How COVID-19 Affects the Hospitality Supply Chain

The year 2020 has been very challenging, 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 fulfil 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 the cause. So how does it affect the supply chain?

Difficult Decision

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 have adjusted their replenishment schedules to reduce inventory and warehouse costs. While the vaccine is around the corner, the economy is expected to pick up next summer.

Another difficult decision for aspiring supply chain management is whether to continue to reduce inventory costs or to take a chance and prepare for future orders.

Shipment Delays 

Reduced capacity and deteriorating schedule integrity have resulted in mass equipment imbalances in head haul regions such as China and S.E Asia.

Due to a lack of equipment and space, rates in Asia have reached all-time highs, leaving customers dissatisfied.In North America and Europe, carriers have reduced export allocations in favour of moving empty equipment back to Asia to fulfil 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?

Looking Forward

We believe the post-Chinese New Year will add pressure to the continuing situation into 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 to manufacture and source quality supplies during this most difficult time.

Contact HYC Design www.hycdesign.com or email us at order@hycdesign.com to find out how we can help you to save money on hospitality procurement.