Supply chain disruptions have been the norm ever since the COVID-19 pandemic spread across the world in 2020. Now that COVID has evolved into an endemic disease, black swan events like the Russia-Ukraine conflict, weather woes like Hurricane Ian, and more ensure that supply chains do not recover. As 2022 comes to a close, supply chain stakeholders might still expect disruptions to persist in 2023, according to experts.
A new CNBC survey found that more than half of logistics managers at major companies and trade groups say they do not expect the supply chain to return to normal until 2024 or after. 61% of respondents surveyed said their current supply chain is not operating normally, compared with 32% that said it is. When questioned when they see a return to normalcy, 22% were unsure, 19% said 2023, and 30% said 2024. Another 29% said in or after 2025, or never. When asked if they believed the Biden administration understood the challenges the supply chain was facing, 59% of respondents said it did not.
The dour outlook comes after almost three years of global supply chain problems, which began with the shutdown of Wuhan, China, where the COVID-19 outbreak began. Survey respondents said they are still placing orders six months in advance to ensure their arrival.
The survey questioned 341 logistic managers the week of Dec. 12-19, 2022 at companies that are members of the National Retail Federation, the American Apparel and Footwear Association, the Council Of Supply Chain Management Professionals, the Pacific Coast Council, the Agriculture Transportation Coalition, and the Coalition Of New England Companies For Trade.
Key Takeaways
Now that the threat of COVID has been contained with vaccinations, supply chains still have to bounce back from the pressure they were under for the last couple of years. Adding fuel to the fire is the threat of possible inflation and increasing diesel prices. Chronic port congestion, and delays in shipping freight, which have only just abated, ensure that logistics players prioritize mitigating risk.
Both logistics managers and government officials have said data sharing would expedite the movement of freight, helping reduce costs and creating savings that could be passed onto the consumer. The Biden administration even rolled out a pilot supply chain data sharing program called Freight Logistics Optimization Works, or FLOW to address this need. It remains to be seen if this initiative helps logistics players in the long run. Meanwhile, all stakeholders will need to be ready to face supply chain disruptions come 2023.
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