"We can´t count on reality as we did before. All we can do is try to build a resilient society so that we can meet the challenges".
With this statement, Ivan Sanchez-Diaz, associate professor at Chalmers and co-director of Northern Lead, framed the initial focus of The Transport Efficiency Day (Transporteffektivitetsdagen), which attracts a variety of actors from the industry, society, and academia each year.
The challenges that the transport sector has faced in recent times seem almost innumerable. Ceren Altuntas Vural, associate professor at Chalmers and Northern Lead, highlighted crisis after crisis which has had a significant impact on supply chains. The pandemic and the war in Ukraine are two of the gravest, prompting additional difficulties such as the energy crisis, increased fuel prices, and shortage of commodities like semiconductors.
Resilience and sustainability are key
"After the pandemic, we have been facing closed borders, port closures, a lack of truck drivers, capacity problems, and empty container shortages combined with heavy consumer hoarding. In 2021, the ship blocking the Suez Canal did not help in solving the problems at all… And while we were trying to recover from all these disruptions, the Russian invasion of Ukraine came, which particularly affected the food and energy supply chains. All these disruptions after another increased costs and consequently caused long-lasting inflation in many countries in the world", she says.
The effects on the supply chains are tangible and have led to a lack of goods and services, continued uncertainty in demand and supply, and higher prices for the consumer, amongst other things.
"Resilient supply chains have always been on our agenda. But now, resilience has become almost the most important capability for supply chains to survive, combined with sustainability goals", says Ceren Altuntas Vural.
Research on the disruptions
Johan Woxenius, professor of maritime logistics at the University of Gothenburg and Northern Lead, pointed out that the many crises at least have led to some media interest, bringing attention to the importance of functioning supply chains.
He added port conflicts, cyber-attacks, low water levels in rivers, and a lack of skilled labour to the long list of challenges in recent years, as well as high prices and shortage of components, commodities, food, and energy. Johan Woxenius and his research colleagues are examining the disruptions of maritime supply chains in several collaborative projects.
"Our interest lies in what we can do about this. How can we create resilience and what types of disturbances might lie ahead?"
Hard to foresee all crises
All results are not yet compiled but looking at today's situation he can at least note some bright spots. Prices are coming down, as well as lead times to cross the pacific and in the ports.
"One difficulty is that the systems for energy, transport, and raw materials are so large and slow-moving that it takes a long time to increase capacity. And you need to know that there is a long-term utility to be able to pay back the investments", he says.
Johan Woxenius emphasized that the complexity of our supply chains means that many crises and complications can´t be foreseen. He illustrated his point by describing the situation with laser grade neon, used in the high-quality lasers needed to manufacture semiconductors.
"50 percent of laser grade neon was made in Ukraine, and the rest in China. And it takes a long lead time to build new factories. So, you can see the complexity! The unexpected things will come, in different forms and different patterns", he says.
Too much autonomy can be problematic
Cecilia Malmström, former European Union Commissioner for Trade, spoke about how the trade sector and supply chains have been impacted by the current geopolitical situation.
"Trade has become increasingly complex. We must take geopolitics into consideration, and companies need to adapt and plan for different scenarios. That requires increased transparency, better use of digital tools, flexibility, resilience, and diversification", she says.
Cecilia Malmström stated that trade in the west has been marked by protectionism and that we will see an increased focus on regionalized trade. New terms have popped up, such as "Friends-shoring", a concept that seeks to reallocate production and sourcing away from unreliable partners.
Independence can be a good thing, she pointed out, but too much autonomy can also be a trap.
"In certain areas, it makes a lot of sense to have your own production or try to diversify. But we are all interdependent and we have so many problems we need to solve together", she says.
Text: Ulrika Ernström
Photo: via Closer
More voices from The Transport Efficiency Day
Sandra Runsten, Sweco
“The society we create today needs to be sustainable enough to last for decades, yet needs to be flexible and adaptable”
Henrik Åkerman, Picadeli
”We are a better company now than before the pandemic. That's because we adapted and took advantage of smart technical systems”
Cecilia Malmström, former member of the European Parliament
“Is this the death of globalization? My answer is no. We will see a regionalization of trade, but that’s not in contradiction with globalization. However, the governance of globalization is in a huge crisis, and we need global rules and international, multilateral frameworks”
About Transport Efficiency Day / Transporteffektivitetsdagen
Transport Efficiency Day
is an annual conference organized by Northern Lead
logistics centre at Chalmers and the University of Gothenburg, and CLOSER
at Lindholmen. The event took place on August 30th 2022, and the topic was "Smart freight transportation to support a resilient society".