Global supply chains have seen an exciting, difficult, and momentous decade so far in the 2020s, and while almost all indications point to 2023 being slightly more “normal,” the sector is still expanding and changing. Let’s look at the issues that supply chain managers need to be concerned about in 2023, as reported by Marine Digital.
1. Businesses will shift from survival mode to growth mode
The majority of supply chain management experts have been battling supply chain crises for the past two years. Decisions have to be made out of need and based on the resources at hand. The challenge will be to avoid overreacting when things change now that the industry is rebalancing. Avoid panicking too early in 2023, and make decisions with your long-term objectives and trends in mind.
2. Carriers will reduce tariffs and improve service
One of the most promising trends for 2023: is a continuation of the downward trend in carrier rates. During the epidemic, consumer spending on commodities increased dramatically but throughput decreased. As a result, transportation companies raised their prices for both sea and land travel, and service quality declined as a result of travel delays brought on by worker shortages and lockdowns. Shippers were forced to manage delays and other problems. This trend has started to reverse as demand has levelled off, capacity has improved, and backlogs have lessened, and we anticipate industry balance to last for a while in 2023 in addition to lowering overall transportation costs.
3. Congestion in ports
The extraordinary levels of congestion that affected major ports across the world were one cause behind the breakdown of transport systems. Although the major US East Coast and European ports were also impacted, the US West Coast ports received the majority of the attention. There was a shortage of ports of departure throughout Asia as a result of the capacity of ships and containers moored at crowded US and European ports, making it a global problem. It is doubtful that congestion levels would decrease in 2023, according on research on congestion levels in 2022 and flight schedules provided by container carriers.
4. Reshoring and nearshoring
While some businesses have boosted their stocks, others have adopted a different strategy to address the supply chain issues brought on by the pandemic. Many of our clients have moved their production, shifting their operations from Asia to the United States, Mexico, or another neighbouring nation. The production costs are frequently higher in the United States and Mexico than in Asia, but the delivery periods are significantly shorter. This method can have both benefits and drawbacks. A supply chain component’s reshoring or short-range shore can also avoid any possible issues brought on by shortages and backlogs. Next year, we anticipate seeing more offshore businesses.
5. Visibility, data, and digitization
Digitalization and new developments in the field of artificial intelligence, blockchain, IoT and automation are becoming increasingly relevant for maritime transport.
And for good reason: supply chain data and transparency can benefit almost every aspect of a business, including customer satisfaction and bottom-line improvement.
The best control software solutions also integrate multiple management systems such as warehouse management systems and enterprise resource planning tools.
Technologies that prioritize data and transparency will be incredibly in demand in 2023.
as the implementation of strategic technologies can enable supply chain managers to streamline supply chains from end to end.
6. Geopolitics will continue to influence supply chains
Obviously, geopolitics has impacted supply chains for a very long time. However, in recent months, discussions about the supply chain have become more prominent when it comes to global politics and current affairs. For as long as it lasts, a Russian-Ukrainian conflict may disrupt global supply systems. Any modification to the bilateral trade relationship between China and the US, meanwhile, has the potential to profoundly alter the US import environment.
7. Advanced tech
You would anticipate autonomous trucks, drone deliveries, and warehouse robotics to be at the top of the list if you had looked at the homepage of Supply Chain Dive, Freight Waves, Supply Chain Management Review, or any other top industry journal this year. corner, the focus of attention And they may be for some companies. However, before such technology becomes commonplace, more time must pass.
8. Cybersecurity
As with other industries, cybersecurity is a growing concern in supply chain management.
Modern technologies can add vulnerabilities to the ships especially if there are insecure designs of networks and uncontrolled access to the internet.
Unknown, and uncoordinated remote access to an operating ship should be taken into consideration as an important part of the risk assessment.
According to one report, attacks on software supply chains are up more than 300% in 2022 from the previous year.
Cyber attacks on supply chains range from data hostage-taking for financial gain to the theft of sensitive customer information.
9. For e-commerce brands, zone skipping and returns management will be key
As the e-commerce space continues to grow, returns management will also grow.
Companies with high return rates will continue to look for ways to automate processes and reduce return costs, whether it be charging return shipping, limiting return periods, or partnering with multiple carrier options to ensure they pay the best price.
Handling returned items will also be a challenge as the items may need to be routed to different locations depending on where they end up.
We expect more companies to look for strategically located distribution centers in 2023 to receive and process returns.
But as shippers learn about the benefits, we expect to see.
10. Consumer demands will increasingly include sustainability and circular supply chains
Another important trend that we expect to continue and grow in 2023 will be sustainability.
Changing consumer demands and tighter government regulation will continue to push companies towards greener practices in 2023.
One notable example would be cyclical supply chains, where manufacturers reclaim discarded products to return or sell back to consumers.
Whether they realize it or not, consumers will be buying more recycled and remanufactured goods in the coming years.
Many of the future trends in supply chain management involve big changes, from new production sources to better technologies.
11. Focus on the environment and green chains
As environmental awareness grows around the world and consumers and corporations become more aware of their responsibility to reduce their overall carbon footprint, we are seeing increased attention to environmentally sound business and commercial practices.
With growing consumer preference for environmentally friendly products and services, coupled with a willingness to pay more for such products, sustainability has become a buzzword for large corporations.
When selecting transport service providers (including shipping companies and domestic carriers), shippers and manufacturers around the world are paying more attention to reducing emissions and reducing their carbon footprint, as these aspects are given more weight in the annual tender process.
Major container carriers have gone even further and set emission reduction targets that are even more ambitious than the regulations allow.
Carriers are also investing heavily in research to reduce emissions and are becoming open to investment in new technologies and fuels.
12. Start of Mandatory CII(Carbon Intensity Indicator) Tracking
A World Economic Forum analysis of emissions data provided by the International Maritime Organization found that ships account for 3.1% of global CO2 emissions per year.
The global shipping industry is seeking more clarity on the implementation of new ship carbon rating norms from next year amid fears it could lead to a series of ground-level complications and disruptions.
From January, all ships over 5,000 gross tonnages will be valued based on historical data.
The CII measures carbon dioxide emissions per payload and nautical mile.
The CII is even more complex than the Existing Ship Energy Efficiency Index, or EEXI, and its implementation will require some adjustments between owners and charterers regarding contract terms.
In order to make sure that the marine sector is on pace to reduce carbon emissions by 70% from present levels by 2050, the IMO will conduct a review to amend or revise the CII in 2025. Just 2% of all worldwide carbon emissions come from the nautical and shipping industry.
New agreements and regulations
The industry may undergo considerable change as a result of new agreements and laws from authorities, as well as investors’ increased interest in supply chain efficiency, which will increase the transparency and accuracy of strategies, benchmarks, and indicators. and investors focused on supply chains, the most important issue of all. For businesses aiming for zero emissions, global climate change mitigation, and sustainable investment choices, this is one of the major roadblocks. In the future decade, marine transportation will be a source of new dangers for businesses, investors, and the environment as it becomes the bottleneck of global supply chains.
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Source: Marine Digital
