One of the biggest challenges at the moment for the horticultural sector is the shortage of raw materials. 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 some suppliers. The purchase prices of raw materials have gone up considerably, however, (see our article from earlier this month), and 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 the result of developments such as corona and the incident with the boat stuck in the Suez Canal.
In the logistic industry, 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 might sound 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 the world of international logistics is still chaos. There remains a serious lack of space onboard the ships and empty equipment 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. During the first lockdown, less money was spent because people felt insecure about the future. And the second lockdown was the opposite; demand for goods increased. 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 tells us. 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 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 party."
"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 to help them. The focus remains on long-term relationships," concludes Victor.
Optimization 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 optimizing 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.
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Martin Van Dueren-den Hollander