Four Biggest Global Supply Chain Challenges in 2022

MIT Professor Jonathan Byrnes once said: "Many supply chains are perfectly suited to the needs that the business had 20 years ago." And this quote speaks volumes about how vital agility and innovation are in supply chain management.
For all that, a company can innovate and adjust to a certain point, after which there are limitations - time, money, and labor. In this article, we are talking about leading supply chain challenges and the possible solutions to resolve them.
It’s been more than two years now since the pandemic started, and the supply chain sector has turned upside down. Most of the main issues weren’t resolved. Instead, they are even more prominent than ever, at least on a global scale. Let’s see how you can help your company stay competitive and grow despite all the issues you might encounter along the way.
Companies with different levels of revenue have different issues regarding the supply chain. It seems logical that the challenges of shippers with a smaller customer pool, especially if it is localized, may be different - however, not more minor - than those with a huge consumer base.
Nevertheless, all companies, big or small, that rely heavily on the supply chain have four main concerns: technology, inflation, labor insufficiency, and rising customer expectations.
The customer-centric supply chain doesn’t exist without integrated technological innovations. Technology has multiple complex roles, but the main ones are: providing a better user experience and giving insights about customers - their habits, needs, and behaviors. Technology is what enables managers to predict market conditions and customer actions.
It seems like many mid and high-revenue companies face the challenge of having so much information on their customers that they don’t know how to utilize it properly. Similarly, they don’t know what innovations to use, as there is so much happening at the same time. Information and innovation overload has left many businesses wondering if they are doing enough.
Having a data analyst expert on board will help you immensely with selecting, processing, and analyzing information that you collect across various platforms. Additionally, integrate all systems - new and old - so you avoid getting sporadic data that might confuse you.
Small shippers with annual revenue of $200 million or less have issues with technology and innovation, but it is of different nature. Namely, small shippers’ main concern isn’t utilizing the data, it is the question of How to afford all these innovations?
They usually have a problem with rising freight prices, as their number of shipments does not guarantee a contract with the carriers. So, they struggle with a budget for innovations. The question is: Do you need to afford all those new platforms and systems?
If your customer pool is small and localized - prioritize quality products and fast delivery. Find the best platforms for you, and use social media to get in touch with your consumers and build a community around your brand. With growing demand, you will get more revenue and, thus, more money for new supply chain technology.
The inflation rate in the US has risen more than 8% in a year, and the supply chain industry has felt the consequences. This category of supply chain challenges shows the discrepancy between small and big shippers, as the former usually have no contract with carriers - so they stay at the mercy of the volatile market.
Whether we’re talking about the upstream or downstream supply chain, transportation costs are rising. Fuel costs have risen more than 10% since 2021, and labor shortages have increased salaries. Generally speaking, everything is getting more expensive, and there is no sign of slowing down.
The rising costs are emphasized as customer demand grows, so businesses must pay more for upstream and downstream supply to satisfy demand. Unfortunately, these two combined make it very difficult for supply chain managers to predict the future.
Businesses worry about nothing like they worry about unpredictability. However, meeting demand despite rising costs requires taking risks, and playing safe does not work in the times like these.
Congestion happens when a ship docks at a port but is unable to load (or unload) its cargo because that station is already full. Although the loading and unloading operation generally proceeds as planned, the pandemic-associated labor shortages and social isolation have strayed from the plan.
Port congestion is causing delays in loading and unloading, and it is an often talked about issue in the world of supply chain management. Ship overload is a similar, however, separate issue. There have been reports of shipments falling off into the sea because ships became overburdened with cargo.
Spot freight prices are expected to remain high due to global port congestion, which is expected to last until at least early 2023. To limit shipping costs, logistics experts advise charterers to opt for long-term contracts.
The pandemic has left the supply chain industry without workers because many people can’t or won’t work, or the company is in lockdown.
The so-called "Amazon effect," which speaks to the expectations raised and boosted by the e-tail giant's expanding popularity, has exacerbated cost problems and stressed an already limited carrier supply. Customer demands faster, cheaper service. Everyone now expects two-day free shipping, which has become the industry norm in e-commerce, even in business transactions.
Additionally, depending on the industry you belong to, customers expect to receive a shipment packed like a “little gift to themselves”. They want to be excited about the delivery and to get nice packaging - they expect the mere delivery to be the experience. All this adds cost to the supply chain process.
Not only do customers expect fast, cheap, and exciting shipments, but they also want you to be a sustainable, socially responsible company. On top of manufacturing your product with caution and respect for the world around you, customers want you to choose suppliers with care, not the cheapest ones, but the ones that do not harm the environment, animals, or humans.
The crisis between Russia and Ukraine, broader geopolitical impacts, and ongoing COVID-19 lockdowns in China have made an already poor situation within the international supply chain much worse. The current sanctions on Russia continue to have an effect on fuel prices, adding to the overall supply chain issue.
