Future of Supply Chain: Another Victim of Global Events

Since 2019, world has been in the claws of (coronavirus) COVID-19 pandemic. The outbreak of this novel disease has severely disrupted global supply chains by adversely affecting demand and supply. Industries of all sizes and power were disrupted, along with supply chains. However, during this chaotic period, while supply chain experts were attempting to adapt to the market changes, they were capable of delivering vital medical supplies, food, and other essentials needed direly by people. Aside from the negative effects of the pandemic, it has brought many supply chain issues to light dealt by the trucking industry for decades. We will discuss pandemic’s positive and negative consequences and other global events, along with the possible implications for the supply chain management future. Moreover, due to the link between post-pandemic global supply chain and the US-China trade war, manufacturers are reconsidering their supply chains.

The pandemic significantly disrupted supply chain in almost every economic sector worldwide, from trade to education. Unsurprisingly, businesses were not ready for this pandemic, and as per a survey conducted by Ernst & Young LLP, 72% of companies were adversely affected by lockdown. Some industries came out as a winner, such as life sciences companies producing COVID-19 tests and vaccines, consumer products, such as toilet papers, and so on. However, some went out of business.

The trucking business was not spared by the pandemic, resulting in a shipping crisis. Many transportation companies had to lay off workers as the epidemic affected the economy. After a certain time, when businesses recovered from the pandemic, carriers were unable to meet demand due to the enormous volume of orders. Consequently, trucking companies became understaffed, with about 80,000 drivers shortage in 2021 as per American Trucking Association. The carriers didn’t only suffer from being understaffed but also, from skyrocketing prices, and health concerns owing to the impact of Covid-19. Nowadays, diesel prices doubled up compare to 2021 and already reached $6 per gallon. Brokers and manufacturers are unwilling to increase the rates and some people say the industry would face a recession if this continues. For instance, even though the expense of drivers increases, load rates remain the same. Consequently, drivers are not happy with the pay that they are taking home after long workdays and trucking companies’ profits remain unchanged.