Cautiously Optimistic: How to Prepare Your Supply Chain for the 2022 Holiday Season

After years of pandemic disruption, the supply chain is beginning to normalize. There’s less transportation congestion, freight rates have plummeted, and transit times are closer to 45 days than the 75-, 90-, or 100-day waiting periods we’ve seen recently. However, varying inventory levels, warehouse issues, and labor shortages remain. If we’ve learned anything from the pandemic, it’s that anything can happen. These steps can help your organization prepare for the upcoming holiday season amidst both improvements and continued uncertainty.

Stay Vigilant: While supply chain disruption is easing, we’re definitely not out of the woods completely. For example, the Zero Covid policy in China could lead to unexpected shutdowns, creating turmoil in the supply chain all over again. An energy crisis and rolling blackouts are affecting areas from California to the U.K. to China, and it’s unclear how far-reaching the effects may be. We can remain cautiously optimistic while staying on our collective toes to be ready for potential future surprises.

Flex Your “Pandemic Muscles:” A silver lining of the pandemic was forced reinvention. In other words, we learned to pivot quickly, adjust on the fly, and mitigate one delay after another. As supply chain professionals, being nimble will continue to be necessary, even when we aren’t staring down crises or addressing supply chain challenges. Our clients are coming to us with questions like: what can we do to take advantage of freight rates at under $5000/container? What can we do to manage through the continued labor shortage? These are questions organizations need to answer and take action on quickly.

Understand the Bigger Picture: External forces and market conditions continue to have immense impacts on the supply chain. There are also over-corrections happening in response to multiple recent global issues. The rate of imports is slowing; shipping costs are coming down; stock is being liquidated, and yet there is massive warehouse expansion in progress. While warehouse construction is beginning to slow as well, we’re still likely to end up with more warehouse space than we need in the near future.

In the shorter term, we’re seeing signs of pre-pandemic cycles of seasonality, but it’s too soon to fall into a seasonal rhythm. After Chinese New Year 2023 – and its resulting impacts on the supply chain – we can reassess the supply chain state of the union.

Work with Experts: Proactive planning can help prevent scrambling when problems hit. However, simply tracking supply chain transit is no longer enough to minimize bottlenecks or identify minor issues before they become severe. Our technology provides a robust view of a supply chain, from raw material procurement to final delivery, and detailed metrics to help customers make strategic decisions. Investing in this type of technology and leveraging a service that provides comprehensive metrics, reporting, and historical views is critical to saving time and costs and eliminating inefficiencies. Partnering with experts who understand the transport business and can manage a process of continuous improvements will also help you maximize the holiday season and beyond.

The end goal of any supply chain is a 360o logistics approach and a network that runs smoothly from end to end. In an ideal world, processes, warehousing, transport, distribution, and data flow are integrated and efficient. The last few years have shown us opportunities to get closer to this ideal state. In the meantime, staying vigilant, maintaining pandemic-era flexibility, and staying on top of market conditions will help businesses enjoy a happy holiday season.