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Despite the well-reported supply chain challenges that companies faced in 2020, plus ongoing pressures like long lead times, worldwide port congestion and ocean container shortages, companies have confidence in their global supply chains’ capability of producing, moving and delivering the goods in a timely manner right now.
According to a new report from third-party logistics provider (3PL) GlobalTranz, there’s definite optimism around future supply chain performance even as companies continue to face challenges with final-mile logistics, the rising transportation costs and a persistent labor shortage.
Prepared to Meet Customer Demand
Six months ago, companies were faced with record-breaking shipping volumes due to increased e-commerce demand on top of peak shipping demands during the period that preceded the holiday season from October through December, GlobalTranz reports. “Supply chains continue to operate at these peak levels and consumer and business buying activity isn’t showing signs of slowing down in 2021,” it adds.
Despite the pressure being placed on global supply chains, the 3PL says that decision-makers believe their own supply chains are prepared to meet consumer demand. And even with a confluence of economic and societal factors at play, just one in 10 decision makers reported a pessimistic outlook of their company’s revenue three to six months—and even a year—from now.
Some of the other key report findings include:
- Seven in 10 respondents believe the COVID-19 vaccine rollout will enable them to attract new customers.
- 94% of respondents reported confidence that there will be robust economic recovery due to vaccine distribution.
- Six in 10 believe that the latest stimulus packages will benefit both their operations and business revenue.
- More than half anticipate that regulatory policy coming out of the new U.S. administration will have a positive impact on their business operations and revenue. This sentiment comes as infrastructure bills are introduced in Washington D.C.
“With 94% [of companies] saying they’re confident there will be a robust economic recovery due to the vaccine distribution,” GlobalTranz points out in its report, “it explains why more said that the vaccine rollout will have a positive impact on their company’s supply chain operations, sales/revenue, customer base, and customer retention than stimulus packages, the new administration’s regulatory policy, and tax returns.”
And while product innovation and investment, sales and customer retention all ranked higher than supply chain operations in order of company business priorities, eight in 10 decision-makers said supply chain strategies (i.e., offering visibility into the supply chain and adopting or improving e-commerce services) are major priorities this year.
Key Challenges Remain
According to the 3PL, companies continue to deal with supply chain challenges:
- 37% noted rising transportation costs as something they will need to continue to manage throughout 2021.
- One in three companies say having enough resources (e.g., parts, materials, product, etc.) is a top concern when trying to meet customer demand.
- 31% reported concerns over having enough workforce to meet the demand for consumers.
- 24% cited poor handling or service related to home deliveries as an ongoing challenge.
- 76% cited concerns over the ability of their small parcel provider to deliver on time.
Adapting to New Market Demands
The survey also revealed that supply chain decision-makers believe they have made “appropriate adjustments” to meet the heavy shift in e-commerce activity in the market, with 76% of respondents noting that their company has adopted a successful omnichannel strategy (a 20% increase from GlobalTranz’s October survey).
Concurrently, 84% of respondents are seeing greater demand for final-mile delivery services, with 69% struggling to find reliable transportation partners to meet this demand. With continued market volatility in 2021 forcing companies to reevaluate their supply chains, about 80% of companies say they’re increasing warehouse space and expanding warehouse locations, while 82% are investing in supply chain visibility tools.
Finally, over 75% of respondents see reshoring or nearshoring of supply chain operations as a priority right now. “With much of 2020 marked by the growing pains from the dramatic shift to an e-commerce dominated shipping landscape,” GlobalTranz’s Ross Spanier said in a press release, “we’ve seen companies effectively accelerate plans that were years down the road.”