While there is little direct exposure of freight markets to Russia and Ukraine, there are a growing number of risk factors that global logistics will need to manage, such as airspace restrictions, uncertainty about the direction of consumer demand, and ongoing roadblocks caused by China's COVID-19 response.
Keep in mind that effective supply chain management is made possible by well-managed logistics, which is what Unival Logistics offers. You may obtain cutting-edge technology-based end-to-end logistics solutions from us. The optimal routes will be used by your goods to ensure that they reach their destinations promptly and securely.
Additionally, we provide full-value insurance for additional protection, so get in touch with us if you want our help. It is only natural that a business that relies on eCommerce needs a logistic partner to get to the optimal solution to the challenges we discussed in this article. Contact us today.
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.105 per ton-mile. Reducing truck transport and opting for the optimal rail transload facility can help increase expense savings through rail.</p> <h2>Rail Freight and Intermodal Strategy</h2> <p>Intermodal is the use of two or more freight transporting modes. When combining rail and road, trains are utilized for the long-haul chunk of the transport. Trucks are used to ship loads from the origin to the terminal and then from the terminal to the recipient, known as drayage.</p> <p><strong>Using rail freight as part of an intermodal strategy has many benefits</strong>, which you can discover below.</p> <h2>Rail Freight Is Eco-Friendly</h2> <p>Given the current state of our environment, caring for it is imperative. From an ecological point of view, rail freight is a great transport alternative compared to air, sea, and road freight. <strong>The biggest advantage of rail freight is the reduction of CO2 emissions</strong>. Compared to other transport modes, rail freight leaves the smallest carbon footprint.</p> <p>For example, air freight consumes 138 tons of CO2, and the combination of air and sea consumes approximately 76 tons of CO2. However, rail freight consumes only 5 tons of CO2 over the same distance. That’s why, now more than ever, rail freight deserves more attention.</p> <h2>Rail Transportation Is Safe and Efficient</h2> <p>Railway safety has notably improved over the past couple of decades. Now, <strong>rail transportation is one of the safest shipping options</strong>. With steady investments in railway infrastructure, routings, tracks, terminals, and border crossing stations, there’s a significant enhancement in the performance of rail freight.</p> <p>Moreover, GPS tracking in trains prevents theft and losses, protecting the goods in transit. Since carriers can locate their customers’ shipments and follow up on milestones, they can deliver information on container position and detect if something unexpected happens during the transportation.</p> <h2>Rail Freight Is Fast and Reliable</h2> <p><strong>Rail freight is a fast and reliable shipping mode</strong> with shorter lead times when compared to sea freight. Although not always possible, there are many situations when rail freight is a more optimal choice than other transport modes.</p> <p>For instance, one of the biggest challenges for companies with production in China is the long lead times to northern Europe when shipping by sea. Sea shipping from China to that part of Europe typically takes around seven weeks.</p> <p>With rail freight, the shipping times can be cut in half, significantly reducing the lead time. Shorter lead times can make it easier to predict business operations and costs, positively impacting capital binding.</p> <p>In addition, rail freight transport is a <strong>punctual mode of transport</strong>. Compared to sea and road freight which can be subjected to bad weather and congestion, not much can hinder the rail path, reducing the risk of unexpected delays.</p> <h2>Are There any Drawbacks of Rail Transportation?</h2> <p>Intermodal containers experience a lot of movement during transit that can damage their contents. There’s a risk of a denied claim if cargo isn't appropriately blocked and braced by rail standards.</p> <h2>Rail Freight Shipping Can Be Your Optimal Choice</h2> <p>Rail shipping has many benefits and very few drawbacks. Apart from being extremely reliable, rail freight is also cost-effective. On top of that, it leaves the smallest carbon footprint compared to other shipping modes.</p> <p>With rising challenges in sustaining our environment, it’s vital to do everything we can to reduce CO2 emissions and reduce the impact of global warming. For those reasons, using rail freight as a part of intermodal strategy can be an optimal choice for many companies that wish to see improvement in our environment.</p> <p><a href="https://unival-logistics.com/">Unival Logistics</a> provides end-to-end logistic solutions and we always choose optimal routes, so that your packages arrive on time and cause the least amount of pollution. You can also take out <a href="https://unival-logistics.com/package-insurance">full-value insurance for high-value goods</a>, track your packages in real-time, and integrate your business with Unival’s API.</p> <p>If you need a logistics partner that combines traditionally effective methods of transport with modern solutions, contact Unival Logistics.</p> <script type="application/ld+json"> { "@context": "https://schema.org", "@type": "BlogPosting", "mainEntityOfPage": { "@type": "WebPage", "@id": "https://unival-logistics.com/rail-freight" }, "headline": "What You Need to Know About Rail Freight", "description": "Rail freight is reliable, fast, and green and can be an excellent choice for various businesses. 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