Supply chain threats come in a number of formats and target various sectors of the supply chains. This is part two of a five-part series by Marina Meyer of Food Logistics.
Fast forward to present day, and more than half of executives do not expect a return to a “normal” supply chain until the first half of 2024 or beyond, while 22% expect disruptions to continue until the second half of 2023, according to a survey presented by Carl Marks Advisors.
These executives also see a number of threats clouding the picture and complicating the return of a more reliable supply chain, most notably the war in Ukraine (30%) and labour concerns (24%). Additionally, more than two-thirds of supply chain executives said they are “very concerned” that the U.S. economy could tilt into a recession over the next 12 months as a result of rising interest rates, high inflation and geopolitical uncertainty.
“With no apparent end to the Ukraine conflict in sight, we would expect fuel costs to continue to put pressure on supply chains for the remainder of the year, and possibly beyond,” adds Peter Keogh, managing director, Carl Marks Advisors. “Moreover, with the U.S. economy potentially entering recession, we could see an extended period of uncertainty. In this environment, it will be incumbent on organisations to review their sales forecasting, continue to monitor their on-hand inventory levels, and revisit their procurement strategies.”
In an outline of the Top 5 threats set to impact supply chains in 2023, here’s no.2:
Driver shortage
The American Trucking Associations (ATA) reported a shortage of 80 000 drivers last year, an all-time high that could reach 160 000 by 2030. And to think, in 2020, the trucking industry employed more than 1.95 million heavy and tractor-trailer truck drivers, according to the U.S. Bureau of Labour Statistics (BLS).
But, for the last two years, the trucking industry has been faced with what can only be described as the perfect storm of unanticipated challenges that has since created a downward spiral.
“Based on our estimates, the trucking industry is short roughly 78 000 drivers,” says ATA chief economist Bob Costello. “That’s down slightly from 2021’s record of more than 81 000, but still extremely high historically.”
Furthermore, the shortage could swell to more than 160 000 over the next decade, based on current driver demographic trends and projected growth in freight demand. To keep up with demand, the industry must hire nearly 1.2 million new drivers over the next decade. Furthermore, the shortage is not unique to the United States – Germany, Italy, Argentina, Mexico and China all reported shortages of drivers in the past year.
However, data analytics and other technologies are in position to somewhat tighten the gap so that operations can continue to run, driver or no driver.
“Using data points from previous shipments, the devices can perform a much more detailed analysis to reveal deeper insights and long-term trends, such as shippers or shipping lanes where temperature excursions seem to occur most frequently; products that are most susceptible to temperature issues; seasonal and geographic factors that impact reefer temperatures; and distribution centres (DCs) that may be allowing careless cold chain management,” says Daniel Knauer, Midwest regional sales for Emerson’s cold chain business. “Most importantly, data provides an objective record of cold chain temperatures in-transit. In challenging times like these, where truckers and retailers simply can’t afford the negative impacts of rejected loads, data serves as an arbiter of supply chain disputes. It takes emotion out of the equation by providing indisputable proof of precisely when and where temperature excursions occur.”