In our last “Freight Freak” blog, John B. answered questions about whether the trucker protests were affecting the supply chain. Here below are some of John B.’s observations:
“The Canadian blockades at the borders have, ironically, largely impacted the trucking industry and its cross-border drivers. The protests have added hours of transit time for drivers both US and Canadian — including unpaid time waiting in traffic for many — and slowed down the operation of carriers. Keeping in mind this blockade shut down the busiest crossing between Canada and the US, which is one of the main line supply chain arteries for many raw materials and products desperately needed for both countries.” Read the full article HERE.
Since that time, how things have changed in the world! The trucker protests seem to have disappeared from view and we are looking at an entirely new situation. Recently an article in the Harvard Business Review asked, “How the War in Ukraine Is Further Disrupting Global Supply Chains.”
Since John B. is our AMS expert, we have asked him for his view on the supply chain – is the political turmoil having an effect? What are the issues and observations from inside the industry?
Here is his response:
“Anyone who has had to rely on the transportation sector lately is seeing unprecedented cost increases across all sectors. The major issue prior to the Ukraine crises was that covid caused a huge lapse in production of goods while facing a surge in demand. This was compounded due to labor shortages, increase in the cost of oil and the lack of operational assets to move goods across all points of the supply chain infrastructure.
“As merchants became desperate to re-stock it caused the perfect storm within the industry to raise prices across the board. We felt we were finally starting to see a slight softening in the transportation sector early 2022. Then the Ukraine crises and sanctions began, thus more oil and energy fears and shortages, which re-kindled the already record high cost increases once again. With some of the major producers of energy, food sources and fertilizer now removed as major exporters, the disruptions are becoming even worse with no relief in sight for possibly the next couple of years.
“Therefore, with our transportation industry’s huge thirst for oil to fuel trucks, trains, planes and ships, don’t count on cost reductions any time soon unless we could unleash a replacement for foreign fuel supplies soon. The continuation of inflation may not stop certain markets, of course we all have the main primary hierarchy of human needs, but it does come to a point of the elasticity of demand for such products as well.”
Wow! Thank you John B. for telling us how it looks within the industry. We very much appreciate the industry professionals and associates, striving to excel in extraordinary times.
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About the Freight Freak: John Bevacqua is the VP of Logistics at AMS Fulfillment. His area of excellence is in creating distribution and fulfillment operations that function as a capable interface between suppliers, retailers, and wholesale distributors. His experience includes developing and leading FedEx/ Kinko’s Distribution Services into the FedEx post acquisition, USA Wireless Technologies, and a top Logistics Management company. He has also worked with third party fulfillment companies, preparing him for his current position with AMS Fulfillment.