Supply Chain 2012, pt. 2: Cliff's view

Supply Chain 2012, pt. 2: Cliff's view

by Cliff Lynch
23. December 2011 12:04

S.S. 2012: Panamax

As we approach the new year, I believe there are several things with which supply chain managers should be concerned.

  • First of all, the economy will continue to plague supply chain activities. With unemployment fluctuating between 8 and 10%, supply chain costs increasing and resources decreasing, managers will be challenged throughout 2012, and probably beyond.
  • The infrastructure in the country continues to deteriorate, and Congress seems to be in an almost-hopeless turmoil and conflict over jobs, spending and other issues all tangled up with infrastructure. I don't see this getting a lot better. The major risk is that in an effort to create more jobs, we won't focus on what infrastructure issues are the most critical.
  • I believe the motor carrier industry will continue to be negatively impacted by fuel costs, capacity issues and driver shortages, resulting in higher rates for most shippers. Although diesel fuel costs are down somewhat, the end result will be higher costs in 2012. Capacity will be affected by both equipment and driver shortages. Look for higher rates in 2012.
  • On a brighter note, rail service continues to improve, and 2012 will bring more diversions from highway to rail, primarily intermodal.
  • With the Panama Canal expansion proceeding on time and on budget, there will be a continuing expansion and retrofitting at Gulf and East Coast ports in order to accommodate the new post-Panamax ships. Many industry observers believe we also will see port expansion in the Caribbean, where larger ships will be unloaded, with their loads dispatched on smaller vessels to various U.S. ports.

The last two or three years have been tough, but through it all, the best and brightest in supply chain management have been creative and innovative, and have accomplished more with less. I don't see that changing.

Cliff Lynch is Principal of C.F. Lynch and Associates. With over 50 years of experience in supply chain management, he has authored a prolific collection of books and articles on the industry.

What are your predictions for Supply Chain 2012? Please share your questions and comments!

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