UP FRONT 01
EDITOR’S LETTER
AS WE ROLL TOWARDS the end of 2021, it is traditional to look back at the year just gone and consider what we have learned from
exactly what logistics experts are used to dealing with. Meanwhile, shippers and receivers have been changing
it. Unfortunately, the global pandemic but the brakes on a lot of
their behaviour in response to the problems they are facing.
business, especially the business of getting around and meeting
In conversation with executives from both ends of the chain
people. Recently, event organisers have seemed more optimistic
recently, it seems clear that many are looking at existing
that things are changing and that we can begin to get together
sourcing and inventory procedures and finding that they are
again, though the sudden emergence of the Omicron variant of
contributing to greater uncertainty. The result of that review is
Covid-19 has prompted the re-imposition of travel restrictions.
a turn towards on- or near-shoring of supply and, very often,
So, to answer the question posed above: what we have learned
multi-sourcing. Buyers can no longer rely on a single supplier,
from the year 2021 is that we don’t really know what’s round
given the assorted barriers that have grown up, and are
the corner.
seeking active alternatives.
That uncertainty was clearly evident in global supply chains,
Consequently, supply chains have had to adapt and the
disrupted all around the world by a wide range of different factors.
flexibility and expertise that logistics service providers can
Covid restrictions caused closures and personnel shortages,
offer has become more valuable. We are hearing more and
varying from place to place and often creating sudden bottlenecks.
more that the traditional annual bidding round is now giving
There was the well-documented shortage of ocean shipping
way to longer-term relationships between shippers and
capacity, reflecting a significant increase in cargo volumes to meet
logistics firms. That is something that the logistics side of
consumer demand at a time when the measures put in place by
the bargain has been calling for for many years and it is rather
the liner operators to address over-capacity (following the Hanjin
ironic that it has taken such a crisis for the shipper side to see
bankruptcy) were starting to have an effect. There has also been
the other point of view.
the growing impact of the chronic shortage of heavy goods vehicle
Will that sort of relationship last once we get back to
drivers, evident in all the main mature markets; this has been
normal? Will we, indeed, ever get back to ‘normal’? It seems
a threat for decades but it is now reaching a crisis as existing
unlikely in the near term and what the past year has taught
drivers retire or are tempted away to the increasingly well paid
shippers in particular is that just-in-time is no longer
jobs in home delivery transport.
enough to secure their commercial viability: ‘just-in-case’
All this has been going on in an environment of high energy
is the approach to be taken. The balance has shifted now
prices alongside an overriding commitment to sustainability and
and logistics providers at last have an equal place at the
the approaching energy transition. That has given all those involved
negotiating table.
in the supply chain an endless stream of headaches – but that is
Peter Mackay
WWW.HCBLIVE.COM
