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Will the choked ports of 2021 snap back to normal in 2022?

Solving the great supply chain depression is no longer a matter of just waiting it out.

Will the choked ports of 2021 snap back to normal in 2022?
[VanderWolf Images/Adobe Stock]

The traditional world of logistics is changing, with congested and choked ports increasingly revealing the impact of technological, demographic, and sustainability drivers on daily business—and giving rise to several significant trends. For any business that is active in the port value chain, there is an urgent need to know, and know early enough, what shifts are likely to occur during runtime, and how the outcomes of these changes will impact their business.

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Port congestions, the biggest crisis on every supply chain player’s mind right now, are unfortunately here to stay. With congestions and the ensuing havoc at ports showing absolutely no signs of letting up, prices for a staggering range of goods spiraling out of control, and truck drivers playing peekaboo, the writing on the wall is loud and clear: solving the crisis is in no way a matter of riding out the storm.

But there’s also good news. With the right technology, you can reimagine the new normal for your business despite the ongoing chaos—and even make the most of it. But given that several industry experts are of the belief that the ongoing crisis will take months or even years before it finally abates, it’s likely an option worth considering—if not your only way out.

The port you use today is gone tomorrow. With cost-effective, reliable shipping becoming a practical impossibility, where do you go from here?

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No business has been spared from the most spectacular supply chain fallout of the decade—from the likes of household brands such as Whirlpool to global behemoths like Amazon, Shell, and Tesla, not a single business has been able to avoid the onslaught. With the realization that cheap, reliable shipping no longer exists sinking in, manufacturers have been left hanging high and dry as they try to bridge the gap between supply and demand. They have all these goods, and they have all these customers, but no way to join the dots between the two.

That leaves them with two options: either roll out production closer to customers, or spend exceedingly large amounts of money on inventory carrying costs, shipping, and trucking—none of which can even be found easily.

Chief supply chain officers (CSCOs) are indeed stuck with an unenviable job—that of ensuring an uninterrupted flow of goods and resources across business functions, while at the same time keeping an eye on the macro-level strategy for the overall organization and optimizing it for future growth. Facing unprecedented pressure to cut overall spending and improve margins, CSCOs are focused on ensuring a cost-effective supply chain, which means they have to minimize hard costs and gain control of soft costs in the near- as well as long-term.

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Decreasing manual processes can help both goals to a large extent by eliminating time spent tracking down shipments as well as affording the necessary visibility to optimize inefficiencies. This visibility will also set up logistics for the future, enabling it to fit perfectly into the larger supply chain ecosystem. Most importantly, it will afford CSCOs the ability to lower costs, make real-time, proactive decisions powered by predictive analytics, and mitigate risk across the length of their value chain.

AI CAN GO THE DISTANCE

When it comes to solving the current crisis, the only solution is to fight fit. In other words, operational efficiency is more important than ever before, since any further disruptions or delays are only going to keep grinding the entire trade ecosystem to a halt. With all resources stretched to maximum capacity, businesses no longer have the resilience to take any more strain.

The best way out, therefore, is to let real-time supply chain visibility and demand guide your operations. This way, shipping can be significantly optimized so that there are fewer, less frequent shipments—meaning lower chances of further port blockages and bottlenecks. With AI-powered port ecosystems, businesses will no longer be at the mercy of expensive, unreliable logistics support any more than is necessary. Even more important, customer demand is fulfilled on time and in full (OTIF).

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Supply chains are the core of business operations. Their health is critical to business health.

No longer can businesses afford to send containers into a suspended animation state and live to talk about it. With demand finally beginning to become comparable with pre-pandemic levels, they don’t have the luxury of getting away with unfulfilled orders and dissatisfied customers. However, neither can they afford to expend any more energy than they have to, meaning that overstocking is no more an option than understocking is.

To walk that fine line, use your chosen AI technology to do the following:

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• Track shipments: Your goal should be to prioritize what and when to unload shipping, enabling much more efficient distribution than before.

• Eliminate capacity issues: Adapt your operations completely to generate just the right amount of output to meet demand, thus preventing stockouts and overstocking (both of which lead to excessive inventory carrying costs).

• Optimize logistics: You can significantly cut back on shipping costs by consolidating and prioritizing product distribution to enable cost-effective order fulfillment. In addition, you can use real-time supply chain visibility across all layers of logistics to accelerate business sustainability.

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The time to act is now.

The technology is in place, and the date has been there for the taking for decades now. Do you have a good enough reason to continue to hurtle headlong into logjams?


Anita Raj is the VP of Product Marketing for ThroughPut Inc., an AI-Powered Supply Chain Software Company based in the U.S. & Germany.

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