In recent weeks, dedicated supply chain professionals have been working around the clock to get presents into stockings and beneath trees. Their perseverance paid off, and the holiday retail crisis was avoided for the most part. But it’s not time to exhale just yet. More extensive efforts are required to fix the buildup of logistics and labor issues, which are threatening to bring a deluge of new problems in the New Year.
Since November, the U.S. Ports of Los Angeles and Long Beach have cut in half the number of long-dwelling containers and now are moving record numbers through their ports. Still, it currently takes twice as long to get a container from Asia to the United States than before the pandemic, and a long line of ships still waits off the coast. The pace of arrivals is not expected to slow anytime soon. In fact, retailers say they may start their 2022 holiday ordering even earlier to avoid the stresses many of them faced this year.
To improve port operations and reduce supply chain bottlenecks, the U.S. Department of Transportation has announced more than $241 million in grants to bolster U.S. ports. However, lasting improvements will require significant operational advancements across supply chains. Some industry advocates are requesting federal funds for logistics technology so that port authorities, rail operators and trucking companies can access real-time cargo data. Gene Seroka, executive director of the Port of Los Angeles, points out that this data can help supply chains anticipate demand and correct bottlenecks if and when they arise.
There are three key challenges here: The first is that some organizations might not have quality supply chain data. In fact, a study by The Economist Intelligence Unit, with support from ASCM, found that more than half of businesses lack end-to-end supply chain visibility.
Second, significant distribution improvements are needed. The trucking industry has been dealing with labor shortages and worker satisfaction issues for years. In response, the U.S. government announced its Trucking Action Plan, which aims to recruit drivers, expand apprenticeship programs, address the backlog of commercial driver’s licenses, and support job quality and worker retention. Yet Greg Regan, president of the American Federation of Labor and Congress of Industrial Organizations’ Transportation Trades Department, told Politico that the efforts simply don’t do enough to reduce the industry’s 90% turnover rate. Of course, workforce turnover bleeds supply chain organizations of crucial resources and essential knowledge.
Another imminent threat to our workforces is the Omicron variant. Many companies are struggling to protect their people from the spread of Omicron because of a lack of rapid tests. Last year, ASCM and the American Society for Microbiology (ASM) created an online platform to monitor COVID-19 testing supplies and identify and address supply shortages in real time. As our work with ASM made clear, information sharing is a proven way to remove constraints. Which brings us to the third challenge: Many companies are reluctant to share data with competitors, despite the fact that great things are accomplished when we communicate openly.
It’s better to work together
Whether data, labor, health and safety, or another issue, supply chain problems can only be solved through collaboration. And ASCM is devoted to bringing together individuals and corporations to do just that. To all of our members, thank you for being a part of ASCM and for the contributions you make to supply chain every day. I encourage you to invite others to join us in cultivating the spirit of true camaraderie that our world so urgently needs.