Everywhere you look, supply chain issues are getting a lot of attention. Turn on the TV and you’ll see a record number of ships anchored off shore in the L.A. Basin. Pick up the newspapers, or scan numerous internet sites and you’ll see countless articles echoing some thoughts we shared in a Two Minute Warning: Get your Christmas Shopping (and Shipping) Done Early This Year because shippers can expect to see plenty of empty shelves when December rolls around.
With all this supply chain news, it is not surprising that perhaps the most commonly asked question that has been asked repeatedly is: "How long will this supply chain crisis last?" It’s looking more and more like this crisis will continue well into 2022, and quite possibly, into 2023.
Why the gloomy prognosis? If you listen to our interviews with experts like the Journal of Commerce’s Peter Tirschwell, we have an infrastructure issue that is being exacerbated by “Black Swan” events. And in our recent interview with Paul Page, Editor of the Logistics Report for the Wall Street Journal, these issues, as well the pricing discipline exhibited by the carriers, are not “short term” issues that will be going away anytime soon.
For example, if you picture our Nation’s freight infrastructure as being like the neck of a funnel, there is only so much volume that can flow through at a time. Right now - and the experts are predicting for the next several months - there's too much volume for the funnel which means that there will inevitably be more backlogs and higher rates.
Overall, supply chains depend upon somewhat predictable flows. Given the variability of flows, as well as the shortage of equipment and drivers, 2022 will likely be another very challenging year for shippers.
Of course that just scratches the surface! So if you want to get a much better understanding of what all this means for shippers, I strongly encourage you to check out the aforementioned interview with our friend Paul Page. He is one of the most knowledgeable people in the industry.
He has great insights about the strategies you need to consider to effectively manage your supply chain. We encourage you to listen to the interview and share it with anyone who could benefit. Also, check out the other outstanding resources and interviews we have in our Resource Center.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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