The GSCPI was negative for the first time since August of 2019 in February and was below -1 for the first time since August of 2009 in March, signaling that pandemic induced pressures have eased.

Considerations:

• Shift focus from managing disruption to managing cost and risk mitigation.
• Increase investments in supply chain resiliency, and visibility to prepare for future disruption.

Inflation has risen significantly over the last 3 years, although the federal reserve action to raise interest rates, among other factors, appears to be easing the burden on consumers.

Considerations:

• Inflation highs may reflect shifts in, or reduction in, demand that affects transportation channels.
• Analyze procurement spend to identify savings opportunities as customers are likely to begin pushing back on further price hikes.
• Revisit demand planning processes and results to ensure accurate forecasts.

The labor market remains tight with unemployment rates at historic lows. Businesses are facing increased competition for labor and higher wages.

Considerations:

• Invest in employee upskilling to improve satisfaction and address potential labor disruptions.

Due to the tight labor market, with unemployment rates at historic lows, businesses are facing increased competition for labor and higher wages. Employment costs continue to rise; however, businesses saw some relief in the second half of 2022.

Considerations:

• Enable supply chain professionals to make data driven decisions and consider automation opportunities.
• Assess your key vendors’ ability to staff at levels required to meet demand.

Prices of diesel fuel rose significantly in the first half of 2022. The price remains unstable but there were sharp monthly declines in the second half of 2022. In 2023, prices rose in January and then fell in both February and March.

Considerations:

• Analyze your supplier, distribution, and transportation networks to understand where instability in diesel results in increased risk.
• Increase supply chain visibility to understand exposure to fuel prices and manage risk accordingly.
• As prices continue to fall from the peak, consider challenging surcharges implemented in 2022.

Prices of deep sea freight reached all-time highs in 2022 but have decreased each month except for February since September of 2022.

Considerations:

• Work with key international suppliers to develop contingency plan and increase visibility into the supply chain.
• Review sourcing/category strategies for opportunities to diversify supplier networks, reduce geographical risk, and build supply chain resiliency.

Prices of truck transportation rose significantly in the second half of 2020 through Q2 of 2022. Truck transportation costs declined in the second half of 2022 and that trend has continued early in 2023.

Considerations:

• Review contracts with carriers and look for opportunities to negotiate rates as prices decrease.
• Evaluate transportation networks for consolidation and route optimization opportunities now that capacity has increased.

Prices of transportation and warehousing services rose significantly in 2021 and early in 2022 with some relief in the second half of 2022 and so far in 2023.

Considerations:

• Revisit Sales, Inventory & Operations Planning (SI&OP) processes to optimize inventory to further reduce holding costs.
• Evaluate distribution networks and strategies for opportunities such as shipment consolidation.