Bill Brooks, vice president of North America transportation with Capgemini, delves into the multiple causes of the congestion that’s currently plaguing global supply chains, and speculates on some possible short- and long-term solutions to the crisis.
How did we get into this mess? It comes down to multiple causes, says Brooks. Among them is the failure to make adequate investments in systems and infrastructure. Ten years ago, he suggests, businesses were diverting too few of their profits into capital investments for the future. Then COVID-19 came along to reveal the weaknesses in those under-funded systems.
Ports, too, under-invested in their facilities over the years, both in terms of physical equipment and software systems. They found themselves unable to handle the volume of cargo generated by the new generation of mega-containerships, which are too big to call at all but a handful of ports worldwide.
Surface transportation was lacking as well. The trucking industry was suffering from a shortage of drivers years before the pandemic hit. And many warehouses lacked the modern information systems that drive innovations in machine learning and automation. Each part of the supply chain had a hand in setting the stage for the current crisis, which was then made all too real by the pandemic and its resulting surge in consumer purchases of hard goods that flooded the system.
As a result, shoppers can expect to see a limited supply of goods on the shelves this holiday season and even in the months beyond. Brooks notes some short-term measures that can be taken by logistics providers, such as increasing the number of hours during which ports are in operation, but real progress toward solving the crisis won’t be seen for many months, and will depend on new investments in infrastructure from both public and private sources.
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