Tanker getting ready to go under the Crescent City Connection. (iStock)
Businesses rattled by high logistics costs and freight bottlenecks over the past several months are extending the workarounds they adopted and taking on new strategies to ease supply chain pain in the new year.
According to The Wall Street Journal, some are extending their use of stopgap measures, such as storing goods in idle truck trailers, while others are making deeper efforts to wring additional capacity from strained distribution networks or to trim costs by sourcing products and raw materials closer to home.
With the seasonal rush fading, the tactics that companies undertook during 2021 remain pressing because shipping rates are expected to climb further in 2022 as robust U.S. consumer spending pushes ongoing strong freight demand and the supply chain crunch.
“They are looking at every way they can to reduce their own costs so that they can make the equation work for them from a profitability standpoint,” says Lisa Ellram, a professor of supply chain management at the Miami University Farmer School of Business in Oxford, Ohio.
Big operators with deep resources such as Home Depot and Walmart have taken expensive steps such as chartering ships, but midsized and smaller companies have fewer resources to draw on. Read the full story.