A closer look at major obstacles impacting the global supply chain amid the pandemic
Consider for a moment the multitude of logistics it takes to relocate an employee from one location to another, whether domestically or internationally. An inexhaustive list includes home sales and purchasing, household goods and auto shipment and storage, temporary housing, and settling-in services — and all include a combination of labor, materials and transportation. It’s a complicated process even without a global pandemic, and much more intricate as the industry — and world, for that matter — experiences a variety of supply chain challenges as we recover from COVID-19.
So how can companies still provide exceptional experiences for mobile employees, while balancing cost implications and navigating supply chain constraints? Here are some tips on how to overcome these challenges and ways your relocation management company can — and should — be supporting you.
Confronting the Moving Challenges in Global Mobility
Like every other facet of our lives, COVID-19 has reshaped global mobility. After a year of slowed relocations due to health and safety regulations and border closures, the entire transportation industry experienced company closures and significant losses in drivers, as many are retiring or changing professions. The moving component of the industry was impacted even more severely with the low move volume. However, the talent mobility industry is roaring back with a double peak season (due to the wave of COVID-19 postponed relocations) that’s keeping mobility managers and relocation management companies on their toes.
This has led to supply chain limitations with everyone trying to access the same services and resources at once, including:
- Even as company-initiated relocations and employees’ personal moves out of large cities increase, the number of movers is decreasing as some leave the industry. That demand is enabling workers to follow the best compensation (which we’re seeing across industries, not just moving) and as a result, there’s a growing trend of movers, packers, drivers, etc. switching companies more often than before, making it difficult to staff planned relocations. Driver labor also has shifted from hourly rates to day rates, no matter the size of the shipment. These labor logistics have cost implications for supplier partners. Now that rates for moving have increased, yet contract pricing remains the same, margins for movers have eroded, sometimes even becoming unprofitable. In certain instances, this has led to movers not carrying out contracts, further exacerbating labor impediments and delays.
- Moving essentials, like cardboard boxes and lumber for crates and overseas lift vans, have seen shortages — making them more expensive to provide. We’re also seeing similar impacts in the hot U.S. housing market, where the price of lumber and other building materials has skyrocketed as mobile employees are turning to new builds due to the competitive housing market.
- A mix of container shortages and imbalances is creating delays in the shipping process. For example, while we may need containers in China to relocate an employees’ goods to Canada, the containers are in North American ports, where they’ve been sitting as the world shut down. So, those containers are being shipped back to, in this example, China, empty. They’re then filled and returned, but not fast enough to accommodate a backlog of shipment requests that continues to grow. This can cause delays in both shipment and drayage, further resulting in a need for longer storage times in both warehouses and ports. All of this can cause increased costs.
- With shipments delayed, goods are sitting in warehouses longer. This is creating storage space restrictions, meaning mobile employees may have to store their belongings a hundred miles from where they need to be, because that’s the closest open warehouse.
Leveraging an Open Supply Chain Model
While there’s no clear-cut solution to beating the supply chain challenges, partnering with a relocation management company that has an open supply chain model, like Graebel does, can ease some of the issues.
An open supply chain means the relocation management company doesn’t own any part of the supply chain and isn’t boxed in to directing business to certain companies. Instead, Graebel works with a network of trusted and vetted suppliers. This model gives us the flexibility to work with the best supplier partners in each market, allowing us to choose different supplier partners that fit mobile employee needs and client costs. It also gives us more room to negotiate the best contracts for our clients, helping rein in costs as they increase due to demand.
An open supply chain network also enables Graebel to scale as needed during busy times, like this double peak season. One of our core principles at Graebel is to understand clients’ business objectives, desires and goals clearly – to plan for work in advance and to coordinate support with our network of expert supplier partners. When things are busy, we have the benefit of being able to work with multiple supplier partners all at the same time, and we can plan ahead according to our clients’ changing needs and find more trusted partners, as needed.
Tips for Global Mobility Managers and Their Mobile Employees
Although an open supply chain eases the challenges of the above limitations, it isn’t immune to them. All of the factors we outlined earlier still impact relocating mobile employees with an open network. We expect to see these difficulties continue into early 2022, given the peak season will extend due to delays and then the holiday season will keep shipping busy.
So, for the next several months, the most important thing for mobility managers and your mobile employees to keep in mind as they’re journeying through relocations is that current scenarios will require:
- Maintaining open communication, patience and flexibility in both proactive plans and real-time, unexpected changes.
- Recognizing that each move is unique, and delays will be a reality in this kind of unpredictable supply and demand market
- Understanding the specific needs and challenges of each of your mobile employees will create a smoother process for everyone involved
- Working together to anticipate issues or delays, so that mobility managers and their relocation management companies can be better prepared to provide solutions.
Graebel takes a people-first approach to mobility, so we’re doing everything we can to understand each situation clearly to continue providing the most exceptional employee experiences, despite these unprecedented service challenges. We’re advocating for our clients and mobile employees, helping them negotiate the best contracts with movers and guiding them through the process and delays by finding solutions and managing expectations.
And one last tip to help get through these challenges: thank a mover. Throughout the pandemic, rain or shine or typhoon, movers are the frontline heroes of the mobility industry helping make exceptional experiences happen every day. It’s tough work at the best of times and they’ve kept going.
If you’re interested in learning more about these and other supply chain challenges like housing, temporary living, auto shipment and rental car shortages, among others, or how an open supply chain network like Graebel’s can help with your logistics, contact us.