How 2020 Supply Chain Disruptions Are Influencing 2021 and Beyond

Before COVID-19, supply chains were already evolving globally. But 2020 brought some significant challenges, and even organizations with a local or regional reach are scrambling to adapt, just like their global counterparts. 

• Constraints on transportation and logistics have pushed delays in supplier deliveries to their highest level in decades. 
• Faster than anticipated recovery means suppliers are facing challenges of their own.
• Logistics issues are widespread and not confined to a handful of industries. 

Here are just a few of the factors influencing suppliers in 2021, and it's not all bad news:

Higher Transportation Costs

Strong economic growth in 2018 caused transportation costs to rise, while the pandemic in 2020 increased demand and reduced the availability of truck drivers and air cargo flights. Consumers holed up at home turned to online ordering, putting even more pressure on the commercial transportation sector. While 2021 has seen some of this pressure dissipate, we’re still facing a severe truck driver shortage and environmental restrictions on air and sea travel that make this a slow recovery.

A Greater Reliance on Data and AI Technology

Technology has had a profound impact on supply chains. While AI and the Internet of Things continue to generate enormous amounts of data, businesses are still developing ways to respond to and use this data. In a world where even the slightest adjustment can mean significant cost reductions, every advantage can be a potential game changer. 

Increasing Customer Expectations

There once was a time when next-day shipping was a novelty, but now it seems like next-day and even same-day supply is becoming the rule. Even at the height of the pandemic, customer demand increased. The companies that embrace this change and innovate to meet it are the ones that will find themselves at a distinct advantage in the next 2-3 years. 

Supply Chain Complexity

2020 demonstrated the effect that global shutdowns have on supply chains that were built to deliver the exact amount of something at the exact moment it is needed. This exposed many organizations to the stark reality that they had little understanding of how their supply chains truly operated and how they could handle future disruptions. 

How We're Past Diversifying Your Supply Chain

While the past few years have proven that supply chain diversification is something every industry entity needs to contemplate, shipping costs will most likely remain elevated until early 2022, putting pressure on the prices of consumer goods. 

The best ally during difficult times is a logistics partner that understands supply chain management. They leverage the latest transportation management software to reduce the pressure on fragile chains, compare shipping costs, and find the best way to get things from Point A to Point B. Sheer Logistics is just such an ally. We are standing by to help you mitigate the damage you may have sustained during these few bad months.