge challenge today.
In a recent survey, 84% of leaders said they have been successful in breaking down organisational siloes across their entire supply chain by using real-time data insights. This proves how crucial it is to quickly gather your supply chain data and interpret it in a meaningful way to make informed decisions.
Choose an intuitive logistics software that allows you to capture every data and seamlessly collaborate with multiple stakeholders using a single, easy-to-use data dashboard. Not everyone has advanced analytical capabilities to comprehend metrics, nor the technical expertise to navigate numerous tabs to gather data insights. Supply chain managers need a single data dashboard that is intuitive and can present real-time analytics in an easy to comprehend format and in the simplest way possible.
As the supply chain challenges persist in 2023, businesses of all kinds will accelerate their investments in supply chain automation and digital capabilities. Business leaders are looking to make their supply chain processes more agile to mitigate risks and proactively respond to future disruptions. This will prompt organisations to invest in supply chain technologies and mobilise real-time data insights for informed decision making.
– Chitransh Sahai | CBO, GoComet
Port congestion will be a bottleneck, again
In 2021, we saw historic wait times before ships could enter major ports across the world. The pandemic created severe labour shortages across ports, which resulted in port congestions like never before. As the various stakeholders in the supply chain ecosystem continue to scramble for a reasonable solution to this problem, port congestion will continue to remain one of the top challenges for the global supply chain in 2023.
In a customer advisory note, Maersk has warned its customers that they must brace for another tough year of bottlenecks and disruption as congestion linked supply chain chaos will persist till mid-2023. All the available data shows that congestion and bottleneck problems are worsening in 2023, and there is no indication of improvements yet (source: Seatrade Maritime News).
Port congestion challenge will not disappear overnight; it will continue to cause distress to global supply chains. But organisations can be better prepared to handle this challenge if they have access to real-time data on congestion status across international ports. This will help organisations to identify alternative shipping ports. You can even use a free port congestion smart tool that calculates the delays at major ports across the globe and gives you the live port congestion data. This data will help you plan your shipments better.
The role of supply chain technology will be crucial in 2023 in addressing the various challenges. How quickly organisations embrace and leverage these technologies to build their supply chain resilience and agility will essentially make a difference in their ROI.
Feel free to reach out to us if you’re looking to build your supply chain resilience and drive significant cost savings amid these supply chain challenges in 2023.
Read our exclusive blog on “Two supply chain trends you can’t ignore in 2022.“