Supply Chain Trends for the Rest of 2021
As we approach mid-year, what remains clear is the supply chain industry has witnessed a lot of changes since last March. The impact of the COVID-19 global pandemic, the week-long blockage in the Suez Canal, and, most recently, the cyberattack against the Colonial Pipeline presented unprecedented circumstances and sparked new discussions around supply chain management.
Keeping all areas of your supply chain running smoothly is critical, especially during increased consumer demands, continued disruptions to the industry, and a changing landscape. In this article, we’re highlighting key supply chain trends our Navegate experts determined that shippers and importers should watch for the rest of 2021 and beyond.
Top Logistics & Supply Chain Trends You Should Know:
1. Be prepared for the new (ab)normal.
Since the COVID-19 pandemic started and caused unprecedented congestion and capacity constraints at the ports, industry experts have been saying that these abnormalities are truly abnormal.
Here at Navegate, our VP of Global Accounts Shannon Olson says that in her decades of supply chain and logistics experience, she’s never seen anything like this before:
“I’ve been in this business for decades, and I’ve never seen supply chains so fragile. Every single leg has its challenges. The life cycle of a shipment used to incur a bump here or there — now it is a complete detour.”
So this landscape is uncharted waters not just for smaller businesses and people new to the industry, but for literally everyone. “It doesn’t matter if you’ve been importing for one year or 10 years, events like the ones happening now can be catastrophic to the bottom line,” Shannon explains.
Through ongoing tariffs, COVID-19 lockdowns, global container shortages, and other supply chain disruptions, companies have learned that supply chains are fragile without proper management, visibility, and security. Using logistics and supply chain software to help mitigate these continued abnormalities in the industry will only create more flexible, agile, and resilient supply chains. “I still believe having the technology to help clients dig in deep to determine which partners navigate disruptions the best are the ones they need to keep,” states Shannon. “Knowing which partners can be flexible during unprecedented and abnormal times is so important.”
2. Price volatility and rates remain high.
Due to commercial and personal protective equipment (PPE) demands, global economies’ uneven recovery, limited capacity, and the Suez Canal blockage that left ripple effects across global trade, it’s likely that high rates for shippers will remain for the rest of the year, or even into 2022. Operational disruptions are still being ironed out from the canal blockage, and carriers are charging hefty prices to guarantee deliveries for shippers due to the already congested global trade network.
While rates remain high, shippers should continue to plan for fluctuations in supply chain prices. Navegate’s sophisticated supply chain and logistics software can help your business do exactly that, so don’t hesitate to contact an expert to learn more.
3. Capacity strains will continue in transportation.
Strained capacity in the air, ocean, and trucking sectors is not new news. However, the continuation of these transportation challenges increases the stress of an already congested industry. Due to e-commerce, PPE demands, and shippers turning to air freight for cross-border transportation, air cargo supply chains are nearly maxed out. The global container shortage and ongoing limited ocean capacity have also been in a pickle for months. What’s more, the nationwide labor shortage and the exceeding freight demands don’t leave the trucking industry exempt from this supply chain trend either.
As a logistics provider, Navegate can help address these transportation issues by offering a variety of transportation options that provide shippers with the flexibility to adapt to changes in the market.
4. Software is the new black.
As global trade continues to be inundated with delays, high costs, constrained capacity, and a lack of containers, a supply chain, and logistics software is not just a perk for your business, but a necessity. Companies that don’t invest in tooling that will allow them to have granular-level visibility, document storage and management, and collaboration between trading partners will fall behind. And businesses that still use outdated methods to track and trace shipments through email, phone calls, and spreadsheets will waste time on unnecessary and burdensome tasks.
Read more about how to stay afloat during a changing logistics industry, and learn how our Navegate Emerald software can propel you forward.
5. Tariff uncertainties may cause supply chains to be reactive.
Since the Biden-Harris administration took office in January, many of the tariffs implemented by the previous administration will likely remain in place as the new cabinet has not indicated making changes. There are pending cases with the Court of International Trade (CIT) on the legality of some of these tariffs, however, leaving shippers and importers anxiously waiting for more information.
Melissa Birch — our compliance division manager here at Navegate — provides some insight into the trajectory of these tariffs:
“The cases regarding the legality of these tariffs will, hopefully, be heard this year. These cases may result in refund opportunities on prior duty payments, as well as how future tariffs can and cannot be implemented.”
As these tariffs remain in place, Melissa advises that importers should be monitoring import values to ensure they are meeting bond sufficiency requirements. “Importers should review changes to expected volume, values, and duty rates before there’s a mandated change by U.S. Customs,” she explains.
Additionally, as freight delays continue at the ports, importers must monitor their shipments to ensure they are being cleared timely and accurately. “Clearing shipments too early could result in release issues as well as making duty payments earlier than necessary,” Melissa states.
Therefore, importers need to be alert and agile. Developing a more resilient and efficient supply chain will put you in a position to respond better to unexpected challenges, global tariffs, and mandates from Customs. Contact one of our Customs experts today to learn more about how this trend may affect your business operations.
6. Using a digital supply chain to be sustainable.
Leveraging software and logistics services to make your supply chain greener will not only become common practice for importers but rather, a standard. Supply chains and transportation services around the world greatly contribute to carbon emissions, waste, and resources, but with supply chain software like Navegate Emerald, you can optimize your delivery routes so your shipments can arrive in the fastest and most efficient way possible. This feature in supply chain software often reduces a carbon footprint and resources supply chains use along the way.
Our Navegate Emerald software also has unique compliance abilities where users can upload compliance requirements and work with factories that have humane working conditions and partner with vendors that adhere to your standards. Learn more about our software applications and their capabilities.
7. Outsourcing logistics and supply chain operations to support efficiency and business growth.
Since the start of the COVID-19 pandemic, unique twists and risky turns remain in supply chains worldwide. For instance, one week, capacity seems to be freeing up. In another week, everything is maxing out. These twists and turns likely won’t calm anytime soon. To keep up with these changes and the challenges already present in global trade, it is necessary to monitor your supply chain operations and find ways to improve its performance. Companies and shippers outsource to third-party logistics (3PL) providers and software services to gain control, bolster their competitive advantage, and better serve their clients.
As the volatility of the industry continues, businesses must have high visibility of their supply chains and efficient work processes to adapt to sudden changes and unexpected events and make thoughtful decisions faster. Using a global supply chain management company like Navegate can enable businesses to be ready when the unexpected happens. Discover how our logistics management services and Navegate Emerald software can make your supply chain more efficient.
While this list is not exhaustive of all the logistics and supply chain trends, it provides some insight into the key trends that you and your team should have on your radar. The impact of 2020 will remain in 2021 and beyond due to the global pandemic, capacity constraints, transportation disruptions, trade wars, and so forth. The best hope for navigating the unique challenges of today’s trade industry and preparing for the future is to strengthen their operations and build an agile and resilient supply chain.
Did one of these trends strike a chord or resonate with your business? If so, our Navegate team is here to help you build an adaptive and steady supply chain.
Don’t hesitate to reach out to one of our experts for more information on the supply chain trends we’re seeing for the rest of the year.
Photo by william william on Unsplash