Navigating the Waves of Change: Supply Chain Predictions for 2021

Introduction

As we bid farewell to a year marked by unprecedented challenges, the global supply chain industry stands at a crossroads. The events of 2020 have reshaped the landscape of international trade and logistics, forcing businesses to adapt rapidly to survive. At FreightAmigo, we believe that understanding these shifts is crucial for success in the coming year. In this article, we'll explore five key predictions that will likely shape supply chains in 2021, and how our Digital Logistics Platform can help you navigate these changes.

1. The Pandemic's Lingering Impact on Economy and Consumer Behavior

The COVID-19 pandemic has accelerated the shift towards eCommerce by up to five years, dramatically altering consumer behavior and business operations. As we move into 2021, the volatility of a W-shaped recovery seems more likely, especially with the resurgence of infection rates and uncertainty surrounding additional stimulus measures.

Key considerations for businesses include:

• Consumer spending patterns and economic confidence
• Shifts in product category demand
• Evolving consumer habits and preferences

Our prediction: Businesses will need to compete fiercely for relationships with suppliers and secure limited carrier space. Success in 2021 will hinge on:

• Staying attuned to rapidly changing customer demands
• Reinventing business models with robust eCommerce strategies
• Maintaining agility to overcome obstacles and find new competitive advantages

At FreightAmigo, our Digital Logistics Solution is designed to help you stay ahead of these changes. Our platform provides real-time market insights and flexible shipping options to adapt to evolving consumer demands swiftly.

2. Tariffs and Trade: A Continuing Balancing Act

The trade relationship between the US and China remains complex, with the "Phase One" trade deal disrupted by the pandemic. As we enter 2021 with a new US administration, uncertainty persists regarding future trade agreements with China, the EU, and other trading partners.

Our prediction: Tariffs are likely to remain steady in the near term. Any changes will likely be tied to political considerations and key administrative appointments. Additionally, increased scrutiny on product origins, as evidenced by the recent US Customs and Border Protection order on cotton products from Xinjiang, China, may lead to more frequent inspections and potential supply chain disruptions.

FreightAmigo's customs expertise and data-driven insights can help navigate these complex trade environments, potentially reducing customs inspections and associated fees.

3. Ocean Freight: Capacity Management and Rising Rates

The ocean freight market in 2020 was characterized by blank sailings, capacity management, and unexpectedly strong demand, leading to record-high rates. As we move into 2021, these trends are expected to continue.

Our prediction: High spot rates will influence fixed rates and affect contract negotiations in 2021. The current equipment shortage is likely to persist into the early part of the new year. Capacity management will remain a key strategy for carriers, even if demand dips.

To navigate these challenges, businesses should consider:

• Preparing for potential cost increases or seeking deeper supply-side savings
• Adapting to increased global trade lane competition
• Being prepared to pay premium prices to ensure goods movement

FreightAmigo's Digital Platform offers comprehensive ocean freight solutions, including real-time rate comparisons and booking capabilities, helping you optimize your ocean shipping strategy in this challenging environment.

4. Air Freight: Tight Capacity and Evolving Priorities

The air freight sector faces an even greater capacity crunch than ocean freight. With passenger travel not expected to return to pre-COVID levels until 2024 at the earliest, belly cargo space remains limited.

Our prediction: Capacity will remain extremely tight, with rates potentially moving even higher than 2020 levels. Key factors to watch include:

• The impact of vaccine distribution on available cargo space
• Increased reliance on freighters and conversion of passenger planes to cargo configuration
• Continued investment in pharmaceutical distribution capabilities
• Persistent ground handling capacity bottlenecks

To succeed in this environment, businesses should invest in forecasting tools and maintain close communication with sales teams to anticipate needs accurately. FreightAmigo's Digital Logistics Platform provides real-time air freight tracking and booking capabilities, helping you navigate these capacity constraints effectively.

5. The Rising Importance of Data and Technology

In the face of ongoing disruptions, timely data and advanced technology will become increasingly crucial for supply chain management in 2021.

Our prediction: Real-time data analytics enabling critical decision-making will become even more valuable. Companies that leverage technology to run their supply chains remotely and efficiently will have a significant advantage.

FreightAmigo's Digital Logistics Solution offers:

• One-stop dashboards for comprehensive supply chain visibility
• Real-time shipping maps and analytics
• Tools for tighter collaboration between shippers and suppliers
• Advanced analytics to reveal trends and patterns

These features empower you to manage disruptions effectively and make data-driven decisions to optimize your supply chain.

Conclusion: Preparing for 2021 and Beyond

As we look towards 2021, it's clear that the COVID-19 pandemic will continue to be the primary driver of supply chain dynamics. Even in the best-case scenarios, businesses will need to adapt to permanent changes resulting from the "COVID Economy."

To navigate these challenges successfully, companies should focus on:

• Leveraging technology for better visibility and decision-making
• Utilizing tariff and trade advisory services to navigate complex regulations
• Implementing flexible transportation strategies
• Using tools like duty and carbon calculators to meet financial and sustainability goals

At FreightAmigo, we're committed to providing the Digital Logistics Solutions you need to thrive in this evolving landscape. Our full-service, one-stop Digital Platform combines artificial intelligence, big data, and innovative technologies to accelerate logistics, information, and cash flow, ensuring a hassle-free and enjoyable logistics experience.

As we step into 2021, let's embrace the challenges and opportunities ahead. Together, we can navigate the waves of change and chart a course for success in the new year and beyond.