Curating the hottest news with the greatest potential to impact your business.
At its core, the problems impacting nearly every disruption along the globally interconnected supply chain is a lack of labor. A shortage of workers – a problem that existed pre-pandemic, but one that has only worsened since – means that goods can’t get from the ports to warehouses, to then find their way to retailers and consumers.
- In September, more than 70 container ships at ports in Los Angeles and Long Beach were unable to unload goods because of a shortage of workers.
- A survey of local chamber of commerce leaders by the U.S. Chamber reveals that 90% of respondents say that labor shortages are limiting economic growth in local areas.
The food distribution and production industries have been affected by shortages in workers on production lines, in warehouses and driving delivery vehicles. Labor disruptions in the supply chain are forcing schools to substitute menu items when their orders are not delivered – and they are having to place additional orders at a higher cost, find new local suppliers, and work with local restaurants.
- A back-to-school survey by the School Nutrition Association, which represents more than 55,000 school nutrition professionals, found that 97% of program directors who responded were concerned about continued pandemic-related supply chain issues, with 65% citing "serious" concerns. The second top concern was staff shortages, according to the survey.
Australia faces food and grocery shortages similar to those in Britain unless the definition of close and casual contacts of positive COVID-19 cases changes before lockdowns come to an end.
- The Australian Food & Grocery Council said manufacturers in NSW and Victoria have had between 25 and 60 percent of their staff in quarantine at any one time during the Delta outbreak and have had to stop production and dip into inventories to keep supplies flowing.
- Tanya Barden, Council Chief Executive, said if workers exposed to COVID-19 were forced to quarantine for two weeks as lockdowns eased and the economy opened up, grocery stocks would start to run down, leading to empty supermarket shelves.
- The Grocery Council’s annual State of the Industry report revealed that food and grocery manufacturing turnover rose 4.1% to almost $133 billion in the 12 months ending in June 2020.
The vast network of ports, container vessels and trucking companies that moves goods around the world is strained. Unmet demand and filled ports have caused record costs to ship goods over the last several months, meaning that shoppers are likely to face higher prices and fewer choices this holiday season.
- To try to ease pressure on the supply chain, in October President Biden unveiled plans to expand operations to 24/7 at the ports of Long Beach and Los Angeles, which handle 40% of America’s cargo.The administration is working with the ports, unions, and leading retailers and shippers.
- In the past year, the cost to have a container shipped by freighter from China to the West Coast has risen more than sixfold from $3,000 in August 2020 to $20,000 in September 2021.
Food prices are increasing due to strong consumer demand that have driven up the cost of other goods and services in the U.S. The strong demand from consumers comes as many are eager to spend their cash from government stimulus checks and after COVID-19 restrictions over the last year.
- Typically, Americans spend 52% of their food dollar at restaurants and 48% at grocery stores. However, during the height of the pandemic last year, 80% of families’ budget went to groceries. As vaccinations picked up this year the mix has evened out.
- Although COVID spikes due to the Delta variant have again affected food consumption at home. The fluctuations in demand make it difficult for manufacturers to plan for production and deliveries.
- Additionally, early in the pandemic, Americans were more concerned about their ability to purchase food rather than rising prices, according to surveys by the Food Marketing Institute.
- In March 2020, 62% of shoppers polled said they were concerned about finding food versus 35% being concerned over prices.
- In August, 50% said they were concerned over prices versus 46% worried about being able to purchase food.
Impacts of the COVID-19 pandemic on the global supply chain have caused uncertainty ahead of the critical holiday season, which can account for over half the annual sales for retailers. Severe shortages of goods and drastically higher prices are projected during the holiday season, as the costs and time to ship has dramatically increased due to a shortage of shipping containers and increased demand.
- The time it takes to ship an item from Asia to the United States has roughly doubled — 15 days by air, 90 by sea — during the pandemic.
- The backlog, coupled with labor shortages and pandemic-related shutdowns at every point in the process, has led to months-long delay for many imports.
The consumer confidence index increased in late October to 113.8 from September’s 109.8, ending three straight monthly declines and contrasting with a University of Michigan survey of consumers earlier in the month showing sentiment falling. The rebound in confidence has coincided with declining coronavirus infections.
- Consumers are upbeat about both current conditions and the short-term outlook, with the labor market differential – derived from data on respondents' views on if jobs are plentiful or hard to get – reaching 45 in October, its highest in 21 years.
- More consumers intended to purchase household appliances, buy homes and travel in the next six months.
- Labor: Labor continues to be the biggest challenge within the transportation and logistics industry, as well as the wider global market. The COVID-19 pandemic has led to a shift in mindset towards work as people reevaluate and reconsider what work means to them: how they spend their time, how much flexibility they have, and the safety of working in-person during the pandemic. From an operations standpoint, current labor challenges are impacting customers’ ability to quickly and efficiently move food throughout the supply chain. However, Lineage is working hand-in-hand with our customers to determine labor countermeasures and we expect labor issues to gradually improve in the near-term. In the long-term we’re continuing to invest in automation across our network for support in critical, high-demand markets.
- Global Shipping: Significant cost increases on shipping containers and pallets have continued to strain the global shipping market this quarter. However, Lineage is proactively addressing these challenges by using lean problem-solving tools and creating innovative solutions for our customers. In California, for example, by leveraging our network we can assess where products will be consumed downstream and reroute overflow to other Lineage warehouses earlier in the process. The food chain has proved to be resilient this past year and Lineage is confident that we can continue to improve product positioning strategies for customers in the coming quarters.
