<img src="https://ws.zoominfo.com/pixel/H4QRKGJNZm52yFBaHe9u" width="1" height="1" style="display: none;">
Contact Us

These 3 Events Broke the Supply Chain, IoT Can Help

7 minute read

Our economy relies on getting products from point A to point B through a quick, efficient supply chain. Any issues with this process can cause costly problems.

Recently, there have been all too many examples. COVID-19 stopped the world, a new iPhone launch throttled air freight, and a cargo ship blocked the Suez Canal. Each of these events signaled the importance of strengthening supply chains and preparing for future threats.

Decision-makers can learn from these events. Applying supply chain IoT can reduce costs, prevent problems, and keep end consumers satisfied.

How COVID-19 Broke the Supply Chain  

The pandemic has thrown a wrench into supply chains around the world. COVID-19 measures created a reduction in dock workers and a general slowdown of cargo handling. Typically, shipping containers are quickly refilled and shipped elsewhere. This constant cycle of use meant that the delay in their turnaround time created a chain-reaction disruption. Empty containers were in the wrong place at the wrong time.

As a result, companies scrambled to find containers to ship products, creating a backlog of demand and rising prices. Freight rates from China to the U.S. and Europe surged 300%. Seaports also faced a surge of incoming vessels that could not dock and unload quickly enough. This trend is ongoing: the Port of Long Beach in the U.S. logged its busiest February on record.

Airfreight is often used in bottleneck situations to help ease the burden on ocean freight. Due to travel restrictions, air freight faced shortages of their own after a plunge in international flight volume.

How the New iPhone Launch Broke the Supply Chain

Apple is known to use air freight over ocean freight to ship its products. This means that before a new iPhone launch, air freight prices per kilogram spike. The 2012 iPhone 5 launch is a great example of this phenomenon. The launch was so large that the Federal Reserve noted an increase in air cargo shipping volume of smartphones and computer tablets.

The surge in air freight from Apple launches means that other companies have to pay more to secure air cargo. It also means that space is limited and not guaranteed. Since air freight is the quickest method of international shipping, shipping products internationally becomes much harder (and slower) when it is impacted.

How the Ever Given Broke the Supply Chain 

As the 2021 Suez Canal blockage shows, even the most seemingly banal problems can disrupt supply chains. The Ever Given, one of the largest container ships in the world, caused a massive delay when it got stuck in the Suez Canal for six days.

The blockage caused a backlog of other cargo ships that weren't able to pass through the canal, which is the main artery for ocean freight. All major carriers in the shipping industry were affected. Because the canal accommodates about 12% of global trade, the cost of the blockage was extremely high. Estimates valued the hold up at  $9.5 billion of goods daily.

The ship was refloated thanks to tireless work from excavators in Egypt and an international effort of tugboats and dredgers. This is good news for trade, but delays from the event are still being felt.

How Supply Chain IoT Can Help

While events like these can be unpredictable, they offer important lessons. Decision-makers can use them to become better prepared. As the transport industry ramps up its use of technology, supply chain IoT offers a wide range of solutions.

Applying supply chain IoT can look like a lot more than simply tracking location, too. Real-time asset tracking is certainly a main benefit of IoT — but so is the information gained from it.

By using aggregated information from both real-time and historical data, companies gain access to a high level of insight. This kind of insight is crucial for better predictive planning such as supply and demand forecasting. It can also be used to make quick decisions when responding to sudden changes in the supply chain. If a disruption like crowded air freight occurs, this data can help companies choose the smartest response.

Specific parts of the transport industry can also benefit significantly. Cold chain logistics, which is the transport of temperature-controlled goods, can gain reassurance from IoT-monitored cargo tracking. This has been especially helpful for shipping vaccines that need to be kept at a certain temperature. It has also helped Danish transport company Maersk monitor the shipment of perishable foods like bananas.

Supply chain IoT also helps companies keep all parts of their supply chain connected. The higher the connectivity, the more accurately a company can pinpoint any issues. When shipping delays happen, as in the example of the Ever Given incident, companies can use supply chain IoT to identify affected cargo and react accordingly. KORE is an expert in fleet telematics, location based services, and asset monitoring. The future of logistics and technology is promising. KORE can help keep your company ahead of the curve with solutions designed for your needs.

For more information on how supply chain IoT can solve logistics companies, download our ebook.

New call-to-action

U3GM Blog Post Comments


Stay up to date on all things IoT by signing up for email notifications.