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How Ecommerce Retailers Can Mitigate Shipping Delays and Disruptions

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Global Logistics, Global Trade Daily, News, Ocean Ports

How Ecommerce Retailers Can Mitigate Shipping Delays and Disruptions

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Shipping delays and disruptions are the silent killers of ecommerce success. Even though 90% of total fulfillment costs go into getting packages from A to B, one late package can undo months of customer trust. Carrier issues, supply chain hiccups, and unpredictable weather don’t care about your delivery promises.

Read also; Global Shipping Market Faces Turbulence as Tanker Rates Surge on China Routes

That’s why smart retailers don’t just react to shipping problems but plan for them. The right strategy won’t eliminate every delay, but it will keep things running smoothly when challenges pop up.

Let’s talk about how to stay ahead, keep customers happy, and protect your bottom line.

1. Keep Your Products Close to Where They Need to Be

Shipping disruptions often start long before a package leaves the warehouse. If your inventory isn’t in the right place at the right time, delivery times stretch, costs rise, and customers get impatient. That’s why strategic inventory management is key to keeping orders on track.

To minimize delays:

  • Analyze your sales data to identify where most of your orders come from.
  • Use this information to map out strategic warehouse locations that cut down shipping times to your busiest regions.
  • Work with reliable fulfillment centers and split your inventory based on regional demand patterns.
  • Set up reorder points that account for longer lead times between warehouses.

For businesses with seasonal trends, strategic inventory placement is even more important. A retailer selling winter gear, for instance, benefits from stocking up in colder regions before peak season hits.

Similarly, placing inventory in regions with faster shipping routes ensures customers get their orders quickly, even when demand surges.

A great example of a business that could gain from diversifying inventory locations is Mannequin Mall, a retailer specializing in fashion mannequins. Their products are large and bulky, meaning long-distance shipping can be both expensive and slow.

By distributing stock across key regions, they could shorten delivery times and cut costs, creating a better experience for both themselves and their customers.

2. Don’t Put All of Your Shipping Eggs in One Carrier’s Basket

Relying on a single carrier is a risky move. Shipping disruptions happen, whether due to weather, labor strikes, or unexpected demand spikes. If you don’t have a backup plan, delays can pile up fast.

A diversified carrier strategy ensures your business stays agile when things don’t go as planned.

To ensure your packages keep moving:

  • Start cooperating with both national and regional carriers.
  • Large carriers offer extensive coverage and reliability, while smaller, regional providers can often deliver faster within specific areas.
  • Compare rates, transit times, and service levels to balance cost and efficiency.
  • It’s also smart to negotiate contracts in advance so you’re not scrambling for solutions when issues arise.

Using multiple carriers also improves flexibility. If one provider faces delays, you can shift shipments to another without major disruptions. This is especially useful for businesses shipping temperature-sensitive or fragile goods, where delivery speed and handling matter just as much as cost.

For example, Armra, a brand specializing in natural colostrum-based health supplements, relies on cold storage shipping to preserve product quality. Since their products require careful handling, they can’t afford unreliable shipping.

Working with multiple carriers who specialize in temperature-controlled deliveries gives them backup options if one carrier has issues. It also helps them maintain product quality standards and meet strict handling requirements across different regions.

3. Use Smart Tech to Catch Problems Before They Happen

Manual processes and outdated systems slow everything down. When a single delay can set off a chain reaction across your entire supply chain, real-time visibility and automation become essential tools in your arsenal.

Investing in advanced supply chain technology helps businesses predict disruptions, optimize routes, and keep orders moving smoothly.

To stay competitive and keep shipping disruptions at bay:

  • Begin using AI-driven analytics to track shipments in real time.
  • Knowing exactly where your inventory is (and spotting delays before they escalate) allows for quick adjustments.
  • Automation also plays a key role. Smart systems can streamline warehouse operations, improve demand forecasting, and even negotiate supplier contracts to keep costs under control.

Retail giants are already leveraging this tech to stay ahead. Walmart, for example, uses Pactum, an AI-based system that automates negotiations with human suppliers, reducing bottlenecks and improving efficiency.

Meanwhile, companies like FourKites provide AI-powered logistics software that offers real-time tracking and predictive analytics, helping businesses anticipate and avoid shipping disruptions before they happen.

For ecommerce retailers, adopting these tools means fewer surprises and better control over fulfillment.

Whether it’s AI-powered contract negotiations or real-time shipment tracking, the right technology makes supply chains faster, smarter, and more resilient. That way, you can focus on delivering a seamless customer experience.

4. Let Your Customers Choose How Their Orders Arrive

Customers expect fast shipping, but delays happen. When they do, a lack of options can turn minor inconveniences into lost sales.

Offering flexible shipping solutions (like expedited, economy, or in-store pickup) gives customers control over their delivery experience and helps manage expectations.

To cater to different needs while managing expectations and costs:

  • Provide multiple shipping speeds at checkout.
  • Some customers prioritize cost savings, while others will pay extra for faster delivery.
  • Being transparent about estimated delivery times reduces frustration, especially during peak seasons.
  • If delays occur, proactive communication goes a long way. Automated updates and clear policies help maintain trust.

Brands that set realistic expectations upfront see fewer complaints. Instead of promising unrealistic delivery times, factor in potential disruptions and provide honest estimates. Customers are far more likely to stay loyal when they know what to expect.

Mannequin Mall, the fashion mannequin retailer we mentioned above, can maintain customer satisfaction by leveraging this practice.

Since their products are large and often purchased by businesses for time-sensitive store setups, offering premium expedited shipping could be a game-changer. During peak retail seasons, B2B customers may be willing to pay more for guaranteed faster delivery.

By giving customers flexible options, retailers can reduce frustration, increase conversions, and build long-term loyalty without overpromising on shipping speeds.

