supply chain industry Archives

The Impact of COVID-19 on Supply Chains

Pre-pandemic, the just-in-time (JIT) supply chain model, which minimizes inventory to reduce costs, was the norm. However, this model exposed companies’ vulnerabilities when COVID-19 accelerated change across every supply chain industry vertical – especially warehousing.

The shift to remote work and the exponential rise of e-commerce exposed supply chains to crushing demands and major disruption. Companies didn’t know if their warehouses were going to be empty week to week, or if they were going to be overstocked. Extra industrial space that goes unused is a huge financial strain for a business, but on the other hand, purchasing patterns were so unstable during the pandemic that overflow also became a financial concern.

With changes in consumer preferences, supply chain setbacks, project delays and more as a result of the pandemic, there has never been a greater need for regional space that can be leased on flexible terms. Because of the nature and uncertainty of the economy, many businesses don’t want to commit to a long-term sublease for space, but at the end of the day, they still need a solution. Tenants and landlords also want the opportunity to generate earnings if they have unused space simply racking up their expenses. Short-term, on-demand warehousing has allowed companies of all sizes and industries to make smart decisions about warehouse space and plan more effectively for the future during COVID-19.

The Rise in Popularity of Short-Term Warehousing

The supply chain industry understandably doesn’t want to fix what’s not broken. However, when the COVID crisis hit, many traditional processes and workflows began to fail. This accelerated the need for more innovative solutions and new, tech-based services like Chunker became a mainstream necessity.

Warehouse leasing has long been predicated on long-term commitments and needs. For example, a business would have to commit to a 10-year lease, which meant predicting and planning space needs over the course of a decade. This left a ton of room for error, especially as consumer behavior evolved so quickly.

Short-term, on-demand warehousing supports supply chains in the new era by adding agility and flexibility. Companies no longer need to sign a five-year lease when they only have a five-month problem to solve. By enabling short-term deals, flexible warehousing allows a business to respond faster.

Additionally, companies are able to take advantage of new opportunities and move into new markets faster. Typically, it takes six months to a year to source and secures long-term warehousing space. Through short-term, on-demand warehousing options, a company can now find industrial space in 24 hours and enter a new market, while planning for the long-term. This allows for better market testing, while removing some of the risks that comes with entering a new market.

Looking Ahead: What’s in Store for Warehouse Space and Supply Chains

Where we will see short-term, on-demand warehousing proliferate is in areas such as construction, 5G rollouts, hotel remodels and overflow storage for retail and e-commerce. For instance, construction projects require truckloads of goods to be brought on-site, necessitating a short-term space for materials storage. Flexible warehousing is going to become more and more vital to supply chain resilience in the future, and is less expensive than a traditional brick and mortar.

Short-term, on-demand warehouses are the natural next step in the evolution of commercial real estate and the industrial space in particular. Over the last few years, we have seen the space evolve and adapt to new entrants in the market like on-demand office space, short-term rentals, co-living, pop-up retail and more. As the industry continues to shift and adapt to more on-demand solutions, it will continue to be a go-to resource for people seeking convenience, simplicity and efficiency for finding and leasing warehouse space in the post-pandemic era.

______________________________________________________________

Brad Wright is the CEO of Chunker

Technology keeps evolving and impacting lives. It is changing how things happen in various industries worldwide. One of the most impacted industries is the supply chain industry, mainly because electric vehicles are becoming more popular now than ever before.

Research shows that by 2025, 30% of all vehicle sales will be hybrid electric vehicles and EVs. Vehicle manufacturers are doing their best to keep up with the demand for electric cars. This has been a result of carriers in the supply chain industry opting for clean-running vehicles.

It is vital to know how electric vehicles are set to transform the supply chain industry. This includes companies that offer car transportation services. In this article, you will learn about emerging electric vehicle trends. It will also look into how the trends will impact the supply chain industry.

Read on to find out more.

New Challenges for Automotive Companies

As mentioned earlier, technology has had a massive impact on automotive companies. Supply chain companies are looking for modern cars and trucks. Automotive manufacturers now have new challenges. The materials and parts used in making these cars are different from regular automobiles.

