Supply Chain Insights: A Review of 2024
In 2024, global supply chains were tested by a series of unprecedented disruptions that challenged their resilience and operational capabilities. The year was marked by a variety of pivotal events, from labor strikes and natural disasters to significant political and economic developments, each leaving a distinct mark on the complex web of global logistics.
This review offers a structured breakdown of major events across these themes, offering detailed insights into the dynamics that shaped the year’s supply chain dynamics.
Labor strikes
The Canadian National and Canadian Pacific Kansas City rail strikes in August severely disrupted North American supply chains. Origin rail yard dwell times increased by 44%, while destination yard dwell times dropped by 80%, reflecting reduced shipment volumes. Industries reliant on rail transport, such as crude oil, mining, and automotive, faced higher transportation costs and delays as operations resumed under binding arbitration. The lingering tension highlighted the fragility of essential transport networks.
The Canada Post strike during the critical November peak season reduced on-time performance by 14%, leaving nearly one-third of parcels delayed. Canada’s limited carrier diversification exacerbated the impact, forcing shippers to rely on costlier alternatives such as UPS, which charges up to 40% more for comparable services. The strike underscored vulnerabilities in last-mile delivery networks during high-demand periods.
The 3-day strike by the International Longshoremen’s Association (ILA) in October caused delays at 36 East and Gulf Coast ports. Import and export dwell times spiked, albeit briefly, while vessels were rerouted to ports in Canada and Latin America. The strike disrupted industries ranging from retail to energy, highlighting the importance of resolving labor disputes to maintain supply chain stability.
Disasters
Natural Disasters
2024 marked a particularly active year for natural disasters. Between typhoons, earthquakes, floods, and a very active hurricane season, supply chains felt pressure from Mother Nature throughout the year.
Hurricane Helene: This Category 4 storm caused catastrophic flooding across the U.S. Southeast, particularly in North Carolina, where rainfall reached historic levels. The Port of Jacksonville experienced significant operational disruptions, with on-time truckload performance plummeting to 47%.
Hurricane Francine: Made landfall in New Orleans as a Category 2 hurricane caused widespread power outages, port closures, and a 50% drop in Louisiana’s truckload volume. Ports like Mobile and Houston avoided major disruptions but remained on high alert for flood and tornado risks.
Hurricane Milton: Striking Florida two weeks after Helene, this Category 3 hurricane compounded delays at ports already recovering from labor strikes. Savannah and Norfolk ports experienced persistent vessel congestion, reflecting the cumulative impact of consecutive disasters.
DANA Storms in Spain: Extreme rainfall in October disrupted operations at Valencia, Barcelona, and Algeciras ports. Container dwell times spiked, particularly for transshipments in Barcelona, affecting European trade during the peak season.
Infrastructure Failures
Francis Scott Key Bridge Collapse
The Baltimore bridge collapse in March caused a 2.5-month port closure, rerouting cargo to ports in New York, Norfolk, and Newark. The estimated $85 million in demurrage charges highlighted the cascading financial impact of infrastructure failures on supply chains.
In July, a global IT outage caused by a faulty CrowdStrike update disrupted numerous industries, including airlines, banks, and hospitals. The outage led to a 25% increase in air freight transit times and a 6% drop in last-mile delivery performance for two days. While recovery was swift for most sectors, the incident underscored the vulnerability of supply chains to IT failures and emphasized the need for robust contingency planning and manual backup systems.
Political and Economic Factors
The Biden Administration’s targeted tariffs on Chinese imports aimed to bolster U.S. manufacturing and enhance supply chain resilience. Despite concerns about inflation, the $18 billion scope was narrower than the 2018 tariffs, focusing on strategic goods like semiconductors, EV components, and medical supplies. Tariffs and trade policies will likely have a more active year in 2025 with the administration shift.
The ongoing Houthi attacks in the Red Sea disrupted major trade routes, reducing Suez Canal volumes by more than 75% in 2024 compared to 2023. Transit times from Southeast Asia to Europe increased by 33%, forcing carriers to reroute around Africa. The conflict emphasized the geopolitical risks that can drastically reshape shipping lanes.
Peak Season Trends
- U.S. Ocean Imports: Imports from China rose by 6% as shippers pulled forward orders to mitigate new tariffs. West Coast ports like Long Beach regained prominence, handling nearly 40% of U.S. peak-season imports.
- Europe’s Peak Season: China remained Europe’s top trading partner, while U.S. imports to Europe increased by 2.4%, reflecting strengthened transatlantic trade ties despite labor unrest.
- Last-Mile Performance: Delivery times improved by 27% year-over-year, reaching a 3.7-day average in November 2024. However, consumer complaints about delays and theft persisted, underscoring the need for robust last-mile visibility and security solutions.
Conclusion
While 2024 was characterized by frequent and overlapping disruptions that exposed many supply chain vulnerabilities, it was also a year of resilience. From labor strikes and natural disasters to geopolitical tensions, each event served as a critical learning opportunity, underscoring the necessity for robust contingency planning, effective labor relations, and durable infrastructure. As supply chains continue to evolve, the lessons learned this past year highlight the increased importance of proactive measures and collaborative efforts. These strategies are essential to fostering stability and adaptability in a world where unpredictability is becoming the norm.
Predictions for 2025
- More technology and automation will be introduced into supply chains, particularly ports. This will help make operations more efficient but also increase the risk of cybersecurity attacks and service interruptions due to glitches and bugs. This could also add tensions among the labor pool and unions, who do not want jobs to be replaced with automation.
- The new administration in the United States introduces a lot of uncertainty, with talks of major tariffs for numerous countries as well as talks of US freight getting preferential treatment through the Panama Canal. If these things do come to fruition, expect to see shifts in global trade patterns and sourcing.
- Natural disasters will continue to become more frequent and more severe, as exhibited by the wildfires in Los Angeles and the winter storms throughout the southern states in the U.S. As a result, expect companies to invest more heavily in sustainability to mitigate climate change.
- It is rumored that a peace treaty is within reach among the Middle East. 2025 will likely see volumes returning to the Suez Canal as political crisis in the area are resolved.
