First, hooray for us! Supply chain professionals have readjusted and reengineered, and although the logistics industry is facing great difficulties, we are getting the job done. News organizations have significantly increased their coverage of industry; hopefully this will continue beyond the current crisis. Regular attention is long overdue, given the importance of the supply chain to the US economy.
Clearly, the whole world has learned from the COVID-19 pandemic and related consumer spending and e-retailing that traditional international supply chains were fatally flawed in that they lacked robust backup features. They relied too extensively on one or two ports, or on a small number of trucking companies or warehouse providers. Shippers need to utilize secondary suppliers on a regular basis to keep those networks active and effective.
Major ports have not been able to handle the flood of cargo. Why should one or two municipalities bear the brunt of all the containers and the attendant congestion? On the East Coast, there is a container port roughly every 150 miles, and shippers are beginning to realize they will need to utilize more alternatives going forward.
Warehouse operations — both proprietary and third-party — need to extend their hours. Truckers will need greater flexibility in their operations. Class I railroads need to provide more frequent service to additional nodes in their networks. Ports have already instituted extra gate hours, established satellite container yards, purchased additional equipment, and cooperated more closely with stakeholders. But alternatives are the key.
Every complex system needs redundancy, and every shipper should regularly reevaluate its supply chains. The “just-in-time” inventory model is dead, while the “just in case” model is alive and well and doing overtime on our laptops and mobile devices.
Shippers shouldn’t put all their eggs in one basket. This is an obvious lesson, but the COVID-19 pandemic really drove it home. Although labor constraints and government policies contributed to the crisis, the lack of alternatives has been a major contributor to the current supply chain difficulties.