The global supply chain has been under stress as the high demand for product delivery has only increased over the last few years. Furthermore, as businesses import more products into the USA, supply chains and cargo ships have struggled to keep up and make timely deliveries. While COVID-19 certainly changed the supply industry, there are primarily 3 critical challenges facing global supply chains. Here’s what you need to know.
Virtually every industry is dealing with labor shortages, and global supply chains are not left unaffected. In fact, if trends continue, then in the next 8 years, there may be dealing with a shortage of 85.2 million workers, according to one study.
Without enough qualified employees, supply chains are forced to delay deliveries. Even if delivery is made, it often will sit in port much longer than necessary without employees to unload it.
The shortage continues down the chain with too few workers in the long-haul trucking industry, empty warehouses, and retail stores with limited hours of operation. The ripple effect of the labor shortage has resulted in several issues with goods making it from start to finish, keeping items off the shelves, and away from consumer reach.
One of the most critical challenges facing global supply chains is the bottlenecks holding ships hostage. A bottleneck is a point of congestion that is caused by a hiccup or issue somewhere along the supply chain.
Unfortunately, for the global supply chain, numerous issues fit this description. One example is single-sourcing.
When a company receives all of their product from one source, then anytime that source is disrupted it will delay the supply chain. This happened several times during the height of COVID-19 as companies and manufacturers were forced to shut down operations. This made it impossible for many businesses to get ahold of their product, and the supply chain “bottlenecked” as suppliers sat there, waiting for more products to be produced.
Every step of the supply chain utilizes equipment. From loading and unloading trucks and boats to organizing the product in a warehouse, equipment is needed. However, due to the supply chain bottlenecks, there is a shortage in many of the materials used to construct equipment, making it difficult for companies to acquire new machinery as old assets break down.
Many materials such as steel, copper, aluminum, and plastic are imported from other suppliers and simply can’t meet the demand needed to update and replace equipment. Unfortunately, this challenge affects numerous industries, from HVAC to medical.
How Insurance Protects You From Supply Chain Delays
One of the biggest financial losses to result from global supply chain issues is seen in the food industry. As shipments of imported food are delayed, many companies are receiving food that has already spoiled and can’t be used for retail. Without insurance, many companies are experiencing great financial loss and are having a hard time bouncing back.
By partnering with a company like Coughlin Insurance Services, you can ensure your business is covered if your goods are spoiled upon delivery. You shouldn’t have to pay the cost of problems in the supply chain, and with our services, you won’t have to! Reach out today to find out how you can protect yourself and your company from potential loss!
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At Coughlin Insurance Services, we believe that our customers should be valued and taken care of. We aim to provide quality service and meet the needs of our clients by providing businesses, especially those in the food industry, with the insurance they need to protect their assets. If you’re a business looking for insurance, don’t hesitate to reach out for a free insurance quote today!