The current chaos in the supply chain may continue well beyond the holiday season. While some of the challenges may end by 2022, experts believe there will not be a full recovery of the supply chain this year.
Now, experts are starting to talk about when they think the supply chain will finally recover – and whether we will return to business as usual by the end of next year.
Here’s what we know about the supply chain situation so far, its likely future in 2022 and how businesses can act to navigate these ongoing supply chain difficulties.
Currently leading supply chain challenges
Current disruptions can be blamed on a variety of factors that have made it difficult to ship goods, even as the COVID-19 epidemic continues to subside.
Storage space is one major challenge. Warehouses are overflowing as businesses prepare for the peak season. Retailers are currently seeing record levels of demand – and as they stock up on the holiday rush, they are starting to push the boundaries of storage space available in the warehouse.
Doug Kirsey, president of Dermodi Properties, which owns warehouses used by some of the country’s largest retailers, Told NPR Mid-November that “in some markets … we are over 99% occupied.”
Some larger retailers are even starting to buy their own warehouses to ensure storage space is available whenever and wherever they need it.
The storage supply shortage is due in part to the ongoing effects of COVID and in part due to the whiplash caused by Sharp recovery in demand, Which leads to unprecedented sales numbers in some sectors.
At the same time, it is becoming much more difficult to move goods from point A to point B. The congestion at the port is at an all-time high in major US ports such as the Port of Los Angeles.
Businesses, realizing that goods shipped by sea could get stuck in the port, began to switch to air transport use. As a result, the demand for air delivery began to exceed supply. Similar issues are emerging in the trucking industry as well.
In general, every link in the supply chain is now in serious tension, and the end-of-year shopping season will be a serious test for business logistics around the world.
Supply chain challenges are likely to continue until 2022
Supply chain experts disagree on exactly when these challenges will end. Some shipments, for example, predict that congestion at the port may continue next year, while others are much more optimistic – saying we can be Without congestion Until Rosh Hashanah.
In warehouses the tone is much less optimistic. Some industry experts and business leaders do not see the end in sight for the current crisis, meaning it may continue next year as well.
At an analyst meeting on Oct. 28, Tarek A. said. Robiati, chief financial officer at information technology company Hewlett Packard Enterprise Co., that “Supply Chain Constraints Will continue to be on the market all the way until the second half of 2022, “according to the Wall Street Journal.
All of these problems are also exacerbated by the ongoing shortage of manpower. As with many challenges in the current supply chain, we have no good idea when labor gaps will begin to close. While experts have hoped that the shortage will start to subside in the fall, it seems more likely that the shortage will continue until 2022.
Businesses may receive some relief in late 2021 and early 2022 when certain supply chain challenges begin to end. However, many companies also treat these challenges as if they will become long-term problems.
Preparing for the possibility of an extended supply chain crisis may be the best option for businesses that are still planning how to organize logistics next year.
What businesses can do to manage supply chain troubles
Taking steps now can help businesses prepare for ongoing supply chain struggles. Even if storage space is still difficult to obtain and slow delivery times remain, businesses can do well before the supply chain returns to normal.
“Diversifying distributors can help businesses ensure product availability and the prospect of timely delivery even when the supply chain remains volatile.
For example, if one distributor does not have the raw materials or products your business needs because of local shortages in supply, or if problems in the regional supply chain make it difficult to ship goods, you may be able to rely on a secondary delivery partner.
Building an inventory of goods can help you navigate a shortage, but it may be increasingly difficult to find a place. Regular communication and strong business relationships with both distributors and other shipping partners, such as warehouses, can help you keep up with disruptions and better plan your local shortage.
While some businesses prefer to work with the business that can offer the lowest price available on shipping or storing goods, working with businesses you have worked with in the past can help create stronger business relationships that may be valuable in times of supply chain instability.
Preparing for the supply chain challenges of 2022
While some supply chain challenges may be over before the new year, it is likely that the full recovery will come some time in the middle to the end of 2022, or even more so in the future.
Preparation now can help businesses prepare for the long term, and build supply chains better equipped for future disruptions.
Simple changes in the way a business obtains, stores and ships goods can make the supply chain activity more prepared for current and future challenges.
By Eleanor Hex
Eleanor Hex is the editor-in-chief at Designer magazine. She was the Creative Director at the Digital Marketing Agency before becoming a full-time freelance designer. Eleanor lives in Philly with her husband and puppy, Bar.