While most contiguous U.S. states continue to experience intense heat and seasonal drought, a new season has begun in the supply chain. While some are shaking off their COVID-19 strategies, others are adjusting COVID-prompted changes into new business plans to address the latest global disruptions. Here are some recaps of the latest market changes to guide supply chain professionals in their quarterly business plan shifts.
On June 29, FedEx revealed "Network 2.0", a new long-term strategy focused on collaborating with FedEx's three previously separate entities: FedEx Express, FedEx Freight, and FedEx Ground. According to Supply Chain Dive, "By fiscal year 2027, FedEx expects to operate 100 fewer stations, eliminate more than 10% of pickup and delivery routes overall and reduce millions of linehaul miles driven." While the upfront costs of this change are estimated to be $2 billion, FedEx hopes to see that amount returned annually as operations become more efficient.
After less than optimal Q1 numbers, "Amazon has delayed or canceled plans for at least 13 facilities in its distribution network this year," Supply Chain Dive reported. While this change will have varied impacts across the U.S., slowed e-commerce growth has revealed that Amazon needs to grow into its current warehouse distribution network before launching. Time will tell whether Amazon turns its focus in the interim toward the evolution of tech or other ways to decrease expenses.
Despite not reaching a contract agreement by the expected deadline, West Coast dockworkers and employers have chosen to continue operations. Supply Chain Dive reported on this situation, sharing, "With the current contract expired, clauses not to strike or invoke lockouts are now void." While this mutual agreement to continue work outside a union contract is rare, freight accounting professionals and logistic managers are relieved across the board.
In June, UPS announcedit had successfully negotiated a two-year contract extension with its flight crewmember's union. The pilots have until July 12 to review the contract, followed by a three-week ratification vote through August 3, according to a UPS press release. While this doesn't address what to do if an item is damaged in shipping, shipping companies will appreciate knowing that the parcel giant will continue to fly.
While the supply chain management market continues to grow across the board, 2022 research indicates the healthcare market in particular will account for $6.42 billion annually by 2030 and is expected to register 15.4% CAGR during the forecast period (2022–2030). Business logistics will play a vital role in getting healthcare products to their final destination.
The Russia–Ukraine war and other 2022 supply chain disruptions have led to a completely different food environment from pre-pandemic life. On June 1, 2022, a USDA press release expressed the need to "transform the food system to benefit consumers, producers, and rural communities by providing more options, increasing access, and creating new, more, and better markets for small and mid-size producers." By learning lessons from the last few years of old, the USDA will mitigate risks through data and strengthen the national food supply chain.
As diesel prices remain high, a law that the majority has no opinion on was brought up by the minority with polarizing views. FreightWaves reported, "The Jones Act requires that all vessels carrying goods between two U.S. points be American-built, -owned, -crewed and -flagged." While some believe that waiving the Jones law will lower gas prices, others firmly believe it is not worth the intangible cost to the economy.
As passenger planes pull off record-level flights, air cargo is quieting down. Although the summer months tend to be quieter for airfreight, Air Cargo News said, "The fall comes as air cargo faces up to a weaker demand environment, with volumes declining in March, April, and May as the war in Ukraine continues and inflation puts the breaks on consumer spending." The declined rates have yet to impact current freight rates so high that many wish they were freight invoice errors.
As real-world droughts increase the probabilities of wildfires, analytical deficits do the same in business, creating a cycle of constantly putting out fires. Supply chain professionals can get out of this cycle by teaming up with business intelligence experts to gain the analytical knowledge they need for current and future business fires. Start a conversation with Intelligent Audit today to learn how they can fireproof your business for whatever disruptions are ahead.
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