Manufacturing companies are increasingly moving their activities close to sales and sourcing locations. And more are planning to do so this year. That’s one of the conclusions of an interesting survey conducted by the prestigious U.S. Logistics Management Magazine.
The survey was recently conducted among several hundred supply chain managers and executives from different parts of the world. As the respondents admit, the supply chain situation is still a cause for concern. The chaos and uncertainty initiated by the pandemic and then the war in Ukraine is still affecting the fluidity of supply today.
The numbers speak for themselves. As many as 71.8% of companies face supply chain disruptions on a daily basis, and nearly 58% are struggling to provide capacity for products in transit. Of particular concern are ocean freight prices, which as recently as mid-2022 were up to eight times higher than before the pandemic. (Container rates are now falling, but the situation at ports continues to create uncertainty, especially in view of the Zero Covid policy at Chinese ports). Nearshoring, or locating production close to markets, mentioned at the beginning, is the market’s response to the problems of ensuring continuity of supply and rising transportation costs.
52.3% of companies have decided to do so, but the process is still ongoing. Especially since nearly 60% of managers felt the effects of the war in Ukraine in their companies, which shook the supply market badly. On the other hand, an optimistic signal from the market is that 70% of companies anticipate further growth in global demand for consumer goods. As a result of difficulties in finding a carrier, nearly 20% transported fewer goods in 2022, although 40% of companies say they transported more goods or at least the same amount.