News of a ‘Pingdemic’ led to HGV labour shortages, retail stock shortages have been rumoured to last until the autumn, and some restaurants are now being forced to close. It seems a mixture of Brexit, the pandemic, and mixed messages surrounding lifting lockdown are all playing havoc with the UK. With further news of there being toy shortages by Christmas, and Marks and Spencer reducing their range of festive feastings in Northern Ireland, the Supply, Chain Network team digs a little deeper to find out just what is happening within our supply chains, how long to expect this disruption, and whether it is all too late to save our supply chains…
Food shortages and the Pingdemic
Despite retailers urging consumers against panic buying groceries, new surges in demand combined with a decrease of labourers due to Covid restrictions consequently resulted in supply chain imbalances.
To combat this, the UK Government quickly revealed plans to tackle these shortages by easing driver qualification requirements and improved working conditions. Retailers quick to offer these new incentives included Tesco, Aldi, M&S, John Lewis, and Poundland. Other perks included providing drivers with more official parking spaces and boosting standards of lorry parks to help encourage hauliers to stay in the sector.
According to (Retail Gazette https://www.retailgazette.co.uk/blog/2021/08/6-retailers-that-have-addressed-the-lorry-driver-shortage/) the BRC food and sustainability director Andrew Opie previously commented that retailers were aware of a fall in HGV driver numbers and were working with their suppliers to ensure that consumers still have the same selection of fresh produce.
With labour shortages occurring in the first instance due to social distancing rules dictating that front line workers within the retail and logistics sectors must self-isolate if alerted to by the NHS App, shortages in workers soon ensued.
According to (Bloomberg.com https://www.bloomberg.com/news/newsletters/2021-07-26/supply-chain-latest-u-k-stores-struggle-with-labor-shortages) a rush of absences after 1.7 million people were “pinged” as of last week by a National Health Service app that tells them they’ve been in contact with a Covid-positive person. In the UK the alerts urge recipients to avoid people for 10 days. That’s hard to do when you work at restaurants or grocery stores. The crisis prompted authorities to commit last week to daily testing rather than self-isolation for some employees in the food supply chain.
The UK government was swift to bin this rule, in favour of restoring equilibrium within our stores and supply chain networks, opting to introduce a new daily testing scheme to allow many food workers to continue working, regardless of NHS warning alerts and vaccination status.
Since the new regulations have been in place, Health Secretary Sajid Javid has ruled that those who are double-jabbed and under-18s will no longer be required to isolate for ten days if they are 'pinged' by NHS app or contacted by Test and Trace. As a successful vaccine rollout has allowed Government to ease rules, people who are ‘pinged’ will be 'advised' by the NHS Covid-19 app to continue work as normal and take a free PCR test, instead.
Avoiding a Christmas crisis
While a series of pressures have combined to cause the potential Christmas crisis, the extraordinarily high costs and limited availability of the shipping containers needed to bring stock from manufacturing bases in Asia are the main issues, according to (the Guardian, 2021 https://www.theguardian.com/business/2021/aug/15/toys-could-be-in-short-supply-this-christmas-so-get-buying-now-industry-warns).
A deadly combination of the extortionate costs of securing a 40-foot shipping container from China (which have risen between 10 and 15 times over the last year from £1000 to now ten times that) and a slump in the production of containers themselves, has led to delays occurring in toy importers’ orders and even resulted in some companies now unable or willing to pay the fees to secure a container.
In addition to the seasonal nature of the toy trade, shipping difficulties have been further impacted by the pandemic and Brexit this year, as toy retailers struggle with the challenge of lorry driver shortages when their goods arrive in the UK. These transport issues are sadly not a glitch, and this is a problem that needs to be resolved over time but is very unlikely to be solved before the UK's 2021 festivities occur.
Bah Humbug is not also no stranger in Northern Ireland, where it seems that the ghost of Christmas yet to come has already unleashed its bad omens, as Marks & Spencer says it will not supply some Christmas products to Northern Ireland stores because of the risk that fresh food will be impeded under forthcoming arrangements.
According to (Irish Times https://www.irishtimes.com/business/retail-and-services/m-s-plans-to-delist-christmas-products-from-ni-stores-1.4626606) the retailers’ chairman commented on the decision for products to be delisted to avoid transit issues with the food supply chain over the festive period.
Closing Restaurants
Nando’s has been the big foodie name flying around amidst claims of the restaurant going cold turkey due to supply shortages.
According to (The Guardian https://www.theguardian.com/business/2021/aug/17/nandos-forced-to-shut-outlets-through-covid-related-shortages) Peri-peri chicken wings have become the latest casualty of Covid-related upheaval in the food industry, with a shortage of chicken forcing Nando’s to temporarily close a 10th of its restaurants. The chain blamed the need to shutter outlets on staffing issues at its suppliers' factories as well as the shortage of HGV lorry drivers that have resulted in gaps on supermarket shelves in recent weeks.
It seems that a mixture of supply (Brexit) and staffing issues (Pingdemic) has recently challenged several branches of Nando’s, resulting in a struggle to keep pace with demand, and the temporary closure of premises. Nando’s reportedly aims to re-open their closed sites from Saturday, onwards.
Save our Supply Chains
A deadly cocktail of labour shortages, supply chain blockages and a global pandemic has proved to be enough to knock recovering businesses back off their feet.
With change the only constant that is here to stay, now, more than ever, is the perfect time to consider how best to protect and future-proof your business. Experts in all aspects of warehouse and network design, SCN understands the importance of remaining competitive in a dynamic industry and the critical data analysis required to achieve this.
Specialists in Warehouse Design and Fit-Out, the SCN team can help you reach your facility’s fulfilment potential in 2021 and beyond. Visit www.scnuk.com to learn about the work that we do and to ensure you are ready and future-proof your business plans and warehouse design.
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