Supply Chain Management

Supply Chain Disruptions

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From labor and transportation availability to material and input costs, supply chain disruptions are causing issues throughout the produce and floral industries. IFPA has created a place for you to discover data, recommended actions, and steps being taken by the International Fresh Produce Association to mitigate these challenges. Dive into the information below to learn more.

Current Challenge: Labor Availability

Unemployment stats by top member countries

January 2022

USA

3.9%

Canada

5.9%

Mexico

3.7%

Chile

7.5%

Brazil

12.1%

South Africa

34.9%

Australia

4.6%

New Zealand

3.4%

China

5.0%

According to a 2021 supply chain survey of our members;

82% of members reported that labor shortages were a major challenge to their business.

Up from 30% in 2020

Transportation

82,000 driver shortage in the United States

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Transportation

18,000 driver shortage in Canada

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Labor Recommended Actions

Adopt the Ethical Charter to assist in your recruiting efforts by showing that your company treats your employees fairly.

Ethical Charter

Current Challenge: Transportation Costs

U.S. Trucking

  • Trucking CEOs expect higher prices, potential disruptions in second half of 2022
  • Cost percent increase of 40% - 60%
  • Rates are forecast to remain at or near record high through most of 2022
  • All non-U.S. drivers crossing into the U.S. from Mexico or Canada must be fully vaccinated with a CDC/WHO recognized vaccine
  • All non-Canadian drivers crossing into Canada must be fully vaccinated with two doses of the Pfizer, Moderna, AstraZeneca, Covaxin, Sinopharm or Sinovac vaccines; or one dose of the Janssen/Johnson & Johnson vaccine
  • All Canadian drivers crossing into Canada who are NOT fully vaccinated must test negative to enter Canada or enter into a 14-day quarantine after completing their delivery in Canada

Marine Freight

  • Cost percent increase 100% - 500%
  • Abnormally longer transit times for marine freight
  • Port congestion has reduced sailings and overall capacity by 12-15%
  • Marine carriers refusing to carry perishable shipments
  • As of July 28, 2022, there were a record of 153 ships awaiting to get into a North American port, the majority off East and Gulf Coast ports.
    • Los Angeles/Long Beach - 26, down from a high of 109 in January 2022
    • Savannah - 43
    • Houston - 24
    • New York/New Jersey - 18
    • Vancouver, British Columbia - 17
    • Oakland - 15
    • Other North American ports - 10
  • West Coast U.S. export bookings are delayed 30+ days due to the inbound vessel congestion issues
  • Higher costs and port congestion are expected to continue at current level until 2023
  • The ongoing space crunch out of both Asia and Europe is accelerating the pace of contract negotiations for 2022/2023 container space
  • Carriers are offering more reasonable numbers for volume stability and predictability for any new contracts

Air Freight

Transportation Recommended Actions

Adopt Fresh Produce Transportation Working Group best practices to become a preferred receiver and/or shipper

Fresh Produce Transportation Best Practices

 

As supply chains continue to become more complex, we are pleased to share three best practices recommended by Mike Short, president of global forwarding, C.H. Robinson, to help optimize your global shipping strategies for the new year.

3 Key Global Shipping Strategies for 2023

Anticipate delays

Maximize capacity

Chose alternate ports

Forecast 6-8 weeks minimum

Consider entering into annual or semiannual contracts with marine and over the road carriers

Amend your transportation contracts to ensure all drivers crossing U.S./Mexico and U.S./Canada border are fully vaccinated with a CDC-approved vaccine

Current Challenge: Packaging

  • Cost increase from 2019 due to:
    • Price of paper and materials (i.e. corrugated price per ton is up 22% December 2021 from December 2019)
    • Exceptional demand (and stockpiling)
    • Increased labor costs & labor shortages
    • Cost of transportation
  • Increased lead times
  • Pallet availability and cost – Wood prices were up 350% in early and mid-2021 but have since reduced.

Packaging Recommended Actions

Adjust buying frequency for packaging

Confirm lead times and prices with all packaging suppliers

Consider sourcing North American manufactured packaging versus imported packaging

Current Challenge: Building Materials

  • Cost has increased: 12.2% in 2021 (National Association of Home Builders, as of November 2021)
  • Lead time is extended by up to 6-8 months

Building Materials Recommended Actions

Build longer lead times into planned projects

Current Challenge: Crop Protection and Fertilizers

Availability is down: Actual demand for fertilizer in 2021 was up 3.5% over expectation

Lead times have increased

Fertilizer cost up between 150% and 300% in the past year driven by a reduction in Chinese exports

Crop protection costs up 100%

Crop Protection Recommended Actions

Build longer lead times into purchase decisions

Confirm prices, availability and lead times with suppliers

Actions by International Fresh Produce Association

View Virtual Town Hall on supply chain disruption

Related Resources