Top UPS Exec Warns Supply Chain Disarray Will Leave Permanent - Scar Posted: Sep 13th, 2021 - 6:35 pm
UPS, one of the world’s largest delivery companies, expects global supply chain woes to carry into 2022. The disruption to the complex web of airports, seaports, and land ports, cargo freight and container shipping lines, and trucking companies that move goods worldwide remains strained and is expected to leave a permanent scar on globalization.
Scott Price, president of UPS International, told FT that multinational retailers and manufacturers are regionalizing their supply chains:
“A lot of companies are coming to us saying ‘where is the best place to put manufacturing and assembly?'” he said. “There’s an understanding that reliance on stretched supply chains puts you at risk.”
Price, who manages the company’s international businesses, said the pandemic downturn of the travel industry had made it challenging for companies moving large amounts of cargo in the belly of passenger aircraft.
He forecasted recovery in the air travel industry may take until 2025.
Price expects multinational companies to reshuffle their factories in Asia to North or South America to shrink supply chain footprints.
“One of the reasons it [supply chain regionalization] accelerated is companies were surprised how little optionality existed during this period,” he said.
Shipping prices for the Atlanta-based logistics company said annual price increase for customers would be about 2.8%, well below the 10-year average.
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