food visibility

Visibility in the food supply chain

Jun 21, 2023 | , ,

For many importers, the underlying problem that prevented them from pivoting their supply chain as the pandemic’s impact became more pervasive was lack of visibility and control upstream. 

The food supply chain has stabilised since the pandemic, but new macro events continue to create disruption, including the war in Ukraine and the cost of living crisis and where there is a lack of visibility, it prevents the timely, proactive action that optimises operations in the face of disruption.

Participants across the food and drink sector still need that greater transparency and control, to ensure an effective, resilient and flexible supply chain is available, whatever challenges arise.

End-to-end visibility removes uncertainty in the supply chain, by providing the wider business with a view of inventory supply upstream and when they can expect to receive particular product batches. 

With clearer visibility and transparency between production, shipping, storage and distribution, it is easier to anticipate any supply shortages or delays, so they can immediately overcome the issue, or update the business, so that alternative sources may be accessed and implications for customers avoided. 

Delivering visibility in the food supply chain

This importer of food products and raw materials is a major international manufacturer of branded grocery products, that includes many market-leading household names and consequently has a vast integrated global supply chain, with many layers of complexity.

The supply chain visibility solution that has been developed for them by Metro comprises seven core functions, and a users portal with dashboard, which provides a real-time view of the entire supply chain, together with drill down options for each of the seven functions.

  • POMs (Purchase Order management)
    • We receive a feed of PO/SKU data, with suppliers confirming quantities, dates and place a booking at origin. Tolerances are set and approvals required for anything outside of certain dates or other values.
  • EBSA (E-booking space and allocation)
    • Vessels bookings are allocated to POs and carrier contracts.
  • Track and Trace with AI powered ETA
    • SKU level tracking with market leading predicted dates. Vessel AIS images and automated delay logging - with reasons.
  • Report centre
    • Key KPI reports such as average days a container is at port, transit and delivery times within SLA agreement, bookings per week by carrier split.
    • Bespoke reports also built around financial reporting and inbound forecasting.
  • DCM – Distribution centre management for 3rd party DCs
    • The DCM has been tailored to their requirements and includes integration with Port Health. Container landing, customs clearance, and released for collection are timed, so client can specify containers for priority, or ‘drill in’ to see the SKUs inside and prioritise collection accordingly.
  • My Notifications
    • Client is closely monitoring inbound vessel movements based around a strict tolerance.
  • MVT Eco
    • ECO tool measures emissions and GHG output, by individual shipment, within their supply chain.

EMAIL Simon George, Technical Solutions Director, to learn more.

Coronavirus update 24th March

Low speed containerships are propping up rates

Jun 7, 2023 | , ,

Last year the shipping analyst Drewry’s forecast that the container shipping lines earnings would be down 64% for 2023, but added that there were strategic choices available to the carriers, to protect their revenues, with slow steaming a proven method of removing capacity, to protect rates and comply with environmental regulations.

In the first quarter of 2023, the global container fleet accordingly moved at all-time slow speeds, with analysts suggesting that vessels could go slower still which, despite massive falls, will help carriers keep rates higher than pre-pandemic levels.

During the covid pandemic the container shipping lines increased average sailing speed by 4% to meet strong demand and create spare time, because of widespread port congestion. 

In the first quarter of 2023 the average sailing speed has come back down 4% year-on-year and could drop a further by 10% before 2025, to absorb capacity that would otherwise be surplus. 

Across the global container fleet average speeds went down by about one knot, in the last two years, which does not sound like much, but Alphaliner data shows that is about 6% slower overall, which means you need proportionately more tonnage to carry the same cargo volume. 

For the past couple of decades carriers have adopted slow-steaming whenever there is structural overcapacity or high fuel prices - or both - as is the current situation.

At the same time the shipping lines have ordered record amounts of new vessels and additional capacity is now being delivered into a market with minimal demand growth, new environmental regulations, carbon taxes and rising fuel prices.

Maersk and MSC announced last month they would be adding nine new vessels into the Asia-Europe trade, but that these services would be moving up to three days slower than before, thus absorbing all the new capacity. 

As part of plans to conduct field tests of an onboard carbon capture system (OCCS) for container ships in 2024, South Korea’s HMM will replace the propellers on six of its containerships with more efficient ones specially designed for slow steaming, with HMM also expecting to increase energy efficiency by 8-9%.

The transition to new fuels such as LNG, methanol and ammonia also favours slow speeds, since these fuels will be much more expensive than current ones, which makes sense to deploy extra ships and save fuel.  

Despite a 70-80% fall in freight rates over the last two years, and a worsening of the supply/demand balance, it is quite clear that the container shipping lines have been successful in matching capacity to cargo demand, in keeping rates higher than pre-pandemic levels.

Slow-steaming and evolutions in shipping alliances change competitive dynamics on all the major trade-lanes, which is why we stay close to our carrier partners and contacts, to keep track of changes and identify opportunities for our customers.