5. Keep Customers in the Loop Before They Ask Questions

No one likes waiting for a package that seems to have vanished. When shipping delays happen, poor communication only makes things worse.

Customers don’t expect perfection, but they do expect honesty. Clear, proactive updates can turn a frustrating situation into a manageable one and keep customers from jumping ship.

To turn a frustrating situation into a positive experience:

  • Provide real-time tracking and automated notifications for every stage of delivery.
  • If a delay occurs, don’t wait for customers to reach out first. Send updates with a revised timeline.
  • If necessary, offer solutions like refunds, store credits, or discounts on future orders.
  • The key is to acknowledge the issue and show that you’re actively resolving it.

Brands that communicate early and often reduce complaints and improve loyalty. Companies known for great customer service, like Zappos, an online shoe and clothing store, excel at this.

They make sure to inform customers of shipping delays and go the extra mile by offering alternative solutions and making the process as painless as possible. Their return and refund policies are excellent and keep customers loyal to a fault.

Customers don’t expect instant shipping every time, but they do expect to know what’s going on. The brands that communicate best are the ones customers return to, even when things don’t go as planned.

6. Plan Ahead for Peak Season Challenges

Peak seasons bring massive sales opportunities and, along with them, the highest risk of shipping delays. With carriers overwhelmed and demand spiking, businesses that don’t plan ahead can quickly fall behind.

A solid contingency plan ensures you’re ready to handle the surge without letting customers down.

To turn potential shipping nightmares into smooth sailing:

  • Start by forecasting demand early. Use historical data and trends to predict high-traffic periods, then stock up on inventory at fulfillment centers near your key markets.
  • Build flexibility into your carrier network by having backup shipping options in case of disruptions.
  • It’s also smart to train customer support teams to handle inquiries quickly during peak times.
  • Additionally, consider offering perks like expedited shipping upgrades during delays.

Small gestures like these show you’re prioritizing their experience, even when challenges arise.

For a niche wellness brand like Armra, peak seasons such as New Year’s (when customers focus on health resolutions) are crucial. To avoid delays, they could pre-ship products to regional fulfillment centers ahead of time, ensuring faster delivery during high-demand periods.

This helps prevent shipping bottlenecks and reinforces their reputation as a reliable brand.

With the right preparations, peak seasons become an opportunity to shine, not stumble. That keeps both your customers and bottom line in great shape.

7. Bring Your Inventory Closer to Your Customers

The farther a package has to travel, the greater the risk of delays and the higher the shipping costs. That’s why relying on a single warehouse isn’t always the best move.

Regional fulfillment centers help retailers store inventory closer to customers, reducing transit times and improving delivery reliability. Faster shipping isn’t only convenient but also directly impacts customer satisfaction and conversion rates.

To make the most of this approach:

  • Analyze where your customers are and distribute inventory accordingly.
  • Working with reliable fulfillment companies can streamline this process, allowing you to access multiple regional centers without the overhead of managing them yourself.
  • Regional fulfillment also benefits localized promotions. If you’re running a flash sale in a specific region, having inventory nearby ensures you can deliver quickly without overloading a single warehouse.

This flexibility helps brands scale more efficiently and respond to demand spikes without delays.

Companies like BURST, which sells oral care products, and SportStop, a lacrosse gear and apparel retailer, leverage regional fulfillment to cut costs and increase efficiency. By storing products in multiple locations, they can keep shipping times short and costs manageable, giving them a competitive edge.

This smart placement means customers can get their toothbrushes and kneepads quickly when they need them most. That allows these companies to save on shipping bulky equipment long distances.

8. Let the Pros Handle Your Shipping Headaches

Managing logistics in-house is complex and time-consuming, especially as your ecommerce business grows. That’s where third-party logistics (3PL) providers come in.

Partnering with a 3PL lets you offload warehousing, shipping, and even returns management to experts who can handle the heavy lifting, freeing up your team to focus on what matters most: growing your brand.

To choose the most suitable 3PL for your ecommerce store:

  • Make sure they align with your specific needs.
  • Look for a provider with a proven track record, technology integrations, and the ability to scale with your business.
  • A reliable 3PL can help optimize your supply chain, streamline operations, and cut down on shipping delays by offering multiple fulfillment centers and advanced tracking systems.

For example, Barefaced, a skincare brand, partnered with ShipBob, a major 3PL, to handle their fulfillment. This partnership eliminated the need to hire a large operations team, allowing Barefaced to focus on product development and marketing.

Since Mannequin Mall sells large mannequins, they can also benefit from partnering with a specialized 3PL. Their bulky products create unique logistical challenges, and a 3PL with experience in handling oversized goods can prevent bottlenecks, improve shipping times, and lower costs.

By outsourcing these tasks to the experts, businesses can scale more efficiently and provide a better customer experience.

Final Thoughts

Shipping delays don’t have to be the downfall of your ecommerce business. They can be the catalyst for smarter, stronger operations.

By taking proactive steps, from optimizing inventory to partnering with the right experts, you can turn potential disruptions into opportunities to impress your customers.

The best part is that you don’t need to overhaul everything overnight. Start small, focus on what matters most, and build from there. After all, in a world where speed and reliability define success, the brands that adapt are the ones that thrive.

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Global Logistics, Global Trade Daily, Imports/Exports, International Trade, News, Ocean Carriers, U.S. Ports, United states news

US Port Strike Looms: Freight Rates Surge Amid Surcharge Announcements

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Shipping Lines Brace for January 15 Disruption

The looming January 15, 2025, strike by US East Coast dockworkers is sending shockwaves through the logistics industry, driving up freight rates and triggering surcharges from major shipping lines. Negotiations between dockworkers and terminal operators remain deadlocked, prompting industry stakeholders to prepare for significant supply chain disruptions.

Read also: East Coast Port Strike Looms as Contract Talks Stall, Carriers Brace for Impact

Surcharge Rollouts by Leading Carriers

To mitigate potential impacts, carriers like Maersk, CMA CGM, and Hapag-Lloyd have announced surcharges across various shipping routes.

