With increasingly complex global supply chains, companies must be proactive in dealing with the possibility of disruptions to maintain a competitive edge. Supply chain management today is more like a giant chessboard than a series of linear steps. Failing to anticipate disruptions can result in far-reaching consequences.
For example, consider the ripple effects of recent global conflicts, COVID surges, and climate-related events, including the Panama Canal drought causing bottlenecks. These issues, not to mention any labor, factory, and port disruptions, can easily impede the flow of goods worldwide.
Fortunately, shippers can avoid many problems caused by supply chain disruptions by increasing proactivity through visibility. Companies can better navigate the complexities and uncertainty they face for their container shipments through ocean freight visibility.
As Disruptions Increase, Shippers Demand Solutions
According to Resilinc, from January 2023 to June 2023, supply chains saw a 3% YOY increase in disruptions, categorizing, “The ten biggest disturbances reported during the first half of 2023 were factory fires, mergers & acquisitions, business sales, leadership transitions, factory disruptions, legal actions, labor disruptions, cyber-attacks, port disruptions, and recalls.”
These categories are diverse, as are the risks and the likelihood of disruptions occurring. In general, companies can take the following approaches to mitigate their risk.
- Labor Disruptions – Operational diversification can mitigate risk, but companies should also keep informed of any labor tensions that could escalate and cause immediate problems.
- Factory Disruptions – Similarly, diversifying production sites can help businesses continue operations even if one site faces disruptions.
- Mergers & Acquisitions (M&A) – Rather than a fast merger of supply chain operations, a phased approach can help ensure a smooth transition.
- Leadership Transitions – In preparation for any significant leadership change, a detailed transition plan should be in place to ensure continuity and prevent misalignments.
- Port Disruptions – Companies should focus on staying informed and proactive through enhanced visibility data, while they should also have a plan in place to diversify and reroute shipments when needed.
- Legal Actions – This is a highly individualized category where companies must be aware of and manage their unique risks.
- Cyber Attacks – Companies should implement cybersecurity tools and protocols, train their employees, and ensure regular backup of critical data.
For many of these categories, diversification, preparedness, and staying informed are the name of the game. However, as mentioned, some risks require more attention than others. For example, disruptions caused by M&As and legal action will be less frequent than labor disruptions or port disruptions. In fact, the latter stands out as one area where companies often have a significant risk to their supply chains and yet lack a system to protect themselves. That is unless they have the right technology in place to enable ocean freight visibility.
Beyond Location: End-to-End Ocean Freight Visibility Enables Proactivity for Ocean Freight Disruptions
Ocean freight visibility offers companies real-time data on their shipments’ journeys. This gives them more than a shipment's location. It brings the ability to manage disruptions before they escalate into significant issues.
Opportunity: Optimizing Rerouting and Alternative Routes
Any type of port congestion—due to weather, port strikes, or sudden spikes in demand—can necessitate the rerouting of shipments. In these situations, time is of the essence. Visibility tools can help companies identify where their shipments should be routed. They can analyze data from various options and choose the ones that get shipments to their destinations with minimal delay. Decisions to reroute improve speed as well as cost-efficiency. By being able to navigate around disruptions, companies can reduce other costs like demurrage charges and expenses associated with managing operational disruptions.
Opportunity: Leveraging Data Analytics for Exception Insights
The value of data goes beyond immediate updates. Emerging patterns can provide valuable insights. With data analytics, companies can detect trends and use this to understand their supply chain vulnerabilities. By examining past causes of exceptions, companies can strategically make decisions that prevent their recurrence. This might involve adjustments in routing, partnering with different carriers, or reconsidering the timing of shipments. When grounded in this type of data analytics, operational decisions can be proactive versus reactive, and ensure smoother supply chain operations in the future.
Opportunity: Improving Communication
Supply chains are not closed systems; they depend on numerous changing variables around them, including the actions of other companies. Increasing visibility for one party increases visibility for those they share updates with, benefiting the supply chain on multiple fronts — like a vehicle with all-wheel drive versus only two-wheel drive to navigate tricky situations. When there is a supply chain issue, real-time updates to all parties empower them to take action and lessen the overall impact.
Stay Prepared with Ocean Freight Visibility from Vizion
The range of challenges we’ve seen so far in 2023 illustrates the need for a proactive approach. Companies cannot prepare for every unique possibility individually. Instead, they must have systems in place that make them more resilient and able to handle anything new that comes their way.
Vizion offers the detailed level of ocean freight visibility that shippers and freight forwarders need to be prepared for everything from one-off exceptions to wider disruptions. They can track their own containers to improve their operations and monitor port performance data industry-wide for rerouting decisions, relying on data analytics and updates to know sooner when situations require their attention in any circumstance.