In a growing technological age, the general population of developed, technologically-adapt countries are able to outsource shopping and allow deliveries to be made directly at their front door: from hot restaurant food in one’s neighborhood to the newest fashion trend from a boutique across the country. While many may see these advancements as an easy, new-adaption due to developing supply chain logistics, these third-party deliveries prove to hinder individual business themselves who are simply trying to keep up with ever-changing industry trends and consumer demands. In addition, people have been limited to the four walls of their residences for quite some time due to the Covid-19 pandemic, and with this isolation, there is an astronomical amount of wealth growing in savings accounts and stocks. In fact, as the world begins to revert to pre-pandemic conditions, people are willing to spend money and simply put, get what they want- no matter the cost. The pandemic has caused the everyday person to realize what they “actually desire”; whether or not that item is in short supply, the cost seems to be less of a driving factor than previously simply based on human nature. The same idea goes for large companies since businesses are deep into contracts that require certain materials, which are now facing various supply chain issues: from an increase in costs to limited shipping containers due to heightened consumer demand across the globe. All in all, the Covid-19 pandemic has drastically altered supply chain logistics on both micro and macro levels: simple last mile delivery as well as crowdsourcing and corporate shipping.
To begin, the Covid-19 pandemic has re-defined crowdsourcing and supply chain logistics in less than a year. Humans have never been forced to adapt so quickly to contactless systems of delivery, communications, and ways of living. However, even now as we transition back to normalcy, many of these monumental technological developments will be integrated into our lives as we begin to revert to pre-pandemic times. To begin, crowdsourcing is an increasing phenomenon in omnichannel retail as it seeks to better customer experience and efficiency. The rise of crowd sourcing logistics and last mile delivery is in part due to the growing gig economy as people prefer to work for themselves. All in all, the presence of crowdsourcing boosts a customer’s purchasing behavior, yet it also can prove to be counterintuitive for a company as the 3rd party can possess too much power in relation to the logistics chain. Hence, the expansion of a business through platform partnership will increase sales through greater purchase options and platform partnerships; however, the lack of control a company possesses over the last mile can decrease customer value and loyalty.
With this idea in mind, it is important to recognize that increased consumer demand is a source of shipping delays and supply chain issues as businesses rush to create supply. These companies are struggling to ship said items due to a lack of shipping containers, for so many corporations are seeking to meet growing customer needs. While this may seem to be a microeconomic issue of small companies attempting to fill clothing orders, these seemingly miniscule delays are causing large corporations to face exorbitant shipping costs and delays on multi-million-dollar contracts. Thus, the macroeconomic effects of these supply chain issues are being felt by the greater economy, for supply chain delays continue to setback technological, energy, and agricultural businesses. For example, National Grid, the largest UK utility is currently facing these issues in their North American projects. I interned this past summer (2021) for NG Renewables in Minneapolis, and one project I worked on regarded the negative financial impact of a shipment of solar panels from a company in Thailand due to an increase in prices. While the contract has already been signed, the shipping costs increased by millions of dollars due to a lack of shipping containers, which can be attributed to western holiday purchases and Chinese New Year as well as the blockage of the Suez Canal. The problem lies in the fact that shipping companies are not traded publicly, so they are essentially monopolies that are feeding off of increased consumer demand, so they are disregarding contracts and selling to the highest bidder. Thus, this scenario is thus causing NG Renewables to be forced to change their project budgets at the last minute, which in turn affects the status of other solar, wind, and storage contracted projects.
NG Renewables was not only affected by macroeconomic issues such as the blockage of the Suez Canal or the monopolistic nature of the shipping industry, for the company was also blocked by microeconomic factors. These microeconomic factors include the impacts of crowdsourcing as the expansion of third-party delivery services drives consumer demand to an astronomical level regardless of cost within the rapidly expanding technological age consumers and businesses are currently experiencing.
Nina Reamer, University of San Diego ’23 (email: firstname.lastname@example.org)