Why is the Global Supply Chain Currently in a State of Complete Chaos?
If you’ve been following the shipping industry at all since COVID, you’re undoubtedly aware that things are kind of a complete mess right now, having been so for some time.
While we’ve all heard talks about going “back to normal” or the “new normal,” it’s easy to see that the current global supply chain is far from a state of normalcy. Skyrocketing fees and surcharges coupled with massive congestion, bottlenecks, and worker shortages have combined to create a perfect storm of supply chain chaos.
And the result is a quadrupling of worldwide average freight rates per 40-foot container from just a year ago.
Everything is still a mess, and the big question remains: “Why?”
Reason One: The Global Supply Chain is Incredibly Complex
The global supply chain is long and made of an incredible number of links seeking to do their jobs in the safest and fastest way possible, mostly unaware of the impact their actions have on other parts of the chain. The main reason being, there is no one single organization / agency overseeing the entire chain, making sure each link operates efficiently and fairly, while cooperating smoothly together.
A whole slew of different, independent actors now play a role in the global supply chain and most of them don’t think about the rest of the chain until it starts to impact them directly.
This situation is ripe for all kinds of issues, especially when something like a global pandemic rears its ugly head.
Reason Two: Supply Chains Rely on Predictability
Enormous systems like the global supply chain are built, with each chain having its own role to play, but each link is also directly impacted by the links that come before and even after it.
As such, supply chain systems are set up to keep things moving smoothly and predictably from one end to the other. However, they aren’t very well set up for dealing with times like these, when their plans begin to unravel because each chain operates primarily of its own accord.
Breakdowns in communication and a complete lack of financial incentive result in an “every man for himself” sort of mentality. There aren’t really systems put in place for all the chains to coordinate together, adjusting to unexpected events like a global pandemic.
This has proven itself to be true in the abysmal recovery the shipping industry is still attempting to undergo in the wake of the ongoing COVID pandemic.
The chaotic state of the global supply chain is more than enough evidence that the current systems in place just aren’t cutting it. As a result, there are bound to be a lot of changes coming down the pipes for the world of logistics in the wake of all this upheaval.
Exactly how it will all turn out is uncertain, but what is certain is that ClearFreight stands ready to support you and help you figure everything out one step at a time. Contact the experts at ClearFreight to learn how our customized supply chain solutions can be used to meet your businesses’ logistics needs.