  • Maersk: $1,500 per TEU, rising to $3,780 for 45-foot containers.
  • CMA CGM: $800 per TEU for exports and $1,500 for imports.
  • Hapag-Lloyd: A Work Disruption Surcharge applicable across multiple regions, with additional fees for East Asia imports.

Freight Rate Increases Across Key Routes

Freight rates are climbing sharply, reflecting the uncertainty surrounding the strike. The Shanghai Containerized Freight Index (SCFI) reports:

  • A 9% increase in the Shanghai-US West Coast rate, now at $4,581 per FEU.
  • An 8% rise in the Shanghai-US East Coast rate, reaching $6,074 per FEU.

These figures mark a recovery from prior losses and indicate further gains if the strike proceeds.

Outlook: Rising Costs and Supply Chain Shifts

Industry analysts at Linerlytica predict that freight rates on China-to-US routes will continue rising, with emergency surcharges of $1,000 to $2,000 per FEU likely if port closures occur. Cargo diversions to the US West Coast are also anticipated, potentially driving rates higher as capacity tightens.

As the deadline approaches, the industry braces for widespread disruptions that could ripple across global trade, underscoring the critical role of stable port operations in supply chain continuity.

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Global Logistics, Global Trade Daily, Technology

Supplier Diversification, AI Readiness, and Circularity Top Supply Chain Priorities for 2025 

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One effect of the global pandemic was the elevation of supply chain management from a back-office business function to a C-level strategic priority. As we approach 2025, all indicators suggest that for most industries, including retail, optimizing the supply chain to meet the needs of a post-pandemic world is more than ever a priority. 

Read also: How Supplier Diversification Can Help You Combat Recent Manufacturing Supply Chain Disruptions

To stay competitive, businesses can no longer rely solely on past supply chain measures such as cost reduction, inventory minimization, and service improvements. A recent Bain & Company survey of CEO priorities highlights the need for leaders to balance traditional supply chain priorities with newer ones, such as increasing resilience, improving sustainability and responsiveness to customer expectations. 

Based on extensive industry research and discussions with our customers and the broader retail community, TradeBeyond’s new “Retail Sourcing Report: 2025 Supply Chain Trends” highlights the concerns and priorities that are most top of mind for supply chain leaders going into 2025. These include diversifying and derisking global sourcing and manufacturing, preparing for the long-awaited broad adoption of AI in supply chain operations, and advancing sustainability initiatives beyond compliance. 

Diversification and Derisking 

Ongoing disruption to supply chains is now the norm rather than the exception. In the coming year, we can expect to see similar hiccups in supply chains due to trade wars between regional economic blocs, ongoing conflict in the Middle East and Eastern Europe, and extreme weather – to name a few. Close to half (47%) of global supply chain executives recently surveyed by KPMG, see their business as vulnerable to disruption. 

Leading companies in this new-normal are focused on resilience, supported by flexibility in their operations, enabling them to quickly respond to potential disruptions. To ensure business continuity, companies will need to make a real-time cost/risk assessment – sometimes accepting higher costs. 

Many companies will continue to focus on diversifying their supply chains in the coming year. This might take the form of avoiding reliance on a single supplier, factory, or region. Depending on the product and market, this could also mean shifting manufacturing domestically (onshoring) or closer to the market (nearshoring). Despite the obvious upstream/downstream benefits of manufacturing in China, Vietnam or Mexico, companies will need to keep adapting to the evolving geopolitical environment. 

No question, the recent U.S. election will have further implications on global supply chains, with escalation in trade wars and significant tariffs likely. This is just one more implication of the post-globalization era. 

AI: Beyond the Fundamentals 

AI is laying the foundation for dramatic transformation across global supply chains. As industries increasingly turn to digital solutions, AI technologies are now poised to drive significant economic value for retail sourcing and supply chain operations. From improving traceability and risk management to automating time-consuming processes, 2025 is set to be a pivotal year for AI adoption. 

Core AI technologies, such as machine learning and advanced analytics, are ready for widespread implementation. Many companies are already leveraging these tools for “level 1” applications, including AI-powered quality risk management and chain-of-custody tools. These technologies have enhanced supply chain visibility, ensured regulatory compliance, and reduced manual effort, marking significant progress in operational efficiency and sustainability. Jeff Alpert, founder and CEO of Pillar AI, notes, “The ability to monitor and analyze supply chains in real time has already unlocked considerable value for forward-thinking organizations.” 

While these foundational applications are already adding measurable impact, that’s only the surface of AI’s potential in supply chains. Within the next year or two, AI is on track to make deeper inroads into complex supply chain functions, such as probabilistic demand planning, advanced risk assessment, and predictive ESG performance analysis. These “level 2” applications will help businesses not only respond to challenges but anticipate and mitigate them with unparalleled accuracy. 

To unlock the full value of AI, organizations must focus on building robust data ecosystems. By centralizing proprietary and external supply chain data in accessible platforms, businesses can empower AI to deliver transformative insights. A well-prepared data foundation enables AI tools to generate breakthroughs in speed, precision, and agility—transforming supply chains into engines of innovation and competitive advantage. 

Sustainability is Growing up 

Over the last few years, most businesses have been heavily focused on sustainability, both from a marketing perspective and to meet an ever-growing body of compliance requirements. In the initial stages of the sustainability movement in the apparel sector, retailers and brands could make unsupported ESG related claims about material content and origin, emissions and other ESG related criteria, but those days are ending. 

Today, across the globe, rigorous standards are in play, to enforce green claims and limit greenwashing. This includes top-down standards governing transparency, traceability, and other areas of ESG compliance. TradeBeyond has produced several reports this year which cover retail supply chain sustainability trends and traceability in greater detail. 

