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Transportation Review | Friday, January 28, 2022
In 2023, visibility will foster resilience and sustainability.
FREMONT, CA: In 2023, the global supply chain will face significant obstacles that differ from those of the past. In 2022, the pandemic produced transportation bottlenecks and drove up the price of raw materials, but these issues have improved over the past few months. As 2023 progresses, the supply chain will face fresh shipping, labor, and logistical issues, compelling retailers and manufacturers to shift.
As a result of COVID-19's closure of international borders, shipments were delayed at ports, causing retailers' inventories to fluctuate. Since then, borders have reopened, enhancing the flow of products, but transportation now faces new obstacles, chief among them inflation. The growing price of goods has deterred and diminished customer demand, altering purchasing patterns and disrupting worldwide shipments. During COVID-19, demand vastly outpaced supply, but cautious spending by customers has prompted merchants to review their inventory.
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Moreover, persistent labor shortages continue to harm an already suffering logistics industry. Despite a minor improvement in the truck driver shortage this year, the trucking sector continues to experience a workforce decline. As a result of an aging labor force and growing freight demand, the American Trucker Association claimed a shortfall of 78,000 drivers. A national rail strike that was narrowly averted demonstrated the fragility of the transportation sector and the impact a single disruption can have on the entire supply chain; the strike was estimated to cost $2 billion per day.
As new difficulties emerge, supply chain standardization is more important than ever; the capacity of retailers and manufacturers to communicate data effectively can determine the success or failure of a supply chain. Global standards and improved communication between trading partners expedite supply chains, strengthening operations and boosting bottom lines; they also facilitate a more sustainable supply chain and greener business practices. Now in 2023, it is imperative that businesses and trading partners move away from data silos, adopt industry standards, and invest in new technologies to enhance product traceability, information exchange, and interoperability to resist supply chain problems.
Global standards will replace outmoded data silos
Numerous businesses are presently utilizing archaic legacy systems, which silo their data - a crucial visibility issue that impedes business operations by generating inconsistent data sets that prohibit retailers from having an accurate view of their inventory. With product and shipping costs at an all-time high, it is crucial for retailers to effectively manage their inventories, increasing ordering efficiency and enabling them to handle interruptions.
Different departments' use of diverse data sources can lead to data compartmentalization and misalignment throughout the business. Companies that store their data in data silos are at a tremendous disadvantage, as segregated data is often incompatible across systems, drastically limiting the ability to share information with trading partners and internal teams.
Without a good grasp of their data, businesses are ill-equipped to deal with disruptions. This lack of visibility into the supply chain can result in an inability to accurately predict orders, delaying material manufacturing and shipment and causing a domino effect that further congests the supply chain.
When data is digitalized and shared universally at all levels of a company's value chain, the collaboration between users grows, and merchants are better prepared for the next potential disruption.
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