42% will change supply chain strategies post COVID-19 – Impact Survey

COVID-19 supply chain impact survey resultsGlobal Supply Chains are very important in linking various countries to international markets facilitating global trade..

Modern day supply chains come with great opportunities but also pose some challenges which can test some of the best built and run supply chains..

One such challenge that is testing the world currently is the COVID-19 pandemic which came into limelight in December 2019..

This pandemic which has spread to every country around the world has caused/is causing major economic and social disruptions with far reaching impacts on global supply chains..

This has been an expensive learning curve for everyone as no single country was effectively prepared to handle the impact of this pandemic on the entire supply chain..


Global supply chains and shipping as we know them will be different from how they worked for decades. Navigating around and through the COVID-19 situation has left us all in uncharted waters rocking the foundation of even the most stable businesses..

In order to understand the impact of this pandemic on the supply chain better, a recent survey designed to measure the effect of the coronavirus pandemic on global supply chains was conducted by Shipping and Freight Resource and sponsored by Ocean Insights, the Ocean Freight Tracking System Provider..

This survey which was answered by over 300 Shipping and Freight Professionals across the world collected and analyzed data on three key aspects – Impact, Preparedness, and Recovery..

One of the most important trends unearthed was the readiness to change supply chain strategies (42.2%) with 59.2% of responders indicating their operations were significantly affected..

Additionally, answers and a large number of comments on the survey questions point to the overall adaptability of the industry and that we can expect a renewed surge in the demand for technology solutions, with 67.6% of the survey takers indicating they will invest in technology..

The survey was answered by Carriers, Logistics Providers, Freight Forwarders/NVOs, Consultants, Shippers/BCOs (95.7%) and other (4.3%) industry professionals across job levels – C-Level, Director/Top Management, Middle Management, and Operations and brought out some key indicators that will inform the future course of global supply chains..

Sharing information and understanding best practices will enable the industry to come together and combat this as a whole. If there was ever a time for collective efforts, it is now..

 

So here are the results of what the industry said in the Supply Chain Impact Survey

 

On Impact

COVID-19 impact on operations59% of survey takers said that their operations had been significantly affected. 25% were moderately affected while 14% were ‘somewhat affected’.

Only 1% maintained they were not affected while a negligible number stated they were unsure.

Survey participants were asked to check multiple options with respect to affected operations. 70% experienced volume decline, 61% were hit with transit delays, 50% with delays from port to customers and 40% with lack of capacity.

Furthermore, based on additional comments, operations suffered from other factors such as, “late or non-payment from clients, canceled credit lines from physical carriers”, “inconsistent volume demand” and “increased costs”.

COVID-19 communication

With respect to communications with their shipping and supply chain partner, 35% experienced delayed communications while 10% stated they received scarce communications, while 4% were unsure. The majority (51%) were receiving real-time, ongoing communications.

 

On Preparedness

COVID-19 preparedness of industry54% stated they were somewhat prepared, 35% were not prepared at all, 7%  were completely prepared and 3% were unsure.

When quizzed about adaptability, 37% stated that they experienced a partial supply chain shut down with significant freight delays.

36% had a few glitches that delayed freight by a few days, 14% stated the supply chain was able to adapt with no problem, 4% were unsure and 9% experienced a complete supply chain shut down.

COVID-19 supply chain adaptability

Through this data, it is established that the supply chain has had to adapt to the ongoing crisis.

92% of survey takers experienced some disruption but managed to adjust to it in varying degrees. This points to the fact that there was some flexibility built into global supply chains and shipping operations.

However, it might be imperative to look at the best practices of those (14%) that seamlessly adjusted to this unprecedented situation.

COVID-19 partner's preparedness

About their shipping and supply chain partners, 55% stated their partners were somewhat prepared, 32% said they were not prepared, 9% stated their partners were fully prepared and 4% were unsure.

 

On Recovery

COVID-19 impact survey - change in supply chain strategies

A whopping 42% of survey takers said they would change their shipping and supply chain strategy based on their experience with the Coronavirus pandemic, 29% said they may change their strategy, and 29% said they would not.

Survey takers expressed they would invest in technology (67%), employees (33%), assets (26%), acquisitions (13%) and other aspects (12%) as part of their recovery efforts post the pandemic.

The felt need for technology solutions was echoed by a large number of survey takers who said:

  • “Need improvement in terms of transparency and flexible supply chain to allow change based on real time events/impacts”
  • “Logistics still needs to undergo a technological transformation (long queues at the European borders this month highlighted again the lack of visibility during transport and lack of reliable ETA).”
  • “[E]ven though we are already online [i]n most of [the] activities, we will still need to enhance our IT capabilities.”
  • “More online remote procedures to be included. manual processes to be seriously looked into for alternatives.”
  • “Integrate more digitized workflows”
  • “Technology upgrades, work from home capability and preparedness are needed”
  • “[W]e hope after [the pandemic] to invest in technology to deliver and match our customers’ requirements”

COVID-19 supply chain impact survey results

As the present indication for the future, a majority of the survey takers expect to recover from the hit they have taken due to the pandemic. They were given multiple options to gauge how the recovery from this would be. Only 2% expect not to recover. 43% expect a slow recovery, 38% a moderate recovery, 19% a fast recovery and 3% were unsure.

COVID-19 recoverability

It is realistic to expect a slow recovery from this pandemic, considering the major hit that the global economy has taken. However, we expect technologies to play a crucial part.

The unusually high number of comments (over 200) by the survey takers strongly reinforced this.

There is a call for “more online remote procedures to be included”, “improvements in terms of transparency and flexible supply chains to allow change based on real-time events/impacts”, “better manpower management systems”, “development of the greater route and mode options for ocean and hinterland transport”, “better forecast predictions”, “enhancement of IT capabilities”, “integration of more digitized and paperless workflows”, “implementing eBL”, “creation of tools to anticipate disruptions”, “the introduction of automation”, etc.

These were just some of the opinions, expectations, and new world views the participants had.

While the new normal is something that we will all have to get used to, it is refreshing to see that the industry is not down and out but accepting of the hit that it has taken and ready to take the required actions to bounce back stronger and more secure than ever before!

 

About Ocean Insights: Founded in 2012, with offices in Europe and Asia, Ocean Insights is a leading ocean supply chain visibility provider that supplies real-time tracking data and market intelligence for the logistics industry to improve supply chain visibility and transparency in ocean freight.

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