Agility is key for success in the supply chain world. And with a new decade underway, organizations are eager to get ahead of the curve. What should the shipping industry expect?
Here are four things that will shape the supply chain in 2020 and beyond:
1. More attention from the c-suite and executive board
As supply chains (and cyber attacks) get more and more complex, there’s an increasing need for leadership to understand that complexity and take appropriate action.
Where procurement was previously siloed, many organizations are pushing for more supply chain awareness in the boardroom. CPO positions are becoming more commonplace as organizations realize the importance of procurement strategy.
This trend will continue in 2020, with CPOs becoming more prominent and influential on the c-suite and in the boardroom. Procurement professionals will need to amp up their communication and collaboration skills to break down organizational barriers and achieve alignment with other business units.
2. Geopolitical impact
From tariffs to Brexit and beyond, geopolitical tensions show no signs of slowing down this year.
Despite President Trump’s agreement to an initial trade deal with China, powerful tariffs remain in place, spelling uncertainty for the global supply chain landscape. Higher consumer prices and lower profits related to by trade war mean that organizations are contending with increased risk.
Meanwhile, the Brexit withdrawal agreement leaves questions about the U.K.’s future trade relationship with the E.U. While Brexit is unlikely to cause significant disruption to the U.S. economy, Capital Economics’ Senior U.S. Economist Andrew Hunter told CNBC that a no-deal scenario “could cause a period of volatility in global financial markets.”
Tensions with Iran also hold potential for economic repercussions, with economists warning that extended conflict could result in “broad economic, financial shock.”
These and other geopolitical issues will be top supply chain concerns in 2020, requiring organizations to demonstrate agility and resilience amidst uncertainty.
3. Greater focus on sustainability
Climate change continues to make headlines, putting pressure on companies to disclose their environmental impact and pursue more sustainable supply chain solutions.
62% of consumers say it’s important to buy products in environmentally-friendly packaging, so carriers who utilize sustainable packaging like compostable mailers, paper-based void fill materials, and bioplastics will be in high demand in 2020.
Electric trucks are another promising change on the horizon. Daimler’s “eCascadia” freightliner truck is expected to enter series production in 2021, while Tesla plans to begin production of its new electric semi later this year.
Currently, less than 1% of fleet vehicles are electric, but by 2030, that number is expected to grow to 12%, and many companies have already placed preorders. Until electric trucks become commonplace, there are also other options for more sustainable shipping practices, like using optimized routes and regional warehouses to cut down on unnecessary carbon emissions.
4. Access to high-tech logistics solutions
Logistics solutions such as supply chain orchestration, Blockchain, IoT, digital twins, AI, quantum computing, and more are evolving fast, and will continue to do so in 2020.
As this new technology becomes more readily available, it will also become more affordable for mid-market companies. Working with a 3PL partner like Globecon makes high-tech warehousing even more cost-effective by giving companies access to the latest technology and eliminating the obstacle of high warehouse rent.
After one month of 2020, some things remain uncertain. Here’s what’s clear: organizational structures, geopolitical tensions, sustainability, and technology are all main drivers of change for the global supply chain, and companies in the shipping industry need to demonstrate more agility than ever before to avoid falling behind in the new decade.