Economic factors, including inflation and possible recessions are the top challenges Australian companies face this year regarding their supply chain. These economic factors can cause changes in consumer demand, leading to overstocking, understocking, or supply shortages.
As a result, Australian companies are enhancing their supply chain management and procurement strategies. In 2024, businesses are adopting innovative approaches to ensure operational continuity and resilience during economic downturns.
See what companies are investing in, and how these investments can combat supply chain disruptions. We make it our business to keep you updated on what’s happening in global supply chains. Here are the top nine supply chain trends that are transforming 2024.
Trend 1 – Pricing and Schedules
Ocean carriers are under immense pressure, grappling with unpredictable schedules, reliability and pricing due to disrupted major trade routes, including the Red Sea. These challenges have created volatile ocean freight rates and significant supply-demand imbalances. While there is hope for medium-term resolution as underlying demand softens, carriers are cutting capacity to maintain sustainable rates, impacting schedule reliability.
To address these issues, we work with customers to offer alternative routes and transport modes. Communication of volumes and timeline requirements is essential for improving logistics planning.
Trend 2 – Carbon Pricing
Earlier this year, the European Emissions Trading Scheme began pricing emissions for vessels over 5,000 gross tonnages traveling to, from and between EU ports, with more carbon charges expected later this year. Countries like China, Australia and Singapore are implementing similar systems, but at a lower cost per tonne. Australia’s carbon pricing mechanisms are aligning with global standards, driving shipping companies to adopt sustainable practices and improve efficiency and transparency across the supply chain, setting a global benchmark.
The immediate effect includes increased demand for reporting and transparency along the supply chain and a focus on cost reduction through efficient product movement. We are actively discussing emissions levels with customers, helping them reduce and accurately report emissions for their annual reports. The carbon footprint will remain a significant issue for the logistics industry, not only in 2024 but for the next 20 to 30 years.
Trend 3 – Sustainability and New Technologies
The push for sustainable technologies is driven by both carbon costs and global consumer sentiment, alongside the need for more sustainability insights in annual reports for publicly listed companies. Australia is at the forefront, investing heavily in electric and hydrogen- powered logistics solutions. These advancements are significantly reducing carbon footprints and setting a global standard for sustainable practices. This trend towards sustainable and ethical sourcing will continue to grow, making it a critical area to watch.
Trend 4: Supply Chain Resilience
Supply chains are becoming shorter and more resilient to geopolitical shocks and supply disruptions, with a focus on low-carbon outcomes.
Southeast Asian economies, including Thailand, India, Indonesia, and Vietnam, are benefiting as manufacturing diversifies from traditional hubs like China. For example, India specialises in industrial goods, Thailand in automotive semiconductors, and Vietnam in solar panels. Australian companies are proactively diversifying their supply chains by sourcing more from Southeast Asia and other regions. This strategy enhances global supply chain resilience, ensuring continuity despite disruptions.
Trend 5: Reshoring
Reshoring, the practice of bringing manufacturing back to local markets, is gaining momentum and boosting local economies.
The Australian government’s push for reshoring is revitalising local industries but also presenting complex supply chain challenges. These challenges necessitate sophisticated management and local expertise, influencing global practices. Trusted supply chain partners become critical in navigating these complexities, especially in new markets. This trend is expected to continue, altering the traditional flow of goods and strengthening national economies. As more businesses and governments adopt reshoring, the dynamics of global supply chains are being reshaped.
Trend 6: Labour Shortages and Automation
The logistics sector in Australia is significantly investing in automation to address persistent labour shortages.
Technologies like robotic process automation (RPA) and AI are becoming integral in both office and warehouse environments, helping to fill gaps left by an acute global labour shortage. Flexible and adaptable forms of automation are being implemented, enabling cost- effective start-ups and seamless integration within existing environments. This trend not only mitigates labour shortages but also cuts costs and boosts productivity.
Trend 7: AI and Digitisation
AI is making waves in supply chain management in Australia, enhancing efficiency and accuracy through improved forecasting and planning capabilities. Traditionally, inventory and sales predictions were manual and data-intensive tasks. Now, AI handles these processes, setting a high standard for digital transformation globally.
This year, AI-driven applications in sales and operations planning for custom products are expanding rapidly, providing significant benefits to customers by streamlining operations and improving decision-making processes.
Trend 8: Vendor-Managed Inventory
AI-driven inventory management systems are enabling Australian retailers to manage stock, pushing inventory closer to consumers for faster market response.
By optimising stock levels and predicting consumer demand, AI helps retailers avoid overstocking unnecessary items, like a million white t-shirts. This facilitates closer collaboration between global manufacturers and local markets. Our digital capabilities connect retail customers, vendors and consumers, supporting the entire process. This
approach improves customer management, reduces inventory levels for retailers and helps manufacturers get closer to their markets, enhancing overall efficiency and responsiveness.
Trend 9: Ecommerce
Ecommerce continues to thrive, with consumers enjoying the convenience and benefits of online shopping. Although growth won’t match the COVID-19 surge, a steady rise is expected this year. This growth is driving innovation in delivery models and increasing the demand for supply chain visibility and reliability.
Australian companies are developing new strategies influencing global ecommerce logistics. There is also a growing demand for information visibility, particularly regarding sustainability and schedule reliability. Retailers and manufacturers are innovating to find alternative ways to market their products, bypassing reliance on major platforms.
Adaptability, innovation and sustainability are key to ensuring a strong and efficient supply chains. For over four decades, Airmark has set the benchmark in the freight forwarding industry, offering comprehensive logistics solutions tailored to global businesses. Our services span air, ocean, and multi-modal freight forwarding, warehousing, distribution, customs clearance, and project cargo handling. We provide bespoke solutions, including Vendor Managed Inventory, to enhance efficiency and responsiveness.
Speak to our experts today to manage your logistical challenges seamlessly.
