After the COVID-19 pandemic, new challenges emerged such as rising geopolitical tension, global conflicts, a shift of the global supply chain, climate change, decarbonization and the expansion of AI, just to name a few. All have direct impacts on global trade, the supply chain and shipping.
Because of the significant supply chain disruptions during the pandemic, a strategy of “China plus one” has been adopted by many. This shift was marked by the significant decline of Chinese exports to the US in the first half of 2023 and losing the title of top spot for the first time in 15 years. Mexico and Canada took the two top spots, respectively, amid decoupling between the world’s two biggest economies. In addition, US imports from the Association of Southeast Asian Nations reached the highest figure for the same period, doubling the region’s share of US imports over the past decade. Furthermore, Apple and other prominent OEMs are shifting some of their manufacturing capacities from China to Vietnam and India. This trend is likely to continue.
Will the above developments cause a modal shift in the US? By how much and how to respond? Container carriers, intermodal carriers, ports, intermediaries, shippers and logistics service providers face multi-dimensional challenges. Strategically, they need to carefully assess the magnitude of the changes in the global supply chain and trade patterns and have risk mitigation plans to deal with potential disruptions. Tactically, they should optimize capacity deployment and adjust potential realignment of alliances while identifying feasible paths to decarbonization.
Given the experience of pandemic, each stakeholder plays an indispensable role in maintaining normal functioning; they need to collaborate and share information via AI technology. This way the efficiency and resilience of the supply chain can be improved and enhanced.
Disclaimer: The views expressed in this commentary are the author’s own, not representative of USMMA and Maritime Administration.