Table of Contents
1. Getting costs under control
Cost containment strategies are an important part of any business practice, and supply chain services are no exception. A price rise at one point will have effects further down the chain because of the supply chain's interconnectedness. At the moment, there has been significant inflation in the cost of labor, energy, and transportation. Due to all of these issues, the current supply chain is at risk. According to a CNBC report, inflation has risen by much to 7%.
Controlling costs will be the first objective for firms in 2023, and supply chains will come under intense scrutiny as everyone scrambles to keep costs under control.
Carriers and LSPs seek to realign their tactics and enable technologies to benefit from the quickly changing market conditions in the transportation sector. However, Shipping companies do more than just monitor carriers. It also addresses customer and after-sales policies that have a significant impact on shipping costs. Numerous strategies and tactics can be used to increase transportation-related income or to reduce transportation costs.
2. Global restructuring of supply chains.
In 2023, There will be an increasing focus on resilience and agility rather than cost-optimized supply strategies. The shift to onshore or nearshore high-demand/high-volatility products will continue as companies seek to be more responsive to changes in demand without missing opportunities or overstocking. National initiatives to ensure the availability of critical materials and products encourage supply chain leaders to be “friendly” or expand the scope of their sourcing outside particular nations and areas. These tactics make supply chain management more complex, but they also make it better able to respond to ongoing market volatility. As the degree of restructuring results in capacity arbitrage, the ability to quickly identify new sourcing, manufacturing, and logistics options becomes critical as alternative capacity quickly becomes exhausted or expensive.
3. Ameliorate last mile delivery process/ work. Alternative.
The common inefficiencies of last-mile distribution are referred to as the "last-mile problem." Short delivery windows, same-day delivery, fuel costs, last-minute route adjustments, missed deliveries, and customer expectations are just a few of the factors that contribute to the last-mile dilemma. Customers have very high expectations for delivery in a timely manner, and fleet managers are under pressure to meet those expectations. The last mile of the shipping process is sometimes the most expensive and time-consuming step. In actuality, 53% of shipments' overall expenses are frequently attributed to the last mile.
Due to excessive delivery volumes and driver shortages, delivery performance in B2C and B2B markets has been reduced. Over time, customers become less tolerant and companies are penalized for poor delivery performance.
This poor performance is evidenced by a home delivery consumer sentiment survey conducted by Descartes. 73% of consumers said they had experienced a supply disruption in the three months before the survey.
As a result, in 2023, suppliers will concentrate on the performance and capacities of their own and third parties deliveries.
4. Renewable and Eco-friendly logistics.
Consumers are demanding environmental awareness and more sustainable logistics options. Actually, According to Descartes’ survey on consumer sentiment around sustainable delivery, 39% of respondents claimed they routinely make purchasing decisions based on the environmental impact of our company or products.
The best a company can do is to use recyclable or reusable materials to reduce future harm to the planet and keep consumer advocates happy.
In 2023, major retailers and last-mile delivery services will try to offer more sustainable delivery options, this will ensure that supply chains are adaptable and resilient even in the face of quickly changing market conditions and assist companies in remaining competitive in a society that is becoming more environmentally conscious.
5. Labor shortage leading to automation.
The Covid-19 pandemic is not only having a devastating impact on public health but is wreaking destruction on the economy, with supply chain disruptions and labor shortages becoming a problem for businesses around the world. In 2023, shippers and logistics companies will focus on automation to Increase the productivity of the available workforce and minimize the number of workers needed. To compete in a changing economy, firms need to invest in cutting-edge technology like AI/ML, robots, and IoT (Internet of Things). A recent survey by Gartner found that 61% of respondents thought technology gave them a competitive advantage. Many people point to emerging technology as an important area for investment, with 20% going toward robotics. On the other hand, automated systems help companies reduce costs, streamline processes, increase efficiency and increase supply chain visibility.
6. The digitization of international logistics.
Most businesses have concluded in recent years that their supply chain and logistics strategies need to be changed since they are no longer working. They will need to scale their efforts to stand out, run more effectively, and improve services in 2023 by coordinating with the key global macro-trends. They will be able to influence the fundamental evolution and transformation of the sector and enhance the performance and resilience of the supply chain and logistics going forward.
2023 is expected to be a revolutionary year for supply chain management and logistics due to factors such as technology, market changes, and global turmoil. Various technologies and methods are evolving to transform supply chains as companies strive to achieve greater efficiency and sustainability.
Digitization addresses the customer experience, enabling customers to evaluate, quote, and book shipments in seconds instead of days.
Digitization opportunities are abundant for his LSPs (Logistics Service Providers) and carriers and will have positive effects in many areas.
Figure: Degree of the impact of COVID-19 on the supply chain
