Although navigating logistics is unlikely to become obstacle-free anytime soon, there are measures that businesses can take in order to mitigate the impacts of supply chain disruptions, and start the year with their best foot forward.
Invest in digitisation
Prioritizing investment into technology-driven solutions is key to improving supply chain resilience. Benefits of technology include: increased visibility over supply chain operations, improved document management, and more detailed reporting – all of which in turn help to mitigate uncertainty around shipping costs, vessel capacity and delays in shipments.
The global logistics industry is inherently unpredictable and constantly impacted by many different factors, so businesses that use technology to operate and make decisions informed by real time insights will be the ones able to react the fastest to any disruption and therefore the most likely to achieve success.
Choose a data-savvy partner
Logistics requires collaboration among numerous stakeholders. Key for a frictionless collaboration is the access to and sharing of high quality data. For the data to be exhaustive and relevant, find a partner that integrates multiple sources of data – both internal and external – and that uses artificial intelligence (AI) to interpret this data. Accurate data and accompanying analysis, such as the prediction of a potential disruption, allows businesses to make decisions and find solutions to issues if and when they arise, in real time.
Finding the right data-driven partner will help businesses be more proactive with issue management, and save valuable time.
Don’t underestimate experience
Whilst data is undeniably key to building supply chain resilience, it is only combined with logistics experience that it unfolds its full potential. A deeply experienced logistics operation team will ensure the details of each shipment’s specificities are carefully considered to suggest the best route or recommend the most appropriate transport type. Any partner chosen should carry this experience in order to offer the support required for success.
Although supply chain stability remains uncertain, aligning with knowledgeable and trustworthy partners will allow businesses to navigate this more smoothly.
Diversify your supply chain
Reflecting on the events of the last three years, it’s clearly impossible to predict what the next major issue will be. Therefore, businesses must not have all of their eggs in one basket when it comes to any aspect of operations – such as supplier or production location – or they risk being unable to operate when a problem arises.
With container prices[1] now down to $2,000 from $10,000 at the same time last year and low consumer demand, now is the time to use freed resources to diversify the supply chain. This could include increasing the supplier base and looking into new locations for production, as well as trying out alternative trade lanes and transport modes. Diversification will mean businesses are less vulnerable to the impact of potential issues, and so more likely to be able to continue to operate even through difficult times.
Embrace sustainability
Mitigating the effects of the climate crisis continues to climb the agendas of governments, businesses and stakeholders, with latest news showing that 2022 saw record-high temperatures across Europe. With emission reduction by at least 55% by 2030 being now a legal obligation in the EU, businesses have no other choice but to track and reduce their emissions.
Freight transport is still responsible for seven percent of global greenhouse emissions – which is more than either Germany or Canada emit[2]. Making logistics processes more sustainable is an industry wide issue that needs to be tackled – and this is something Forto feels passionate about. Offsetting emissions, and using biofuels in shipments are examples of positive first steps businesses can take.
While it isn’t possible to predict what will happen in the global shipping market in the year ahead, taking into consideration some of the points discussed above – whether digitizing and diversifying or, collaborating with experienced partners – and making sustainability a priority will certainly help businesses to weather whatever storm may arise, and to make 2023 a success.