Shipping expert Lauren Pittelli shares her advice to manufacturers for keeping those components coming in and finished goods moving.
For Industry Week
Photo: © Carolyn Franks | Dreamstime.com
Now that 2022 is in the rearview mirror, it’s time to consider the top global logistics trends that will impact manufacturing businesses in 2023. Here are the issues and trends that we have in our headlights.
Carrier Market Disruption
Rapid supply and demand changes during the pandemic reshuffled team rosters and altered every carrier playbook. The ocean carriers were flush with pandemic profits and invested in vertical integration. Two of the largest global carriers, Maersk Lines and CMA CGM, expanded into air cargo and contract logistics. Mediterranean Shipping Company (MSC) purchased the African logistics division of Bollore.
Non-traditional players decided to get into the logistics business, too. Retailers such as Home Depot took supply chain matters into their own hands, chartering vessels to overcome supply chain snarls. Amazon increased its air-service offering and expanded its fulfillment services to companies not selling on the Amazon platform. TikTok announced plans to offer U.S. fulfillment services.
Now the bloom has faded off some of these initiatives – demand for space has fallen precipitously and transportation rates have gone south with the missing demand. Carriers have responded by scaling back or eliminating their new services. For example, Amazon is subletting excess warehouse space while CMA CGM suspended all its U.S. cargo flights.
Lauren’s advice: To avoid service disruptions in 2023, avoid the flash-in-the-pan by strengthening ties with established carriers.
Geopolitics Interrupts Business as Usual
We’re in a new era of industrial policy, one that considers protecting national security and minimizing climate change when setting the rules businesses operate by.
Export controls are being used to advance broad national security objectives. To protect U.S. leadership in the high-tech sector, the Biden administration restricted the sale of advanced semiconductors and chip-making equipment to China. Additional actions will follow that protect our dominance in biotech and clean energy development. Russia has been shut out from purchasing U.S. high-tech in reaction to its invasion of the Ukraine. TikTok has been banned from government cellphones over privacy and security concerns.