If you take a look at supply chain history, you’ll see it’s an industry constantly evolving. New trends, new technologies, and in the last several years, new challenges. To say the least, change is a constant.
Are supply chain leaders keeping up—are they able to when today’s normal is different from yesterday’s and tomorrow’s likely different from today’s? Today’s leader needs to be agile, and ready to face different scenarios ahead of time, which would include making appropriate investments in technology. The trick is doing all this while the time is right, because waiting until an unknown tomorrow may be too late.
After an upbeat update of Maersk’s Asia-Pacific March, they’re feeling positive and throwing around words like “stabilize” and “equilibrium.”
They’ve indicated that demand across their network is strong on secondary trades or about to strengthen. This is despite mixed signals from consumers who are troubled by the state of the economy and high inventories, leading to little confidence in near future demand.
What goes up must come down, right? That’s a reality that container liners are presently facing. They happily raked in massive increases in profit throughout the pandemic, but now they’re facing massive drops in profit.
Their forecast for 2023 is in and it does not look good—industrywide profits are expected to be down 80% year-on-year according to some analysts. But as for those massive increases? Sea-Intelligence estimates that “over the past three years, [carriers] made far greater operating profits than they did in the combined previous 63 years, since the maiden voyage of the first container ship.”
Some encouraging data from March is being offset by some gloomy data. US imports were up 6.9% from February and up 4.2% from March 2019.
However, at the same time, US imports are down 26.7% when you compare them to an August 2022 high, with 41.6% of those imports coming from China. Part of the reason for the drop in imports could be due to a significant amount of inventory still on hand that retailers can’t get rid of.
Lately, the news is crowded with articles about the recent surge in AI, and many in the industry are wondering what sort of impact it will have and if it will be positive. After the disruption of the last several years, no one wants to think of some new disruptive force on the horizon.
With that in mind, MIT Professor Yossi Sheffi has written a book, The Magic Conveyor Belt: AI, Supply Chains, and the Future of Work, which explores the impact AI might have on the industry.