01 Jun SSI Freight Audits Enhance Your Recession Resilience
Is your supply chain recession resilient? Mixed signals in the U.S. and global economies are keeping many supply chain professionals up at night. In this season of economic uncertainty you can rest easier knowing SSI multimodal freight audits enhance your recession resilience.
First of all, with SSI you get cumulative savings day-after-day which goes straight back to your bottom line. Also, you gain actionable data insights to help you make short and long-term adjustments to further reduce costs as you improve transportation and supply chain performance. In addition, if your budgets are cut due to an economic downturn, outsourcing freight audit and freight payment services will help you focus your limited in-house resources on what you do best.
So, whether a U.S. or global recession is looming or not, your supply chain will be more resilient by maximizing your savings while gaining relevant analytics that are beneficial to your business.
We will elaborate on these points in more detail below. First, let’s examine what economists and supply chain managers are currently forecasting for the global and U.S. economy.
ECONOMISTS PROVIDE RECESSION INSIGHTS
So, is a global recession looming? Well, it depends on who you ask. The experts at the World Economic Forum recently published their Chief Economists Outlook to provide insights. 45% of the economists say a global recession is likely. Another 45% say it is unlikely.
Seemingly there is a lack of consensus, however, when you dig deeper, the report reveals broad agreement that through 2023, economies across Asia are poised for strong growth and European economies are expected to have weak growth.
Now, when these same economists focus on the U.S., they are once again evenly split. Quite simply it’s a toss-up, as half expect weak growth and other half strong growth. In part, a contributing factor to the lack of consensus on the U.S. economy is the heightened uncertainty about the financial sector’s stability, inflation, and the future pace and extent of monetary tightening by the Fed.1
Of note, on the topic of global supply chains, the World Economic Forum economists’ opinions more closely align.
“When asked about the business strategies that are likely to determine the shape of global supply chains over the next three years, the chief economists highlighted adaptation to geopolitical fault lines (94%), prioritization of resilience over efficiency (91%), diversification of suppliers (84%) and an increasing focus on environmental sustainability (77%).” 2
SUPPLY CHAIN PROS ARE CONCERNCED ABOUT A RECESSION
Perhaps not surprisingly, supply chain managers think differently than economists. A recent survey of supply chain professionals published by Global Trade revealed that 49% of them named a U.S. recession as the disruption that will have the biggest impact on them in the second half of 2023. Geopolitical tensions (32%) and rising operating costs (22%) were the other top concerns identified.3
A separate piece in Supply Chain Digital also highlights recession concerns and urges action to proactively prepare for the possibility of a recession. The piece states: “Taking steps now to strengthen your supply chain will have a positive impact on business continuity and resilience, your ability to deliver for customers, your profitability, and more.”4
TODAY’S MIXED SIGNALS MAKE RECESSION FORECASTING CHALLENGING
According to a recent article from CNBC, the US economy is currently in a ‘freight recession’. The reporting revealed that ocean freight orders are down 50% year-over-year, which is also impacting rail and road transportation. The piece references a separate CNBC supply chain survey that revealed a decrease in truck movements in and out of warehouses and the likelihood this trend will continue as manufacturing orders drop.5
However, a counterpoint to this news is a recent article from American Shipper that reports a 9% month-on-month surge in imports from China. In fact, from all over the world, the U.S. imported 2,020,197 twenty-foot equivalents (TEUs) in April, which is actually 5% higher than in April of 2019, pre-Covid.6
Another source of encouraging economic news is producers of construction equipment, trucks, building supplies and industrial software are reporting strong demand. Why? A growing number of new U.S. factories are under construction. Concerns about overseas supply chains and new green-energy incentives have created a flurry of domestic construction. This is helping to offset the effects of rising interest rates and a weakening in U.S. economic growth, according to an article from The Wall Street Journal.7
ADVANCING RECESSION-RESILIENT SUPPLY CHAIN INITIATIVES
A recent piece in Logistics Management identified six current digital supply chain trends. In the article, experts at Gartner shared that 73% of supply chain organizations are allocating more IT dollars towards “driving business growth and enhancing performance.” In this season of economic uncertainty, digital supply chain transformation helps shippers work smarter, faster and more efficiently.8
A blog post was recently published in SupplyChainBrain entitled, “Is Your Supply Chain Prepared for a Recession?”. A key tip the author emphasized was to automate and optimize. Another tip: partner with third parties to improve efficiency.
