Industries that were hopeful that 2022 product distribution would be better than 2021 are in for a hard awakening. Manufacturers and warehouses are now jumping through additional hoops this year to get products into their customers' hands. Consumers are still finding store shelves bare and suppliers are scrambling to provide inventory to fill the void. Adding new to the already ongoing problems in the industry is proving to be very challenging for manufacturers, warehouses, and retailers alike.
Continuing Supply Chain Backlogs
Yes, United States ports are still experiencing freight backlogs. However, this supply chain problem isn’t just about full containers of components and/or products sitting on the dock or ships waiting for their turn to be unloaded at sea. Manufacturers are also playing catch-up and must fill backorders first before dealing with the newest requests. Production of goods imported into the U.S. has again slowed. In fact, some cities have now shut down factories due to spikes in COVID transmission in China and the United Kingdom. Add to this the Chinese New Year, bottlenecks are bound to remain high.
Labor Force Issues
You need people to move products in the supply chain from every angle. 2020 industry shutdowns due to the COVID-19 pandemic led to millions of people finding themselves without a job. In many cases, those former employees did not return to their most employers when health restrictions were lifted. As a result, the service, retail, shipping, manufacturing, warehouse, and distribution industries began to experience worker shortages globally due to the shift in the labor force. "The warehouses and distribution centers, those staff were laid off," said Port of New York and New Jersey deputy Bethann Rooney in a recent Cheddar News article. "They went on unemployment and it's been very slow to get them back into the workplace," she added.
Massive sick-outs are now happening from the worldwide spread of the Omicron variant, with even newer variants emerging. The impact has been felt in all industries, leaving companies with no choice but to use overworked skeleton crews or reduce hours of operation. As current employees choose to pursue different career paths, referred to as the 'Great Resignation,' manufacturers, warehouses, and other industries have experienced major gaps in sustainable labor. In an article from The Seattle Times, owner Stewart Leonard Jr. of northeast United States supermarket chain Stew Leonard’s stated, “Everyone is hit with a shortage of labor...Some because of the Great Resignation, but a lot of it is the Omicron surge.”
As mentioned above, labor shortages in the shipping industry led to fewer trucks for available distribution methods. Transportation leaders have been working tirelessly to increase the number of truck drivers to pre-COVID numbers by offering bonuses and other incentives. According to the American Truck Driver Association's 2021 Driver Shortage Update, one million truck drivers will need to be replaced over the next decade, The forecast is based on gender and age, as well as expected freight growth trends in driver demographics.
And then there is the unrelenting torrential weather. From tornadoes and unprecedented rains to ice and snow, 2022 has witnessed record-breaking storms and floods that have shut down many regions of the U.S. The higher frequency and increasing magnitude of these weather patterns are being seen from coast to coast, making winter months even more challenging and causing additional shipping delays.
Your company doesn't need any additional operational stress during these already trying times. Let ASC Software help you with an evaluation of your warehouse management system software today.