Opinion | The End of Just in Time Is Not a Crisis. It Is a Reality We Must Learn to Work With

Estimated reading time: 4 minutes

By: Peter Bouwhuis

There was a time when the logistics industry believed that just in time was the closest thing to perfection. Cargo arrived exactly when it was needed. Warehouses became smaller. Inventory costs disappeared from balance sheets. Everything looked efficient. Until it wasn’t.

Looking back, I sometimes wonder whether we confused efficiency with security. We built global supply chains on the assumption that the world would remain stable, energy would stay affordable, and political tensions would never seriously interrupt trade. That assumption has now been broken.

Today we are watching the global economy move from an era of abundance into one where scarcity has become part of everyday business planning. Not because the world suddenly lacks resources, but because access to those resources has become uncertain.

Think about it like driving a car without carrying a spare tyre. It saves weight and fuel until the moment you get a puncture. Then the savings suddenly feel very expensive. That is exactly what has happened to global supply chains.

The pandemic exposed weaknesses. The war in Ukraine deepened them. Growing tensions between the United States and China have made governments and businesses realise that relying on a single country or a single supplier is no longer a comfortable strategy.

That is changing the way cargo moves around the world.

Companies are talking less about just in time and far more about just in case. They are building larger inventories, signing contracts with multiple suppliers and moving production closer to home whenever possible. Nearshoring and reshoring have moved from conference presentations to boardroom priorities.

For shipping lines, freight forwarders, project cargo specialists and port operators, this is much more than another market cycle. It is a structural shift that could shape our industry for many years.

Take Germany as an example. For decades its industrial success relied on affordable Russian energy and dependable manufacturing links with China. Both pillars have weakened dramatically. Replacing them is neither quick nor inexpensive. New factories, new suppliers and new transport corridors all require time, investment and skilled people.

That means logistics networks will also change.

Some trade lanes will shrink while others grow. Cargo may travel longer distances because companies spread production across several countries instead of concentrating everything in one location. Warehousing demand is already increasing because businesses want larger safety stocks rather than empty shelves.

This also means higher costs.

Many people still expect freight rates to return permanently to the exceptionally low levels we once considered normal. I believe that expectation belongs to another era. Greater resilience costs money. Multiple suppliers cost money. Strategic inventories cost money. Alternative shipping routes cost money.

Those costs are now becoming part of doing business.

The work of Joseph Tainter, author of The Collapse of Complex Societies, comes to mind. His argument that complex systems eventually reach a point where maintaining them becomes more expensive than the benefits they provide feels surprisingly relevant today. Our global supply chains became incredibly efficient, but also incredibly fragile. We are now paying the price for that fragility.

Governments have noticed.

Across Europe, North America and parts of Asia we see export controls, industrial subsidies, strategic stockpiles and new investment in domestic manufacturing. These policies are often criticised for reducing efficiency, but perhaps efficiency is no longer the only objective. Security has entered the conversation.

That brings me to another interesting observation from Sarah Paine. She has argued that Europe’s strength lies in building institutions and cooperation between nations. That may sound slow compared with decisive national action, but coordinated investment across allied countries could prove far more durable than every nation trying to become completely self sufficient.

Because that simply is not realistic.

No country produces everything it needs. Not the United States. Not China. Not any European economy. The future is unlikely to be about isolation. It will be about trusted partnerships.

For our industry, that distinction matters enormously.

Maritime transport will not disappear because globalisation changes. Ships will still sail. Ports will still expand. Project cargo will still move. What will change are the routes, the cargo mix and the reasons why goods move between countries.

In many ways, logistics has always adapted faster than politics. When trade changes, our industry usually finds a way to keep cargo moving. That resilience has always been one of our greatest strengths.

The challenge today is accepting that the world we built our supply chains around no longer exists.

The age of just in time was built on confidence.

The next chapter will be built on preparation.

That may not be as efficient, but it will almost certainly prove more resilient.