Supply Chain Outlook for 2023: Welcome to a World of Unknown Unknowns

I’m writing this article just a few days after Thanksgiving in the US and another month before the Christmas Holidays. And although shippers and retailers are still focused on ending the year as strong as possible, it forces us to start looking towards 2023.

If you take a step back and think about all the challenges supply chains have faced in the last few years, it isn’t hard to see that we are still facing very real issues now and further disruptions will occur in 2023 which must be addressed. If people think that when we conquer COVID, get back to lower fuel prices and resolve the war in Ukraine, just to name a few disruptions, things will return to normal, I have to tell you that they are sadly mistaken. To quote Peter Hinssen, co-founder and Partner of Nexxworks, we have to get used to the “Never Normal.”

Regulatory Requirements

2023 will bring more and different cost considerations. There will more changes to regulatory requirements with scrutiny on sustainability reporting. IMO 2023 (Oceanside) will mean older ships must slow down to reduce emissions with a knock-on effect for capacity as ships will reduce the number of trips. Capacity issues will impact rates as demand is still strong. Supply chain operators and their customers will have to build this consideration into their budgeting.

Labor Costs

Labor costs will also escalate as workers demand salary increases to cope with the cost-of-living crisis. We have already seen this impact at ports and in warehouses as companies worry about fulfilling peak demand this Christmas. In project44’s October Ocean Report New York had become the number one box port in the US, overtaking Los Angeles due to fears about strikes by the International Longshore and Warehouse Union. In our recent Global Insights report, it was estimated that the eight-day strike at the port of Felixstowe impacted some $4.7 billion in trade.

Extreme Weather and Climate Crises

Extreme weather events are also on the rise. Experts are warning about the social and economic impacts of extreme weather events brought on by climate change, such as drought on the Mississippi and the Rhine. Record low water levels on the Rhine forced many containers to use rail networks and trucks for shipping adding unexpected intermodal costs and delivery headaches. Such unpredictable changes have a knock-on effect for other ports as well, making it essential to have real-time supply chain visibility so logistics routes can adapt.


Geopolitical factors will continue to pressure global economies. And no, I am not just talking about the war in Ukraine and how this has impacted the flow of goods such as oil and gas as well as grain and many other commodities. I recently attended the NDTA conference in St. Louis, Missouri, US where it became clear that the political and economic instability in China forms one of the biggest threats to the US and other Western countries. For the military, supply chain risk management is seen as China risk management.

Some of these above mentioned factors will also influence the decisions supply chain companies will make around near-shoring versus off-shoring. But near-shoring will have a knock-on effect on regional networks and might in the short turn create further pressure on local labor as well as transportation capacity and the existing infrastructure.

Growing Pressure on Supply Chain Performance

Supply chain professionals always cope with change and black swan events but given how central the performance of supply chains has become to the global economy there is even more pressure on the sector to reassure businesses they can handle not just the uncertainty, but the increased unpredictability of geopolitical, economic, and climate factors.

What is clear from our data is that supply chain performance is an early warning system for potential softening in economic performance, underlining the strategic value to the business of having better supply chain visibility. With this visibility, companies can plan how they adjust production to reflect where demand is slipping and equally identify where it is increasing.

Spotting these opportunities early, particularly in the current economic climate, will be critical to driving new revenue opportunities.

Ready for better visibility into your supply chain? Learn more about project44 now.