The world is experiencing a global supply chain disruption the likes of which has not been experienced since the second world war. It is a fine balance between demand and supply to keep costs at a manageable level, with recent events including the pandemic, Brexit and a shortage of raw materials and HGV drivers, has created the perfect storm.
Fox Trading, as one of the Channel Islands largest wholesale suppliers has been looking ahead to avoid and mitigate as many of these issues as we can, taking a proactive approach to meeting our customers’ changing needs.
As a distributor of over 10,000 different product lines across food packaging, cleaning, equipment, tobacco, soft drinks and confectionery, Fox play a key role in the supply chain, ensuring the Channel Islands have constant access to the latest products and global brand names.
We have direct partnerships with suppliers in China, USA, Europe and of course the UK, dealing with over 250 separate companies.
Our supplier network has been established over decades and is a result of successful partnerships and commitments. Anybody can supply cheaply when there is abundance of product, but it is much harder to do the same when supply and demand are not in equilibrium.
The demand for PPE including face masks, gloves and sanitiser has been unprecedented and we have supplied over 3 million gloves to our customers and have bought containers direct from China and Malaysia to meet customer demand. High demand for PPE and other goods has resulted in a serious shortage of containers used for shipping around the world as many are now simply in the wrong place. This has seen a 10-fold increase for container costs of +$20k, if you can even get them in the first place!
Combine this with the closure of some of the worlds business ports and shipping lanes (Suez Canal closure in March due to blockage caused by Ever Given ), increased administration and border checks due to Brexit, and a shortage of labour in both production and transportation of goods and you can see the true picture faced. A change in the way people are shopping (more online channel and take-aways) coupled with high demand has also created shortages in raw materials, especially on paper and board used for making food boxes, cups etc.
The knock-on effect of these issues has seen increased pressure placed on those ports still operating, causing delays as they attempt to operate beyond capacity with vessels waiting sometimes weeks to be offloaded.
Ever Given blocking Suez Canal
Ever Given in Rotterdam Port
To add further context, Highland Spring Water have cancelled all orders for the next 4 weeks because of unacceptable service levels, not just for the Channel Islands but for the whole marketplace, to allow time to replenish their component stocks so that they can fulfil all future orders. KFC and McDonalds have also warned customers to expect a shortages at their outlets due to a lack of raw materials.
Whilst we currently have some very challenging supply chain issues, we are continuing to deliver good levels of service to our customers with over 95% of their orders being met on a daily basis. This has been down to a proactive approach, switching to alternative products when necessary and listing new suppliers as soon as they become available. Being agile and adaptable has not only allowed us to all to protect our own business but also that of our customers’ operations.
Fox have re sourced products from the Far East to the UK, albeit at a higher cost base. We have also held onto extra stock here in our Jersey warehouses and storing them in the UK in order to maintain our service levels to customers.
We have extended our lead times to anticipate demand placing orders with suppliers as early as possible, including products for Christmas which we are now actively working on to be finalise requirements with our customers.
Fox are here for our customers and will continue to work proactively for them as their long term supplier partner during this difficult time.
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