- Consumer Demand: Continued fluctuations in demand this year are having a “bullwhip effect” on the food supply chain – complicating the farm-to-fork journey for many popular, global commodities. For example, demand for potatoes slumped when restaurants were forced to close during the pandemic, but with recent openings we’re seeing greater demand and resulting fluctuation at each step of the chain, from customers, retailers, manufacturers and suppliers. Heading into the holiday season, we expect higher demand for many food products. Now is the time for transparent communication, and here at Lineage we are committed to greater transparency with customers, manufacturers, retailers, and consumers to ensure a successful holiday season.
Growing our network to serve your supply chain – how, where and when you need us.
Lineage Logistics announced it has acquired Hanson Logistics, one of the most respected cold storage organizations in the Midwest.
Carta made her professional golf debut at the Ladies Italian Open in May 2021 and as part of Lineage’s sponsorship, Carta will wear Lineage’s logo during official tournaments and associated public events.
As an industry leader, Lineage has been at the forefront of providing solutions to any issues facing the cold chain. We’ve been ahead of global sustainability concerns for years, but socioeconomic factors outside the cold chain sphere have forced all of us to double down on our efforts.
Lineage's facility in Colton, CA will establish the first facility in the Lineage network to generate 100% of its energy consumption on-site. Partnering with PowerFlex and Mainspring Energy, Lineage's Colton Agua Mansa facility installs two linear generators, and among the first of its kind to integrate a linear generator with solar panels.
Lineage Logistics Joins The Climate Pledge and Commits to Achieving Net-Zero Carbon Emissions by 2040
Lineage becomes a signatory of The Climate Pledge, co-founded by Amazon and Global Optimism, to encourage corporate climate action. Lineage aims to meet the goal of The Climate Pledge through a combination of innovative energy efficiency measures, onsite energy generation and storage, and network-wide standards to minimize and eliminate carbon emissions associated with its daily operations.
Automation is a Response to Challenges in the Cold Chain
The time for automation in the food supply chain is now – and it's key for our industry to keep up with new disruptions and heightened pressure. Automation is a critical next step for the industry and how it will allow us to continuously deliver food to consumers around the world, safely and efficiently. Automation is crucial to improving efficiency, lowering costs, and helping businesses across the supply chain run faster and timelier. Our new whitepaper covers how automation supports solutions to complex challenges and transforms the food supply chain to help feed the world. Learn why our experts say automation is a critical next step for the industry.
Constantly expanding to meet our customers' demand.
Expansion: Heywood, UK
Lineage recently completed the expansion of its Heywood Northern Superhub, making Manchester home to the UK’s most advanced cold storage facility. The upgraded warehouse will play a key role in UK food distribution and consume 75% less energy than the European average as it features the latest technologies that maximize warehouse space utilization. The Heywood Superhub will provide storage for major food manufacturing, service and retail brands, cementing Manchester’s role as a distribution hub for food products in the UK. Following the 12-month expansion, the facility will boast 425,000 sq ft of space and a total of 78,000 pallets across the site on Hareshill Road.
Greenfield: Tauranga, New Zealand
We recently broke ground on a next-generation cold storage facility at Tauranga in the Bay of Plenty region of New Zealand’s North Island. Strategically located near the Port of Tauranga, New Zealand’s largest export port, this project will feature 10,000 pallets and three blast freezing rooms at the 6,675 square metre facility, which is set to provide food and beverage customers with industry-leading cold storage and logistics solutions.
Greenfield: Portsmouth, VA
Our new, fully automated, state-of-the-art facility in Portsmouth opened on September 9th and includes 30,000 pallet positions with blast freezing capabilities. Lineage’s new Portsmouth location provides our customers access to key markets across the globe through its proximity to the Port of Virginia’s world-renowned VA International Gateway (VIG)., an integrated network of highways, air, rail, and sea services.
Welcoming the industry’s most respected teams into our Lineage family.
The addition of Hanson Logistics expands Lineage's network by seven distribution facilities across Michigan and Indiana strategically located to reach over 60% of the U.S. population.
The acquisition of Kenyon Zero Storage further expands Lineage's presence in the Pacific Northwest.
A family-owned company with a rich legacy as a vegetable trading company dating back to 1925, Kloosterboer has grown over generations to become one of Europe’s best-known supply chain solutions companies.
Claus Sørensen has been running cold and freezer storage facilities since 1926, all strategically placed in relation to the production of Danish food products and the main fishing ports.
Lineage’s acquisition of Kantaro marks its entry into the Italian market. Italy adds to Lineage’s growing European footprint, strengthening the company’s presence in Southern Europe.
Check out our dynamic network of cold storage facilities across the globe.
Lineage Foundation for Good
We are pleased to introduce the Lineage Foundation for Good! At Lineage, we recognize our unique position to do good and make a difference in the communities in which we live and work and we’re excited to leverage our access, influence, experience, and expertise to reduce food waste and fight food insecurity across the globe. We will be sharing more information how customers can get involved to eliminate waste and help feed the world.
Working together to help feed the world.
In mid-October, Lineage came together with some great people and organizations to live our purpose of feeding the world. We worked together to fight food insecurity and hunger in the metro Detroit area near our corporate headquarters, and distributed over 200 meals for those in need.
While feeding people everywhere is a responsibility we act on every day, in September we highlighted Hunger Action Month as a platform to make an impact on how the public perceives hunger and issues such as food waste and food insecurity.