The State of Supply Chain Problems in 2022
The recent pandemic, COVID-19 and the ongoing Russia-Ukraine war has led to many supply chain problems in 2022. These events took the world by storm, affecting our daily lives and businesses in one way or another. Different business sectors also took a hit, with no exception to the supply chain sector.
With every part of the value chain affected, from raw material sourcing to delivery to the consumer, resilience and innovation have been essential in remaining afloat.
Below are some examples of supply chain problems in 2022.
Logistic Disruption Is the Main Supply Chain Problem in 2022
The global logistic disruption that stemmed from the COVID-19 period has already spilled over into 2022. This is due to the continued logistics restrictions in the US. China’s continuing zero-COVID approach with its tight border restrictions has also affected the global supply chain.
This has ultimately led to a restriction in the flow of consumer goods, creating a ripple effect across the nation. The piling of goods in the limited storage spaces has led to a low turnover of goods and increased freight costs. These costs have been passed on to the consumer, leading to high commodity prices.
The disruption has also limited businesses’ access to imported goods or even goods from other parts of the country, leading to a shortage in supply and a surplus in demand.
Delays in Production
Production delays have been making headlines during COVID-19 and aren’t likely to let up anytime soon. As a result of scarcity, raw materials for manufacturing have been in limited supply, thereby breeding competition and eventually leading to longer purchase lead times.
In response, an increase in the prices of commodities and the introduction of complexities to supply chain management have emerged.
Growing Consumer Demand
Even with the existing supply chain problems, customers are shopping more than ever, and they want items delivered to their doorstep. Due to supply chain strain, businesses are struggling to keep up with these expectations.
As consumer demand increases, there’s a need for retailers and supply chain executives to have the right tools in place to help track selling channels and forecast demand. This will help them to stay organized and prepare to meet consumer needs.
Over-reliance on a Limited Number of Suppliers or Markets
Despite the risks involved, many businesses rely on one major trading partner in their business, be it one major supplier, one main customer, or even one major supply chain partner, due to familiarity and a sense of security. But as we emerge from the pandemic, nothing has been as prevalent as the need for diversification. Identify alternative trading partners by broadening the lists of customers, suppliers, and transport and logistic providers.
Workforce and Labor Shortages
The massive retrenchment and mass exodus of the workforce during the COVID-19 period has led to labor constraints in 2022. Trucker shortages are also a growing concern.
According to a recent ATA report, there is currently a shortage of approximately 80,000 truck drivers in the United States, and if the trends continue, these numbers might double in 2030. This means fewer goods are moving at any given time, leading to accumulation of goods at the warehouse and thus affecting the entire supply chain.
Contact AFP Global Logistics Today
At AFP Global Logistics, we provide superior, personalized customer service to the freight forwarding industry to help improve the state of the supply chain. We develop customized logistical solutions tailored to every client’s needs to improve efficiency and reliability.
Some of our services include:
- Expo logistics
- Corporate event logistics
- Retail logistics
- International logistics
- Warehouse storage and distribution
- Domestic logistics
Call us today at 800-274-1237, email us at email@example.com, or fill out a contact form for a quote regarding your company’s logistics needs. We will work with you to ensure you achieve all the milestones you’ve set out. Our professionals are happy to discuss your shipments.