“You can’t do it all, even when business is booming. And because recessions often go hand in hand with higher unemployment, you’ll be trying to do more with less. Companies that find ways to take advantage of partnerships see higher returns during tough times” 9
SSI FREIGHT AUDITS ENHANCE YOUR RECESSION RESILIENCE
As you prepare your supply chain to be more recession resilient, you should outsource freight audits to SSI. For global, regional, and U.S. shippers, across all modes of transportation, SSI applies an automated, customized freight audit.
You get optimal results because our process scales and flexes with your changing needs. Whatever supplier and transportation network adjustments you make based on the economic realities in North America, Asia, and Europe, you will save money with SSI. Many of our clients achieve an 8:1 ROI (achieving 8 dollars in savings for every dollar invested into the service). Others realize even more impressive ROIs.
Our comprehensive freight and accessorials audit checks bills from thousands of carriers worldwide. A valuable benefit of this endeavor is large volumes of relevant supply chain data are captured and entered into a dedicated data storehouse. SSIconnect,™ our user-friendly, online customer platform allows you and your team to access highly relevant information and valuable analytics. Also available are business-intelligence dashboards powered by Domo®, a respected leader in transforming complex business data into useful graphics.10
These modern, customizable dashboards empower leaders to discover and pinpoint the shipments and carriers that adversely affect costs. Armed with pertinent information, supply chain issues can be addressed at the root cause, resulting in real change by cutting shipping costs, improving logistical efficiencies, and reducing operating expenses.
Download the SSI managed analytics brochure to learn how to convert your transportation and logistics data into a powerhouse of supply chain intelligence.
After completing a best-in-class freight audit, SSI can pay your global freight invoices as well. We process these bills from multiple languages, in the world’s most traded currencies.
With SSI freight payment services you save money, reduce administrative burdens from your operations and AP teams, and maintain positive relations with your carriers as we issue their payments in a timely manner.
SSI freight audits will further enhance your readiness for a recession Further, whether a U.S. or global recession is looming or not, maximizing transportation and supply chain savings while gaining relevant, useful data insights is always beneficial for your business.
Contact SSI to speak with a member of our team today.
Footnotes:
1, 2. World Economic Forum, “Chief Economists Outlook”. May, 2023 as published by the World Economic Forum.
3. Container xChange, “Supply Chain Professionals Sound Alarm on Recession, Geopolitical Tensions, and Cost Pressures in H2 2023”. May 10, 2023, as published by Global Trade.
4. Andrea Brody, “Recession requires supply chain risk rethink”. March 11, 2023, as published by Supply Chain Digital.
5. Lori Ann LaRocco, “The economy is in a ‘’freight recession,’ with China trade decline continuing”. April 24, 2023, as published by CNBC.
6. Greg Miller, “US imports up again in April as market mirrors pre-COVID ‘normal’”. May 8, 2023, as published by American Shipper/FreightWaves.
7. Bob Tita, “America’s Factory Boom Drives Sales Surge for Excavators, Steel and Trucks”, May 8, 2023, as published by The Wall Street Journal.
8. Bridget McCrea, “Six Digital Supply Chain Trends That Are Happening Now”. May 8, 2023, as published by Logistics Management.
9. Mike Gross, “Is Your Supply Chain Prepared for a Recession?”. March 30, 2023, as published by SupplyChainBrain.
10. Domo is a registered trademark of Domo, Inc. and SSIconnect is a trademark of Software Solutions Unlimited, Inc.
SSI blog post entitled: SSI freight audits enhance your recession resilience.