In 2025, we expect to see a greater focus on a more mature approach to sustainability, such as building in circularity into the business ethos. Increasingly we are seeing leading retailers and brands taking a step back and re-evaluating their business models, building sustainability and circularity into their core, much like brands such as Patagonia and others have done since inception. 

Circularity in the retail supply chain refers to a shift away from the traditional linear retail model. Rather than selling new products at increasing speeds, only for them to end up in landfills within a year or two, circularity aims to create a value chain that slows and closes the material loop. While fast-fashion is unlikely to go away anytime soon, there is a nascent trend toward what some call “slow-fashion,” which considers the impact of a product in the broader context of people and planet. 

Other indicative trends which point to evolution in the sustainability movement include the growth in the resale of secondhand clothing. The global secondhand clothing market is forecast to reach $350 billion by 2027, up from $43 billion in 2023, ThredUp reported. A wide range of brands, including REI, H&M, Carhartt and others now have resale models in place. 

Much like AI, the will and the need for circularity exist, as does the supporting technology and systems, but retailers and brands must play catch-up. For example, FibreTrace, a technology which provides digital transparency into the life cycle of apparel and other products can track a piece of apparel from the material origin to the product’s end-of-life, either in a landfill or through recycling. 

The above is only a brief overview of the many exciting trends we are observing across both the front-end and back-end of retail. We cover more of these in greater detail in TradeBeyond’s “Retail Sourcing Report: 2025 Supply Chain Trends Report.” 

Lilian Bories is Chief Marketing Officer for TradeBeyond, retail’s leading provider of SaaS supply chain solutions.

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Global Logistics, Global Trade Daily, News

Supply Chain 2025 Predictions

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2024 has served as a stark reminder of the vulnerabilities inherent in global supply chains. Natural disasters, compounded by geopolitical and economic upheavals and persistent inflation, have created a challenging operating environment. Simultaneously, rising cyber threats, have underscored the need for robust digital security in supply chains. These cumulative lessons underscore the importance of resilient supply chains in driving growth and efficiency, while navigating uncertainty. 

Read also: Artificial Intelligence – How it is Shaping and Redefining Logistics

As a result, supply chain leaders are accelerating their shift from reactive approaches to more proactive strategies, aiming to safeguard their operations and drive lasting resilience. One of the most promising tools in this transformation is artificial intelligence (AI). 

AI has already begun to revolutionize supply chains, enabling leaders to better anticipate everything from demand fluctuations to sourcing delays. In 2025, AI will transcend its status as a ‘nice-to-have’ and emerge as an indispensable tool for Chief Supply Chain Officers (CSCOs) seeking to drive growth and resilience in an increasingly volatile world.

Prediction #1: AI will shift from being a “nice-to-have” to “Essential” for Supply Chain Operations.

In recent years, supply chain leaders have increasingly explored AI’s potential. However, skepticism around AI persisted, fueled by complexities such as insufficient data quality, evolving team skillsets, and the need for cultural adaptation. These factors initially raised questions about AI’s readiness to address the intricate demands of modern supply chains.

Despite these obstacles, the perception of AI is shifting rapidly. Leaders are beginning to recognize its transformative potential, with 60% of executives anticipating that AI assistants will soon manage most traditional and transactional tasks. This will free supply chain teams to focus on strategic, higher-value activities. By 2025, AI will transition from being a “nice-to-have” tool to becoming an essential enabler of supply chain operations, providing end-to-end visibility, and enabling faster, data-driven decision-making.

For AI to fully deliver on its promise, organizations must adopt a holistic approach that extends beyond implementing technology. Success requires fostering alignment across departments and building strong support from key stakeholders. Additionally, AI offers a unique advantage: enabling objective, data-driven decisions, which helps ensure organizational priorities take precedence over individual preferences or departmental agendas. This holistic approach drives stronger overall performance and tangible business impact, positioning AI as a cornerstone of resilient, future-ready supply chains.

Prediction #2: Adoption of Agentic AI will increase, driving new levels of agility and resilience in Supply Chain Operations. 

As CSCO’s transition from reactive strategies to proactive, forward-thinking approaches, agentic AI agents is set to become a pivotal enabler of supply chain transformation and accelerate the journey towards “autonomous supply chains”.

Agentic AI—systems capable of autonomously executing tasks on behalf of users or other systems—will increasingly play a central role in driving end-to-end supply chain execution. These intelligent systems hold the potential to optimize critical operations such as inventory management, demand forecasting, and supplier performance analysis, delivering faster, more resilient processes. 

As adoption grows, the role of supply chain leaders will evolve to include collaboration with AI agents, blending human judgment with advanced automation to achieve unparalleled efficiency. This partnership between humans and AI will empower organizations to anticipate and respond to disruptions with agility and precision, enabling new levels of operational excellence in an unpredictable global landscape.

Looking ahead, the successful adoption of agentic AI will hinge on an organization’s strategic priorities, technological maturity, and commitment to ROI-driven innovation. However, achieving this vision will require more than just technological investment. Seamlessly integrating agentic AI with legacy systems, ensuring robust data interoperability, and equipping the workforce with the skills to effectively collaborate with AI will be critical. By addressing these imperatives, organizations can unlock the full potential of agentic AI, driving transformative business outcomes, enhanced resilience, and sustained growth.

Prediction #3: Cybersecurity and Data governance will become a higher priority for supply chain leaders.

As supply chains evolve from being primarily physical to deeply intertwined with digital technologies, this shift has unlocked significant efficiencies and operational advancements. However, it has also introduced new vulnerabilities, including cyberattacks, data breaches, and operational disruptions. With these threats growing in scale and sophistication, supply chain leaders are placing an increasing emphasis on robust data governance and cybersecurity frameworks to safeguard their operations and secure a competitive edge.