If you have any questions or concerns about the developments outlined in this eBulletin, please EMAIL our Chief Commercial Officer, Andy Smith, for the latest insights and intelligence.

Nhava Sheva

Nhava Sheva congestion may last till November

Apr 11, 2023 | ,

The port of Nhava Sheva, is the second largest container port in India and repairs and replacement of gantry cranes are reducing terminal capacity by 50%, which is expected to possibly last until October or November.

Container traffic through India's Nhava Sheva Port (JNPT) is facing bottlenecks due to a significant capacity reduction, which has been fuelled by the closure of a berth operated by APM Terminals (APMT) Mumbai, also known as Gateway Terminals India (GTI), to upgrade and replace gantry cranes.

As part of a US$115-million investment programme APMT are installing six ship-to-shore cranes and three larger rail-mounted quay cranes in place of the existing QCs, which will improve their ability to handle larger vessels and enhance container handling capacity to 2.2 million TEUs.

In addition to APMT, the port has two terminals operated by DP World, one by PSA and one by a new consortium led by CMA Terminals.

The number of weekly vessel calls that GTI is able to accommodate has fallen to six, from the normal 13 and carriers are facing challenges securing berthing windows, which is forcing them to change gate cut-off hours for cargo carting, with terminals facing congestion from increased volumes.

As a result of the congestion, move counts are limited and concerns are growing that vessels may miss connections and cargo roll-overs for exporters may follow, if the congestion escalates.

Export gate-in times may be reduced and waiting times will increase due to road congestion and a shortage of containers is possible as empty discharge from vessels will be limited.

We have seen the situation worsen over the last fortnight, with traffic congestion building on approach roads to every terminal. See our gallery images below.

It can take some drivers up to 10 hours to reach the entry gate due to the traffic, which is  why export containers are being shut out, import containers delayed and long waits for empties.

Our vehicles cannot avoid the congestions, but we are liaising with port officials to ensure that import deliveries are effected within the terminal’s free period and export containers are gated-in before cut-off, to connect with their respective vessels.

We are monitoring the evolving situation and working closely with our local network partners, to protect our customers’ supply chains. If you are currently shipping through Nhava Sheva, or are thinking of developing business in the Indian subcontinent, please EMAIL Elliot Carlile, who will be able to offer guidance and recommendations.

Our network and expertise extends across the ISC, with established operations in Pakistan, India, Sri Lanka and Bangladesh, supporting customers across a variety of verticals, who are sourcing from and exporting to the region.

shopping 2

<strong>Supply chains returning to just-in-time focus</strong>

Mar 29, 2023 | , ,

The Chartered Institute of Procurement & Supply’s (CIPS) Procurement Futures conference brought together the most influential procurement professionals to figure out how to make supply chains more resilient, as buyers consider returning to just-in-time strategies, as port congestion eases.

The disruption of the past two years shifted supply chain operations to’ just-in-case’ (JIC) procurement strategies, but this focus is changing as port congestion and supply chain disruption has cleared and buying teams now consider how to deal with inventory levels.

Speaking at the conference, the CIPS chief economist confirmed that supply chains are increasingly moving back to ‘just-in-time’ (JIT) from ‘just-in-case’, but with significant overstocking in the UK, Europe and North America, many distribution centre's are full. 

In the worst case, merchants still hold inventory across their supply chain, with stocks at ports, or 3rd party storage facilities, although CIPS expect those stocks will work through the system by quarter one, or quarter two, after which supply chains will be fluid again.

With China opening up, the manufacturing capability for ‘just in time’ is returning but, while COVID19 turbulence and uncertainty has diminished, climate-related disruptions, tensions between the United States and China, and the war between Russia and Ukraine raise another question mark over how buyers might manage risk. 

These disruptions are tempting some to still maintain lots of inventory, to ensure business continuity, but that would be a mistake, as JIT remains the most efficient system. With interest rates rising, returning to JIC and adding inventory, harms performance and raises costs without necessarily improving resilience.

For businesses struggling with excess inventory and overstocked warehouses, the lean JIT operating model makes sense, and on many key routes and modes the concept of ordering inventory to arrive ‘just in time’ is viable again.

The supply chain is a system of deadlines, actions, processes and participants and no one can control the end-to-end supply chain, without visibility and the means to manage those four critical elements. 

Instead of living on hope, traders can use our supply chain management platform, MVT, to remove supply chain risk, by evaluating their supply chain and determining where to locate and manage strategic capacity and inventory, to support changing demand patterns. 

In challenging economic conditions, smart executives use MVT to manage their supply chain effectively and tighten their control over inventory in their supply chain, while adapting their supplier footprint to meet customer conditions. 

MVT helps companies offshore, reshore or nearshore their vendors and production, by expanding procurement control and adapting supply chains to match the future.

Metro’s MVT supply chain platform reduces the cost, time and risk of re-sourcing to new vendors and locations, with PO management, visibility and communication tools that onboard and integrate new suppliers into the supply chain.

To learn more or to arrange a demo EMAIL Elliot Carlile.

Category: Supply Chain

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