What is the future of the supply chain?

The COVID-19 pandemic has disrupted every aspect of day-to-day life, including the supply chain and the business operations of ports and terminals.

There is much talk of what the long term consequences will be, in particular how the supply chain will be affected.

It has been suggested that it will be permanently altered, with distribution warehouses having to be moved in order to serve a greater number of the population. The Port of Oakland speculated as such in late-April 2020 as it reeled from the worst effects of the crisis.

However, there is also the possibility that it could bring the supply chain closer and rapidly accelerate the use of smart or exponential technologies as stakeholders, including ports, explore ways of processing ever greater amounts of cargo.

Equally, it could push the port-centric logistics (PCL) concept and force ports and supply chain stakeholders to rethink the role of the port within global logistics. Making ports themselves the centres of storage and logistics, a chief component of PCL is looking more like a viable solution.

Doing so would mean ports would have to work closely alongside cities to cut emissions and mean the transportation of goods is a clean as possible. This concept was explored recently in PTI’s webinar series, and the relevant webinar can be viewed here.

A recent survey from Ocean Insights suggested that we could be about to witness a revolution in supply chain management and collaboration.

Almost half of shipping and freight professionals (42%) will change their supply chain strategies and 67% see investment in technology as way of fundamentally changing their operations post-pandemic, according to Ocean Insights’ survey of stakeholders.

The aforementioned increase in use of new technologies was also mentioned in the survey, which noted that more “online” and “remote” innovations were needed as it became more important to process “change based on real-time events”.

Josh Brazil, Chief Operations Officer (COO) at Ocean Insights, told Port Technology International (PTI) the COVID-19 crisis had “dependent we still are on physical human presence to maintain manually driven supply chains.”

“When humans cannot be physically present there has to be either a virtual channel for them to remain in contact or digitized automation process to back up when crises occur.”

Will the supply chain become more collaborative?
As mentioned above, supply chain stakeholders, specifically those in the maritime sector, will have to find new ways to work together. Brazil said he was “pessimistic” about this happening on its own and that it would probably require action from governments to initiate it.

While this may not immediately happen in Europe or North America straight away, there is the possibility that it could do so in regions with fewer terminal concessions.

The point that governments may require operators to include logistics plans that allow clean collaboration and ease of use for the end customer was raised in the PCL webinar.

A huge catalyst for any change in the supply chain will be the actions of ports. As PTI has reported many times, ports themselves are digital nodes and constantly acquire huge amounts of data. How they use this data will be vital for their future and the supply chain.

This topic, the value of port digitization, will be the subject of the next webinar in PTI’s series and you can register here.