Field Study: Global Supply Chains — Part 1
Investigating the current state and future of global e-commerce supply chains
This post is part of a five-part Field Study by Alpaca exploring the current state of global e-commerce supply chains and the opportunities we see ahead. Use these quick links to read the entire series: Part 1: Global Supply Chains, Part 2: Delivery, Part 3: Cross-Boarder, Part 4: Returns, Part 5: Conclusion.
If I told you that this Field Study was completed over a year ago in May 2021, would you believe that the key takeaways are truer today than they were then?
As I wrote about at the beginning of the year, #supplychainissues are at an all-time high and we are seeing first-hand how fragile our logistics networks are. 11% of goods globally are PHYSICALLY waiting on container ships at port — meaning they are not unloading, nor loading, nor… moving. This stat continues to blow my mind.
Setting the Stage
In 2020 and 2021, as a result of quarantine, factories as well as retailers cut capacity. Shipping companies assumed there would be a shipping downturn, so they waylaid ships to side line productive capacity. Instead, Chinese shipping lines were re-routed everywhere, full of PPE to places that didn’t have lots of goods to ship back (to LatAm, Africa, etc.). So shipping containers sat empty at exotic ports instead of going back to China for more re-filling. Rates sky-rocketed, and delays compounded.
However, as NYT reporter Peter Goodman laid out:
Life didn’t stop in pandemic. We outfit homes into offices; entertained children at home for the first time; outfit basements into gyms; which produced a surge of orders for factory goods, most of which are made in China.
And since brick-and-mortar has been in decline for years, we shopped online. In the US, the rise in e-commerce penetration during the first half of 2020 was equal to the last ten years. Global e-commerce sales are expected to hit almost $5 trillion this year.
Today, on top of the mismatch of global cargo routing and rising e-commerce demand, layer the war…
