How Food and Beverage Businesses Can Mitigate the Driver Shortage and Supply Chain Crisis in 2022

02/10/2022
Supply Chain Crisis in 2022

COVID-19 showed that many companies are not fully aware of the threats that can arise to their relationships with partners. Fortunately, many modern technologies can increase the transparency of operations throughout the supply chain.

The demand for truck drivers has now reached boiling point – 50,000 are still needed to keep the supply chain running smoothly. Many food and beverage retailers are dependent on truck deliveries, and missed deliveries means missed sales opportunities. The lack of dockworkers and truck drivers has directly affected the freight market, creating even more logistical problems such as port congestion and soaring freight rates. According to The New York Times, global supply chains have been rocked by pandemic-related challenges such as labor shortages, limited containers and shipping delays. 

Not only are the cost of freights rising, but many sellers are now leaving the costs in contracts open-ended or adjusting them monthly or quarterly because of continuous rate changes and supply availability. For example, the price of corn sweeteners are surging at least 20% with higher freight costs being cited as the reason. One West Coast sugar importer said he could not lock in supply for 2022 because the seller could not guarantee ocean freight. 

The supply chain issues created by the Coronavirus disease (COVID-19) show that many companies are not fully aware of the threats that can arise to their relationships with partners as a result of large-scale international turmoil. Fortunately, many modern technologies are emerging that can significantly increase the transparency of operations throughout the supply chain and help organizations withstand such upheaval. 

Technologies that can help the supply chain crisis

Lessons learned from the pandemic’s effect on the supply chain may lead to increased use of information technology to speed up the supply chain process. In terms of technology for food safety, this includes e-certifications, blockchain data and increased use of electronic documentation. By using data processing, companies can minimize costs, reduce inventory and accelerate asset disposal. Additionally, they can eliminate any surplus and increase the flexibility needed to resolve disruptions.

The traditional linear supply chain model has evolved over time into a digital supply chain (DSN) model. DSN models break down cross-functional barriers and empower organizations to leverage the full potential of the supply chain, as well as provide end-to-end visibility into its operations, facilitating collaboration, increasing flexibility and streamline processes. DSN employs cutting-edge technologies such as the Internet of Things (IoT), artificial intelligence (AI), robotics, 5G, cloud computing, predictive analytics and machine learning to anticipate and address future challenges. These tools are the solution to maximizing resource efficiency.

What can businesses do to mitigate the driver shortage?

The solution is to recruit quality candidates and build driver loyalty. To find quality candidates and make the hiring process run smoothly businesses can use an applicant tracking system (ATS), which saves candidate information across all touchpoints within an organization. This way, between the phone screen and an in-person interview, whoever is leading the discussion with the candidate already knows what’s been discussed and has all background information at their fingertips.

Businesses must also be transparent with their workers to build driver loyalty. The pandemic has shown that in order for businesses to thrive in these unprecedented times, they must not forget the human aspect of their business, particularly in the case of the trucking industry. The pandemic caused a worker shortage, but many businesses are holding their tongues on revealing that sickness from the disease was a huge factor. COVID-19 ravaged the workforce, leaving people to quarantine or recover in a hospital. And unfortunately, many people never recovered. To build worker loyalty, businesses must care about their workers’ health and safety. Businesses could consider supplying COVID-19 tests when needed or compensating drivers for working in hazardous conditions as they brave the pandemic to get their jobs done. 

How businesses can adapt to changing consumer behavior in the food industry

Shifts in the food supply chain that started during the pandemic such as online ordering, third-party delivery and e-commerce are likely to continue after the pandemic as well. This shift will bring about new food safety risks and challenges that require careful analysis and optimal solutions. Traceability, information exchange, data collection and analysis are critical tools that must be used in the food supply chain and health industries. 

In addition to selling more food online, food operators may continue to adapt or even change their business models. It is also likely that groups of volunteers will emerge to create new food-related activities. As restrictive measures ease, the food sector will recover and adapt, and the introduction of physical distance measures and improved sanitation to protect the health of staff will become part of daily activities.

Governments must support measures that ensure the supply chain runs smoothly so people have access to safe and nutritious food during a pandemic (and after). This includes helping countries assess the short and medium-term impact of the COVID-19 pandemic, providing policy advice for agri-food systems with a focus on food safety, organizing thematic webinars and promoting peer learning and the exchange of best practices.

In conclusion, utilizing modern technologies and solutions can significantly increase the transparency of operations throughout the supply chain and help organizations withstand the upheaval brought on by the pandemic.

Source: Food Logistics by Dmitri Fedorchenko from Doft