Staying updated about supply chain news is not just a matter of keeping up with the times. Rather, it’s a strategic investment in your business’s success. It enables you to adapt, save costs, improve efficiency, reduce risks, and ultimately stay ahead in a dynamic and competitive marketplace.
So, what’s happening in supply chains?
As 2023 comes to a close, let’s stay updated on the latest supply chain trends, insights, and developments. By doing so, you can prepare your logistics operations and fulfillment center ahead of time—perhaps even work with outsourced logistics for long term success in your supply chain operations.
In this article, we’re covering the most relevant supply chain news. We also provided actionable steps for each update so you can better plan for 2024.
Update #1: The Return of Small Carriers is Uncertain
With plenty of carrier options and competitive prices, eCommerce businesses can lower shipping costs and grow revenue. However, this may change soon. A weak economy is causing small carriers to leave, leading to an excess shipping capacity.
Already, businesses report that traditional holiday shipping has yet to pick up despite the peak season. As such, warehouse inventories are high. On a positive note, recent labor agreements suggest there may be more shipping activity in the coming months, although it might take some time to fully recover.
Action Steps: Take advantage of the current favorable conditions to streamline your supply chain and cut costs. With abundant carrier options and competitive pricing, focus on making your shipping solutions more efficient and working with a 3PL warehouse. Simultaneously, keep an eye out for signs of increased shipping activity soon and be ready to adapt as demand patterns change.
Update #2: The Tension Between US and China is Affecting Trade Flows
Recently, the World Trade Organization (WTO) warned that trade tensions between major economies, particularly the US and China, are beginning to influence trade flows.
The WTO emphasized the high costs and instability of fragmenting the global economy into separate trade blocs. The organization’s report urges greater international cooperation and economic integration, describing this approach as “reglobalization.”
Action Steps: The potential fragmentation of global trade can have significant economic consequences. Stay agile in your global supply chain operations and prepare for potential disruptions resulting from trade tensions. Explore opportunities for diversified sourcing, consider regional trade agreements, and keep up to date with customs clearances to mitigate risks.
Update #3: Panama Canal’s Drought Might Extend into 2024
The Panama Canal’s ongoing water level issues are causing congestion and potential disruptions. Due to a prolonged drought, the canal authority has imposed daily limits on vessel transit and drafts throughout 2024. This water-saving measure has led to a backlog of ships and a spike in freight rates, just in time for the upcoming holiday season.
While the canal has recently shown signs of returning to regular traffic, the situation remains challenging. With the canal handling a significant portion of global trade, logistics managers must prepare for potential delivery delays and consider alternative routes to mitigate the impact of congestion.
Action Steps: Plan for delays and increased freight costs, especially when planning for peak shipping seasons. Consider diversifying transportation and shipping routes to minimize the impact of canal congestion on your operations. Also, stay informed about evolving weather patterns and their impact on water levels, as this issue is expected to continue affecting global trade in the coming years.
Update #4: The US Housing Market Will Affect Businesses
Many businesses are facing an evolving economy this second half of the year, where the economic transition into a post-pandemic world hinges on the performance of the single-family housing market.
According to Jason Miller of Michigan State University, the best-case scenario for the economy in 2023 involves a 10-15% increase in new single-family housing construction. This growth signals consumers’ ability to cover significant expenses, reflecting economic health amid federal policy shifts.
However, Flexport Chief Economist Phil Levy suggests a possible “hard landing” ahead, though the timing remains uncertain. His advice: Businesses should remain cautious, anticipate economic challenges, and closely monitor labor market conditions and inflation indicators.
Action Steps: Monitor economic indicators closely, especially those related to housing activity, consumer spending, and inflation rates. Stay flexible in your operations to adapt to changing demand and market conditions—but avoid overextending your business. Your goal is to be proactive against possible economic shifts, where the labor market and inflation trends can serve as early warning signs.
Update #5: The New US-EU Middle East Trade Corridor
In recent developments, the US and EU have backed a transformative trade corridor connecting India to the Middle East and the Mediterranean, posing a challenge to China’s influence in the region. This ambitious project aims to create a shipping and rail route from India through the United Arab Emirates, Saudi Arabia, Jordan, and other countries to Europe.
The corridor promises to offer tremendous trade, streamlining connectivity and accelerating trade between India and Europe by up to 40%. This project could open new avenues for international trade but also disrupt existing logistics routes.
Action Steps: The trade corridor could impact your international trade routes. Keep an eye on potential opportunities for quicker and more efficient trade between India and Europe and explore how this might benefit your eCommerce business. Additionally, evaluate alternative logistics routes and consider diversifying your sourcing and distribution strategies to adapt to potential shifts in trade dynamics.
Navigating Tomorrow’s Supply Chain Landscape
Adapting to these evolving situations can help your eCommerce operations thrive. Your ability to adapt and strategize will determine your success in this competitive landscape. So, stay agile, be proactive, and keep an eye out for new opportunities as you manage your growing eCommerce business’s logistics.
And if your logistics and fulfillment get too complicated for your in-house team to handle, you can always work with Third-Party Logistics (3PL) providers to let experts do what they do best.
Looking for a reliable 3PL company to work with?
At San Legend, we help eCommerce businesses scale their brands and break into new markets by providing customized, agile, and forward-thinking third-party logistics solutions. Reach out today to see how we can help.