How to Manage Your Logistics During the Supply Chain Crisis in 2022

April 25, 2022

Globalization has brought many benefits, including a rapid rise in trade. But, it has also increased our interdependence. 

Supply chains are more complex than ever before and are often stretched across several continents; these long distances can cause delays and hurdles that increase costs for businesses. 

Additionally, some countries rely on imports for critical goods such as food or medicine, for which supply disruptions can have serious consequences. 

What Is the Supply Chain Issue Right Now?

Logistics and transportation have long been dependent on the infrastructure of surrounding countries. Therefore, when war breaks out, there’s a ripple effect that can shut down much of the global supply chain. 

During the current 2022 Russia-Ukraine war, the ports of Odesa and Mariupol are at the center of global attention. Because these two cities along the Black Sea coast were captured by pro-Russian separatists, supply ships from worldwide could not safely dock and unload their goods. 

As a result, billions of dollars worth of food supplies are trapped at sea and may go bad before reaching port. The chaos caused by these events has had ripple effects across international markets; in some cases, manufacturers have halted production due to shortages of raw materials or uncertain demand for their products. 

This situation has left much of Europe and America scrambling for resources. As global demand for goods like oil and gas increases, the prices have risen dramatically. 

The resulting instability has led to shipping delays and a steep rise in the price of raw materials. This is causing trouble for manufacturing companies, retailers, and wholesalers struggling to deal with the logistics chaos.

Why Are There Supply Chain Issues?

The global e-commerce market has grown rapidly over recent years. While new distribution models have emerged along with e-commerce, many companies still rely on old-fashioned supply chains for shipping goods from suppliers to stores and customers. As a result, supply chains are increasingly congested. 

Logistics issues have plagued many companies, leading to lost revenue and unhappy customers. Research shows that consumers return nearly 40 percent of all goods sold online because they were delayed or damaged by poor logistics management.

Here are three key reasons why so many companies struggle with logistics today-

  1. A lack of transparency

There are numerous systems throughout each step of a company’s supply chain, from receiving orders to shipping packages. This makes it difficult for companies to know where their shipments stand at any given moment—and when delays occur, they often don’t know who or what caused them. 

As a result, businesses can end up paying higher costs than necessary due to unexpected expenses like overtime wages and additional shipping fees. 

  1. An outdated approach 

Today’s technology has made it easier to connect with customers and suppliers around the world. Yet despite advances in digital communications, most companies still rely on outdated approaches to manage their supply chains. 

Many firms still use spreadsheets and email to track shipments, which creates room for human error—not only do employees need to enter data manually into multiple systems, but they also run a greater risk of mistakes due to fatigue or distraction. 

  1. Lack of visibility 

Even if a business knows exactly where its shipments are located, it might not be able to see how those shipments are being handled once they leave its warehouse. 

While some companies will provide updates via text message or phone call, others won’t notify you until days after an issue occurs. 

With such limited visibility into how your shipments are handled, you could be missing out on opportunities to save money and boost customer satisfaction.

Global Supply Chain Issues 2022

According to a recent report by McKinsey, by 2020, 50-70% of businesses will experience at least one disruptive event or economic slowdown. In 2022, around half of companies are predicted to suffer extreme disruption as a result of failure to plan for volatile markets.  

Businesses that do not proactively manage these issues risk losing control over their supply chains, resulting in greater costs and revenue losses, declining customer satisfaction levels, and ultimately increasing their exposure to financial risk. 

Additionally, a report from analysts at The Boston Consulting Group states that environmental issues such as increased extreme weather events and climate change will cost global businesses $2.5 trillion by 2050. Supply chains will be hit particularly hard, with damage caused by extreme weather alone projected to amount to $1 trillion in that period. 

Shipping companies are not immune—even major ocean carriers have been forced into debt by fuel prices so high they could not cover their operating costs, not including maintenance or new investments in infrastructure required by changing conditions. 

With shippers struggling under rising fuel costs, they have an incentive to seek ways to reduce shipping expenses while remaining compliant with increasingly stringent environmental regulations. 

Relationship Between Logistics and Marketing

Let’s go back to Marketing 101: the four Ps of marketing are product, price, place, and promotion. Place or distribution is the process of making a product or service available to the consumer. Logistics is the backbone of Place. In an e-commerce world, logistics plays a huge role in customer satisfaction – how fast your purchase reaches you has a direct impact on customer satisfaction.  

Is your brand ignoring the fastest-growing consumer group in the United States? 

Marketing is not just a business function but a strategic tool that should be considered and incorporated throughout all levels of an organization. Marketing ensures brands and organizations stay relevant in today’s turbulent marketplace. In a world of personalized and digitalized world, brands need to stay relevant through a coordinated effort.

One way that companies can combat these issues is through effective marketing strategies. Brands can offer personalized offerings by developing a solid presence on relevant platforms. 

How Can FrontAd Help You Market Your Existing Inventory to the South Asian Niche?

South Asian consumers outspend their American counterparts for Fast-Moving-Consumer-Goods (FMCG) by more than 21 times. Asian Indians, the largest group of South Asians, are the most affluent consumers, with an estimated $212 billion to spend. 

Understanding the niche and communicating effectively with this growing consumer will help brands deliver relevant products through targeted messaging. 

The top five categories among South Asian consumers in FMCG purchases are:

  • Specialty eastern food
  • Coconut water
  • Rice
  • Hot tea
  • Salad/cooking oil

As manufacturers and retailers struggle with inventory and supply chain issues, FrontAd can provide accurate and actionable insights to leverage marketing to ease logistics challenges.