In a morbid sense on this gloomy, windy Monday in southern Maine, the current state of the supply chain and logistics sectors, at times, reminds me of the 1980s Kevin Costner thriller “No Way Out.” To be clear, that does not mean our sectors are full of espionage, state secrets, and secret identities, but, at the same, time, given the ongoing pandemic-driven supply chain “chaos,” for lack of a better word (again, it is Monday) seems to fit the bill.
But what it does mean is that while much progress has been made, going back to the onset of the pandemic, there are so many hurdles that still need to be cleared.
As for the hurdles, there are, or remain, more than a few, in the form of—and in no particular order—the following: port congestion and related container backlogs; the ongoing need for more truck drivers to up over-the-road motor carrier capacity; inflation; and the labor outlook i.e. the need for more workers in order to increase throughput and production, among many others, too.
In terms of what could be viewed as a major issue on the immediate front, a front-page New York Times today came with this headline: “Supply Chain Woes Could Worsen as China Imposes New Covid Lockdowns.”
In a sense, that is certain to register very high on our collective supply chain and logistics radar, no question. In short, the article explains that “companies are bracing for another round of potentially debilitating supply chain disruptions as China, home to about a third of global manufacturing, imposes sweeping lockdowns in an attempt to keep the Omicron variant at bay.”
Given that just about every supply chain and logistics stakeholder has been forced to reexamine their collective approaches towards supply chain and logistics operations and related processes, coupled with just exiting what, in many respects, can be viewed as a successful holiday shipping season, the timing of this development is unfortunate. But when would the timing of something like this ever really be viewed as fortunate?
What’s more, this situation, once again, serves as a potential jumping off point for North American shippers, manufacturers, and logistics services providers to again take a hard look at bringing sourcing and manufacturing operations closer to home, in order to help mitigate these types of situations.
This is not to say it would act as a panacea, of sorts; it won’t. But it certainly could help and would not hurt either. We are fully aware of the United States’ import-export imbalance, which has been the case for several years. Instead of tariff implementation and contentious relationships with China, has the time finally come for nearshoring to get a seat at the table? In fact, it could be viewed as a seat at the same table where supply chain and logistics ostensibly finally have been granted admittance, due to the heightened mainstream supply chain and logistics relevance or awakening, of sorts.
That is not meant to be glib, just an observation is all. While we have lived in this Covid-19 world for nearly two years now (wow), the importance of the supply chain and logistics remains in the forefront of our economic health on so many levels. It did before pandemic arrived, too, but now is getting long overdue attention, which has been addressed in this space before.
There is always going to be another issue or another challenge. That is something which may be truer in our sectors than in any other, to be sure. Taking things one day at a time, with a close eye on the future, and also learning from the past is a key part of any supply chain playbook. Let’s see how things go from here.