There’s no such thing as “business as usual” in the supply chain and logistics business anymore. That went out the window in 2020 when COVID-19 swept the world and transformed how goods move from continent to continent.
A look at recent headlines suggests that the transformation that occurred during the pandemic isn’t over just yet. In fact, we can all expect seismic shifts across the global supply chain in 2024. We’re seeing signs of more change coming from heads of state, publicly traded corporations, regulatory bodies, plus other sources. Continue reading to learn more about the supply chain challenges expected in 2024 — plus possible solutions.
India Emerges as China’s Chief Competitor
China has long been the epicenter of global manufacturing, mostly due to its large labor force and low production costs. But, in 2022 and 2023, China’s manufacturing reliability started to falter. COVID-19 restrictions forced factories to close, drought conditions on key waterways made it difficult for products to reach maritime ports for overseas shipping, and other nations started to emerge as attractive alternatives.
Now, India is in the headlines as a “favored destination for U.S. firms,” according to a CNBC story. The sentiment among executive-level managers in the United States is that India can manufacture the same goods without the level of risk that China has become known for in the last 24 months. U.S. President Joe Biden and Indian Prime Minister Narendra Modi have also improved relations between the two nations, with Biden encouraging U.S. manufacturers to “friendshore” by diversifying their supply chains through manufacturing hubs outside of China — and in countries with closer ties to the United States.
There will be nothing simple about this process. With China so embedded in the manufacturing workflows of so many global companies, a shift to alternatives like India may create a disruption in and of itself.
The Return of Port Congestion?
Supply chain professionals will never forget how containers stacked up at maritime ports during the pandemic, with dozens of ships waiting in line off the coast of high-volume U.S. entry points like Los Angeles and Long Beach. Now, after pandemic-related congestion dissipated, there are new reports that ports on both the West and East Coast of the United States are “vulnerable to longer delays, higher costs,” which are words that no BCO or LSP wants to hear.
The Lunar New Year, which takes place from Feb. 10 to 24, is one of the driving factors of this renewed congestion issue. As China’s factories, manufacturers, and ports limit their activity during this celebration, the global supply chain is disrupted downstream. Both businesses and consumers in the United States are likely to feel the effects of inventory issues, higher prices, and less-than-ideal customer experiences.
The Silver Lining to 2024’s Challenges
Given the issues mentioned above — global supply chain disruptions, the need for alternatives to China, plus others — supply chain executives are turning to artificial intelligence for support in managing through challenges. Intelligent software is a key to transforming supply chain management and increasing supply chain resilience.
The year has not gotten off to a good start for the supply chain and logistics industry. Most prominently, the crisis in the Red Sea and lingering drought conditions around the Panama Canal have made the global supply chain less reliable and the shipping landscape (prices included) more volatile. If there’s any silver lining to be gleaned from the start of 2024, it’s that these issues are forcing more organizations to embrace technology.
Reading the Tea Leaves With Multinational Corporations
If you’re looking for indicators that this could be a tough supply chain year, look no further than the forecasts provided by publicly traded companies. Many are lowering their revenue and profit targets specifically because of concerns about the supply chain.
For example, Lockheed Martin provided a profit forecast below Wall Street expectations at the end of January. The company noted that “its production rate was affected by low availability of processor assemblies, solid-rocket motors, castings, and forging,” impacting its F-35 program. This lower forecast for 2024 would indicate that Lockheed Martin expects more of the same this year.
Stern Warnings From the United Nations
The United Nations is suggesting a convergence of supply chain challenges is creating a growing threat to global trade that needs to be addressed. China is working to help, making an effort to “de-escalate tensions” in the Red Sea, which are having a dramatic impact on the supply chain and even inflation in certain countries.
As we all continue to operate in this threat-filled landscape, it’s important to leverage new technologies to better orchestrate supply chain management. Organizations can attempt to piece together different software to create a fragmented tech stack, but it’s better to find one platform that can serve as a single source of truth for global operations.
Don’t Forget About Shifting Regulations
New regulations and compliance requirements are another new wrinkle for shippers and the organizations that work with them to deal with in 2024. An article from Global Trade Magazine examines how regulations against forced labor have affected Chinese manufacturing and how future regulations might further reshape the global supply chain.
Solutions That Respond to Modern Supply Chain Challenges
There’s nothing simple about supply chain operations in 2024. From achieving real-time visibility to creating an effective system for document management, there’s always something that demands attention. With the right supply chain orchestration platform in place, your team can focus on the most high-priority tasks and decisions while letting technology do the heavy lifting.
At Cargologik, we offer an orchestration platform that allows your organization to be more connected, efficient, optimized, predictable, and sustainable in its supply chain operations. If you need solutions that respond directly to 2024’s supply chain challenges, get started now.