7 Ways the Supply Chain Is Affecting Your Business and What You Can Do
Let us start with what is the supply chain.
The volume of goods being, shipped
The speed at which the goods reach their final, destination
The cost of transporting the goods from the manufacturing facility to the final, destination
The fluctuation of these various, factors
Demand – consumer demand remains strong even in the face of economic uncertainty. This may change with high inflation that we are all experiencing. The World Trade Organization latest Goods Trade Barometer shows the volume of world merchandise trade has plateaued. This could be due higher cost of living and to inflation. For more info visit: https://www.cnbc.com/2022/09/08/shipping-rates-are-still-falling-in-another-sign-that-a-global-recession-may-be-coming.html
Freight – while we are seeing freight costs come down, somewhat they are nowhere near pre- pandemic levels. Lead time for container shipments remain extensive. But we expect things to slow down after the holiday rush is over.
Transportation – Port backlog and trucking availability remain problematic and the costs of these are continuing to rise partially due to the lack of drivers, the cost of petroleum and according to truck new the overall transportation cost have increased by 13%. We are experiencing extensive wait times at rail terminals and ports to pick up and deliver containers. read more here: https://www.trucknews.com/business-management/trucking-costs-reach-record-highs/1003168034/
Labor – Shortages of skilled and unskilled labor in manufacturing, distribution, and trucking continue to affect productivity. According to CNBC there are more than ten million job vacancies right now spread across all sectors with a record proportion of companies raising pay to try to attract staff. This is having an affect on inflation and it continues to be a challenge for companies. For more info visit: https://www.cnbc.com/2021/10/20/global-shortage-of-workers-whats-going-on-experts-explain.html
COVID-19 is still causing delays overseas because of China’s zero covid measures with frequent sudden lock downs. China had a two month lock down in Shanghai which closed the port and delayed shipments that much more. Read more here: https://www.theatlantic.com/international/archive/2022/09/china-lockdowns-zero-covid-policy/671385/
Russian/Ukraine war is causing higher commodity prices which will affect certain sectors such as automotive, transport and chemical.
Natural disasters such as hurricanes, typhoons, earthquakes, flooding all have an impact on the supply chain.
What You Can Do
Plan ahead - lead times remain prolonged and are now higher than pre-pandemic levels. In the reusable bag industry we were to be able to deliver goods between 75 and 90 days. Today we are seeing lead times of 90 to 150 days. Planning ahead is one way to assure you will have stock when you need it. See our full line of reusable bags and totes.
