Supply Chain Webinar Dives Deep Into The Issues And Offers Guidance
The supply chain crisis is bad enough now, but plan on it getting worse. That was one of the sobering takeaways from a one-hour Gemline webinar, “Untangling The Global Supply Chain,” that shared insights on the shipping and transportation issues causing unprecedented delays for companies around the globe, including in the promo industry. Gemline CEO Jonathan Isaacson facilitated last Tuesday’s session that featured insights from two expert guests: A. Ali Ashraf, director of North American Ocean Product at CH Robinson, one of the world’s largest logistics platforms, and Jerry Hempstead, an award-winning parcel industry professional and consultant.
The webinar covered, in depth, a look at several of the key reasons for the current situation, including massive labor shortages at factories, ports and shipping companies and a shift in online buying behavior, spawned during the pandemic, that is expected to persist and keep carriers chronically overloaded through 2022.
As a result, Hempstead warned that the cost to ship packages will increase next year. “We are seeing pricing going up a lot,” he said. “FedEx announced their 2022 rates, and they are substantial—10 percent. UPS hasn’t announced their pricing yet, but they normally follow FedEx so expect to see the same.” He also explained how carriers are looking to change the behavior of their shippers to get more yield from packages.
Ashraf explained containerized shipping, the extraordinarily high cost of the containers themselves and how the massive congestion at West Coast ports is causing a domino effect with other modes of transportation trying to move product across the U.S. “This is something we’ve never witnessed in ocean shipping,” he said. “Things have gotten worse and it’s all COVID driven.” In short, he explained that shipping companies reduced capacity last year because they thought the pandemic would cause a major slowdown in the purchase of goods. Instead, the opposite happened. People were at home, so they needed products for cooking, home offices, home improvements, children’s crafts and more. The shipping industry couldn’t keep up, got backlogged and remains that way.
His advice to shippers is to plan ahead. “Importers who can forecast their planning strategy should look at multiple modes of transportation and different routes. The more diversified you are, the more you can mitigate your risk. You have to build flexibility and lead time into your plans,” he said.
The webinar is available free on demand here.