421 views | Akpan Akata | June 1, 2021
Shortage of raw materials is one of the biggest challenges currently hitting the horticultural sector real hard.
This is largely caused by transport problems. What is the deal with the transport situation?
Most companies have not had any supply problems as of yet, according to a tour of some suppliers. The purchase prices of raw materials have gone up considerably.
Transports are also a lot more difficult than before. Sometimes there are simply no containers available or there is no space on the boat, an imbalance that is (now) the result of developments such as corona and the incident with the boat stuck in the Suez Canal.
Everything is coordinated: a full container back, an empty container back. For example, trade to China is currently getting back on track. A lot is transported from China to the west coast of America, and as a result the east coast is struggling with shortages. In addition, the improving economy is sometimes seen as a “problem factor”.
That sounds strange, but also logical: if demand rises, supply will come under pressure. This is reflected in prices and delivery times.
Martin van Dueren den Hollander of Share Logistics acknowledges that there is still chaos in the world of international logistics. There is still a serious lack of space on board the ships and empty equipment (containers) in a large number of sailing areas (eg Far East – Europe, Europe – America, Europe – Canada).
This results in almost continuously increasing rates. Martin: “At the moment it is really important to make reservations at the shipping companies at an early stage.
”Fortunately, this has been successful at Share Logistics so far, which means that we can still meet the high demand from the various customers. The current situation of scarcity is expected to continue for some time to come, so it remains important to act early and quickly. ”
Victor Wever of Allport Logistics points to the two lockdowns as the reason for the disrupted system.
In the first, less was spent because of doubts about the future. And the second lockdown was the opposite; demand for goods increased. People had saved up, were at home a lot and there was less doubt.
And that’s where it went wrong. It took much longer for the empty containers to return to ports in the United States, China and Europe.
The turnaround of the containers required more time. Because it took too long, the current shortages of sea containers have arisen.
“These are strange times”, Victor Wever of Allport Logistics says.
He explains: “We as forwarders always make agreements with shipping companies. These agreements are recorded in long-term contracts. They concern volumes and the associated amounts.
”Those rates and those of the spot market (day market) are now further apart than ever before. Shipping companies now often opt for the fast money and do not keep their contract agreements well. They play a hard game. Shipping companies are now making record profits. They are the laughing third.”
“At Allport Logistics we are careful with our existing customer package. We receive a lot of questions from new customers. And that is good. We do our best where we can. The focus remains on long-term relationships”, Victor adds.
Optimisation has been a ‘key word’ for many horticultural suppliers for years. Finally, there is also a sore point here.
Many companies have been working on optimising and keeping stocks as low as possible for years. After all, large stocks cost a lot of money. But now, in times of imbalance in the chain, you can see the effects of that.
Short stocks then become a problem. The risk of missing out is high.