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db Supply Chain Update: Stepping into Christmas

06 December 2023 By Michael Huband

For the latest db Supply Chain Update, the team at VinLog summarised this year’s challenges and how best to safeguard against them.

Christmas can be a logistical nightmare. Even on the individual scale, getting people, presents and paraphernalia to the right location can be a struggle. That is before even considering the military precision needed to cater the perfect Christmas feast.

On a grander scale, the drinks industry sees significant logistical challenges over the festive season. Some are perennial, others are particular to 2023, but all of them matter to drinks companies in this crucial month.

VinLog knows the challenges better than most. As part of Kuehne+Nagel, one of the world’s largest logistics companies, it has immense experience in the sector. The VinLog team provided db with its take on the key issues affecting drinks logistics over the festive season.

What are the pressures on the global supply chain around the holiday season?

Ocean carriers are currently grappling with the challenge of falling demand, which translates to an increase in blank sailings. Put simply, if there is too little demand, carriers will skip a port and move onto the next in the cycle.

This phenomenon leads to inconsistency in vessel departure, arrival, transit times, and costs. The decline in demand is a particularly significant hurdle for the global supply chain during the holiday season, as it disrupts the usual flow and reliability of shipping processes. Unlike other points in the year, the clock is ticking: if products are not in the right location on time, a major seasonal sales opportunity could be lost.

What could the impact be on producers, importers and distributors?

There are two sides to the current scenario. In anticipation of a busy Christmas season, inventories are currently elevated. Yet industry strategists are expressing concerns about a potential decrease in consumer spending in the fourth quarter, which they are attributing to challenges in the labour market. Higher inventories may not be met with anticipated consumer demand.

This scenario implies that supply chain issues can have a cascading effect on producers, importers, and distributors during the holiday season. The lower demand, already suppressing sales, could cause blank sailings that further reduce sales opportunities.

What measures can businesses take to safeguard the key profit-making season?

To safeguard the key profit-making season, businesses are advised to plan ahead and proactively address potential challenges. They should stay well informed on shippings that could affect them, which can be achieved by liaising with logistics companies.

Clearly blank sailings or delayed shipments are vital to this. Knowing when stocks may not arrive allows businesses to make contingency purchases or ration stocks. There are, however, less obvious issues worth bearing in mind. For instance, a common problem during the cold winter months is damage to certain temperature sensitive products. Logistics professionals keep track of weather patterns and can advise on whether scheduled pickups are safe for a company’s shipments.

What is the role of VinLog in enhancing business resilience during the season?

VinLog Powered by Kuehne+Nagel has representatives always monitoring the market to advise on unforeseen challenges. They build on Kuehne+Nagel’s experience, after more than a century in the drinks logistics industry, and have the specific expertise required by the industry. Having that advice means businesses can move swiftly to safeguard the important festive season.

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