The realities of today’s global supply chain mean that BCOs and LSPs are more reliant on technology than ever before. They need technology to collaborate across the different parties involved in any shipment, and they need technology to establish the end-to-end visibility that’s so essential to keeping supply chains moving forward in the modern age.
This week’s roundup of headlines explores some of the driving factors behind supply chain technology investment, as well as the most recent supply chain disruptions, their ripple effects, and how governments and organizations are taking action to mitigate supply chain risk.
Continue reading to learn more, and contact us if you’re looking for a supply chain platform that can make your operations more efficient through collaboration, visibility, and orchestration.
New EU Regulations Increase the Importance of Visibility
All sorts of dynamics are driving investment in supply chain visibility technology. One of the most recent drivers is the European Union’s effort to end forced labor in overseas manufacturing. Manufacturing and retail firms operating in the European Union will need visibility for compliance with regulations. It’s estimated that these firms will spend $7 billion on visibility tech by 2029 as they seek to achieve compliance.
The importance of supply chain visibility has been growing due to constant disruptions around the globe, including labor issues, weather events, geopolitical conflicts, plus others. The need for compliance with new regulations is just another reason for BCOs, LSPs, and others to invest in visibility technology.
The Ripple Effects of the Red Sea Crisis
The missile attacks in the Red Sea that created a significant disruption at the start of 2024 still continue as we pass the year’s midpoint. Maersk writes about the ripple effects of these missile attacks, including how they have increased transit times and costs, created capacity shortages, and generated uncertainty across the global supply chain.
The article includes specifics on the impact. For example, going around Africa’s Cape of Good Hope rather than through the Suez Canal adds an average of 9% to transit times. This also leads to higher costs because longer routes mean more time, more fuel, and more resources required.
How Disruptions Impact Individual Businesses
The ripple effects noted above have real consequences for businesses around the world. Pepco Group, for example, just reported an underwhelming 4.3% drop in revenue, placing the blame party on supply chain disruptions related to the crisis in the Red Sea.
The retailer is taking action to overcome the ongoing disruption now and in future months. One strategy it’s using is placing orders for shipments for the holiday season earlier than in previous years to ensure timely delivery from origin points in China.
Hurricane Beryl Hits Houston and Other Gulf Coast Ports
Hurricane season started earlier than expected this year, and Houston is still recovering from Hurricane Beryl's impact. Cargo services in the area have resumed now that the storm has passed, but there remains a backlog for logistics operations to work through before things fully return to normal. According to Supply Chain Dive, the storm also affected ports at Brownsville, Corpus Christi, and Galveston, which are all important entry points for crude oil.
Created a Supply Chain Away From China
Industries continue to look for alternatives to Chinese manufacturing. The United States government is seeking to “bolster textile and apparel trade partnerships in Central and South America” in an effort to reduce reliance on China. The motivations behind this shift are concerns about forced labor and security issues.
The Biden Administration is also promoting electronic chip manufacturing in stateside factories in Texas and Arizona. The U.S. would then ship these chips to partner countries like Costa Rica, Kenya, and Vietnam for assembly, where the chip-powered products would then ship to destinations around the world. The goal of nearshoring chip production is to avoid the “blunt risks tied to China.”
Cargologik: The Supply Chain Platform Designed to Overcome Modern Challenges
At Cargologik, we offer a single-source-of-truth platform that improves upon what you can accomplish with fragmented systems. Our platform offers visibility and orchestration capabilities, plus features for everything from booking to document management.
The supply chain will continue to be chaotic and prone to disruption in the months ahead. Use our technology to ensure that you stay ahead of disruptions, create outstanding customer experiences, and build a long-term competitive advantage.
Contact us to learn more about our supply chain orchestration platform.