A recent IBM Institute for Business Value report underscores this trend, revealing that 84% of organizations are investing in secure, connected ecosystems. Among these efforts, AI has emerged as a top priority, playing a pivotal role in bolstering both security and operational resilience. Over half (54%) of organizations are leveraging AI and data integration to improve efficiency and responsiveness, while 53% are prioritizing AI-powered security and automation to counter cyber threats and fortify their supply chain defenses.

The integration of AI into governance and cybersecurity strategies is not just about mitigating risks; it’s about enabling supply chain leaders to redefine resilience. AI will empower organizations to reinvent their strategies, transforming vulnerabilities into opportunities for growth and establishing a new standard for secure supply chains.

The Path to Future-Ready, AI-Driven Supply Chains 

The rise of AI is more than just a buzzword; it is the driving force behind the next generation of supply chains. As we look toward 2025, AI will empower supply chain leaders to not only reinvent their strategies but also unlock new pathways to growth and resilience in the face of ongoing disruption.

However, with this transformative potential comes the responsibility to ensure its success. Supply chain leaders must think critically about the governance needed to supply these models with high-quality data, enabling meaningful learning and actionable insights. Equally important are the checks and balances that ensure AI outputs remain aligned with dynamic business needs to help organizations stay competitive and agile.

As AI becomes an integral part of supply chain operations, the focus must also shift to capturing knowledge collaboratively, leveraging the strengths of both human expertise and AI agents. This synergy will be the cornerstone for continuous innovation, helping organizations not only adapt to future challenges but thrive in a rapidly changing landscape.

The journey to an AI-powered supply chain brings exciting challenges, paving the way for transformative opportunities and groundbreaking paradigms. For those who approach it with vision and strategy, the rewards will redefine the future—unveiling supply chains that are not only resilient but also powerful enablers of sustainable, long-term growth.

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Global Logistics, Global Trade Daily, United states news

Trump’s Proposed Tariffs Could Trigger Price Hikes and Supply Chain Disruptions

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President-elect Donald Trump’s plan to impose tariffs on imports from China, Canada, and Mexico has sparked concerns among experts about potential negative impacts on North American companies and the global supply chain. For more details, you can read the full article on the potential effects of these tariffs here. On his first day in office, Trump intends to levy a 25% tariff on Mexican and Canadian goods, and an additional 10% tariff on Chinese imports.

Read also: U.S. Port Import Surge Fueled by Strike Concerns and Potential Tariff Increases

The tariffs are part of Trump’s “America First” strategy, aimed at curbing illegal immigration and drug trafficking, as stated on Truth Social on November 25. Industry professionals like Sri Laxmana from C.H. Robinson and Andy Sherman from Fictiv express heightened concern about these imminent changes, with significant implications for the global supply chain.

The non-knitted men’s apparel market would be one of the sectors heavily impacted by these tariffs. According to IndexBox data, China leads the export value at $16.5 billion, followed by Bangladesh at $9.1 billion, and Vietnam at $5.4 billion. On the import side, the United States stands at the forefront with $11.9 billion, with Germany and France following at $6.9 billion and $3.4 billion respectively.

Experts have expressed fears that increased tariffs could lead North American retailers to reassess their reliance on Chinese manufacturing, potentially resulting in elevated consumer costs. The greater Asia region, particularly India and Vietnam, has seen an increase in U.S. sourcing, rising from 35% in 2018 to 47% in 2023.

Trump’s broader policies, which include a large-scale deportation agenda, threaten to inflate consumer prices by reducing labor availability in sectors such as agriculture and construction. As supply chains face reassessment due to these potential tariffs, businesses could experience logistical delays and additional costs, ultimately affecting consumer prices and market stability.

Source: IndexBox Market Intelligence Platform  

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Global Logistics, Global Trade Daily, International Trade, News, Uncategorized

Managing The Supply Chain through Disruption: The 2024 ILA Strike on the Gulf and East Coasts

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Managing our supply chain through Covid taught us many lessons and should have prepared us for any future disruptive events such as we are likely to face with the impending strike of our longshoremen on the Gulf and East Coasts, who, as we have been advised, walked out of negotiations in June and very little progress has been made to negotiate a successful new contract. The last time this peril occurred brings us back to 1977.

Read also: Implications of Looming Labor Strikes on U.S. Container Trade and Supply Chains 

On the face of the known information flow, the two parties are wide and far apart. The carrier community does not want a strike, but the likelihood is high.

If this strike moves forward, the operational and financial consequences will be severe.  And in conjunction with the current instability in global markets, the strike will be the source of devastation, disruption and serious dilemma to thousands of supply chains serviced in the eastern part of the United States, not to mention the overall collateral residual impact to the entire global supply chain, marketplace and local economies.

Supply Chain managers were warned about this potential impact back in the spring and should have already taken steps to mitigate their potential issues by:

a.  Stocking up

b. Diverting freight to alternative ports

c. Finding alternative sources

d. Reserving and preserving the flow of assets

e. Modifying supply chain expectations

f. Creating alternative solutions

IF these steps were not taken most supply chains will struggle intensely with little relief.

Keeping the enormity of this challenge in mind, we can still take steps to mitigate our risks and limit operational/financial exposures.

We need to consider doing the following steps:

1. Create an internal committee of stakeholders, led by the logistics team, to determine what the consequences will be to their supply chain, their customers, vendors, and any collateral-impacted parties.

All these entities need to be communicated to proactively and advising what steps will be taken to mitigate and offset the disruption.

Internal stakeholders are likely to include:

a. Procurement

b. Operations

c. Manufacturing

d. Distribution

e. Sales

f. Customer Service

g. Demand Planning

h. Inventory Management

i. Legal & Finance

2. That assembled team needs to identify all the risks, vulnerabilities and exposures and rank them by severity. That ranking will determine where action will be prioritized.

A SWOT Analysis may be considered (Strengths, Weaknesses, Opportunities and Threats) which might provide input into the decision-making process.

