Investor expectations continue to influence supply chain decision-making

On Nov. 28, 2022, Apple stock dropped 2.6% as unrest at a factory in China led to a Bloomberg report that the company could see a production shortfall of 6 million iPhone Pro units.

The Ever Given cargo ship got stuck in the Suez canal in 2021, backlogging 369 ships at the time and -disrupting $9.6 billion worth of trade.

Yemen-backed Houthi attacks on maritime shipping in the Red Sea, as part of the fallout from the Israel-Hamas war drags on, continue to result in longer transit times as ocean carriers seek to avoid the area.

Ongoing drought conditions in the Panama Canal have created transit delays and limits on how many ships can cross the canal in any given day.

What do all of these things have in common? First, they represent disruption to supply chains, which adds to cost and complexity. Secondly, and more importantly, they impact the bottom line. Either the shipper is absorbing higher shipping costs, or the customer is being asked to wait for their item, which also may be more expensive. In many cases, it is both.

David Correll and Kellen Betts authored Massachusetts Institute of Technology’s annual State of Supply Chain Sustainability 2023 for the Center for Transportation & Logistics. While the report dives into the sustainability of supply chains, it cuts across many aspects of supply chain. And, as the authors note, the pressure to improve supply chain sustainability is growing, especially from investors.

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