The global supply chain has drawn unprecedented attention in the past few months, with reports of 80-plus container ships waiting offshore to be unloaded at the ports of Los Angeles and Long Beach.
There have been rapid increases in costs for shipping, loading and storing goods; and there have been shortages of everything from semiconductors to building materials to basic household goods. Three out of four businesses responding to a Florida Chamber Foundation survey in November reported experiencing a supply-chain disruption this year. Of those businesses, more than 5-of-6 reported increased costs or delays in shipments, and more than half reported shortages of skilled workers and critical inputs or reduced reliability.
What’s behind this supply chain crisis?
Some of it is a response to the global pandemic and sharp economic cycle from the past few years. We have seen a dramatic increase in e-commerce and home delivery of goods, a pronounced shift in consumers’ demand from services consumed outside the home to goods enjoyed at home, and rolling pauses and slowdowns of production around the globe. These trends have simultaneously increased demand for goods and decreased capacity to produce and move them. Our global supply chains have not dealt with so many disruptions in such a short period of time in the past.
The supply-chain crisis has exposed long-term trends and structural forces that have been concerns for some time:
The aging of our transportation and distribution workforce and shortages of labor in key industries such as trucking.
The offshoring of manufacturing from the U.S. to lower-cost foreign locations.
Increasing congestion and decreasing reliability in many of our nation’s trade gateways and corridors.
Disruptions in our supply chain affect nearly every aspect of Florida’s economy, from our large consumer and visitor populations to our agricultural and manufacturing industries, to our emerging logistics and technology sectors. Trade, logistics, and export-oriented manufacturing and services accounted for more than 1 million jobs statewide in 2020, with continued growth in e-commerce and home delivery offsetting declines in other sectors during the pandemic.
More than a decade ago, private- and public-sector leaders joined under the leadership of the Florida Chamber Foundation to develop the first Florida Trade and Logistics Study, which described an opportunity to position Florida as a global hub for trade, logistics, and export-oriented manufacturing after the widening of the Panama Canal. Today, Florida faces another opportunity: How can we ensure our state’s supply chain is a competitive strength that meets the needs of our residents, visitors and businesses, while attracting new jobs and investment to the state?
The Florida Chamber Foundation has launched Florida Trade and Logistics 2030 to identify strategies for strengthening this critical element of our economy. With our partners, we are examining trends and uncertainties, while identifying opportunities for Florida, such as:
Examining how available capacity at our 15 deep-water seaports and 20 commercial service airports can support growing demand for global trade in Florida and the U.S. East.
Determining where to locate distribution and fulfillment centers to support increasing customer expectations for next-day or same-day delivery.
Encouraging U.S. and global manufacturers to use Florida as a platform for research, design, production and final assembly for markets in Florida, the rest of the U.S., the Caribbean, and Latin America.
Determining how to attract, develop and retain skilled workers to make all of this happen.
The Florida Chamber Foundation and its supporting consortium of businesses and organizations encourage Florida leaders to join this conversation in the next few months as we identify immediate, mid- and long-term opportunities, to complete the Florida Trade and Logistics 2030 study. Then there will be a call to action for all to join in advancing this dynamic area for growth during the next eight years and beyond.
“Purposely expanding manufacturing, logistics and trade will help grow Florida,” said Mark Wilson, Florida Chamber of Commerce president & CEO.
David Gillespie is executive vice president of the Florida Chamber Foundation.
**Originally published with Pensacola News Journal