Updated June 9, 2021
Summer is here, and as Covid-19 vaccinations continue to roll out across the country, signs are indicating strong economic growth in 2021. We are very grateful for the resilience of our industry throughout the significant challenges of the past year, and thankful that many of our customers were able to find creative and resourceful ways to continue bringing their products to market. Demand for brewing ingredients remained strong throughout 2020 and we expect that demand to continue.
As our economy recovers, that growth is bumping into several unique and notable obstacles currently affecting the North American freight market, which we will outline in more detail below. For those just looking for the bottom line: BSG recommends allowing additional lead time when placing orders, and allowing for a 48-hour buffer between planned delivery arrival and “drop dead date.”
For a more in-depth look at the global factors affecting freight and supply chain, please read on:
International Ocean Freight Disruptions
While BSG is proud to provide industry-leading customer service, there are unavoidable setbacks in our operations that are caused by (but not limited to) several setbacks in global trade. Our global logistics partner, Kuehne + Nagel, published a video about the challenges facing the supply chain industry that stemmed from the COVID pandemic. In this video, they outline the factors that led us to where we are today:
The travel and transportation restrictions that were put in place to slow the spread of COVID-19 led to a sharp decrease in global sales at the start of the pandemic. The low demand led to many shipping containers being stranded around the globe.
As cargo volumes began to rebound last summer, many carriers have been unable to access these stranded containers that are stacking up at shipping ports around the world.
Port handling capacity has been negatively impacted by the reduction of workforce at those terminals. The additional social distancing safety precautions that were implemented have led to a reduced number of terminal workers, and a reduced number of drivers that are available to remove the cargo from those ports once that it has arrived.
As a result, many ships that carry the quality brewing ingredients that BSG supplies have been left stranded outside of ports for weeks waiting to unload their cargo. This has led carrier schedule reliability to drop to a record-low 34.9% in April 2021 (normal levels ~75%).
Domestic Freight Disruptions
After the difficult weather events this past winter we have seen several new events affect national and global supply chains – from container ships blocking the Suez Canal to gasoline shortages.
These events are taking place in a freight market that was already experiencing a shortage of drivers and imbalances in their networks, drawing out the effects and further exacerbating a bogged-down supply chain.
As difficult as some of these one-time events have been, by far the largest challenge shippers and carriers face right now is the overall explosive growth of our economy. Our carrier partners are experiencing truly unprecedented volume levels as the global economy opens back up, and we will continue to see significant challenges throughout the summer.
We have seen carrier capacity in the market tighten considerably with a freight acceptance rate at an all-time low of 76.26%. While BSG’s freight acceptance rate has declined, it is still well above most shippers in the market.
On-Time truckload deliveries declined significantly in 2021 Q1 and are currently at 82.25%, whereas BSG is running above 90% on time.
Our 90%+ on-time delivery rate is a testament to BSG’s dedication to customer satisfaction.
What We Can Do
BSG continues to actively source additional capacity and establish relationships with new carriers. We realize that on-time deliveries are a critical metric for many of our customers and to that end, we strongly suggest the following:
Thank you very much for your continued partnership. We greatly appreciate your business and relationships and will continue to do our best to deliver on-time and intact.