SLA Logistics

State of Supply Chain Globally

Everywhere you look there are signs of supply chain disturbances, just about anywhere, and it is no surprise. Global supply chain issues are front and center in today’s world. For instance, congestions at the port, truck driver availability, challenges related to equipment (containers and chassis), among all others. Disruption has seen major capacity crunches, rise in rates (specifically of container shipping).

While the pandemic clearly has been a major factor for the situation we find ourselves in, there is no real magic formula that will get us to the other side, except for one thing, that is – time, as it seems. However that leads us to a new set of questions: how long will it take for the global supply chain to work through its ongoing issues? what will that involve?; how will it happen?; and what happens from the point when it looks like the supply chain dysfunction coast is clear? These are not easy questions to respond.

Overflowing warehouses, ships stuck at sea, lack of truck drivers, just some of the issues we come across. Global supply chain is highly interconnected and intricate and is in upheaval and there is little end in sight. In one way or another, much of the crisis can be traced to the outbreak of Covid-19.

Reason for Supply Change Shortage

Supply chain shortages started in the first quarter of 2020 — which was the beginning of the pandemic. Factories all over the world were forced to cut down or completely stop production due to the spread of COVID-19 and the resulting lockdowns. Factories were not shipping as many cargos — or nothing at all — shipping companies responded accordingly by clearing their schedules.

As a result, shipping companies were called to action to ship personal protective equipment around the world. Most of the containers being unloaded in destination countries, removing goods and then not being returned, which further led to a shortage of shipping containers.

Parallelly consumers were forced to shelter in place, meaning, they were no longer participating in activities like dining out, traveling and getting personal care services. People got restless and found other ways to entertain themselves around their homes, for instance improving their homes, buying home office setups, investing in gaming systems and ordering small home appliances.

Even though few companies enhanced production to meet the new level of demand for their products, they were unable to source few parts or raw materials necessary for production, because of transportation delays, shutting down of ports in China, container shortages and a reduced labor force to load and unload goods. So production eventually halted, and a shortage of goods prevailed.

Supply Chain Shortage’s Effect on Businesses
Today’s supply lines are pretty intricate which most consumers fail to gather. Corporations might import some parts from China, other parts from India, maybe some rare-earth elements from elsewhere — and if there are any delays at any point, it limits how quickly these products can be sourced, assembled, packaged, shipped and sold. This leads to escalation in prices because all the efficiencies that were so carefully built into the supply chain have collapsed. Leading to scarcity, shortages and lots of unhappy consumers — especially during the holiday season. A broken supply chain is unpredictable, and the system cannot function without reliability in sourcing and predictability in shipping.

SLA Logistics is extending core shipping services to the global agency networks, affiliated associations and local merchants who are trusted patrons to our services.

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