The world is collectively experiencing nearly unprecedented supply chain
challenges, and the pet food industry must meet them.
COVID-19 has caused global disruption at all levels as businesses havescrambled to take care of their employees, their products and their customers.Supply chains in many industries have been strained or broken entirely, mostvisibly at the retail end of things (e.g., toilet paper) and in shipyardswhere the wild swing of demands (or lack thereof) for goods combined withtransportation issues have left imported cargo piling up at ports and inwarehouses.
For pet food manufacturers, as with other food-related segments of the market,being prepared for supply chain disruptions is part of doing business. But forthe current exceptional uncertainties, companies are taking things a stepfurther: solutions so far have involved diversifying suppliers and lookinginto alternate methods of getting their product where it needs to go, lessonsevery industry is swiftly learning.
“The COVID-19 pandemic has hit global trade and investment at an unprecedentedspeed and scale,” said trade specialists with the World Economic Forum.“Multinational companies faced an initial supply shock, then a demand shock asmore and more countries ordered people to stay at home. Governments,businesses and individual consumers suddenly struggled to procure basicproducts and materials, and were forced to confront the fragility of themodern supply chain. The urgent need to design smarter, stronger and morediverse supply chains has been one of the main lessons of this crisis.”
Transportation challenges possible for the pet food industry
One of the major struggles for the transportation industry has been an aircapacity shortage due to a 95% reduction in passenger flights — flights whichalso transport mail. At the same time, a 25–30% increase in e-commerce demand(and the resulting increase in packages needing to be shipped) has served tooverwhelm a global system that is short-staffed and under-resourced.
“The cancellation of more than 4.5 million passenger flights — the primarymeans of transporting post — has meant that capacity is scarce, costs more andtakes longer,” said Universal Postal Union Director General Bishar A. Husseinat the beginning of May. “Action needs to be swiftly taken to address theshortfall in air cargo capacity and to keep the mail moving.”
The U.S. Postal Service (USPS) has shifted some international air mail to seatransport, resulting in extended timelines for international shipments ofgoods. On May 16, 2020, for example, the third of such sea transports departedthe East Coast of the U.S. with mail slated for Austria, Denmark, Hungary,Poland, Sweden, the Czech Republic, Finland, Netherlands, Spain andSwitzerland. The transport’s estimated arrival date to its scheduled port inRotterdam, Netherlands, is June 9. Of course once the mail gets to port, itmust go through unloading, Customs clearance, transit to central sorting,acceptance and sorting, and road transit to its final delivery. All of that,according to the USPS, can take 1–2 weeks.
On May 28, UPS announced peak surcharges on certain domestic shipments in theU.S., the first of their surcharges that will apply to domestic shipments (thecompany announced COVID-19-related peak surcharges on airfreight shipmentsfrom mainland China, Hong Kong and Europe in mid-March). FedEx has capped thenumber of packages some retailers can ship from certain locations to helpcontrol the increase in e-commerce orders and availability of shippingresources. Both entities suspended their service guarantees in March.
Some pet food manufacturers, particularly those with subscription services andonline orders to fulfill, have been looking into more regional transportationoptions. Communication with customers, as always, has been key. By and large,consumers understand that these are exceptional times. But the averageconsumer has also likely not given much thought to how their orders arrive attheir doorstep. For a world that is suddenly getting a crash course in theglobal supply chain, simply letting pet parents know why their product mightbe delayed, and what you’re doing about it, can go a long way towards gainingand retaining their loyalty.
Source:Lindsay Beaton Petfood Industry
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