Over the last few years, shippers have experienced supply chain volatility, making it difficult to adjust and absorb supply chain disruptions. Disruptions can occur at every touchpoint in a load’s journey, causing even more disruptions in a knock-on effect. The best defense against supply chain disruptions is to prepare in advance. Sudden changes no longer result in cascading problems and ensure long-term sustainability.
Shippers are nervously assessing their supply chains going into 2023 as more disruptions will happen. They are seeking solutions to the challenges ahead, which include:
- China's Zero-COVID U-turn and the resulting infection rates
- Rising operational costs and falling rates
- The threat of global conflict
Ocean freight container tracking offers benefits such as:
- Ocean container tracking helps build resilient supply chains with real-time data on the location and status of their cargo.
- Consolidated data is easy to read and provides actionable insights to manage disruptions, delays, and supply chain risks.
- Complete visibility helps shippers track and manage inventory, respond to demand fluctuations and identify cost savings.
Let's explore the most challenging supply disruptions ahead for 2023.
End of China's Zero-COVID Policy
With the advent of COVID in the city of Wuhan in late 2019, the Chinese Communist Party under Xi Jinping enacted its Zero-COVID policy to keep the country at zero cases to create a political win for Xi. Unfortunately, the ongoing strict social distancing measures, closures of public venues and workplaces, contact tracing of cell phones, and strict hygiene standards failed. While the policy achieved its goals of reducing the spread of the virus and keeping infections very low, it crashed by causing tremendous pandemic fatigue among the Chinese.
The resulting large-scale protests throughout China at the end of 2022 brought the policy to an abrupt end, resulting in massive infection rates in a country without effective vaccines and a population with no prior immunity.
Many are wondering what 2023 holds for China.
Impact on Global Trade
The return to pre-COVID life in China in 2023 has had a massive impact on global supply chains, with companies caught off-guard by the sudden shift. In addition, organizations need help adapting their production and distribution systems due to rising infections forcing factories and logistics hubs to close.
These closures have led to delays and increased business costs, resulting in decreased customer satisfaction due to the longer delivery times. This disruption could be felt for years, making resilient supply chains critical.
Increased Need for Resilient Supply Chains
Facing the fallout from the end of Zero-COVID and the uncertainty ahead, shippers are reinvesting in technology to create supply chain resilience.
Tinglong Dai and Christopher S. Tang wrote in Barron's, "In the long term, firms should continue to invest in new technologies that can enhance supply chain resilience, such as digitized manufacturing, robotics, and automation. These technologies can help firms quickly adapt to changes in the supply chain and minimize disruptions."
As Zero-COVID Ends, Shippers Find Freight Visibility in Ocean Container Tracking
Shippers must invest in ocean freight visibility to face the fallout from China's sudden abandonment of the Zero-COVID policy to ensure their cargo delivery remains reliable and efficient. Visibility allows shippers to monitor cargo in real-time, identify delays, and move quickly to take the appropriate actions to minimize impacts and ensure the shipment arrives on time.
The data gained from real-time visibility provides shippers with actionable insights into their supply chain, making it easy to identify potential risks or supply chain changes before it's too late.
New Year, New Regulatory Pressure
The Ocean Shipping Reform Act of 2022 allowed the federal government to require logistics capacity to share data with the Federal Maritime Committee, which oversees U.S. ports. The act intends to counter the growing monopolies on the U.S. West Coast.
FreightWaves: "The largest overhaul of shipping regulations since 1998, the legislation broadens the regulatory powers of the Federal Maritime Commission intending to promote U.S. exports while reining in ocean carrier market power that has strengthened over the last 25 years, primarily through the rise of vessel alliances."
Since the law's enactment, only some shippers have shown the requisite ability to report the required metrics to the FMC.
As stated by Elizabeth Lowe, a partner with the law firm Venable, a firm specializing in maritime shipping:
"A lot will be addressed as part of the rulemaking process (on demurrage and detention, another provision required under the law), but in the meantime, it puts people in limbo due to some unanswered questions. So there will be an adjustment period for carriers to determine what is required of them and what shippers should expect from the carriers."
As shippers contend with the federal government's pressure for more transparent logistics following the COVID-19 supply chain crisis, the push for readily accessible data only increases.
With Regulatory Pressures Increasing, Shippers Turn To Ocean Container Tracking Software for Intuitive Analytics
Improved consolidation and processing of raw shipping visibility data into actionable analytics provides shippers with the necessary insights to make quick, informed decisions, ensuring compliance with the Ocean Shipping Reform Act. In addition, that data will be vital for the OSRA dispute process.
This data-driven approach will help shippers develop more significant insights into their logistics activity, helping them identify potential problems and take the necessary actionable steps to remain compliant with the law.
The Spectre of Conflict Haunting Vital Trade Lanes
According to experts, the increasing tensions between the U.S. and China due to China's growing influence in the South China Sea potentially increase the chances of shipping disruptions in the Strait of Taiwan. As one of the world's busiest shipping lanes, the impact on trans-Pacific trade could be disastrous.
In FreightWaves, John Paul Hampstead wrote,
"I expect the U.S.-China rivalry to express itself through gamesmanship in several spheres, including technology, international law, diplomacy, trade practices, and military posture. The uncertainty and chaos of this changing trans-Pacific paradigm — from decades of decreasing friction and lower costs to a new trend of increasing friction and higher costs — will drive unpredictable and disruptive shipper behavior similar to that seen in 2018, 2020, and 2021. Stockouts will be followed by inventory gluts and vice versa, as importers pay too much to move their goods that are stored too long and arrive too late, compressing gross margins."
This geopolitical risk presents importers and their freight providers with the need to foster links between their operations teams and strategic planners. Moreover, with tariffs, embargoes, and shifting economic relationships on the table, shippers must identify emerging market trends — which necessitates proper use of all available data.
When Conflict Makes Predictions Impossible, Shippers Turn To Ocean Container Tracking for Unparalleled Flexibility
Global conflicts and increased variability require ocean container tracking, so shippers have the flexibility to navigate the market and remain competitive in vital trade lanes. A crucial facet of container tracking is exception notifications that come with real-time shipment monitoring.
Real-time monitoring gives shippers the ability to access detailed information on the location of their containers and when they arrive, empowering them to plan ahead and not be behind the disruptions. As a result, they make informed decisions, avoid delays, reduce detention and demurrage fees, and rest easy knowing their goods are safe and secure when they track ocean containers.
In Challenging Times, Shippers Choose Ocean Container Tracking Through Vizion
Ocean container tracking isn't an option in 2023; it's necessary to build resilient supply chains and take power away from disruptions. The shift from Zero-COVID, increasing regulation, and potential global conflict require increased visibility, analytics, and flexibility. Shippers need to know the when and where of their containers and have access to holistic data to confront exceptions head-on, save money, and meet customer satisfaction demands.
Vizion's API gives shippers access to the latest container tracking innovations without needing an expensive overhaul of their existing tech stack.
Vizion's API is a cloud-based platform that fosters parties' communication, provides ocean exception alerts, and presents valuable insights with data enrichment add-ons.
Booking a demo with Vizion today is the first step to taking control of supply chains and making them resilient.