Supply chains will have to become more efficient to cope with ongoing dynamics in 2022

Continued demand for goods will have to contend with Russia-Ukraine fallout and transport bottlenecks according to Global Trade magazine’s major trends of 2022

Global Trade magazine has outlined five trends to watch in the supply chain sector for 2022:

  1. Consumer demand for durable and non-durable goods continues unabated, even as restrictions diminish. In February 2022, US container import volumes increased by 12% from January 2021, and February 2020.
  2. The fall-out from the Russia and Ukrainian war, rising inflation and pressures on the cost of living may dampen consumer demand. If not, the pressure will continue on importers and logistic services providers. Fuel prices are also rising, which will exacerbate problems for logistics companies. Due to this, improved visibility of assets to maximise usage is needed as well as optimisation of warehouse resources.
  3. Capacity constraints are pushing up costs for the logistics sector. The infrastructure has failed to keep up with the freight demand, causing problems at US ports and across last-mile distribution. Ocean containers are in high demand, with empty vessels returning to Asia, so that they can take advantage of high shipping rates moving goods to North America and Europe.
  4. There is a shortage of logistics workers and drivers compounding the problem, which also extends to the air cargo sector. The lack of staff is pushing logistics companies into further automation, which increases warehouse worker productivity, eliminates paper-based tasks and proof of delivery, and gives the customer the opportunity to book and track deliveries themselves. The driver shortage is also forcing companies to look at AI-driven route planning to reduce costs.
  5. Governments are also pushing the environmental agenda, meaning companies must have an eye on their sustainability performance. Successful companies are seeing this as a way to improve supply chain performance, rather than a problem to address.

On top of this, the magazine has published a second report on the key issues facing e-commerce retailers and brands in 2022. This shows that traditional retail models are a barrier to reacting to trends and reducing inventory-related risks. A survey of 66 online retailers and brands have found that the main concern is the ability to react quickly to trends such as those previously outlined, which 86% of companies are concerned about.

Customers, however, are concerned about sustainability and customisation. A July 2021 survey, which is referenced in the report, indicates that 68% of customers would be willing to pay more for sustainable products, particularly Gen Z respondents.

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