Companies with foreign trade operations impacted by the shipments and containers delays and fight shortages of labor at ports the continuous contagions of COVID-19, as well as delays in processes within the supply chain; from supplying countries to congestion in the maritime traffic in ports.

Containers are taking much longer to unload and leave the ports, and the newly arrived ships wait a week or more to download. Importers often do not have no choice but to leave the containers stacked at the port or at the warehouse parking with no workers available to download them without there being a place to put them. This aggravates the situation because there are too many containers stopped, the basic components of the world trade are out of circulation.

Challenges

The world has experienced historically troubled logistics like never before, full of situations that have hindered global trade processes. We can clearly identify three situations that have impacted logistics chains seriously leading us to situations in which we currently find.

• The first problem was in 2020, when the Covid-19 pandemic closed factories, businesses and stores, which resulted in the increase of online commerce.
• The second began in the spring of 2021 when companies had to deal with inflation, talent shortage and materials, transportation problems, and maritime transport disorganization due to the excessive demand created by the online trade-oriented world.
• We are currently experiencing the third problem, a Christmas season without precedents in which everything has been seen interrupted, from where the how far should products go and by whom going to sell, has been interrupted.

These situations have exposed the Challenges existing in the business operations and have boosted the capacity of organizations to adapt to dramatic changes in supply and demand.

Since the ‘80s, companies dedicated themselves to looking for suppliers of their components throughout the world with the aim of reducing production costs, as a result of the aforementioned pandemic, they saw cut those channels what also worsened the situation that we are living.

This has exhausted the capacity and flexibility of a global system based on more than 20 million containers.

An important point is the freight rates, which have increased in cost as a result of all these events, and currently, we can quote a container that previously it could be shipped from Asia to North America for $1,500 USD and now, due to the impact, the rates have risen to $4,500 USD in the last weeks. This expense inevitably shifts to retailers and then unfailingly to consumers.

Businesses have limited options, most of which require pay more for less: container shipping and air cargo could be from three to four times more expensive.

Technology and Automation

A new wave of technology investment has been unleashed that focuses on developing intelligence, resilience, and agility in the supply chain to respond better to events, risks, and opportunities.

Digital technologies are expected to be at the center of the next normal, enabling organizations to better meet the needs of their customers, improving the agility and responsiveness of operations without increasing the costs. During the crisis, many companies have been able to overcome the shortage of personnel through the automation of processes or the development of self-service for customers.

Digital approaches can transform the customer experience and increase significantly business value when applied end-to-end.

There is a change in the technological approach of the supply chain with applications, for example:

• Management system transport (TMS)
• Planning system Of demand
• Management system warehouse (WMS)

In the coming months, companies should apply new sources of data and models are driven by artificial intelligence in the development of products, supply chains, and sales lifecycles.

Supply chains demonstrated levels without agility precedents and flexibility to face challenges of the pandemic and other macroeconomic factors; the chains from supply differentiated from today are more beyond simple logistics efficient, and must meet the purpose of organizing as follows:

◦ They must understand the value of the client.

◦ Invest in technology that boosts resilience, agility, and innovation.

◦ Promote innovation and celebrate successes in relation to criteria ASG

57% of companies in the US plan to increase their investment to improve the resilience of the supply chain. In addition, the companies are investing in technologies that promote autonomy and intelligence of the chain’s supply.

Additionally, companies are investing in technologies that drive supply chain autonomy and intelligence. Both factors are key catalysts of resilience, by allowing supply chains to detect and adapt faster to changes or disruptions.

Supply Chain Resilient

To face these challenges, work must be done to have a chain more resistant and able to adapt to future adversities that will undoubtedly, they will continue to impact logistics operations.

A resilient supply chain must have the following features:

1.- PLANNING

Faced with unforeseen events, capacity to anticipate crises and run drills to improve response to these.

2.- LOCATION

Prioritize location and regionalization of the suppliers and the activities of production.

3.- DIVERSIFICATION

Prioritize the diversification of supplier base, production centers and transportation options.

4.- VISIBILITY

Emphasize sharing data with partners and have absolute visibility on the network of supply.

5.- AGILITY

Prioritize flexibility in production and intake processes decisions and show agility to time to transition towards new business models.

6.- TRANSPARENCY

Regarding costs throughout the chain from supply: accounting with an overview clear of the risks associated with low cost strategies.

7.- SUSTAINABILITY

Prioritize sustainability in supply chain to weather disturbances in the planes environmental and regulatory and satisfy the changing customer expectations.

Trends for 2022

Purpose Driven Business Integration

It uses the emerging force and current focus in its supply chain not only to promote “green” and people-related programs but also to consolidate the marketing budget to finance these initiatives and be part of the value proposition for clients and investors.

Customer-driven business transformation

Transform your supply chain to support new value propositions for the customer by building capabilities to enable models commercial "as a service", as well as solutions for commercial customers and consumers.

"Digital First" supply chains

Evolve your transformation journey to become "digital first" using technology to enable smoother customer experiences and decisions more automated and insightful in managing products and supplies at scale.

Prepare for a talent shortage

Everyone is learning to do more with less, which will continue to delay companies looking to increase their capacity.

Find ways to maximize time and resources by using technology that allows supply chain professionals to focus on tasks more strategically.

The capacity crisis will continue

At this time there is too much demand and little capacity, a problem that has been getting closer for years and has only been exacerbated by the growth in shipping volumes.

Investing in infrastructure could improve the way forward.

New ships, new trains, new planes, new ports are needed and improved supply chain infrastructure to alleviate much of the crisis capacity.

Conclusions

It has been 2 years of hard work and coordination to face the new challenges that took us all by surprise, we are getting to know our points weaker and at the same time, we are creating alternatives that not only help us to face the current problem, also the situations that we may not be seen but that at some point another external phenomenon will put them in front of us.

Investment in technology will be vital from this point on, it will allow us to have new and better connections with partners and to know the status of our operations, we need to seek to automate processes but without neglecting the human capital that also requires investment to be in constant training and growth.

That is why we recommend that you start by identifying areas of opportunity internal and looking for tools that support the capture and verification of data.

Create a single repository to help track everything, try to integrate your systems follow-up and partners so that everyone works the same and latest information.

We must continue to strengthen relationships with partners, ask the suppliers and partners your needs, talk to representatives of the carriers to ensure capacity and discuss your seasonal volume, ask how companies measure their capabilities and try to better understand the issues current, all of this plays an important role in the safety of operations

At MDI Trade Solutions, we recommend that you review and evaluate your processes that allow correcting but above all preventing possible failures in your operations in order to strengthen your company and be one step ahead of the competition and challenges that we will surely continue to face.