Over-ordering Leading to Excessive Warehouse Volumes

Demand is high in the Global Supply Chain market, and warehouses globally are feeling the same pressures.  The market is seeing a lot of delays in ocean transportation, airfreight, and domestic trucking, and data is showing logistics and warehouse sectors are stocking up in an effort to meet the demands. 

According to the Logistics Mangers’ Index (LMI) an index that reads expansion and contraction within the logistics industry, measured the warehousing sectors, and reported a “significant expansion”, with regards to volume and inventory. LMI also reported “Abnormally high inventory metrics, combined with tight capacity and unseasonably high price growth”,  resulting from panic over the holidays and companies not wanting to miss any sales due to delays.  

What choice do they have? Many feel that if they had the choice to over-order or accept empty shelves, most would choose to over-order. But, over-ordering is leading to warehouses suffering from excessive inventory, minimizing space for new goods to come in as the months progress. If we continue to ocean and air capacity bottle-necks throughout the sector, it can potentially create a standstill in global trade and transportation. 

Good news looking forward, strategies are being employed to help combat high inventory volumes. Moving forward, the prediction of volume is lessened, according to LMI, citing “respondents do expect to see some expansion of transportation capacity over the next 12 months” 

With eyes on the Global Supply Chain market, and tactics being employed globally to combat supply chain disruptions, we can see that at every avenue of potential disaster, leaders are stepping up to monitor and combat.