Truckers' strikes consistently underscore the vulnerability of even short-term supply routes, exemplified by disruptions between Gujarat and Maharashtra. Recent global events, such as the Covid pandemic, the Russia-Ukraine war, and conflicts in West Asia, have already exposed the fragility of supply chains. These disruptions not only highlight the susceptibility of supply chains but also contribute to increased costs.
Regardless of advancements in trade ties, automation, and AI-assisted logistics, the unpredictability of geopolitics, socio-cultural and legal factors, along with the exclusion of stakeholders from policy decisions, can significantly impact supply chains. The interconnectedness of global supply chains, spanning raw materials to finished products across land, air, and sea, is a product of globalization that cannot and should not be easily unraveled. While some countries express a desire for supply chain "sovereignty" post-Covid, modern economies are inherently designed to be part of a connected world, facilitated by digital connectivity.
Supply chains exhibit a butterfly effect, where minor disruptions in critical chains can lead to ripple effects affecting end-users. The Russia-Ukraine war, for example, halted grain exports from Ukraine, creating fears of a global food shortage. Lockdowns during the Covid pandemic caused disruptions ranging from the US toilet paper crisis to India's delays in truck movement at state borders.
Efforts to reduce dependence on China faced challenges during the Covid pandemic, notably in the shortage of active pharmaceutical ingredients (APIs) required for medicine production. The interconnected nature of global trade became evident as the US, which imported 70% of its APIs from China, realized the difficulty of severing ties.
AI is increasingly integrated into supply chain logistics to address challenges like driver shortages. Automation and AI technologies are prioritized in research and development for road freight, with efforts to modularize critical paths for rerouting in case of disruptions. The vision of an AI-driven control tower with end-to-end supply chain visibility is emerging.
India, in particular, is urged to enhance its logistics infrastructure. Increasing the share of rail freight, currently at 27% and limited to 11 commodities, is recommended to minimize disruptions. The concept of dedicated freight corridors, although longstanding, needs to be expedited. The government's GatiShakti initiative, encompassing a comprehensive logistics national plan, is acknowledged as well-conceived but requires more substantial implementation and movement
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