Vulnerabilities need to be identified and prioritized for proactive mitigation actions.

3. The team will create an “action plan” outlining what steps will be taken, by whom, by when and identify the expectations of the action. Lines of responsibility and accountability need to be created and managed.

In some organizations the plan may need senior management review, input and approval before proceeding. 

4. Senior management may be brought into the discussion:

  • To provide their insight and experience
  • To prepare for the anticipated consequences
  • To allocate resources and funding requirements
  • To ensure that the Business Owners and/or the Board of Directors are communicated and informed of circumstances and potential impacts to the business.

5. Additionally, all internal and external impacted parties must be brought into the communication chain to run transparently, openly and allow an interface for action review, modification or tweaking.

6. Some specific action steps to consider:

a. Work with your service providers and carriers to coordinate potential options within their areas of expertise and scope of capability

b. Identify options within every aspect of the supply chain:  suppliers, routing and transport, distribution, sources, alternatives, demand planning, inventory structure, etc.

c. For any service providers or carriers that called on you in the last year but did not win your business, now is the time to contact them to determine what options and solutions they may have. This becomes their opportunity “to get their foot in the door.”

d. For shipping, consider air freight, but restrict it to only the necessary quantities required to minimize this expense.  Air Freight prices will likely rise and space availability will be limited; the sooner you make these arrangements, the better.)

e. Closely work with all your trading partners on very focused demand planning needs to know what specific quantities and time frames are absolutely needed so options and shipping plans can be executed as necessary.

f. Consider near-sourcing solutions in the USA, Canada & Mexico, which through Covid all have ramped up their domestic manufacturing capabilities.

g. Preserve inventory. Begin to distribute limited quantities. Be conservative but communicative in your approach to all impacted parties. 

We do not know how long the strike disruption will last. Preservation of assets is now warranted.

Disruptions can also create opportunities.  Downtime may afford the following:

a. Taking time to manage some house cleaning

b. Reorganizing inventory

c. Resetting operations

d. Experimenting and trial testing

e. Seeking alternative sourcing

f. Personnel training

g. Reallocation of assets

h. Finalizing open projects

Summary

Disruptions will always happen. To what degree and extent is always the unknown.

How we proactively and reactively prepare will impact the consequences of the disruption to our supply chain and business model.

When they occur keep in mind some additional thoughts:

a. Transparency, timely communications and responsible business acumen will go a long way in managing the impact of any disruptive event.

b. A “Team Approach” has a higher degree of success than does independent activity. As in the Navy, “All hands-on Deck!”

c. Turning over as many stones imaginable will increase the opportunities of finding solutions.

d. You may have to reduce the normal process of change management and cut some corners, expedite actions and accept more risk than usual.

e. Risk taking should include intense, well-thought-out and informed decision-making.

f. Always keep in mind that expediency in analysis, followed closely by swift action, creates the best opportunity for mitigation.

g. Continually evaluate your thought process and actions to modify, tweak and change as the circumstances warrant.

Disruptions will usually end after they run their course.  And new disruptive events yet unknown or anticipated will be in your future – as sure as death and taxes.

Mitigation strategies reduce their negative impact and bring us through a learning curve that better prepares us for the next one.

Disruptions can make us stronger, more resilient and better prepared to deal with future dire circumstances, affording the best opportunity for business sustainability – a goal most organizations strive for!

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Global Logistics, Global Trade Daily

Supply Chain Shortages And Their Impact On Manufacturing

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In the past few years, many industries have seen effects of supply chain disruption. Labor shortages and difficulty obtaining hard-to-source components delayed or even halted production in construction, automobile, technology and other industries. The pandemic brought these delays to regular consumers, putting a spotlight on the impacts of the supply chain on every aspect of modern life. By evaluating the causes and impacts of supply chain shortages on production, manufacturers can find solutions that will minimize their risk.

Read also: Resurgence in Manufacturing Boosts Transport and Logistics Sector

Causes of Supply Chain Shortages

Supply chain disruption can happen for a variety of reasons. An increasingly global marketplace for materials and components can introduce possible complications, particularly during periods of political or economic instability in the region controlling access. Manufacturers that keep minimal inventory are the most likely to experience delays due to these conditions.

Global interdependencies

In the present day, manufacturers are more dependent on global supply than before. A global marketplace means that manufacturers might draw supplies and components from all over the world. While the globalization of production offers opportunities to lower costs or source unusual materials, it can also increase delays when one part of the supply chain experiences a disruption. Although issues with the supply chain can be region-specific, many delays relate to interruptions in shipping processes.

Regional changes

Manufacturers that are dependent on specific regions for materials or parts may experience supply chain interruptions based on the region. Political instability can disrupt shipping and export activities, related to border access, regulations, trade conflicts and more. During the recent pandemic, many countries set new guidelines for foreign transactions. These guidelines affected the rate and volume of transportation and other activities requiring engagement with foreign entities, disrupting the global supply chain.

Economic instability

Economic changes can become a primary driver of supply chain instability. During periods of price volatility or inflation, manufacturers and suppliers may become wary of both producing and consuming. If a particular material or component rises dramatically in price, manufacturers may also increase their prices to offset the rise in overhead costs. The resulting inflation can change demand, particular for customers who worry about the effects of the instability on their own ability to make ends meet.

Material scarcity

Some high-demand materials are scarce or hard to source, whether it results from a low supply or artificial scarcity in the region that controls access. Access to certain metals or semiconductors featured prominently in recent supply chain shortages, due to limited production and increasingly limited access. Mining is still a complicated process requiring a lot of human intervention, which can be interrupted during strikes or government closures. In some cases, countries controlling the supply may use that control as a way to leverage higher prices or other advantages.

