They are headlines that can’t be escaped right now: rising fuel costs. Global supply chain strains. Labor shortages along every stop of those chains.
At this week’s IFPA Virtual Town Hall, the discussion at hand was: how have these disruptions impacted IFPA members?
Gina Jones, vice-president of global insights for the IFPA, spoke about research the association did with members between November 2021 and March 22 about how the industry is functioning in the supply chain.
Shipping to and from farms, ports
With transportation challenges spiking in 2021, 49 percent of the industry reported starting to have issues with moving their product from farms while 42 percent struggled to get their product from ports.
Gina Jones told the town hall that members consider investment key to helping continue managing the supply chain better, starting with software to improve transparency within the chain.
The price of transportation was and continues to be a critical issue. In 2020, 56 percent of respondents reported an increase of more than $100,000 in transportation costs. In 2021, this jumped to 93 percent of respondents. In 2020, about 1/3 of respondents saw the price of transportation increase by between 10-20 percent. In 2021, this increased to 91 percent of the industry experiencing this.
Marine freight saw the biggest jump from 2020 to 2021 where 66 percent of respondents experienced an increase of more than 20 percent and 44 percent experienced an increase of more than 40 percent. And in air freight, the year-over-year increase from March 2020 to March 2021 was the largest ever recorded. In all, 50 percent of respondents saw an increase of more than 20 percent in 2021 and in 2022, that grew to over 40 percent of increases
Developing workarounds
In March, an IFPA think tank gathered to talk about workarounds for the industry. “Collaboration came up a lot,” said Jones. “There were partnerships within the industry where folks were trying to work together to get to a better solution. They put aside negotiating for the best price and really tried to collaborate to get to a better place. But there were also discussions around partnerships with government and they talked about needing to invest and considering them investments.”
Members consider investment key to helping continue managing the supply chain better, starting with software to improve transparency within the chain. “All the money seems to be going into software, whether it’s for transparency or traceability--that’s where the bulk of the dollars are going,” says Jones, noting some dollars are also going into automation in warehouses and an even smaller percentage into autonomous trucks.