An element of stability has returned to Irish companies’ international supply chains that were upturned during the pandemic, according to a report on the Irish market by British global logistics group, Woodland Group.
However, it warns of the possibility of further disruption this year from various industrial actions by port workers ports abroad.
The Woodland Group Ireland supply chain report for the second quarter of the year, covering April to June, said a growing stability trend from the first quarter had continued over the three month period.
The report suggested that some Irish businesses that had previously experienced disruption sourcing goods from Asia have since switched to “near sourcing” from closer markets, such as Turkey.
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Woodland said that “more businesses [are] now looking to spread risks and have contingencies in place to ensure that they have continuity of supply and [that] shelves will not be left empty”.
Kevin Brady, the managing director of Woodland Group Ireland, said Irish businesses had shown “resilience and versatility” over the second quarter in continuing to diversify their supply chains.
“At the start of the second quarter, it was nigh on impossible to predict where we would be as we moved towards the third quarter, with Covid-19 still very much a threat to the Asia supply chain, the Ukraine conflict ongoing, the US experiencing heavy west coast congestion and a whole plethora of drivers pushing up costs at all stages of the chain,” he said.
However, he noted, the supply chain to Ireland had remained “as reliable as it possibly can be”.
Woodland noted that second quarter lockdowns in China and Shanghai in particular has caused problems for businesses importing goods from the region.
“Proposed strikes across US, European and British ports could cause further disruption through quarter three as shipping lines look to get back on track,” said Woodland. It said ongoing congestion in US ports that has lengthened delivery times is also “unlikely to dissipate in the immediate future”.
Despite the challenges, Woodland’s finding that supply chains are maintaining stability chimes with a separate Bank of Ireland report released over the weekend. The bank’s “economic pulse” sentiment index for August said its data suggests that there are “nascent signs that supply chains are healing” following the worst of the pandemic.
