The State of the Supply Chain in 2024

In the past half-decade, the national and global supply chains have been under relentless pressure.  

While some post-pandemic issues have been resolved, there are still many factors for supply chain managers and leaders to consider in 2024.  

Let’s take a quick look at the current state of the supply chain as we speed into Q2 of 2024 and consider how this critical business network will fare in the months ahead. 

Major Takeaways to Keep in Mind

Before we examine the details, let’s take a 10,000-foot view of the supply chain industry in 2024. 

One of the biggest factors driving supply chains at the moment is a major economically driven geo-political divide forming across the globe. The Western democracies of the world continue to embrace free trade and shipping while collectively condemning and isolating out-of-line behavior.  

Contrasted against this group are a growing number of dictatorial regimes. These embrace ideological approaches to policy and recklessly traffic in toxic arenas, such as weapons, hackers, and fossil fuels.  

The space between these two groups is growing, setting the stage for a period of confrontation and chaos that is very different from the unification era the world has enjoyed since World War II. The United States has stepped back from its commitment as a bulwark of the world and no longer feels the need to subsidize the new world order—the 21st-century iteration of which will likely leave out some countries as the next wave of progress and innovation inevitably sweeps the rest of us along. 

However, the post-pandemic global tone isn’t set in stone quite yet. China, for instance, is struggling to pay for Russian oil, while Putin’s regime is running out of places to sell its oil. At the moment, nothing is certain other than uncertainty, and yet, the discomfort of the unknown is creating a ripple effect throughout every area of the supply chain. 

Economics, Employment, and Automation

As supply chains react to the ebb and flow of global and regional demands, they are also adjusting to a growing number of unexpected evolutions in the way we conduct modern business. The digitization of the supply chain—something referred to as Supply Chain 4.0— is in the spotlight here, and AI’s breakout year is the headline.  

Automation and the IoT continue to advance. The automation of various elements of the supply chain, from factories and warehouses to ports, is well underway. Autonomous vehicles also remain on the cusp of relevance.  

Everyone is focused on maximizing speed and flexibility, too. One example of the former is Amazon’s work on its predictive or “anticipatory” shipping, a concept that has recently recaptured headlines again after a ten-year hiatus. Companies are also seeking to improve supply chain flexibility through real-time, dynamic responses to adjust and reroute shipments (great and small) as they move around the globe in an increasingly connected network.  

An Industry-by-Industry Breakdown

Let’s take a look at how all of this transformation and disruption is impacting each major area of the supply chain. 

Trucking

The transportation industry remains tense as fresh pressure on EV manufacturers continues to dampen interest in the electric vehicle market. While this is largely focused on consumer demand, electric trucking has been in development for years and has the potential to be impacted by the shift in sentiment toward EVs. 

Apart from electricity, trucking continues to adapt to newer efficiency and safety standards. The fact that nearly 96% of fleets (over 750,000) operate 10 trucks or fewer, though, puts a lot of expectation on small and medium supply chain enterprises to adapt. 

Aviation

Backlogs were already an issue in the aviation supply chain over two years ago. The situation remains similar in 2024. Airbus recently reported (via Reuters) that it was sending “dozens and dozens of engineers deep into the supply chain to unlock bottlenecks.” 

Part of the pressure is positive, as it stems from rebound demand in commercial travel. Nevertheless, the ongoing issues for the airborne supply chain continue to be a problem as the industry remains backed up and struggling to keep up. 

Rail

At the end of 2022, a railway strike was a worry in the U.S. In 2024, it is now a reality for Germany’s struggling economy as workers created chaos by walking off the job in response to key pain points, such as high inflation and staff bottlenecks. 

The estimate that a single day of rail strikes costs Germany alone? $107 million. The country was already spluttering. This won’t help the movement of goods in the Eurozone in the months ahead. 

Shipping

The tragedy that took place at the Francis Scott Key Bridge in late March is the obvious factor here—at least for the short term. Clean-up is ongoing and a new bridge could take years to build (and cost at least $400 million). 

The situation in Baltimore distracts from another ongoing and potentially more serious issue: diverting shipping lanes from the Red Sea and Suez Canal to avoid Houthi attacks. Going around Africa is a tedious trip that has the potential to impact the availability and cost of goods flowing between the eastern and western halves of the world. 

A Supply Chain in Flux 

Four years after the pandemic began, the world continues to reel from its effects. Toss in inflation, war, elections, and countless other economic factors, and it’s no surprise that the supply chain is still strained. 

This puts a special emphasis on every business’ CSCO. Chief supply chain officers must oversee increasingly complex situations and decide the best way to keep goods and services flowing into and out of their companies. 

If you’re struggling to create proper supply chain strategies, adapt to ongoing conditions, or find the best CSCO for your C-suite, contact the executive search and leadership advisory team at Stanton Chase. Our Los Angeles partners are based in one of the greatest crossroads of shipping, trucking, rail, and air routes in the world. We understand what it takes to be a good supply chain executive, and we can use our expertise, network, and resources to help set the stage for supply chain success for your company, no matter what the future may hold. 

About the Author

Peter Deragon is a Managing Director at Stanton Chase Los Angeles, the Supply Chain Global Functional Leader, and the Capital Markets and Investment Banking Global Subsector Leader. He is also active in the CFO Practice Group and Financial Services, where he started his career. He has 30-plus years of experience as a trusted advisor and manager in B2B environments. In his free time, Peter supports charitable organizations, especially those focused on ocean stewardship.