For instance, the designs have substantially changed in modern cars. In addition, the manufacturing process has also changed. Manufacturers have introduced different electronic components. Besides, other pieces of technology like sensors and microchips have also gained popularity in the industry.

Besides these changes, regulations have also become a challenge for automobile manufacturers. Every tiny part used in making modern cars needs to meet regulatory requirements. This hasn’t been an easy thing for car manufacturers worldwide. It has made it a challenge to meet the soaring demand for cars.

The challenges automotive manufacturers experience affects the supply chain industry significantly. It may delay the planned shift to more efficient cars and trucks. But so far, a gradual change has been possible. The reality is that a complete transformation to an energy-efficient industry is still far.

Increasing Demand for Electric Vehicles

The demand for electric vehicles in the supply chain industry doesn’t seem to slow down. For instance, most car shippers have already started changing their fleets. It could happen quicker if automobile manufacturers could produce as many modern cars and trucks as traditional ones.

However, three vital trends are emerging in this industry of late. These trends will impact many things including the costs of shipping cars. This comes as vehicle transporters plan to have more clean-running trucks in their fleets. EVs will reduce the car shipping operating costs and promote a cleaner environment.

This section will take a more in-depth look at the trends impacting vehicle shipping and the supply chain industry.

Here’s the first trend that you should look out for today.

1. Limited Lithium

Lithium-ion batteries power modern electric cars. But then, there have been concerns of whether there’s enough lithium to support their manufacture. This is because of the ever-growing market of lithium-ion batteries. Well, there have been reports that lithium is running out worldwide.

This hasn’t been good news to an already booming electric vehicle industry. It is even worse for the supply chain industry, especially auto car transporters. The planned shift to more efficient trucks to boost their car shipping business may not be achieved as soon as expected.

Predictions already show that at today’s prices, lithium could run out by 2025. However, the good news is that electric vehicles may reach cost parity with regular cars by 2024. That will make it easy for car transporters to shift to electric cars. It will also lead to an overall reduction in car shipping costs.

2. Lower Consumption

Consumption has been a concern for vehicle transporters worldwide. It is the consumption of shipping trucks that pushes car shipping costs high. But then, shipping a car will cost less when motor carriers change their fleets to include more energy-efficient trucks and some electric vehicles.

For energy-efficient trucks, it will be about low gas consumption and less pollution. This will mean well for the environment and also mitigate pollution-related diseases. The good news is that electric cars will take efficiency to a whole new level. They will also mean little or no pollutants into the environment.

This is what companies offering car hauling services want to achieve. They want to contribute to a cleaner environment. Besides, it will also help them keep up with regulations. This will, however, be achieved once electric cars become mainstream and cheaper.

3. Interdependent Supply Chains

There’s a lot more waiting to change in the supply chain industry. This is because changing car shipping fleets alone won’t be enough to achieve a sustainable energy revolution. Chargers and electrical grids will also have to convert to clean energy to achieve this transformation.

Another trend that you’ll see is an increase in the production of more efficient gas-powered cars. Car shippers will have both energy-efficient gas-powered and electric vehicles in their fleets. Thus, the production of gas-powered engines won’t decline like many people could be thinking.

This means that car suppliers will focus both on gas and electric-powered cars. Even if the prices of electric-powered vehicles drop in the future, they may remain relatively expensive. To be precise, the industry will have to wait at least 20 more years before seeing a complete shift in fleets.

Conclusion

The supply chain industry is one of the biggest industries in the world. It is also one of those set to get transformed by the mainstreaming of electric vehicles. This industry has been anticipating a change in trucks for a while. The primary aim has been to reduce consumption and costs as well as be compliant.

This has seemed to happen in recent years as more electric vehicles are getting produced. But it hasn’t meant anything for car transportation companies as they can’t replace entire fleets yet. The supply of electric cars remains low while the demand keeps rising every day.

However, the future remains bright as car manufacturers push for more production. The availability of raw materials like lithium will determine how soon this happens. Meanwhile, stakeholders in the supply chain industry, especially vehicle transporters, will have to be patient.

Short-Term On-Demand Warehousing and How it Can Support Supply Chains