Supply Chain issues in 2021 and some of the reasons for this.

Logistics is one of our core sectors here at HtE Recruitment and we speak to leading people in this sector on a weekly basis. As we all know, the logistics sector and the ‘just in time’ method used in the UK is a critical part of our Country and the Logistics sector are so often not even noticed. It is great that recently we have had more media attention about what happens within our sector.

Fast switch of consumer habit

Consumers have gone from shopping on the high street to using e commerce and online marketplaces, this increase in demand further complicated issues when the travel bans came in. Less people on flights meant a lot of distributors couldn’t use Air freight services. the travel ban meant air imports just weren’t viable. This caused much strain on our warehouses and depot’s, the switch in consumer habits caused air freight to be less viable in some cases. Sea freight picked up the slack that a lack of air freight services created but this proved to remedy the situation lightly. Simply put, consumers as a majority changed where they source their goods and how they ate which had a knock on effect for logistics, meaning many logistics companies were seeing an influx of orders from consumers over businesses.  

Switch to hybrid working

Many people have either switched or started working from home. This has meant a sharp rise in office goods for the home. This also resulted in imports of furniture, laptops, headsets and desks. There’s also the spending habits of those who work at home. They invested in their local economy, by eating out for lunch many local businesses saw this as a worthwhile reason to start importing stock in larger amounts again, which has caused it’s own benefits and negatives.

Some parts of china were in full lockdown

China is one of the UK’s biggest importers, so when regions of china went into lockdown it caused issues for other businesses who relied on china’s ports in the lockdown regions. Businesses cancelled orders, which meant warehouse space was taken up with unwanted stock. Businesses refused to pay or buy the stock when lockdown lifted. Samsung refused to pay a chip manufacturer for an industrial order of chip boards, causing difficulties for global supply chains and simultaneously causing a ‘chip shortage.’ There wasn’t a shortage of chips. Businesses simply didn’t want to pay for what they’d bought due to the issues the logistics sector was facing, this caused a lot of difficulty for the IT & Digital industries globally.

Change in eating habits

There has been a radical shift in dynamic between the Hospitality & Catering industry and supply chain. To accommodate to the constantly changing needs of both businesses and consumers. Currently it’s easier to ship retail packs of their products. This was less profitable and caused many businesses to change their suppliers or just stomach the charges. While people have been buying from food stores again, others turned to online groceries. This meant that our logistics issues were shuffled around as opposed to fixed because many people were ordering produce from outside the country, causing more issues for both distributors and restaurants. Supply chain problems meant some imports just weren’t coming in on time. This has resulted in more local produce being delivered to stores and restaurants as people have looked to other sources for their goods.

Containers in the wrong area

With less passenger flights, many distributors had to switch to air or road freight for solutions. This caused a lot of stock to be kept on hold, which ran up charges and late fees, some companies even reported their stock was just gone. So a lack of worth while cataloguing lead to much confusion and scrambling to find these crates. In turn causing additional hangups and slowing down the actual shipping side of the logistic process. With more countries re entering the green list, Air freight is becoming a more valid option for many of these distributors as the travel bans lift on countries primarily using Air freight solutions.

Major ports at capacity

Many major ports across Europe and the world had reported being dangerously close to capacity this year. This meant a very aggressive application of ‘just-in-time’ logistics strategies being implemented. One of the supply chains biggest issues has been conferring between ports and route planners to figure out a system that would work to handle this high capacity issue. Leading to some HGV’s being lined up for miles outside of the port, waiting for their turn at collecting goods.

Post brexit changes to customs rules

Brexit ended up causing many changes to how administrative duties regarding customs played out. Resulting in lengthier processes regarding actually taking in the import or exporting the goods. This was accompanied by some aspects of shipping completely losing appeal. Many logistics companies have opted out of cross-boarder fulfilment, due to things like price and complexity surrounding the operation itself. While the price of freight costs went up, encouraging many road hauliers to not pick up return loads. There is currently a consorted effort to create new operations that can prove more effective in our current administrative climate.

Issues with HGV Drivers at Ports

As we mentioned earlier regarding HGV drivers. There has been a lot of difficulty in working around the paperwork and new rules regarding exporting to the EU and product coming into the UK. Leaving HGV drivers in the middle, as they have to wait at these ports while staff confer to figure out where the missing freight is for example. There’s also the issue of why HGV drivers are leaving the industry altogether, many HGV drivers have brought up ineffective administrators leaving them to handle duties outside of their job role. There’s also the legality regarding long stays at ports. As many HGV drivers are licensed and insured for only the transaction and not the waiting period.

From talking to some clients, some of the issues are starting to ease. The UK has a long standing supply chain industry dating back over 200 years. As we look towards 2022, it is now the time to start looking at the staffing levels in your business and having the right skills for the future. This year we have seen many new roles being created on Customs and Ocean freight. We forecast that 2022 will see the bounce back of the Air Freight Forwarding sector and we are already seeing a increase in demand for talent with Air Freight background.  Our team of recruiters within the Logistics sector cover: freight forwarding & customs, Distribution & Warehousing, Transport & planning and Sales roles. If you are planning to increase your talent pool in 2022, our team are available for a informal chat about your plans.  

HtE Recruitment News & Insights

This news and insights page has been written by Josh our Marketing Coordinator. HtE Recruitment take no responsibility for this post, this is just a summary of a number of factors in the news regarding supply chain. HtE Recruitment is one of the UK Recruitment Agencies for the Logistics industry.