The Rapidly Changing Challenges and Opportunities in the Cargo & Logistics Industry
These past weeks, the Hospitio team has been out on site visits to cargo warehouses in Europe. Our group is leading a global cargo handling request and what we saw was heartening. Despite the lack of air capacity versus 2019, airport warehouses are bursting with freight -- a hopeful sign that maybe, just maybe, we can get back to moving supplies around the globe, get Amazon orders delivered in good time, and get the supply chain working optimally again.
Well, not so fast. It seems we’re not there yet.
In fact, all of the behind-the-scenes work that goes into a shipment moving from factory to consumer is under pressure in unprecedented ways. It’s a bit like a global game of “Whack-a-Mole.” As one challenge gets resolved, another emerges. Here are just some of them:
Factories that produce the goods are working unevenly and sporadically due to varying levels of employment and supply challenges related to COVID-19.
In Europe, specifically, catastrophic floods undermined the earth below pipelines, requiring extensive repairs and work-arounds that have created inefficiencies in fuel deliveries to producers and transporters.
Shipping over water is hugely backlogged at various ports around the world. Dozens of ships are still moored outside the U.S.’s largest port at Long Beach, California, waiting to get through a port struggling to handle them.
Air cargo companies and airlines with cargo capacity simply can’t fill the gap, although conversion companies are working around the clock to move orders to the air.
The U.S., Europe and U.K. are experiencing truck driver shortages impacting the delivery of supplies to producers and products to consumers.
And as if to add insult to injury, the warehouses themselves are suffering shortages: Warehouse dollies and other supplies are hard to come by.
As you might expect, COVID has been a big part of this logistics conundrum. COVID cases could and did shut down factories and ports abroad (leading to inventory shortages) at the same time that home-bound consumers, especially in the U.S., ramped up their online purchases.
The impact on everyone has been a dramatic increase in shipping costs and significant delays in getting products to suppliers and consumers alike. Some industry observers (including Hospitio) don’t see this evening out until well beyond 2022.
So what fixes this? The industry has always had uncontrollable factors that arise and need prompt attention. To get ahead of the curve, we aim to foresee those challenges and find new ways of overcoming them. While time may heal all wounds, the pressure points are multiplying today. And at each pressure point, new solutions are required to decrease the time needed in this game of delay and wait.
Supply chain logistics is an enormous area of opportunity. Every day we witness new and creative developments in this massive industry: re-igniting local production sources, advances in digitization, operational analytics and cost-efficient web-based products are moving us ahead and benefitting industry stakeholders. As consultants, we work with a variety of new products and stakeholders within the supply chain, giving us an advantage in collecting and creating best practices; what works and what doesn’t, and building the tools that can move everyone forward.
We can be successful by using the tools mentioned above and not forgetting the one little bit of magic that can’t be underestimated -- the value of good, old-fashioned, tried and true communication and relationship building practices. A core element of our industry is personal interaction, assistance, and communication. All of us must incorporate that Key Performance Indicator into our strategies for improvement.
There is rarely a project that can ignore this vital human element which crosses all cultural boundaries and always leads to better results. If you’re looking at overcoming the challenges of moving goods from Point A to Point B in today’s extraordinary environment, we’re here to help.
Hospitio is a global consulting firm with offices in the U.S., Europe, Latin America, and Asia offering consulting services in aviation, transportation, hospitality, cargo and logistics, travel technology, and tour and cruise industries. The firm specializes in strategic commercial consulting, operations consulting, as well as with organizational staffing and development. You can learn more about Hospitio at www.hospitio.com.