TVF Shares Insight into Supply Chain Disruptions
Port congestion is still a prominent issue disrupting the supply chain
TVF shares a message with customers, offering insight into supply chain disruptions. The company notes it has been watching changes and rising costs closely and provides an update on what it’s seeing.
Key takeaways from the update:
- Congestion is improving in some ports but worsening in others. According to the Northwest Seaport Alliance, the number of vessels in the port of Los Angeles has decreased by more than 50%, while the number of vessels in the Port of Oakland has increased by more than 25%. While this is a positive sign, port congestion is still a prominent issue disrupting the supply chain.
- Overall transit time is increasing in every leg of shipment of goods. A report from Flexport shows transport times have more than doubled this year. Still, schedule reliability is set to rebound slowly.
- Although there are some positive signs, these issues will continue to affect freight costs for the foreseeable future.
- TVF is also experiencing an increase in the price of goods as demand growth outpaces supply growth. According to the company’s industry research on supply and demand growth over the last 20 years, demand (or global throughput) has increased at a rate of 6.6%, while supply (carrier vessel space) has grown at a greater rate of 8.2%. However, TVF says according to recent trends, the growth of demand will rise faster than supply through 2022. TVF expects the shift will worsen cost increases on raw materials.
The statement closes, reading: “With freight costs rising exponentially, transit delays and raw materials increasing, this year brings many challenges. TVF is fortunate to have a vast supply chain to ensure our customers maintain the most competitive pricing possible. Still, it is inevitable we will have to make some pricing adjustments based on current market conditions. We encourage all of our customers to contact us to understand the impacts and to talk through the best solutions so you can thoughtfully plan for the months ahead.”
For a deeper dive into what companies across the industrty are dealing with, check out Custom Graphics Industry Faces Supply Chain Woes.
