![]() ![]() In many cases, supply chain disruptions are being caused not because operations at a port are keeping cargo ships from being unloaded, but because there are no drivers to transport the crates to their final destinations. Even as driver pay and signing bonuses reach unprecedented levels (with Walmart offering drivers a starting annual salary of $100,000), the shortage remains acute and is only getting worse. Simply put, older drivers are retiring, and the industry cannot entice enough young drivers to replace them. A combination of factors including long-run macroeconomics, low population growth, generational shifts in working preferences, and the pandemic have resulted in an ongoing shortage of truckdrivers in the United States as well as other highly developed economies such as the United Kingdom and Japan. One crisis that is slowly but inevitably looming strikes at the foundation of modern logistics. The stressful part, however, is that this is unlikely to be the only major crisis for the supply chain industry within the next few years. ![]() The current situation would almost certainly be far worse as greater shipping costs and shortages would supercharge inflation globally. Imagine for a moment what the current situation would look like if these companies didn’t have 2020 as a learning environment. Within this learning period, GSC companies have mastered a variety of new transportation methods, overcome initial coordination problems, and now regularly provide these extraordinary measures with greatly reduced costs. This is because 2020 benefited from both decreased demand and a greater tolerance for disruption, factors which gave firms the opportunity to learn. The early days of the pandemic were a crucible for creating the capabilities on which the global supply chain is now reliant for survival. “Now, it has to happen in two weeks, and we had to talk to them about $1.2 million dollars in transportation costs.” Navigating the learning period Normally, the client would probably pay somewhere between $100,000 and $200,000 to have all of this product brought in over a three-month period, he explains. “What is its availability? How much is this going to cost?” “Well, that’s not a ship, that’s a plane, and this is going to take up more cargo space then most planes can handle,” he explains.įor example, the Antonov is the largest cargo plane in the world, and Flat World needed this plane multiple times to do this job, Wenck says, adding that led to lots of questions. ![]() “We have clients who, because of the pandemic, couldn’t move the raw materials needed when they were needed, and when they did move it, they couldn’t manufacture due to labor issues - so, they got backlogged,” Wenck says, adding that to fix this, the company needed to figure out how to bring in the product and process it within two weeks. GSC companies like Flat World have had to rapidly adapt from providing not only efficient transportation, but flexible resilience as well. The pandemic caused port delays, transport aircraft shortages, and halts in component manufacturing which have resulted in extreme uncertainty in delivery times, which in turn caused further disruptions. Brian Wenck, CEO of Flat World Global Solutionsīefore the pandemic, the global supply chain was primarily optimized to provide efficiency in line with the demands of just-in-time manufacturing but during the course of the pandemic, this approach has been hamstrung by disruption. To better understand the challenges that the global supply chain is facing, we spoke to Brian Wenck, CEO of Flat World Global Solutions, a global supply chain (GSC) logistics and technology company, to get a viewpoint from someone on the inside. The key to surviving these challenges, (some old and some new) may lie in the lessons learned over the last couple of years. That being said, there are further crises on the horizon with at least two more expected to arrive within the decade, not to mention the continued cycle of global disruptions that seems to once again be restarting with the ongoing Chinese lockdowns. The COVID-19 pandemic, after all, was a massive global event which has caused almost universal trauma. It may be unsettling to think of 2020 as merely the first in a string of supply chain-relevant calamities. The lessons and forced pivots of the pandemic may have actually helped global corporations better prepare their supply chains for any future calamities that may come ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |