If there’s one constant in the world of supply chain management, it is that the industry is continually changing. Each day brings another “breaking news” story that requires some degree of attention: The economy. Natural disasters. Brexit. They all affect the industry. It can be tricky to determine what deserves our immediate attention and what can be stashed away for another day. But some significant concerns are impacting the industry that shouldn’t be overlooked: hiring shortages, tariffs, and U.S.-China trade relations. All three are A-1, above-the-fold, water-cooler-discussion-worthy issues that deserve more attention and time than a cable news scroll can provide.
Here’s a look at what you need to know:
Supply Chain Management Hiring Issues
It’s no secret that the supply chain management industry is in the throes of a labor shortage. Logistics Management magazine has been covering the issue for years and wrote about it extensively back in June. Today the problem is becoming acute at every level of the industry:
- The American Trucking Associations reports that the trucking industry is struggling to find drivers.
- Material Handling & Logistics recently covered a report by an international industrial real estate firm. It said that the United States would need more than 450,000 additional warehouse and distribution center workers by the end of 2019– a number that wouldn’t likely be met.
- The U.S. unemployment rate has remained at near-historic lows, according to the Council of Economic Advisers.
These all add up to a critical skills shortage for an industry with demand for services increasing rapidly (thanks, e-commerce). And the tight labor market doesn’t show any signs of loosening up any time soon. That might be the real takeaway–it is likely time to start investing in automation, innovation and out-of-the-box recruiting.
The Effects of Tariffs on Supply Chain Management
On Aug. 1, 2019, President Trump announced that he would be implementing a 10 percent tariff on $300 billion in Chinese imports. It was just the latest headline in a long list of concerning news stories about the president’s approach to seeking fair trade agreements with countries around the world. The news was not well-received by the supply chain management industry.
One of the most significant issues with this plan is that the ongoing trade war with China would likely continue well into the future, and that will undoubtedly impact supply chains. Supply chain professionals will need to re-think the way business is done. This may include passing along increased costs to consumers, bringing more trade and production back to the U.S., and considering more cost-effective ways to move products.
The big takeaway right now is that the tariffs look like they will be around for a while–or at least until the U.S. and China can work out their differences.
U.S. and China Trade
In case there was any question about the effects of the U.S.-China trade war on the supply chain industry, consider the following from the Financial Times, “US-China trade war pushes global exports into contraction.”
This isn’t the greatest news for the industry. And some say that only Congress will be able to end the war. Until then, it may be time to look for ways to reshape the way you do business.
If you’d like to explore innovative ways to keep your business running smoothly during these rocky days, connect with JIT Services today.