No end in Sight to Spirits Industry Supply Chain Issues, Price Hikes
Supply chain issues in the spirits industry caused by Brexit and COVID-19-related holdups have caused delays in deliveries and shortages of supplies, and there’s no end in sight, Accolade Wines senior regional manager EMEA Jeff Bond told The Drinks Business.
“There is only so far that you can all absorb the cost-impact of Brexit and the cost impacts of global freight. It is now three times more expensive to get freight than it was a year and a half ago,” Bond said.
David Stöppler, a spokesperson for international freight, transport and supply chain service Deutsche Post DHL Group, told The Drinks Business that global demand for freight capacity is higher than available capacity, which is causing freight rates to increase. That price hike is causing direct increases in prices of wines and spirits. “In a way this is a result of the Covid-19 pandemic and the several lockdowns in many countries and regions,” Stöppler said.
Average schedule reliability on ocean freight has plummeted from about 70% to below 20% from February 2021 to August 2021, Stöppler said.
“It’s difficult right now. Brexit hasn’t helped,” Bond said. “Plus with global logistics on top of that, it’s just difficult getting stock anywhere, but the main problem is getting freight companies to even pick our stuff up because a lot of it would get collected or delivered to and from local ports and they would deal with logistics from there. But now, even though we might have 15 deliveries booked in, we might still have 10 drivers who don’t turn up. They don’t show because they don’t want to take split pallets, or they don’t want to take split loads on one container because of all the paperwork they have to do once they get across the water. It’s been a bit challenging.”
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