Supply Chain Strategies Likely to Change Post COVID-19: Survey
A recent survey, conducted by Shipping and Freight Resource along with Ocean Insights, which was answered by over 300 Shipping and Freight Professionals across the world, brought out some key indicators that will inform the future course of global supply chains.
One of the most important trends unearthed was the readiness to change supply chain strategies (42.2%).
Additionally, answers and a large number of comments on the survey questions point to the overall adaptability of the industry and that we can expect a renewed surge in the demand for technology solutions, with 67.6% of the survey takers indicating they will invest in technology.
Global supply chains and shipping will be different from how they worked for decades. Navigating around and through the COVID-19 situation has left us all in uncharted waters, with 59.2% of responders indicating their operations were significantly affected, rocking the foundation of even the most stable businesses.
However, sharing information and understanding best practices will enable the industry to come together and combat this as a whole. If there was ever a time for collective efforts, it is now.
With this intent, the survey, conducted by Shipping and Freight Resource and sponsored by Ocean Insights, the Ocean Freight Tracking System provider, was designed to measure the effect of the coronavirus pandemic on global supply chains. It collected and analyzed data on three key aspects - Impact, Preparedness, and Recovery.
The survey was answered by Carriers, Logistics Providers, Freight Forwarders/NVOs, Consultants, Shippers/BCOs (95.7%) and other (4.3%) industry professionals across job levels —C-Level, Director/Top Management, Middle Management, and Operations.
59% of survey takers said that their operations had been significantly affected. 25% were moderately affected while 14% were ‘somewhat affected’. Only 1% maintained they were not affected while a negligible number stated they were unsure.
Survey participants were asked to check multiple options with respect to affected operations. 70% experienced volume decline, 61% were hit with transit delays, 50% with delays from port to customers and 40% with lack of capacity.
Furthermore, based on additional comments, operations suffered from other factors such as, “late or non-payment from clients, canceled credit lines from physical carriers”, “inconsistent volume demand” and “increased costs”.
54% stated they were somewhat prepared, 35% were not prepared at all, 7% were completely prepared and 3% were unsure.
When quizzed about adaptability, 37% stated that they experienced a partial supply chain shut down with significant freight delays. 36% had a few glitches that delayed freight by a few days, 14% stated the supply chain was able to adapt with no problem, 4% were unsure and 9% experienced a complete supply chain shut down.
92% of survey takers experienced some disruption but managed to adjust to it in varying degrees. This points to the fact that there was some flexibility built into global supply chains and shipping operations. However, it might be imperative to look at the best practices of those (14%) that seamlessly adjusted to this unprecedented situation.
About their shipping and supply chain partners, 55% stated their partners were somewhat prepared, 32% said they were not prepared, 9% stated their partners were fully prepared and 4% were unsure.
A whopping 42% of survey takers said they would change their shipping and supply chain strategy based on their experience with the Coronavirus pandemic, 29% said they may change their strategy, and 29% said they would not.
Survey takers expressed they would invest in technology (67%), employees (33%), assets (26%), acquisitions (13%) and other aspects (12%) as part of their recovery efforts post the pandemic.
The felt need for technology solutions was echoed by a large number of survey takers who said:
● “Need improvement in terms of transparency and flexible supply chain to allow change based on real time events/impacts”
● “Logistics still needs to undergo a technological transformation (long queues at the European borders this month highlighted again the lack of visibility during transport and lack of reliable ETA).”
● “More online remote procedures to be included. manual processes to be seriously looked into for alternatives.”
● “Integrate more digitized workflows”
● “Technology upgrades, work from home capability and preparedness are needed”
● “[W]e hope after [the pandemic] to invest in technology to deliver and match our customers’ requirements”
As the present indication for the future, a majority of the survey takers expect to recover from the hit they have taken due to the pandemic. They were given multiple options to gauge how the recovery from this would be. Only 2% expect not to recover. 43% expect a slow recovery, 38% a moderate recovery, 19% a fast recovery and 3% were unsure.
It is realistic to expect a slow recovery from this pandemic, considering the major hit that the global economy has taken. However, we expect technologies to play a crucial part.
The unusually high number of comments (over 200) by the survey takers strongly reinforced this.
While the new normal is something that we will all have to get used to, it is refreshing to see that the industry is not down and out but accepting of the hit that it has taken and ready to take the required actions to bounce back stronger and more secure than ever before!