Global Supply Chains Face ‘Hangover’ as Excess Demand Softens
It’s not even the morning of New Year’s Day and already there’s talk in supply-chain circles of the 2023 hangover.
“There’s a reliability hangover,” Bill Seward, the new president of supply-chain solutions at United Parcel Service, said in an interview. He was referring to lingering headaches from more than two years of shipping congestion, delivery disruptions and component shortages around the world.
“Many, many companies still feel chagrined and burned by what happened with regard to accessibility,” he said.
While ports may be opening a bit and transportation rates may be coming down, there’s still plenty of angst. “A lot of senior execs feel very kind of battered by the last two years with regard to reliability and there’s a heavy emphasis on the ability to de-risk and to be able to flex in different ways,” Seward said.
For instance, UPS is seeing reshoring trends shift demand for its services to markets like Mexico, and the courier company is trying to adapt with the changes.
“Costs of manufacturing and those things are definitely not coming down the way they’d like,” he said. “So you’re seeing shifts in terms of where manufacturing will happen and we’re seeing it in our business. We are definitely seeing this shift to different geographies.”
Seward was among several contacts who spoke or emailed in recent days with some views on the year-ahead outlook.
