Logistics Challenges That Will Shape the Supply Chain in 2019 - Jan 2019

Supply chain transformation has been the name of the game in recent years as shippers and logistics providers continuously strive to adapt to volatile market trends and technological advancements. 

Fortunately, the logistics world has no shortage of promising and innovative solutions. Shippers and their logistics partners will need to stay abreast of the latest best practices to maintain their competitive edge.

Top 5 Supply Chain Trends for 2019

As we move forward into 2019, supply chain stakeholders will experience some old headaches, as well as some revolutionary new trends. The following issues will likely make an impact on your supply chain in 2019:

 1. Capacity Crunch

The driver shortage and capacity crunch were voted the biggest challenge for supply chains in 2019 in a Kuebix poll of industry professionals. Despite the American Trucking Associations reported 11 percent decline in driver turnover at large carriers, the shortage of truck drivers will not be solved in 2019 either.

 Carriers are spending more and getting more creative with driver recruitment, but these initiatives will not provide short-term relief to the trucking capacity crisis facing the U.S. freight sector. In the meantime, rail CEOs expect more intermodal growth in 2019 as shippers find alternate methods to move their freight, according to Progressive Railroading. Other modes might not be so lucky, as ports and ocean shippers may see delays if available drayage trucks can’t be found to move containers off the dock.

 2. Tariffs

The ongoing trade war between the United States and China left the supply chain plagued by hundreds of billions of dollars in retaliatory tariffs from both sides in 2018. Even though both parties agreed at the 2018 G-20 summit to hit pause on those tariffs, that break ends on March 2, 2019. It remains to be seen whether China and the U.S. can reach a satisfactory agreement, making the effect of tariffs in 2019 very hard to predict.

 If an agreement can’t be reached, the supply chain will be forced to adapt to even more volatility moving forward. Shippers will be forced to source new and/or alternate suppliers, global manufacturers will be forced to move operations back to the United States or other locations unaffected by the trade war, and prices will ultimately rise on various raw materials and critical components.

 3. Technology

The digitization of the supply chain isn’t going anywhere. The Industrial Internet of Things (IIoT) and Supply Chain 4.0 will continue to drive inbound logistics practices and increase supply chain visibility, resulting in the ability to more strictly control of inventory management and vendor relationships. Additionally, small and large supply chain stakeholders alike continue to see the cost-saving and efficiency benefits of cloud-based logistics solutions. The supply chain sector’s ongoing cloud migration will inevitably continue as time moves forward.

Supply chain’s implementation of blockchain experienced a number of starts and stops in 2018 as industry professionals struggle to collaborate and create workable standards for the technology’s use in logistics applications. As data from pilot programs continues to roll in, it seems likely that blockchain for supply chain will begin to find its proverbial feet by the end of 2019.  Despite any hiccups that have occurred, 31% of respondents to an American Shipper survey say that blockchain is the most exciting emerging technology in the supply chain.

Recent developments in artificial intelligence (AI) and machine learning will help shippers to improve forecasting, more accurately predict delivery times, and ship cargo safely. In the warehouse and on the factory floor, new and old solutions across robotics and AI will continue to increase in use in the face of an industrial skills shortage.

 4. Distributed Inventory & Reshoring

The customer experience is now key in retail sales and this has driven massive change in the e-commerce sector in recent years. Amazon changed the way consumers buy and the way shippers move cargo, and that change will definitely carry into 2019.

 In response to what is commonly known as the Amazon Effect – consumer expectations for same-day and two-day shipping – shippers and their logistics providers have begun to invest in the concept of distributed inventory. By locating warehouses and distribution centers closer to large population centers, shippers are finding they can meet these more stringent consumer delivery demands and compete with the internet giant.

Meeting the Future With WSI Logistics

At WSI Logistics, we help our clients streamline processes, improve distribution networks, and stay up-to-date on the latest technology solutions, enabling them to operate effectively even in unpredictable circumstances. If you’re concerned about how the challenges of 2019 may impact your supply chain, please don’t hesitate to contact us or give us a call or email at 920.831.3700 or Solutions@wsinc.com. We are ready to help.