The past few years have highlighted the importance and complexity of the global supply chain. While we aren’t seeing the disruptions and port congestion that existed during the height of the pandemic, that doesn’t mean there aren’t still issues affecting the supply chain.
Many challenges that became prevalent during the pandemic weren’t new, and retailers are working with suppliers and transportation providers to improve ongoing transparency and efficiency as they prepare for whatever the next supply chain disruption might be.
No one can accurately forecast when the next disruption will occur, but stakeholders agree on the need to plan. While the Russia–Ukraine war has had limited effect on US retailers, any escalation could certainly have an impact on global shipping. The same can be said for the Israel–Hamas war, which could have a very significant impact if it spreads to other Middle East countries and results in heightened engagement by the US.
Retailers are paying very close attention to the US–China relationship and have been diversifying sourcing away from China because of tariffs, lessons from COVID-19 and geopolitics. With a presidential election in 2024, US–China relations will be front and center.
Though threats of disruption from labor negotiations at West Coast ports and railroad and parcel delivery companies did not materialize last year, retailers were certainly prepared. The most significant strategy was shifting cargo to East and Gulf Coast ports during the protracted West Coast port labor talks. With that contract settled, the focus is on the East and Gulf Coast port labor contract that expires at the end of September 2024. We urge the parties to reach an agreement before then and provide certainty to an uncertain supply chain. Finally, the health of the US and global economies will play a major role in 2024.