As we kick off 2022, I find myself reflecting on the past years and the impact they have had on the supply chain as a whole, from maritime through to the distribution centers where the containers that transit the globe eventually find themselves. No one has been free from the challenges of the past two years, and no one will be immune from the hurdles we’ve yet to surmount. The supply chain industry must evolve and rise to meet these challenges head-on.
COVID-19 Pandemic
I think you’d all agree with me when I say that I wish COVID weren’t on this list anymore. Unfortunately, the reality has turned out to be that COVID is here to stay, and we are going to have to learn to adjust. In my previous outlook, which I penned in 2020, I talked about unpredictability being the new norm for maritime and intermodal operators; nearly two years on, this couldn’t be truer.
The logistics industry has emerged as a “front-line” industry. Throughout the pandemic, professionals from across the supply chain have stepped up to ensure that goods and commodities continue to transit the globe, ensuring there is food on the shelves of our local grocery stores and all the other essentials on which we depend. Without all of our front-line workers, whether they are the crane operator at the port or a nurse or doctor, we’d not be fairing as well as we have throughout the pandemic. To all of you, I say thank you!
That said, not everyone has fared well over the past two years. We’ve lost countless small businesses around the globe, the arts are suffering, and that’s all before we even mention the over five and a half million individuals who’ve lost their lives globally. My heart goes out to all those families that have lost loved ones to COVID and must find a way to endure. As I write this, we’re knee-deep in the fifth wave in Germany, where the data is showing that the latest variants are becoming less severe, which could prove to be the silver lining we’re all hoping for. COVID remains a test of each of us individually and for all of us as a collective global community.
Disruption
In fact, “disruption” was arguably the keyword for the maritime industry in 2021. In mid-2021, I gave a keynote at the Container Terminal Automation Conference, where I discussed the short-, medium-, and long-term disruptions that are increasingly impacting the supply chain. From the Suez Canal blockage and COVID, all the way through to shifting global markets and the resulting trade flows, the status quo in logistics is no longer static and decreasingly predictable in the long term.
Climate change, cybersecurity, and global collaboration (or lack thereof) are all driving disruptions globally. The global supply chain is doing its best to absorb the ebbs and flows, but the impacts of trade wars, real wars, politics, organized cyber-attacks, and increasingly frequent severe weather events are taking their toll on the logistics network. Month by month, year on year, they are slowly compounding into an ever-increasingly more chaotic and unpredictable global supply network.
Resiliency is Crucial
AI- and OR-based decision support systems position maritime, intermodal, and distribution center operators in the best position to effectively respond to this sustained disruption. I need to be clear, technology on its own is not the solution. Technology paired with a deep market understanding and a clear strategy to improve decision-making resilience is the solution. But it is super-important to note that these types of solutions must be built into standalone solutions or added onto existing digitalization solutions.
Digitalization is fundamentally moving forward. Data is the foundation of strong businesses today. And it must be the foundation that the supply chain is built upon. As an industry, we need to take care not to create “digitalization voids” or “black spots” within the logistics industry that are often overlooked as low ROI potential for digitalization. The ROI for a small element, or tree within your operational forest, is likely less tied to that tree and more likely tied to the big picture, the forest. The results that can be achieved through data science projects that help you see the path through the forest because they know where all the trees are, are arguably worth every data point you add.
In Closing
I opened by saying that as an industry, we must rise to meet the challenges outlined head-on. Setting aside my personal views on the impact that COVID has had on us all and looking at the supply chain from the perspective of a solutions provider that works across the whole of the supply chain, I must admit that I’m excited by the challenges that lie in front of us. We have the tools, the solutions to address many of the challenges we’re facing today, and as an industry, we’ve proven time and time again that we’re resilient and strong. Now, with the need to act, we can begin forging a future for the industry that many of us have envisaged for so long. And I, for one, look forward to taking the next steps together with you all.
Dr. Eva Savelsberg
Senior Vice President
Logistics Division