Realizing relief and chill deep down to their bellies, alongside a thrill to re-experience liberty like before, Americans scurry towards popular restaurants, pizzerias, bars and other popular hangouts as the Covid-19 restrictions get blurred which simply adds to fresh strains in supply chains concerning food items. Clearly, to enjoy best of both worlds, flavour-seekers throng such places in a large number now a days, across America, resulting in acute shortage of many items, such as chicken parts, skilled workforce and then, costs of transportation goes up too. A situation, suppliers and logistics providers feel worried about.
In the observation of Mr. Mark Allen, who is chief executive of the International Foodservice Distributors Association, he reveals, “Over the last six weeks, we have seen the market come roaring back faster than anybody would have anticipated.” “The start up has been, in many ways, as difficult as the shutdown…Everybody is trying to turn it on immediately and the capacity might not be there.”
Then, we have a large portfolio freight broker at Cincinnati, Total Quality Logistics LLC, with a large network of service to food-processing companies and distributors, whose president Kerry Byrne witnesses catch-as-catch-can deliveries of items being made these days, with no professional consistency owing to shortage of raw materials. He laments, “That disrupts entire supply chains. Everything is stressed,”
In fact, going by supply-chain experts, the industry is facing bullwhip effect, whereby companies that narrowed the scope of their operations earlier due to pandemic, are now trying to flare up operations but with slight haste, as demand grows and this is what makes suppliers frantic in fulfilling demand.
To woo retail parties during pandemic crunch, food suppliers widened their capacity and included more items, which distributors feel the pain now as their storage potential has shrunk, while restaurants and organizational food services have resumed their operations now.
Nevertheless, there has been a drastic shift on a range of aspects related to food supply chains, for instance, those manufacturing breaded chicken tenderloins have also downsized their production and to satisfy Covid-19 safety standards, even those into meat processing, have slowed down too.
In same way, nature of demad has undergone a change too as during pandemic, restaurants cut short their menus and started using prepackaged food items meant for takeout and making deliveries of food items and now fresh vegetables.
To gauge the current scenario in America, you can call any regional barrito chain lucky enough, if it gets two shipments of boneless, skinless chicken thighs per week, whose consumption was of 3 shipments in BC (before corona) times. Mr. Byrne adds, “lucky if they get two, and their supplier was out of chicken thighs for three weeks.”
Such shortages prove to be big hurdles before the retailers and restaurants. In words of Mr. Byrne, “Companies are putting things on sale or restaurant chains are offering promotions on special items but then they’re not sure they can get the shipments they need to meet the demand.” He added, “I’ve never seen anything like it, and there are no indications it’s going to let up anytime soon.”
As such, food and beverage consultancy firm, JPG Resources LLC maintains that from irregular availability of preferred items to high prices on staple ingredients, restaurants, hotels and enterprise food service has to bear with every such issue, in today’s times.
JPG Managing Director, Glenn Pappalardo shed light that, for instance, at a pizza restaurant in Indiana, pepperoni’s price jumped upto 60% high in the past five weeks. Likewise, at a restaurant in same state, supply of chicken is reduced by 60% as suppliers are unable to arrange, while no credible sight of flour and tofu.
Suzanne Rajczi, chief executive of Hudson, Ginsberg’s Foods Inc, complains that in the past few weeks, French fries and frankfurters, which used to be the menu mainstays, seem to have gone with the wind now, leaving most of her clients across upstate New York in angst.
As a result, her sales crew tries to promote the items which the firm maintains a stock of, for example, 6 oz chicken breast in place of 4 oz. She informs, “We’re trying to buy as much high-volume inventory as we think we can sell,” Ms. Rajczi said, “but we’re still beholden to those manufacturers that are hampered by their production capacity.”
Disruption in supply chain is widespread which also affect food distributors capability, as we have cases of dilly-dallying approach to resorted to international exports, such as of tuna and olives while packaging material is not seen leaving shores too. She says, “We can make salad dressing but we can’t make the bottles to sell the salad dressing.”
Now, not surprisingly, owing to such upheaval in delivery lines causes rising transportation costs as they need exclusive refrigerated truck trailers to haul foot items, which are in short to sight, while high in demand.
DAT Solutions LLC, which operates with connecting trucks, reveal that in May, last year, $3.09 per mile used to be the average transport price involving a refrigerated truck in the US, the amount has now swelled to $20.07% in the month of February this year.
Other than this, industry executives also flag the shortage of skilled workers as also the major drawback as the impact transfers from production units to transporters to distributors and warehouses.
Mr. Allen relates, “People cannot get the labor back, whether that’s working in the warehouse or somebody with a commercial driver’s license.”.