Lean inventory management

Trends toward inventory management focus more on efficiency, which can lead to delays when the supply cannot be renewed. Many manufacturers emphasize the importance of maintaining a just-in-time inventory, so they rarely have more than they need. This approach can help to reduce necessary space in a warehouse, cutting costs for storage. If manufacturers cannot replace their supplies when they need to, however, they may have to cut back or even halt production.

Supply Chain Impacts on Manufacturing

With a host of possible interruptions to the supply chain, manufacturers must try to anticipate changes and get through them as smoothly as possible. Supply chain disruption can lead to various negative effects for manufacturers, including:

  • Delays in production, which can disrupt other parts of the supply chain
  • Higher costs for materials with high demand and low supply
  • Greater labor expenses in relation to production
  • Decrease in customer satisfaction, which can lead to lower demand

Ultimately, the supply chain can make or break a business. When manufacturers fail to anticipate their supply needs in advance, they may find that their customers go to a competitor with a robust plan to maintain production.

How to Minimize Supply Chain Disruption

Because supply chain problems can lead to higher costs and fewer revenue-generating opportunities for manufacturers, minimizing the effects becomes the most important goal. By employing these improvements, manufacturers can identify the most common sources of their own supply chain interruptions and reduce their risk of major delays in production.

Diversify supply chain

Manufacturers that depend on a single supplier for a particular component are most likely to experience problems related to the supply chain, and diversification can reduce the risk. Diversifying the supply chain might involve considering multiple suppliers for the same materials, looking for local producers to minimize transportation delays, or bringing some of the services in-house. In some cases, manufacturers are using 3D printing to create components on their own, to minimize production times and limit the effects of supply chain interruptions.

Optimize inventory

Optimizing inventory has the potential to minimize the damage that supply chain delays can do to a manufacturer. Organizations should evaluate the potential for disruption in their supply chain and change their procurement strategies to suit. Maintaining an ideal inventory can allow production to keep running on time, without devoting space to manage an excessive supply. This process improvement may require the integration of supply, inventory and production systems.

Improve technology

Upgrading technology can help manufacturers anticipate supply chain disruption and eliminate other delays in processing. Many manufacturers have implemented supply chain technology into their processes, so that they can maintain real-time inventory management and increase the resiliency of their supply chains. Improving material handling equipment can reduce waste, which makes production more efficient and cuts down on the amount of supply a manufacturer needs to order.

Supply chain interruptions are a fact of life, but they can seriously disrupt a manufacturer’s production goals and timelines. Major supply chain issues can be difficult for manufacturers to anticipate, which emphasizes the importance of a robust management plan. By diversifying the supply chain, optimizing inventory and improving technology, manufacturers can find ways to reduce the effects of global shortages.

Author bio

Annette Harris has been with American Equipment for 23 years and in the industry for over 40. Her roles include Service Manager, Outside Service Sales and — most currently — Head of Sales Operations for American Equipment. She has a passion for service in the industry and loves to discover customers’ needs and find a solution for them.

SOURCES

https://www.allthingssupplychain.com/supply-chain-shortages-and-its-impact-on-manufacturing/

https://www.randstad.com/workforce-insights/workforce-management/impact-supply-chain-crisis-manufacturing-industry/

https://www.velosio.com/blog/causes-of-supply-chain-disruption/

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Global Logistics, Global Trade Daily, News, Ocean Ports

TIA Urges Quick Resolution to Port Labor Dispute Ahead of Holiday Shipping Rush

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With the potential for an International Longshoremen’s Association (ILA) strike at East and Gulf Coast ports, the Transportation Intermediaries Association (TIA) is calling for an urgent resolution to the labor dispute as the holiday season nears.

Read also: C.H. Robinson: How Shippers can prepare for a Potential ILA Strike Amid an Increasingly Disrupted North American Shipping Landscape 

TIA President & CEO Anne Reinke stressed the high stakes, noting that a strike would severely disrupt the supply chain, particularly during the peak holiday shipping period. “With 43% of U.S. imports passing through these ports, any delays would create bottlenecks across various sectors, from retail to manufacturing,” Reinke said.

The TIA backs good-faith negotiations between the ILA and United States Maritime Alliance (USMX) to avert a work stoppage that could affect industries nationwide. The association also urged the Biden administration to step in, if needed, to ensure the U.S. supply chain remains intact during this critical period for businesses and consumers alike.

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Global Logistics, Global Trade Daily, News

ALAN Urges Logistics Industry to Mobilize for Hurricane Francine Relief Efforts

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As Tropical Storm/Hurricane Francine intensifies, the American Logistics Aid Network (ALAN) is calling on logistics businesses to prepare for post-storm relief efforts along the Gulf Coast. With the storm expected to make landfall as a Category 2 hurricane, ALAN Executive Director Kathy Fulton emphasized the potential for widespread damage, including downed trees, power outages, and water system disruptions in Louisiana, Mississippi, and Texas. Inland flooding is also a significant concern.

Read also: Call for Nominations: ALAN’s 2024 Humanitarian Logistics Awards Celebrate Supply Chain Heroes

ALAN has already begun receiving requests for assistance and is actively coordinating with non-profit and emergency response organizations. To track the storm’s path and assess its supply chain impact, ALAN’s Supply Chain Intelligence Center offers real-time updates, and its Disaster Micro-Site provides essential resources for businesses looking to contribute.

Fulton also urged Gulf Coast businesses to prioritize employee safety by allowing ample time for preparation or evacuation. Donations and logistical support are welcomed as ALAN prepares to assist in the aftermath of the storm.

“We hope these precautions prove unnecessary, but we’re ready to assist and support Gulf Coast communities in the event of significant impact,” Fulton said, encouraging positive thoughts for those in the storm’s path.

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3pls, Global Logistics, Global Trade Daily

Supply Chain Resiliency and Strengthening Supply Chains

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Fortifying Supply Chains: How to Navigate Today’s High-Risk Global Trade Landscape

Efforts to make supply chains stronger are as old as supply chains themselves, but today’s global networks necessitate a more proactive, continual, and detail-oriented approach. Even if you have a resiliency plan in place, now is the time to reassess your preparedness. 

