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It started with a toilet paper crisis. It soon became a lumber shortage that impacted our everyday lives in dozens of ways. Then, computer chips became scarce, meaning that most of our most popular electronics would increase in price at best, become impossible to find at worst.
It seems that supply shortages have just become a way of life since the beginning of 2020. And the pet food and livestock feed industries are hardly immune from the troubles. As the shipping industry goes, so goes the food chain, and as the food chain goes, so goes pet food.
When there is a product shortage of any sort, it’s generally for one of two reasons: Demand outpaces supply or the supply chain has been disrupted. These reasons are not mutually exclusive, and one usually impacts the other at some point. In the case of the Great Toilet Paper Crisis of 2020, it was simply a case of people suddenly buying a lot more than they usually did, and it took some time for the supply to catch up. But it did catch up, and now our bathrooms are no longer in danger of missing vital ingredients.
Not so with other industries, however.
The lumber shortage was caused by a little from column A and a little from column B. The pandemic caused production issues through all parts of the lumber industry chain: workers at all levels, for a variety of reasons, were largely unavailable for great periods of time, causing supply levels to dwindle. The truck driver shortage caused delivery delays of that dwindled supply. And home and business owners who suddenly had more downtime decided seemingly en masse to start building. Increased demand + dwindling supply + transport woes = building projects that cost four times more than usual at the height of the shortage.
The pet food industry’s challenges have mirrored the lumber industry crisis in many ways. According to the Pet Food Institute, pet food ingredient costs have risen up to 20 percent since the start of the pandemic, which is almost 15 percent more than the jump in overall consumer retail prices.
Much of this price jump is due to increased demand. At the height of the pandemic, many people decided that since they were spending much more time at home, it was an ideal time to adopt a pet. Pet adoptions skyrocketed in many regions, and jumped 5 percent on average in the U.S. According to Packaged Facts, from 2019 to 2020, the number of American households with medium or large-sized dogs (20+ pounds) increased by 8.5 million. That is a lot of extra mouths to feed.
So, demand for pet food certainly increased, and it did so as the supply chain faced disruption in multiple ways. Shortages in labor, hardware and certain ingredients have slowed production of many brands’ signature recipes. High demand for corn, soy and meat products, not to mention scarcity of packaging materials like aluminum and cardboard, have hit pet and livestock owners directly in the wallet.
But the most concerning problem has been transportation.
Whether you’re feeding two cats, a dog and a pet hamster or supplying feed for 5,000 head of cattle, moving everything from ingredients to packaged product seems to grow more daunting every day.
If ingredients or products need to be shipped from overseas, there’s the small problem of what to ship them in. According to Thomas.net, there is a near catastrophic shortage of shipping containers. Unforeseen port closures, COVID, the Suez Canal shutdown and other factors have gummed up the flow of large containers, meaning that possibly the most vital cog in nearly every international logistics plan is simply unavailable.
But it’s also become much harder to ship smaller quantities, as shipping options like cardboard boxes are also in short supply. As consumers stopped shopping in person and relied more and more on e-commerce since the pandemic hit, the demand for corrugated cardboard shot up almost 300 percent in a single year. And again, the labor shortage has impacted our collective ability to produce packaging.
If the product or raw material needed to process your product does make it into a barge (or it’s lucky enough to be produced domestically), we have to contend with a trucking labor shortage that grows more significant every day. In 2019, before the pandemic was even a buzzword, the American Trucking Association had reported a need for 60,000 truck drivers just to keep up with the current shipping demand. That same report indicated that the shortage could reach 160,000 by 2028. These projections have yet to be updated post-COVID.
When you factor in the European driver shortage, which is at 400,000 and counting, and the fact that the average age of long-haul drivers is close to 50, the driver shortage isn’t looking to end anytime soon.
So in addition to the container shortage, when a barge hits U.S. shores, it’s faced with gridlock. The Port of Los Angeles, the busiest container port in the western hemisphere, is looking at a bottleneck so unprecedented that President Biden is intervening in an attempt to get freight flowing again.
Manufacturing and delivering quality feed and pet food is more challenging than ever before, but that only emphasizes the need for creative solutions of logistics problems. The Bill Barr team exists to create solutions that help ease those challenges, whatever they might be.
No matter your industry or product, we can create a customized solution to help reduce supply chain and inventory stresses. This may involve dedicated sourcing, so you don’t have to reach out to multiple suppliers. Or it could mean inventory management to streamline your ordering and ensure you get what you need when you need it. It could even involve creative transportation or distribution opportunities. Whatever the challenge, Bill Barr has a solution.
Want to see how Bill Barr can help with the supply chain headache? Reach out to a team member today.
RESOURCES:
https://its4logistics.com/dedicated-fleet-services/how-wildfires-affect-the-supply-chain/
