Supply Chain and Logistics Trends We Expect in 2023

By Len Batcha, CFO/President

Technical Transportation, Inc

As we end 2022 and head into 2023, it seems like we’re in a fog. It’s difficult to develop a strategic plan based on the current inflation and economy, so it’s equally hard for companies in the supply chain and logistics industries to make concrete predictions and decisions.

However, based on what we can indeed see through these murky times, we can note several trends that companies should consider as they begin the new year.

Uncertainty Will Remain

The current uncertainty and apprehension will likely follow us into 2023, largely due to uncertainty in the economy, which is driven by record inflation and high fuel prices.

In addition, now that the midterm elections are behind us, there are questions about potential policy changes that could affect the overall economy and the supply chain specifically. Those will begin to take shape in the first half of the new year.

Perhaps there’s a bit of good news despite the uncertainty, as consumer spending has grown again this past holiday season, although not at the torrid pace we saw in recent years. In early November, the National Retail Federation forecasted that overall retail sales would grow 6-8% this season, compared to a growth rate of 13.5% last year.

Following a more robust than anticipated Black Friday/Cyber Monday, the organization noted that its growth prediction was on target. At the end of the season, Mastercard data confirmed the forecast, saying retail sales grew 7.6%.

Amazon Announcements a Bellwether?

That good news was contrary to Amazon’s announcements in Q4 2022, when the retail giant shared plans to lay off more than 20,000 employees.

In addition, Amazon Founder Jeff Bezos advised consumers to hold off on purchasing big-ticket items such as cars and appliances during the 2022 holiday season amid growing concerns about a potential recession in 2023.

These announcements, coming during the busiest time of the year in retail, tell us that Amazon is concerned about consumer spending and is cutting its own costs to remain profitable.

Could these moves be a potential bellwether for things to come in the supply chain and logistics spaces as well? We think it’s something to keep an eye on in 2023.

Supply Chain Issues Will Still Exist

There are still supply chain shortages with certain products, especially among big-ticket items such as automobiles, trucks and SUV’s. That is a concerning trend for the entire industry, and one that we hope will improve in 2023.

The good news is that supply chains in some vertical industries, particularly the medical and medical device spaces (where TechTrans has a core competency), are expected to remain strong in 2023.

That said, those industries may face supply shortages as well, which could delay the release of products, but not to the point where it would keep manufacturers in those industries from having a potentially strong 2023.

Election Impacts

The U.S. elections in November 2022 yielded a new crop of politicians, with a pretty stable Senate but a turnover in the House of Representatives slated for this January. Overall, we don’t expect big changes nationally.

On the state level, however, we witnessed stronger division and polarization, where “red” states got redder and “blue” states got bluer. That could potentially result in varying legislation from each state and companies having to adjust to policies and economies on a more localized level.

Emphasis on Quality Assurance and Control

Finally, we believe that quality assurance and control will play a bigger role in the supply chain and logistics industry in 2023. Many companies are evaluating their data and processes to find new ways to boost profitability by ensuring quality and efficiency.

That includes recruiting new talent to serve as quality liaisons between sales and operations to ensure that the customer experience is optimal. It also means meeting and exceeding quality standards for specific industries, whether it’s FDA regulations or ISO standards.

Though the crystal ball is not yet clear for the coming year, we do expect some uncertainty in the market, as well as swing toward operational adjustments that will positively impact the bottom line. If you need support optimizing your supply chain, we’re here to help.

Here’s wishing you and your companies a successful and prosperous 2023! Let us know how we can help you today.