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How COVID-19 Has Reshaped Supply Chains and What Comes Next


Personal lives as well as businesses have been changed by the COVID-19 pandemic. Whether for the better or the worse is up for debate but there’s no denying the impact it has had on our lives. Below we will dive into how the supply chain has changed due to COVID-19 and what the future could hold.



Diversification & Visibility

As the pandemic set in and supply chains underwent significant changes, many companies that relied too heavily on a single supplier or location were devastated and left without alternatives to continue business. As a result, many companies are now striving to increase their resilience against risks by diversifying their trade networks. Having a more diverse network prevents any single bottleneck or supply chain issue from devastating the entire chain, allowing business to continue with only minor setbacks.

Complications in the supply chain have highlighted the need for transparent data on where goods are, what condition they’re in, and when they will arrive at their destination. This is particularly true for sensitive goods that depend on certain temperature conditions or have a limited shelf life – for example, for the delivery of vaccines and other medications. A lack of end-to-end visibility can cause significant financial losses due to an inability to react to disruptions and save valuable goods from damage or loss. Therefore, developing and implementing the tools to collect and use this data is a top priority for many companies.


Lead Times & Technology

Supply chain disruptions due to lockdowns and labor shortages across the globe have caused growing lead times for products coming from overseas, making it increasingly difficult to achieve the rapid delivery that most consumers have come to expect. Since the onset of the pandemic, lead times for China, the US, and Europe have all increased by 200% or more. The delays can be even greater for certain products or raw materials, as has been the case for electronic components experiencing shortages that affect a range of industries.

While some economic downturns result in slowed technology advancements, the pandemic has pushed many companies to increase investment in technologies like AI and automation. These technologies can boost supply chain capabilities and help companies rapidly respond to fluctuations in the market while making people’s jobs easier and more efficient. There is a strong focus on connecting such digitized, autonomous tools within the supply chain, from planning and procurement to manufacturing and logistics.


Biden’s shipping reform

In the face of ongoing port backlogs and logistical slowdowns, the Biden administration endorsed legislation that would work to reform shipping laws and regulations for container lines. The White House noted that the FMC could challenge container line alliances if they violate the US Shipping Act, causing unreasonable transport cost increases or declines in service quality.


What’s next?

High shipping rates and mismatched supply and demand are likely to persist for over 18-months, or as long as blockages in the supply chain remain. These high rates affect global import and consumer prices and are likely to hamper short- and medium-term economic recovery. Returning to normal freight rates will require companies to readjust their networks, technology, and infrastructure in ways that increase resilience while facilitating trade.

With the global supply chain in its current state, it more important than ever to have a logistics partner, like ClearFreight, looking out for your best interests and making sure you have all your options in front of you. Contact our team of experts today to hear how our supply chain solutions can meet your needs and make logistics easier for you.

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