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If you are a homebrew retailer in the US and you haven’t been living under a rock for the last year, you have undoubtedly been impacted by unreliable delivery times, increased shipping fees, and overall lack of available products from wholesalers.
As you probably already know, the end to this supply chain disruption is far from over. That is why we at BSG HandCraft want to try to give you a nuts-to-bolts look at why these issues have continued to persist in our industry, and some suggestions on how to navigate this new market.
While it does little to ease the minds of small business owners, know that the homebrew and craft beer industries are not alone in the various challenges presented by today’s global supply chain.
International Ocean Freight Disruptions
There are multiple challenges that are wreaking havoc on your orders from BSG HandCraft, and other industry suppliers. Though we are 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 that video, they outlined the factors that led us to where we are today:
Container Shortages
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.
Congested Ports
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 high quality brewing ingredient and equipment that BSG supplies are left stranded outside of ports for weeks waiting to unload their cargo. This has led to carrier schedule reliability to drop to a record-low 34.9% in April 2021 (normal levels ~75%).
Domestic Freight Disruptions
As our economy begins to recover, the growing demand for brewing ingredients is bumping into several unique and notable obstacles currently affecting the North American freight market.
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 caused by the recent Colonial Pipeline cyberattack.
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 see some pretty 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 but 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 Can Be Done?
Four tips for BSG HandCraft customers to follow to help alleviate some of the headaches caused by today’s freight challenges.
We continue to face tremendous amounts of pressure within the industry, and experts are predicting that we will not have relief until at least Q1 of 2022.
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 that you utilize these suggestions:
- When possible, allow additional lead time when placing an order. We see this as very important to have in order for our customers to not experience inventory delays.
- Allow for a 48-hour buffer between planned delivery arrival and your “drop-dead date”. This will help reduce any major impacts on your customer expectations or shelf cycle.
- Keep in touch with us. Our dedicated customer service team is always happy to help provide an update on your order or to give you an estimated timeline for delivery.
- Optimize your order. Be sure to check out our tips on how to optimize your order based on our weighted shipping tiers.
BSG HandCraft’s collaborative partnership with our valued customers during the current freight market disruption is critical to returning to more regular and settled times. We guarantee we will keep you readily informed as the global supply chain situation further evolves.
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.