The last two years have brought never seen before challenges in the global logistics industry, and 2021 was volatile, to say the least.  While many are ready to put the difficult past year behind them, the global supply chain will continue to be disrupted into the new year. Labor shortages, port closures due to COVID outbreaks, and inflation will continue to put pressure on global supply chains in the upcoming year. Logistics teams will be forced to once again, get creative in how they approach the year, and the use of technology will get them there. 

Meeting the Supply Chain Challenges of the New Year

There are three things that logistics managers should focus on in the upcoming year. 

Identifying Disruptions Early: While no company was prepared for what the COVID-19 pandemic brought, those that were able to respond with innovative strategies have been more successful at weathering the ups and downs of the last few years. New warehousing and transportation processes, delivery modes, and technology have helped logistics companies adapt to the ever-changing market. 

Logistics managers should focus from a tactical point to the activities of warehouse and transportation management to a strategical perspective that can mitigate risks. Having a broad view allows logistics teams to react in a planned manner at the earliest sign of disruption. A 2021 study conducted by Blue Yonder and Reuters Events found that 63% of manufacturers and retailers as well as 60% of logistics providers believe that increased visibility is yielding the greatest ROI on their strategies. Even so, managers might feel that supply chain visibility is crucial, but their companies might not be adopting it 100% for a variety of reasons.

Technology such as artificial intelligence (AI) is enabling companies to share the same data which improves end-to-end visibility.  Once logistics teams are on a common technology platform, all can be alerted with the AI system recognizes a deviation and can work together to formulate a response. AI triggers an autonomous response but it is the managers who take innovative actions to keep the supply chain operating. 

No matter what the issue—a plant shutdown, port closure, or delayed items from a supplier—recognizing and addressing the issue as early as possible is the best way to handle uncertainty.

Managing Labor Shortages: Labor shortages are apparent in just about every industry.  The U.S. Bureau of Labor Statistics estimates that the truck transportation workforce has experienced a loss of 6%, or 1.52 million employees, as compared to pre-pandemic levels. Many companies are using warehouse labor management solutions to make up for the labor shortage. Robotics and task automation make up for limited human resources but drivers are still needed to operate the trucks. 

Transportation management solutions automate the intensive process of finding carriers, planning truckloads, and finding optimal routes. This results in higher productivity and the ability to navigate disruptions that will inevitably occur such as finding a new carrier or better route without hours of manual labor. Leveraging advanced technology like AI enables employees to work smarter. Technology can automate decision-making and create more efficient workflows even with a smaller workforce.

Going Green: Many manufacturers and retailers are realizing that sustainability matters to customers. Almost every country is requiring stricter environmental regulations to offset carbon emissions and climate change. Unfortunately, global transportation is a large contributor to emissions.  The U.S. Environmental Protection Agency (EPA) estimates that the freight transportation industry will produce more emissions than all transportation segments combined by the year 2040 unless action is taken now.  

Again, technology is the answer. AI optimization engines can make more environmentally sound decisions that reduce emissions and waste and support green initiatives. Technology such as a warehouse management solution can also be used to reduce fuel and energy consumption.    

Preparing for the New Year

The last two years have taught us to expect the unexpected. Supply chain disruptions will undoubtedly occur as variants continue to pop up. Logistics teams can use technology solutions to prepare their supply chain and mitigate risk. Being able to identify supply chain challenges early can have a big impact on how successful the response is.