The global supply chain was disrupted at the start of the pandemic, even now as the pandemic has been contained global supply chain issues have raged on, exposing both the fragility and inflexibility of these systems whose smooth functionality it now seems too many took for granted.
The fresh produce industry is uniquely vulnerable to logistical upheaval, which since the turn of the decade has included late deliveries, a severe shortage of truckers in the United States, and a lack of refrigerated containers globally. Other commodities can be stored for long periods, this is not the case with fresh produce. These issues have now combined with dramatically rising costs of almost everything from transportation to fertilizers to create major losses of products, sales, and revenue for the produce industry, and in many cases shortages of supply for retailers and foodservice reports www.visionmagazineus.com
In a survey carried out in the second quarter of 2022 by FMI-The Food Industry Association, more than 70% of responding retailers said supply chain disruptions would negatively impact their business during the year, up from 42% who reported that concern in 2021. The figure was even higher for suppliers, of whom more than 82% said they expected negative supply chain impacts and outcomes.
In the U.S. especially, a shortage of truck drivers has become an increasingly troublesome issue for the produce and retail industries. The American Trucking Association (ATA) says there was a record deficit of 80,000 truck drivers in 2021 – a 30% increase from before the pandemic. Even more worrisome, the ATA predicts that if current trends continue, the trucking sector is headed for a shortage of 160,000 drivers by 2030.
These shortages affect the fresh produce industry more than others, as it needs to transport its goods quickly and therefore has a different labor requirement, notes Rick Stein, vice president of Fresh Foods at FMI.
The supply chain crisis has undoubtedly been taxing for the fresh produce industry and retailers. But out of this adversity it seems that numerous positive long-term impacts will emerge. For one, partnerships between buyers and sellers at every level of the supply chain are strengthening, according to Ed Treacy, vice president of Supply Chain and Sustainability at the International Fresh Produce Association (IFPA). He anticipates that the stronger relationships, forged by being there for each other during difficult times, will ultimately lead to an overall lower reliance for many on the spot market and increased focus on long-term contractual partnerships.
Greg Ferrara, president and CEO of the National Grocers Association, says that in addition to continuing to leverage relationships with local growers, independent retailers will continue to seek alternate channels for products – such as foodservice, which became a key source for products during the pandemic – as well as plan for their needs further in advance to assure ample supplies for their customers.
Ferrara adds that it is important for growers to work closely with retailers, being transparent and establishing a two-way street of collaboration to understand their needs and common goals in fulfilling consumer demand for fresh produce.