Global Supply Chain Issues
There can be no doubt that the COVID-19 pandemic impacted the logistics and international shipping industry. Since the COVID outbreak, pandemic-induced issues have continued to be grappled with by all parties involved in the global shipping industry. Problems induced by the pandemic culminated in a disruption of the international supply chain. A freight rate spike was necessitated. In the face of growing customer demand, this led to a reduction in shipping capacity.
Here, global supply chain issues will be explored as well as how e-commerce entrepreneurs have been affected by those issues. What will the future bring? That will be explored as well. Finally, some advice as to what Amazon sellers can do to manage the global supply chain issues in 2023 will be offered.
Disruption of the Supply Chain
From year to year, global supply chain issues have carried over since they the first began.
China and the Supply Chain
Major Chinese ports and factories added to the already existing disruption with holiday closures to celebrate the Chinese New Year. The result? Delayed deliveries, port congestion, container shortages, and more. In an effort to improve cargo flow and clear backlogs, orders were canceled. Problems were caused for shipping lines, freight forwarders from China, and global shippers moving goods from China throughout the world, including to the US.
Additional Issues That Disrupted The Flow of Goods
International shipping challenges and supply chain disruption was also caused by the Suez Canal blockage. The effects of this still linger, as well. The shutdown of a Ningbo-Zhoushan port provided yet another recent obstacle for international shipping.
There are, in fact, numerous additional events that contributed – and continue to do so – to the global shipping crunch. As a result, supply chain disruptions are being stretched even further.
What Will the Future Bring?
Granted, without a crystal ball, it’s hard to imagine what the future will bring related to logistics, supply chains, or anything else. Is there actually still a problem? Surprisingly, not everyone is in agreement.
Opinions of Supply Chain Issues
What is the overall opinion of trade groups and logistics managers where the supply chain in 2023 and 2024 are concerned? Is there actually still a problem? If so, when will things return to normal? CNBC did a survey and published the following results:
How do you feel that your supply chain is functioning?
- Our supply chain is functioning normally – 32%
- Our supply chain is not operating normally – 61%
Provided There’s a Problem, When Will It Be Resolved?
Further surveys asked the question: When will things return to normal?
- 2024 – 30%
- 2023 – 19%
- 2025 or never – 29%
- Unsure – 22%
How Can Supply-Chain Issues Be Fixed?
What is the solution? Some government officials and logistics managers believe that the freight movement could be expedited by data sharing. The Freight Logistics Optimization Works (FLOW) program is a pilot supply chain data sharing program that the Biden administration rolled out. The program has roughly 46 participants. To create a truly 21st-century supply chain, ways to expand data sharing and improve supply chain operations will be discussed.
Will a true supply chain database be created eventually? Logistics managers were surveyed, and the following answers were the result:
- Yes, one will eventually be successfully created – 22%
- No, a supply chain database on a national level will never be created – 51%
- Unsure – 27%
Yet all are in agreement that the creation of such a database – and data sharing – would help reduce costs, expedite the movement of freight, and create savings that could be shared with consumers.
Managing Uncertain Logistics
So, what can Amazon Sellers do to manage the supply chain issues this year, next year, and beyond?
Environmental Impact Minimization
To mitigate climate change effects, and minimize carbon emissions, stricter environmental regulations must be insured by sellers and all countries. To make environmentally responsible, smart decisions, artificial intelligence optimization engines can also be utilized. The result could end up being the following:
- Minimized paperwork
- Taking trucks off the road
- Supporting green initiatives
- Reducing waste
Maximize The Limited Human Resources That Are Available
Available – albeit limited – labor maximization is one way to deal with some of today’s current issues. How is this done? Through the deployment of warehouse robotics and other warehouse labor management solutions. Some logistics providers are currently optimizing routes, freight, capacity, and loads – and brokering services – courtesy of an artificial intelligence-enabled engine for optimization. It makes intelligent decisions by gathering real-time data without human intervention.
Create Ways To Assure Early Disruption Identification
An early warning system should be built by logistics organizations. With speed and innovation, this system will respond to unexpected threats. Logistics professionals, such as Amazon Sellers, must assure seamless workflows across functions, goals, and end-to-end supply chain excellence in order to see a system like this through.
Tips for International Shipping
If, as an Amazon seller, you ship internationally, here are a few tips to keep in mind:
- Before the Chinese New Year and Q4, be sure to order an inventory amount that is thought out and appropriate. To control the production for export, China often limits their power availability and raw material prices then increase.
- For your shipments, be sure to choose the correct seaport. Before shipment, check the status of the seaport you’re considering. A lot of congestion is still occurring in any number of places. This is why a wise destination shipping port choice is so important for both you and your customers.
- For your shipment, make sure you choose a reliable shipping line.
- Currently very volatile, international shipping prices are another issue that is affecting Amazon Sellers and other e-commerce entrepreneurs. Choose a freight forwarder with great communication and one without hidden costs. So you will have complete control of your shipments, they should also offer online tracking.
- Consider transload options. Inquire about alternative shipping ports with your freight forwarder.
Now, more than ever, Amazon sellers must have a design in mind for inventory planning and forecasting. If you’re going to grow your business, you most know exactly where your e-commerce sales and prospective shipping issues stand, and how they relate. No one knows what the future will bring – so it’s even more important to try to be prepared as much as possible.