Paul TessySenior Vice President, Purolator International
The State of Supply Chain Disruptions
B2B and B2C companies must prepare for the increase in scale and frequency of global supply chain disruptions. They cause major financial impacts costing 45% of annual profit for companies over a 10 year period, with disruptions that are a month long or longer occurring every 3.7 years.
Both McKinsey & Company and Gartner have indicated prioritizing visibility, agility, resilience, and sustainability to effectively navigate supply chain disruptions, highlighting the importance of a trusted shipping logistics partner that can improve organizational readiness.
In 2024, supply chains across North America have been significantly impacted by a series of disruptions, including labor shortages, port delays, and transportation challenges and of course the constantly unpredictable weather. Recently, my colleagues Stacey Cummings; Director of Marketing, Laurie Weston; General Manager of eCommerce, and Frank Jacketti; Director of U.S. Districts at Purolator International, held a webinar to help businesses understand the key disruptions and how to streamline efficiencies to address and overcome disruptions.
Watch the full webinar below:
Here, I outline the state of supply chain disruptions today, and how partnering with Purolator International can increase your capabilities to face disruptions, including 5 key actions for immediate response.
Top 7 Causes of Supply Chain Disruptions
- Geopolitical conflicts and Global Health Crises. The Russia-Ukraine war, US-China tensions and pandemics have added challenges to the global supply chain, halting the speed and flow of materials and goods, and changing the economics of trade.
- Inflation and financial hardship. Inflation has increased the cost of materials, labor, energy, and transportation. Organizations are feeling the impact – in August 2024, Pitney Bowes agreed to liquidate its e-commerce unit in bankruptcy.
- Extreme weather events and resource scarcity. In Spring 2023 heavy rains and flooding in California, Nevada and Utah resulted in 20-30% decrease in shipments. In 2023, prolonged wildfires in Canada delayed deliveries in Chicago and New York, and reduced visibility impacted shipment speed by 75% in some areas. Businesses can expect these disruptions to increase in the future.
- Port congestion. With 2024 marked with labour unrest, extreme weather events, and container explosions, port congestion continues to be a challenge in the supply chain. With more than 90% of global merchandise trade (by volume) transported through sea routes, poor port performance in 2024 translated to entire schedule disruptions for shipments.
- Labour disruptions. In 2024, across the US and Canada, labour disruptions impacted ports, air (Air Canada’s pilot strike), road (UPS and CPC strikes), and rail (strikes with both major rail suppliers in Canada: the Canadian National and Canadian Pacific railways). This caused losses in sales through inventory and shipping delays.
- Technology and Automation. According to Forbes, as of 2024, more than 75% of supply chain executives are unprepared to observe and predict disruptions to the supply chain. Based on a survey of 250 supply chain, inventory, and planning executives, this report cites many are still manually tracking vs using automation solutions. This is despite the desire to invest in proactive supply chain risk management (92% of respondents), signaling a gap in organizational priorities and existing capabilities for business growth and advancement.
- Changing consumer demands and expectations. As demand for convenience continues to increase, this intersects with market disruptions and considerations, meaning businesses have to prioritize future-proofing for supply chain disruptions or sacrifice their customer base. In fact, 66% of US consumers have indicated that convenience (comfort, speed, accessibility, and availability) is a key factor in purchase decisions.
5 Key Actions for Immediate Response to Supply Chain Disruptions
As a leading provider of courier, freight, and supply chain management solutions, Purolator International is the shipping logistics provider for companies facing supply chain disruptions that need immediate response. Building on insights from Gartner, here are the 5 key steps to take:
- Assess the current state of operations, contact stakeholders and engage in contingency plans. Ensure there are several key supply chain partners integrated into your systems so you’re not subject to any single partner’s variability. To keep on schedule, look for “mission critical” services that expedite shipments faster with greater flexibility.
- Prioritize what shipments and supplies are critical and how your shipping logistics partner can find alternate routes. This includes specialized attention and care for time-sensitive products and “best flight out” trackers for real-time route building.
- Leverage data through tracking and monitoring to make strategic decisions and manage inventory. This includes task-driven alerts and up-to-date monitoring of heightened shipment visibility.
- Collaborate with teams and your shipping logistics partner to create solutions and streamline initiatives. Look for 24/7 customer support that is dedicated to your business with an expertise in mission critical shipments, cross-border expertise, and global inbound support.
- Communicate transparently with customers, partners, and stakeholders on current situations and timelines for solutions. Seek out active monitoring of the logistics process and end-to-end visibility that can then be shared externally.
As one of the most trusted brands in shipping logistics, Purolator International is the service that delivers your promises on-time more often than competitors. Purolator Mission Critical is a tailored solution that understands your business priorities and provides the support for your emergency and time-sensitive shipments, so you are ready to meet the unexpected.
Learn how to maintain operational efficiency in the face of supply chain disruptions. Watch the full webcast.
In the next article in this series, I’ll be sharing 4 key levers for long-term optimization for agile and resilient supply chains. For more information on how to build supply chain resilience, download our whitepaper.
If you need a supply chain solution or want to connect to chat about US supply chains, I welcome you to connect with me.
Written by Paul Tessy, Senior Vice President, Purolator International