As we enter 2023, addressing supply chain challenges will remain a top priority for retailers, among other economic and political uncertainties worldwide. The big question is what the next disruption faced by retailers and consumers will be. There are many potential culprits. Will COVID-19 lockdowns in China remain an issue? Will rail labor and West Coast port labor agreements be resolved and ratified?
On the global macroeconomic front, what will the US and global economies look like as interest rates continue to rise to combat persistent inflation? Will consumers continue to spend, or will inflation and a cooling economy dampen consumer spending? Retailers have witnessed year-over-year sales growth every month since May 2020, according to the US Census Bureau. That has certainly contributed to significant growth in cargo volume, which exacerbated supply chain challenges that existed before the pandemic. Continued investments in supply chain resiliency are critical.
Cargo volumes decreased in the fourth quarter due to lower demand and mitigation plans. If volumes drop further, this will create an opportunity to focus on addressing key challenges that continue to disrupt the supply chain. These efforts could include digitizing the supply chain so stakeholders can provide better and more timely information when the next big disruption occurs.
While the retail industry will continue to address supply chain challenges, both Congress and the administration must also remain engaged. This includes a focus on information sharing through the DOT’s Freight Logistics Optimization Works (FLOW) initiative and ongoing implementation of the Ocean Shipping Reform Act and the Infrastructure Investment and Jobs Act.
The focus for all stakeholders in 2023 should be continuing to work together to address ongoing issues and create a more resilient supply chain for the future.