Coping with supply chain disruption

DURING THE past 12 months the cost for businesses to ship one container globally rose by eightfold, although this has since dropped back to 2019 levels. While pressure has eased slightly as consumer demand has returned to pre-pandemic levels, there are other threats still facing our supply chains. 

Cyber-attacks can easily be overlooked due to lack of awareness on the scale of the issue. It is crucial that government and the sector acknowledges the danger cyber-attacks can inflict and look at better securing IT systems. Due to a lack of antivirus software, the supply chains are becoming increasingly vulnerable and so it is vital that logistics businesses stay alert to these threats and seek both professional support and the ongoing advice provided by agencies such as the National Cyber Security Centre.

In 2022, The Business Continuity Institute (BCI) carried out its annual survey for the top five causes of disruption in supply chains. Unsurprisingly the top response was loss of talent and skills, combined with a labour shortage within logistics and other related sectors. Logistics UK is calling for action to address skills shortages in the sector. For example, by amending the apprenticeship levy into a training levy, it will allow more flexibility as apprenticeships have a vital role to play in the development of a skilled workforce and solving the sector’s long-term skills shortage. In a 10-year projection – published by the World Economic Forum in its annual survey for 2022 – it was noted that all potential risks were environmental and climate change related. Logistics UK believes that these reports highlight the vital role government must take in these issues to ensure that their efforts are aligned with the sector’s determination and dedication to improve resilience within supply chains.

Decarbonisation also has potential to cause disruption to supply chains as industry looks to shift freight to lower carbon transport modes, as well as optimise the use of logistics assets – both in vehicles and warehouses – and improve energy efficiency to reach decarbonisation targets. Some of the ways this could be achieved is through diversifying the supply base, relaxing ‘just in time’ pressures and in turn increasing the amount of inventory in our supply chains and extending order lead times. Industry has its own part to play in addressing the challenges of decarbonisation, both in its own operations and in supporting the wider transition of the economy. The logistics sector has taken enormous strides forward in recent years and must be supported to go further.

Jonathan Walker, head of cities and infrastructure policy, Logistics UK 

For more information, visit www.logistics.org.uk