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/ Published in Global Themes and Feature Topics, Industries, Transportation

International shipping crisis and the rise of supply cost globally

International shipping crisis and the rise of supply cost globally, become new news headlines across all the country. Due to the COVID-19 pandemic, the world uses the work perfectly by division of work and production in the cheapest countries and then shipping in bulk containers. Now the issue is due to port lockdown, in particular happening in a world factory – China.
The cost escalates like a sky rocket, or is not capable of supplying in the consistent manner, because a lot of the countries can not complete their final product assembly. The shortage of screws caused the giant furniture company not able to complete their final product assembly, to shortage of some of the raw material required for production.
The Law of supply and demand in this case forces the sky rocket to rise in the final product price that is absorbed by the final consumer and buyer hand. Either they got to postpone the buying decision or absorbed the cost rise. For the COVID-19 pandemic it accelerates for us to face something we may have forgotten, while division of work may work for some cases, it is in consideration for fully functional and never stop production mean control. But if the entire final product assembly is forced to slow down, pause and delay due to missing constant supply of spare parts or raw material, then it is against the whole purpose. It breaks the Just-In-Time (JIT) production that was invented.
With that in consideration, for sure new shipping means will invent and adapt just like what we see, some of the modes of shipping are forced to change from shipping to land transport.
With the decline in business for some sectors, the shift to buying from shopping apps, the world now depends on integrated end to end control of the means of production. It is particular so for the global enterprise with the global scale of business.
With the world continuing toward digital economy transformation, more and more of the needs can shift from physical to digital consumption. We will continue to see decline in physical goods for some of the product categories, such as physical books, and rise in the ebook purchase and consumption.  The trend is also killing off some of the physical retail outlets, such as Microsoft deciding to close down all the physical retail outlets and focus on a single online presence.  The trend is also a threat to digital products. For instance, the new iPhone v13 just released in 14-Sep-2021 comes with the cinematic mode for video, this for sure affects some of the existing ecosystem, like continued decline in the product that used to provide cinematic video capture. Of course for the mainstream equipment the demand is there, but the mass market now has access to cheaper means to produce cinematic mode video. With the trend few of the existing line of product and category unless new innovation in place, else for sure it undergoing decline, as the market continues to shift toward better means for fulfilling their needs.
Regardless for what business sector you are in, the past 100 years of conservative and traditional thinking of stick to the core business will not be work anymore, as you can see how many century long business is falling, that is not really kill off by COVID-19 pandemic, but it is due to they are simply just can not cope with the change fast enough to survival. While their existing business and market is being taken away by new players who are brave enough and have the business innovation offering where the market accepts the value proposition and shifts their business over. It will be this kind of business innovation and digital transformation that shape the market, and where business leaders in all sizes are required to possess so you can lead the enterprise to cope with the changing market needs. This is why Digital Transformation (DT) is being named after Internet, as one of the major opportunity you either seize and ride with it, or you are for sure to be wipe out from the market, as the new rule is changing, it time for wake up, your past glory and success experience may or may not work under the changing context.
E-SPIN Group in the enterprise ICT solution supply, consultancy, project management, training and maintenance for enterprise and government agencies. Feel free to contact E-SPIN for your project requirements and inquiry.
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