2022 Supply Chain Predictions

Supply chains have seen unprecedented changes since the beginning of the pandemic, forcing companies throughout the ecosystem to make adjustments in accordance with the needs of the market. Because COVID-19 continues to spread across the world and affect the ways we all live and work, the supply chain will need to adapt accordingly. The following predictions represent the most crucial factors that affect how supply chains will operate in 2022.

Final Mile

E-commerce purchases are at an all-time high, upping shipping needs to a struggling delivery workforce. Shipping prices are likely to increase, particularly for large corporations whose volume is accounting for a decent percentage of a large shipping organization’s work. Shippers will be forced to expand their staff to meet demand to fulfill orders as well, coming off a difficult 2021 of serious struggles to properly staff for demand levels.

There is a great opportunity in the parcel delivery market for one or more organizations to fill the shipping needs of companies who are relying on e-commerce sales for the majority of their revenue. Amazon may become more of a force in final mile deliveries if they choose to expand their business in this way, though they, too, seem to be plenty busy with their own deliveries, so it would require a serious investment. The USPS is expected to expand their capabilities in 2022, with nearly two pandemic years under their belt but the question remains whether they are the most reliable choice for larger corporations to depend on year-round.

As COVID-19 cases continue to rise going into 2022, it is clear that we are far from a “normal” where consumers spend excesses of time shopping in person and bringing their purchases home themselves.

Maritime

The pandemic has significantly impacted ocean shipping, forcing unprecedented delays and frustrations for each party involved in the supply chain. Freight rates have skyrocketed, making ocean freight much pricer than consumers are used to and for a much slower delivery time. Even more concerning than delivery times and pricing though is the availability of goods. Many manufacturers have been struggling to stay open with COVID cases running through their workforces. There have also been plenty of exporting difficulties between nations with differing COVID policies in place, such as China and the United States.

Also important to watch is if and how the United States updates its regulation of ocean freight. Any changes in their regulations will impact all industries and will take logistics managers time to adjust to, causing delays and surely disrupting if many exports will be able to happen. And as always, geopolitical tensions may cause unwanted disruptions to ocean shipping, as conflicts in and amongst countries such as China, Russia and Iran will have far reaching implications.

Air Cargo

Air cargo is projected to continue growing in 2022, as it has over the last two years. With demand for goods being so high and commercial airlines selling fewer tickets as Omicron surges, there is a desperate need to fill airliners with anything that can turn a profit. Freight forwarders have found much success in partnering with carriers for charter arrangements, getting their clients’ goods where they need to go safely, efficiently but for a higher cost. If airline passenger volume continues to decline in 2022, there will likely be more airliners shifting to cargo charter arrangements for full-time usage.

Weather

Although this winter season has only just started, large swaths of the country have already been hit with major snowstorms, which always impact how efficiently cargo can be transported. Much of these storms have hit in unexpected areas, making the safe delivery of goods even more complicated. Above average precipitation levels are expected this winter in large parts of the North and Midwest, which freight forwarders should prepare for as much as possible. Moving into the spring and summer, temperatures are projected to be above average, possibly causing more devastating wildfires that will surely disrupt supply chain efficiencies.

More Supply Chain Questions?

If you are left with any questions about how supply chains will be impacted in 2022, contact us and we’ll be happy to help you understand how this could impact your business and what you should do about it.

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