Read also: Resiliency, Wherever You Can Get It: Uncertainty In Global Supply Chains Is Going To Stay

Few endeavors are more central to the pursuit of global trade than the effort to create a stronger supply chain. But despite this, far too many organizations fall victim to risks they could have mitigated.

In fact, most of the challenges supply leaders face are not new. Geopolitical tensions, warfare, piracy, natural disasters, pandemics, and weather events are age-old risks. What is new is the frequency with which they occur.

Most supply chain professionals could not have envisioned a global pandemic that led ocean transportation costs to increase by 1,000%, the continual and high-impact threat of cybercrime, or concurrent global conflicts. This is the current high-risk environment in which global trade is conducted. It is also why it has never been more important for leaders to reassess how to make their supply chains stronger and to revisit their supply chain resiliency plan.

On its most fundamental level, supply chain resiliency comes down to having an actionable risk management plan in place – a roadmap that tells you what to do to respond to an event that impacts your business. But, it’s not enough to just have a plan, you must also be able to quickly execute it to have a resilient supply chain. 

What then should supply chain leaders do to ensure they are prepared?  It starts with assuming the right mindset.

A risk management mindset is crucial

The most resilient supply chains – those that are effective even when faced with catastrophic events – are the result of a risk management mindset that emphasizes diversification. They are the work of organizations that did the groundwork of creating plans that can be implemented and acted on quickly. At their core they address two imperatives:

1. The need for alternative suppliers: Having alternative sourcing options in place is the hallmark of any supply chain resiliency plan. It can also be one of the most difficult things to achieve, particularly for organizations that rely on raw materials that are highly specialized or come from areas of the world prone to conflict or disruption.

Putting optional suppliers in place is not an easy task, and it also takes time to vet them. This is particularly true in highly regulated industries like medical devices, where it takes 10-18 months to vet a source and address compliance and quality requirements. The time to map these back-up plans is not when an incident occurs, but well in advance to ensure continuity if and when something happens.

2. The need for cross-functional collaboration: Organizations with effective supply chain resiliency plans know their decisions require the input, buy-in and support of colleagues in numerous internal business functions, among them product design, procurement, finance and marketing. For example, if a rare resin for extrusion molding is only available from a single source it is worth exploring if a more commonly available item can be used instead. Such questions should be explored with the design and quality teams.

Cross-functional collaboration is also particularly important if new suppliers need to be onboarded, for example when the risks associated with any component shortage are material to the company’s operation and performance. Onboarding requires not only the collaboration of procurement to vet suppliers’ financial strength, quality and business practices, but also finance. 

Other departments may also need to be included to answer questions such as whether the risks involved justify the storage of additional supplies and the capital expenditures required to attain them, and whether carrier partners can effectively add them to the company’s supply chain network. 

Once onboarded, the second most important step in the creation of any supply chain resiliency plan begins. Vigilance is required.

Resilience requires constant monitoring

Importantly, supply chain visibility and supply chain monitoring are different things. Supply chain visibility comes down to knowing where supplies come from – including where your suppliers get their materials – how and how often they are delivered, and when any interruptions occur. But supply chain visibility alone is not a sufficient safeguard.

In-depth monitoring, not just of the supply chain, but also the myriad issues and events that can impact it, is crucial. Monitoring efforts should be multi-faceted and address several key factors:

1. Track the right performance indicators (KPIs): Leaders should ask if they are measuring the right things to determine if their supply chain is functioning optimally and protected from risks – something that differs from product to product. Internal metrics like overall equipment effectiveness (OEE), throughput levels, maintenance costs and performance benchmarks – including if constant improvement is achieved – must be tracked.

2. Monitor suppliers with supplier scorecards and conduct routine reviews: Metrics like the percentage of on-time, and in full (OTIF) deliveries and quality levels should be analyzed as a matter of course. Leaders should also conduct annual or quarterly business reviews with the supplier to maintain a dialogue and gain insight into the suppliers’ financial health and other factors. These reviews should also be used to strengthen relationships with suppliers. When difficult situations call for supplier diversification, suppliers naturally take care of the customers they know first. 

3. Monitor global events: No one predicted the floods in Taiwan that devastated the hard drive industry in 2011, the collapse of the Francis Scott Key Bridge this year, or the impact of the Uyghur Forced Labor Prevention Act. In all cases supply chain leaders who can act quickly gain an immediate and important advantage. Fast action requires continual monitoring of world events and the risks they pose. 

Perhaps most importantly, supply leaders must remember that business continuity and resilient supply chains require not only hard work, but continual work. What it means to be prepared, like the events that test it, changes every day. Now is the time to reassess the supply chain resiliency plan that served you well and take action to ensure your organization is prepared in the event of disruption.

Author Bio

Matt Stekier, Principal, Supply Chain, at Plante Moran serves clients by quickly identifying improvement opportunities that deliver tangible results and lower costs in a variety of industries, including the medical device, food and beverage, footwear and apparel, military vehicle, and automotive manufacturing sectors. Matt earned his bachelor’s in supply chain management from Central Michigan University and a master’s in business administration from Wayne State University. A 10-year veteran of Plante Moran, he previously served in supply chain roles at Mercedes-Benz Technology and Ford Motor Company.

Aaron Ennest, Senior Consulting Manager, Supply Chain, at Plante Moran helps clients identify, prepare for and respond to market disruptions and events impacting their supply chains and business models. Prior to joining Plante Moran, Aaron was a project team leader at a global Tier 1 automotive supplier, where he oversaw holistic efforts to decrease costs and increase product quality from engineering and design to manufacturing and supply chain operations. A staff member of Plante Moran for nearly ten years, he earned his bachelor’s in supply chain management from Michigan State University.