By Anna Cen
How COVID-19 affects the hospitality supply chain
The year of 2020 had been very challenge, unlike anything most of us have experienced in our lives before. While we have shown our resilience, obstacles remain that continue to impede our path, and create the necessity for constant changes.
What Cause It?
In the beginning, port shutdowns due to COVID-19 related issues, coupled with the removal of vessels and reduced sailings, created severe pinch points throughout the global supply chain.
Since then, cargo volumes have surged to fulfill increased inventory requirements.
Recently, the COVID-19 outbreaks have promulgated the necessity of void/blank sailings and port omissions. These actions taken by carriers were a necessity due to cause. So how it effects the supply chain?
Due to the impact of the COVID pandemic, hospitality supply chain business has suffered in turn since there is far less activity in hotels/motels etc.
Many suppliers adjusted their replenish schedule to reduce inventory and warehouse cost. While the vaccine is around the corner, the economy to pick up in next summer is expected.
To continue reduce inventory cost or to take a chance and prepare for future orders become another difficult decision for the striving supply chain management.
Reduced capacity and deteriorating schedule integrity have resulted in mass equipment imbalances in head haul regions such as China and S.E Asia.
This shortage of equipment & space has created a pushing rates to all-time highs in Asia, and leaving customers frustrated. In North America and Europe, carriers have reduced export allocations in favor of moving empty equipment back to Asia to fulfill high-yield cargo.
With many exports’ needing extended free-time, carriers have opted to reduce the cargo and could turn containers faster. So, when will this vicious cycle end?
We believe post Chinese New Year will add pressure on the continue situation to the late Spring.
With heightened communication and information sharing, we are well positioned to battle the storm to succeed.
As your Hospitality Supply Solutions Provider, HYC Design will continue our efforts in manufacturing and sourcing quality supplies during this most difficult time.
Contact HYC Design www.hycdesign.com or email us at email@example.com to find out how we can help you to save money on hospitality procurement.