In 2022, Overhaul shared several supply chain predictions for 2023, and we’re proud to say we were spot on. For 2024, we’re once again consulting our Magic 8 balls (aka industry expertise) to help you plan for what’s ahead.
From investments in sustainable practices to the role of machine learning, here are our 2024 supply chain predictions:
1. Strategic and violent thefts will increase
Cargo theft has long been an obstacle for supply chain managers. In 2024, this problem will persist, and criminals will likely have new, more advanced methods.
“The least risky method for theft is a fraudulent or strategic approach,” said Danny Ramon, Overhaul’s Intelligence & Response Manager. “While some criminals have been deterred from their favored targets, none have suffered lasting incarceration that would prevent the continued commission of these crimes.”
Ramon also added that these groups have already expanded from SoCal into areas where safeguards are not as prevalent. “This allows for more ‘low hanging fruit’ to be targeted,” he said. “Major changes in the way business is done will be needed to combat these tactics en masse.”
The use of violence in cargo theft will also likely increase in proportion to newly formed large-scale pilferage crews. As Ramon said, “These crews are often made up of local criminals who are already engaged in violent crime. They are therefore unconcerned with the increased penalties that come with violence. This is a stark contrast to organized FTL cargo thieves who avoid violence and driver confrontation.”
To make matters worse, criminals will probably find new ways to infiltrate brokerage operations by hacking or manipulating data.
“Over the past year,” said Ronald Greene, Senior Vice President at Overhaul, “the amount of criminal carriers exploiting security weaknesses in truck brokerage operations has increased nearly 400%. We expect this trend to continue. Criminals will work to identify new ways to exploit truck brokerage operations with the aim of stealing freight.”
2. Sustainability will remain top-of-mind across the global supply chain
Sustainability has been a central focus for many supply chain organizations. As the effects of global warming become more obvious, this goal will become even more important.
“There will be a higher-than-usual rainfall forecast in the first quarter of 2024 for countries such as Peru and Ecuador,” said Reginaldo Catarino Ferreira, Sr. Intelligence Manager – Brazil at Overhaul. “Countries such as Brazil, Guyana, and Suriname can expect droughts. Such unusual weather events can cause negative impacts on crops such as soybeans, rice, corn, and wheat. In addition, such weather conditions will continue to cause flooding and fires that disrupt logistics operations.”
Fortunately, steps are being taken to make sustainable supply chains a reality. Legislation is already forming in the EU, including the Corporate Sustainability Due Diligence Directive (CSDDD), which will require companies to report on carbon emissions.
“This is a significant move from reporting to compliance and as such is now a CFO requirement,” explained David Warrick, Overhaul’s Executive Vice President. “It will begin to appear in RFQ documentation. Emissions as a result of transportation are the biggest culprit from a supply chain perspective. The pressure will grow for the industry to start taking action.”
3. Economic disruptions will continue – but they’re not insurmountable
In 2024, supply chains will continue to face disruptions from numerous events, including geopolitics and war. This period of flux will severely test supply chain efficiency, integrity, and capacity. The economic impact will have far-reaching implications, affecting countries around the globe.
“Latin America will grow by 2.2%, according to the IMF (International Monetary Fund),” said Ferreira. “This is still far from the 6.9% reached in 2021 before the COVID-19 pandemic. It is also below the 3.9% achieved in 2022 during the pandemic crisis. In this context, supply chains in Latin America will continue to face cost challenges in dealing with the high level of competitiveness and lack of demand.”
In spite of these challenges, there is still reason to persevere. Supply chain managers can endure the hardships of 2024 by pursuing new partnerships and economic models.
“Economic downturn typically creates a fall in demand and a greater pressure on supply chains to reduce costs,” said Warrick. “On one hand, that means less investment in technology. But on the opposite side, cutting edge technology will actually be the answer to deliver cost savings. The value of new solutions will be carefully scrutinized going forward to understand real return on investments and actual impact to operations and the subsequent P&L.”
4. Artificial intelligence (AI) will play an important role in fighting risk
The topic of supply chain risk is far from new. In 2024, it will become an even greater focus at the leadership levels of shippers and logistics providers. Managers will spend more time analyzing and assessing business risks in and around supply chain and logistics operations. To do so, they will often rely on AI.
“The power of generative AI is only starting to be understood as it relates to potential opportunities in supply chains,” said Warrick. “The ability to harness historical and current data to predict upcoming events will change the nature of how supply chains react and plan going forward. 2024 will see a surge in solutions offering more cognitive capabilities. This will enable the opportunity to bring together disparate data sources to deliver new intelligence and insight.”
Over the long term, supply chain resiliency will depend on managers understanding which tech can best support their business. This is an important conversation to start having now so that your supply chain operates at full force.
“There will be less space for ‘nice to have’ solutions,” said Warrick. “Those offering real tangible value propositions will be the ultimate winners. In real terms this will mean the consolidation and unfortunately the eradication of certain offerings while the market rebalances. This is not just due to cost pressure but also the opportunity and expansion of AI and its ability to deliver faster, cheaper results without deep integration or re-engineering of current architecture.”
An overview of 2024 supply chain trends and predictions
Many of the challenges and obstacles of 2023 will continue into 2024, including cargo theft and economic disruptions. However, there is also much to look forward to in terms of AI and new sustainability measures.
In order to make the most of 2024, your supply chain needs real time, data driven insights. To achieve and best use those insights, your supply chain needs Overhaul.
Reach out to us today to see why we’re a differentiator in the field.