Supply Chain Disruption in 2021

Logistics is coordinating and moving material and other resources from one location to another. Transportation of products or goods from plants to customers affects the cost of the product. Water or ship transportation mode is beneficial for bulk items such as oil, coal, and chemical products. From the article "Container Ship Backlog Grows Again at the Port of Savannah," a backup of container ships from one of the U.S. East Coast's busiest ports has swelled to 40 vessels causing a bottleneck and supply-chain disruptions during the critical peak shipping season in the summer of 2021. Georgia's Port of Savannah is the fourth-largest U.S. gateway for seaborne container imports. Griff Lynch, executive director of the Georgia Ports Authority, says that they more than doubled the demand they had pre-pandemic on the import side. This year, the market has been surging earlier than usual because major retailers moved up their back-to-school and holiday imports to beat ongoing supply-chain challenges. The Savannah backup, which handled close to 3 million containers in 2020, indicated seaport congestion in the U.S. The Georgia Port Authority claims Savannah's insufficient yard capacity to hold containers triggered the backup. There is a $34 million expansion of the port's storage capacity." We have one of our berths under construction. Had we had that berth completed, or if it weren't under construction, we wouldn't have anything near this backlog," said Lynch.

As a result of the influx of goods, retailers, and logistics operators are challenged to find space to store the flood of goods that have swamped warehouses and cost a fortune in their budgets. Due to experiencing container backlogs in 2021, warehouse owners are looking to add storage capacity for goods in their store networks and distribution centers to keep inventory on hand long-term in fear of running out of supply. Prologis Inc, the world's most prominent owner of warehouses by square footage, market analysis expects an increase of 800 million square feet of space to accommodate excess inventories. As of August 2022, 300 million square feet are on lease.

"Surging Retail Inventories Are Swamping U.S. Warehouses", mentioned strategies retailers apply to mitigate the lack of storage space for their overwhelming inventories.

1. Stretch out buying cycles. Retailers bring in goods early to ensure shelves have enough stock during the critical fall sales season.

2. Retailers bulked up orders. The shift from "just-in-time" inventory management to "just-in-case." Retailers prepare in case of supply-chain disruptions like what transpired in 2021.

3.Retailers were stacking up at seaport docks. Warehouses near gateways were utilized, which caused the clogging of distribution networks across the U.S.

4.Trailers used for storage. The overflow strategy resets distribution operations to keep the supply chain running amid disruption in transportation networks and challenges in forecasting demand.

In conclusion, the articles "Container Ship Backlog Grows Again at the Port of Savannah" and "Surging Retail Inventories Are Swamping U.S. Warehouses" describe the logistical challenges from transportation, warehouse, and retailer supply chain disruptions and how retailers coped with situation. It continues to remind us that Covid-19 has not only caused a healthcare crisis but a retail boom that led to a surge of imports since 2020, resulting in logistics operations at sea and on land scrambling.

References:

1. "Container Ship Backlog Grows Again at the Port of Savannah" by Akiko Matsuda, Logistics Report, Wall Steet Journal, July 2022.

1. "Surging Retail Inventories Are Swamping U.S. Warehouses" by Liz Young, Logistics Report, Wall Street Journal, August 2022.

Question: Give examples of organizations or companies that were affected by the supply chain disruption in 2021. How did they respond to the supply chain disruption? Did they use any of the strategies mentioned in the articles discussed? Would you support their approach? Explain why or why not.