How Exporters and Importers Adapted
Changes in Production and Logistics
How did exporters and importers and their logistics agents react to this situation? How did they adapt to the disruptions in maritime transport and the impact they had on production and supply chains? They opted for different solutions, depending on the characteristics of their logistics chains and the products they manufactured.
Some companies diversified their suppliers and looked for them in areas closer to the company’s headquarters. Many even moved production from China and other Asian countries to Eastern Europe, Morocco and Turkey. In other cases, they repatriated production to the company’s country of origin, as in the case of Ikea and Buff. Shortening logistics chains protected companies from many disruptions, including unreliable port calls and exorbitant freight rates. The new destinations could not offer the same advantages as manufacturing in Eastern Asia, but shipping times and transport complexity were reduced and, as a result, reliability was enhanced.
In other cases, companies chose to regain control over their logistics chains. Large international companies, such as Lidl, Coca-Cola, Amazon and Walmart, opted to manage their logistics chains themselves by buying or chartering ships and/or planes to transport their products from production sites to consumption areas. This involved major investments and was indicative of producers’ lack of confidence in the actors managing logistics chains.
This situation also forced companies to change their stock management strategies. There was a shift from a just-in-time to a just-in-case approach, in which inventories were increased to deal with irregular deliveries and the unreliability of logistics chains. Stockpiling was cheaper than stockouts, which were much more common in this context.
Finally, it is worth noting that some companies, especially in the chemical sector, decided to give up shipping their goods by container. Although they were accustomed to transporting their products by container, they abandoned this practice and went back to transporting them by conventional ship, which they often chartered themselves, thus avoiding the difficulties associated with container logistics chains.