What current challenges could affect the global supply chain moving forwards?
The global supply chain as we know is undergoing many challenges, which has been the talk of the world over the past few years. As of recent months we have seen many changes for the good and for the bad, with many businesses feeling uncertain of the future. There has been light at the end of the tunnel for many, with some industries experiencing high volumes of orders rather than the opposite. However, it’s undeniable that world events such as the current Ukraine and Russian conflict and Covid-19 lockdowns in China continue to impact the global supply chain.
What challenges can we expect going forwards for the global supply chain?
Other than what’s been mentioned already, there are other challenges ahead that we could expect to make an impact. It’s no doubt how much countries rely on each other for trade, even with more onshoring occurring. Regardless, it’s important to keep updated on information regarding these challenges, to stay better prepared.
One of the most obvious and current issues the world is experiencing at the moment is the rising cost of living. Inflation has hit an all time high across most sectors, from household goods to food costs. No matter where you are based, most households are experiencing this rising cost which is resulting in prioritizing spending. Going into the winter months, all households will no doubt be using more energy depending on where they are living, therefore meaning that there will be a cut back on expenditure to cater for this. With this uncertainty of spending, business plans going into the Christmas season will be difficult. Businesses will likely order less to cater to this, which could potentially be a make or break.
A knock-on effect of the cost of living leads to labor, with strikes, wage increase demands and more becoming impactful factors. Of course, workers are needing to keep up with the increasing prices and cost of living, therefore businesses are needing to increase their wages. However, those businesses that aren’t doing this could be losing staff, or experiencing strikes which then leads to disruption and delays of logistics and manufacturing. According to Hellenic Shipping News:
‘Striking truckers in South Korea have already disrupted computer supply chains this summer, while UK railway strikes have affected deliveries of construction materials. Dock workers have been on strike in Germany and the UK, while freight hubs in Ireland are expected to clog up due to strikes at the Port of Liverpool across the Irish Sea. Some UK unions have floated the idea of coordinated strike action in coming months, which could cause further disruption to supply chains.’
A huge factor which will continue to disrupt global supply chains as well as rising costs is the current Ukraine invasion. The uncertainty of this, is causing businesses to rely more on bringing manufacturing onshore, trying to reduce the reliance on other countries. The invasion has been the root cause of many of this year’s supply chain issues, and going into the winter seasons this will continue.
Energy costs and shortages globally affecting supply chains
Lastly, a topic on many countries' minds at the moment is the shortage and costs of energy. With this being a knock on effect of the Ukraine invasion, reduced supply from Russia is forcing European companies to look to alternative energy sources. - Hellenic Shipping News
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Source: Hellenic Shipping News